A Summary of OIG Preaward Contract Reports Issued in Fiscal Year 2025 on VA Federal Supply Schedule Pharmaceutical Proposals

The federal government spends billions each year on pharmaceutical items through VA’s Federal Supply Schedule (FSS) program. As part of ongoing oversight to combat fraud, waste, and abuse, the VA Office of Inspector General (OIG) reviews individual pharmaceutical proposals submitted by commercial contractors for FSS contracts with anticipated annual values of $5 million or more, or where VA has requested a review. The OIG’s oversight helps VA contracting officers negotiate fair and reasonable prices for the government and taxpayers. While OIG price recommendations can inform negotiations, there is no guarantee the government will receive the recommended price. To promote transparency, this summary covers the 16 preaward reports provided to VA contracting officers in fiscal year 2025, representing a cumulative estimated contract value of about $21 billion and 1,043 offered items. As of June 2026, contract negotiations for 10 of the 16 proposals were complete, and OIG recommendations on seven proposals helped contracting officers obtain about $24.7 million in savings. This amount may be understated, as three proposals with OIG-estimated cost savings had not yet received final awards.

The OIG determined that commercial sales practice disclosures were accurate, complete, and current for five of the 16 proposals reviewed. The other 11 contained deficiencies, primarily related to errors in the expiration or disclosure of most-favored customer prices, which prevented VA from reliably using them for negotiations until corrections were made. Tracking customers, used as benchmarks for price reductions, were evaluated and found suitable for 79 of 84 sampled items based on the General Services Administration’s price reductions clause.

This report details the proposals assessed for accuracy and completeness, summarizes pricing recommendations, and makes no additional recommendations requiring VA action.