The VA has posted a change in policy regarding the necessity to add covered drugs (SIN 42-2A) to Federal Supply Schedule (FSS) 65IB contracts.
Covered drugs include single source drugs and innovator multi-source drugs as defined in 42 USC §1396r-8, and biological products. Although manufacturers of covered drugs must offer them on the FSS in accordance with the Veterans Health Care Act (VHCA), 38 USC §8126, the VA is bound by the Trade Agreements Act (TAA) prohibition against procuring items manufactured in non-TAA countries under contracts subject to the TAA, including FSS contracts, unless the contracting officer determines that the item is not available in sufficient quantities to meet the agency’s needs.
For many pharmaceuticals, the country of origin under the TAA is India or China, neither of which is a TAA country. When necessary, the VA has made non-availability determinations for its own “national” requirements contracts, enabling manufacturers to bid non-TAA drugs for those contracts. However, VA policy has prevented it from adding covered drugs to FSS contracts, as contemplated by the VHCA, because the VA administers the FSS contracts under a delegation of authority from GSA and GSA policy prohibited FSS contracting officers from issuing non-availability determinations. The VA’s policy reversal now allows covered drugs to be available on the FSS.