SmithKline Beecham Corporation, B-283939, January 27, 2000

B-283939 Jan 27, 2000 Jump To VIEW DECISION RELATED PAGES GAO CONTACTS Highlights DIGEST Protester's challenge to the price evaluation scheme included in a solicitation for prescription drugs that anticipates evaluation of a per-dose price based on the only use for which all three of the competing drugs are approved by the Food and Drug Administration is denied. Even though the evaluation does not consider certain uses of the solicited drugs that will have a different cost profile. The protester has not established that the solicitation's approach will produce a materially misleading result. SKB argues that the RFP's price evaluation methodology will not identify the proposal that will provide the actual lowest price to the government. This procurement is part of the VA's program to standardize the availability of pharmaceuticals and medical/surgical items. View Decision Matter of: SmithKline Beecham Corporation File: B-283939 Date: January 27, 2000 DIGEST Attorneys DECISION SmithKline Beecham Corporation (SKB) protests the terms of request for proposals (RFP) No. RFP-797-NC-99-0020, issued by the Department of Veterans Affairs (VA) for 5-Hydroxtryptamine (5HT3) receptor antagonists, used for the treatment of nausea and vomiting (emesis) resulting from chemotherapy. SKB argues that the RFP's price evaluation methodology will not identify the proposal that will provide the actual lowest price to the government. We deny the protest. This procurement is part of the VA's program to standardize the availability of pharmaceuticals and medical/surgical items, through the use of its national formulary. A formulary is a list of prescription drugs, grouped by therapeutic class, that a health care organization prefers that its physicians prescribe. Drugs are chosen for a formulary on the basis of their medical value and price. Defense Health Care: Fully Integrated Pharmacy System Would Improve Service and Cost-Effectiveness, (GAO/HEHS-98-176, June 12, 1998) at 2 n.1. In addition to standardizing drug availability, the VA is using its national formulary to increase the continuity of VA care, standardize the processes for evaluating the safety and efficacy of drugs, and manage cost growth. VA Health Care: VA's Management of Drugs on its National Formulary, (GAO/HEHS-00-34, Dec. 14, 1999) at 4. Prior to issuing this solicitation, the VA's Pharmacy Benefits Management (PBM) section, together with its Medical Advisory Panel (MAP), conducted a drug class review of the three known 5HT3 receptor antagonists, /1/ which are: Dolasetron, manufactured by Hoechst Marion Roussel, Inc., and marketed under the name Anzemet ; Granisetron, manufactured by SKB, and marketed under the name Kytril ; and Ondansetron, manufactured by Glaxo Wellcome, Inc., and marketed under the name of Zofron . The review concluded that the three drugs were equally efficacious in managing CINV and PONV; that they presented similar, and acceptable, levels of side effects; and that a single 5HT3 drug should be selected for the national formulary based on cost. Agency Report (AR), Tab 7, Drug Class Review, Oct. 1999, at 13. The RFP, issued on July 21, 1999, sought fixed-price proposals to provide an indefinite quantity of the three 5HT3 receptor antagonists, and advised that award would be made to the offeror whose proposal was deemed most advantageous to the government considering price and past performance. RFP amend. 0003, at 2, 5. Of these two factors, offerors were advised that price would be more important than past performance, and that the agency's objective was to award to the offeror with the lowest per-dose price (PDP). Id. at 5. To perform its PDP comparison of the three drugs, the RFP established an oral dosing level for each drug, as set forth below: PRODUCT STRENGTH PATIENT DOSAGE NO. OF TABLETS Dolasetron 100 mg 100 mg 1 Granisetron 1 mg 2 mg 2 Gndansetron 8 mg 16 mg 2 RFP amend. 0003, at 2. The VA explains that it selected these dosing levels for its price evaluation because they are the FDA-approved dosing levels for these three drugs when treating patients with moderate CINV, and because the treatment of moderate CINV is the only condition for which there are FDA-approved dosing levels for the oral version of all three drugs. /2/ AR, Legal Memorandum, Nov. 18, 1999, at 5; see also AR, Tab 7, Drug Class Review, Oct. 1999, at 2. Thus, put simply, the PDP will be based on the price for 1 tablet of Dolasetron, and 2 tablets each of Granisetron and Ondansetron. SKB protests that the solicitation's price evaluation scheme is defective because it does not give reasonable assurances that an award to the offeror with the lowest evaluated price will result in the lowest cost to the government during actual performance.