Kyle Bernal
Healthcare is one of the industries that commands the largest portion of the federal government’s budget. It encompasses many institutions, such as public health agencies, laboratories, departments, and health insurance programs, including CHIP, Medicare, Medicaid, and the ACA Marketplaces. To ensure the effective delivery of healthcare services to Americans, numerous federal government agencies award healthcare contracts to capable contractors. Get to know the top healthcare government contractors in 2022 here.
Table of Contents
Why Are Healthcare Government Contracts Important?
Healthcare contracts are crucial for several reasons, including the following:
1. They Promote Innovation
Healthcare contracts play a pivotal role in fostering innovation within the industry by incentivizing providers to develop novel treatments, technologies, and care delivery models. This drive for innovation leads to enhanced patient outcomes, reduce costs, and drive progress in the healthcare industry.
A notable illustration is the Department of Defense’s partnership with MilliporeSigma. This collaboration allowed MilliporeSigma to produce a nitrocellulose membrane material for rapid COVID-19 test results, significantly amplifying the production capacity of SARS-CoV-2 POC tests to an impressive 83-85 million per month.
2. They Lessen Overall Healthcare Costs
Healthcare contracts are instrumental in cost containment as they enable the selection of the most cost-effective solutions through a competitive bidding process. This approach not only saves taxpayer money but also contributes to reduced healthcare spending for patients and insurers alike.
For example, the U.S. Army contracted Pfizer to supply Paxlovid, a COVID-19 treatment in pill form. Paxlovid’s pricing was 25% lower compared to Merck’s molnuporavir, making it a more affordable option while also being highly effective.
3. They Provide Easier Access to Healthcare Services
Healthcare contracts empower healthcare providers to deliver services to patients without requiring them to pay out-of-pocket or with significantly reduced out-of-pocket costs. Some of the government programs covered are Medicare, Medicaid, and CHIP.
Note: The following list of healthcare government contractors is ranked in no particular order. The selection criteria are based on a variety of factors, including market capitalization, revenue, and overall industry impact. That said, while they are highly regarded in the industry, plenty of other companies also offer exceptional products and services.
AmerisourceBergen
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- Revenue: $239 billion
- Year founded: 2001
- Headquarters: Conshohocken, Pennsylvania
- Founders: AmeriSource Health Corporation and Bergen Brunswig Corporation
About the Company
AmerisourceBergen is a leading global healthcare company known for its foundation in pharmaceutical distribution and solutions for manufacturers, providers, and pharmacies. The company’s offerings include pharmaceutical products, technology, practice management, and data and analytics solutions.
AmerisourceBergen operates in two segments, Pharmaceutical Distribution and PharMerica, with a network of 16 companies to meet the increasing market needs and expectations globally.
Early Beginnings
AmerisourceBergen started in 1871 when Lucien Napoleon Brunswig worked for a U.S. druggist in Forthworth, Texas, which spurred his journey to become a drug wholesale market leader. Brunwig partnered with top drug market companies, Wheelock-Finlay and later F. W. Braun. He bought Braun, renamed it, and relocated to California to formally establish his wholesale drug distribution business.
Notable Government Contract in 2022
In July 2022, AmerisourceBergen was awarded a $6 billion contract to support Defense Logistics Agency’s TRICARE Pharmacy Program. The task order included restocking the TPharm ordering facilities with pharmaceuticals and pharmaceutically-related goods.
Centene Corporation
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- Revenue: $145 billion
- Year founded: 1894
- Headquarters: St. Louis, Missouri
- Founder: Elizabeth Brinn
About the Company
Centene is a prominent healthcare service organization that specializes in providing services to government-sponsored healthcare programs, primarily catering to underinsured and uninsured citizens. The company holds a significant presence as the main provider of Medicaid services in some of the largest Medicaid states, including California, Florida, Texas, and New York. Furthermore, Centene has experienced substantial growth in serving the insurance markets established by the Affordable Care Act, cementing its position as one of the top healthcare government contractors today.
Early Beginnings
Centene had its humble beginnings in 1984 when Elizabeth Brinn, a former hospital bookkeeper, established “Family Hospital Physician Associates, ” in the basement of a hospital in Milwaukee.
This marked the initial steps of the company’s journey. In 1997, a significant milestone was achieved as the company underwent a name change to Centene Corporation. With this transformation, Centene solidified its corporate presence by establishing its headquarters in St. Louis, Missouri. Furthermore, Centene made its first subsidiary acquisition with NurseWise, laying the foundation for future expansion and diversification in the healthcare industry.
Notable Government Contract in 2022
In September 2022, Centene’s Texas-based subsidiary, Superior Health Plan, continued providing healthcare coverage to foster care children under the STAR Health Medicaid program. Superior Health Plan became the sole statewide Medicaid coverage provider in 2018.
CVS Health
Photo from CVS Health Official Website
- Revenue: $322 billion
- Year founded: 1963
- Headquarters: Woonsocket, Rhode Island
- Founders: Stanley Goldstein, Sidney Goldstein, and Ralph Hoagland
About the Company
CVS Health, originally known as “Consumer Value Stores”, is a comprehensive health solutions company that serves a vast network of healthcare professionals, including over 40,000 physicians, pharmacists, nurses and nurse practitioners. The company operates through four business segments: Health Care Benefits, Pharmacy Services, Retail/LTC, and Corporate. These segments encompass various subsidiaries, such as:
- CVS Pharmacy, which operates a wide network of retail drugstores
- CVS Caremark, a pharmacy benefits manager that offers comprehensive pharmacy services
- Aetna, a health insurance unit with a patient base of more than 1 million individuals
- MinuteClinic, a chain of walk-in medical clinics providing accessible healthcare services
- Omnicare, a subsidiary with millions of plan members in the pharmacy benefits management (PBM) space, specializing in specialty pharmacy services and a long-term care pharmacy solutions
Early Beginnings
CVS Health has a rich history that dates back to its founding in 1963. The company’s journey began when Stanley Goldstein, Sidney Goldstein, and Ralph Hoagland opened the first CVS Store in Lowell, Massachusetts. The venture proved successful, and within a remarkably short period, the chain expanded to encompass 17 stores. As part of their growth strategy, CVS Health opened one of its first stores with pharmacy departments in Cumberland, Rhode Island and Warwick.
Notable Government Contract in 2022
In terms of notable government contracts, a significant achievement took place in April 2021. Aetna Better Health of Ohio was selected for the OhioRISE contract, a specialized managed care plan designed to cater to the complex behavioral needs of more than 60,000 young adults and children. This contract commenced in January 2022, Allowing Aetna to deliver crucial healthcare services tailored to this specific population. Aetna has been successfully managing care for over 26,000 Ohio citizens for more than seven years through MyCare Ohio.
GSK (GlaxoSmithKline)
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- Revenue: $32 billion
- Founded: 2000
- Headquarters: Brentford, United Kingdom
- Founder: Joseph Nathan
About the Company
GSK, a leading global healthcare and biopharmaceutical company, is renowned for its extensive research, development, and manufacturing of pharmaceutical medicines, consumer healthcare products, and vaccines. The company operates through two main business divisions: pharmaceuticals and consumer healthcare. GSK’s operations are further organized into segments, including Pharmaceuticals, Consumer Healthcare, Vaccines, and Corporate Executive Team.
Early Beginnings
GSK’s origin can be traced back to the Plough Court Pharmacy, which opened its doors in London in 1715. The pioneering establishment aimed to combat diseases and improve people’s health. Over the years, GSK has built upon the legacy of its predecessor companies, leveraging their expertise and achievements to produce a robust pipeline of medicines and vaccines.
Notable Government Contract in 2022
In January 2022, GSK received a$945 million contract modification from the U.S. Army. The task order involved the production of over 340,000 doses of sotrovimab, with an additional 715,000+ doses to be delivered by June 2022.
Humana
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- Revenue: $93 billion
- Year founded: 1961
- Headquarters: Louisville, Kentucky
- Founders: Wendell Cherry, David A. Jones, Sr.
About the Company
Humana a leading American health insurance provider, caters to millions of medical and specialty members with its comprehensive coverage. The company’s expansive network of healthcare providers enables easy access to doctors, dentists, vision care providers, and pharmacies, ensuring convenient and accessible healthcare services for its members.
With a particular focus on older Americans, Humana generates a significant portion of its revenue from Medicare Advantage while also offering its newer CenterWell business, which provides home care, pharmacy services, and primary care specifically tailored to seniors.
Early Beginnings
H. Wendell Cherry and David A. Jones, Sr. founded Humana in 1961. Initially established as Extendicare, a nursing home operator, the company underwent a transformative phase during the 1980s. Recognizing the exceptional performance of hospitals managed by local owners, Humana made a strategic decision to sell its nursing home operations and transition to owning and managing hospitals. This pivotal shift led to the renaming of the organization as Humana.
However, after experiencing the loss of a contract with a local health-maintenance organization in Arizona, Humana pivoted once again, this time becoming a health insurance plan provider. This transition proved instrumental in shaping Humana’s future trajectory. To complement its health insurance offerings, Humana established Galen as its hospital arm, ensuring a comprehensive approach to healthcare provision.
Notable Government Contract in 2022
In December 2022, Humana Military secured its sixth TRICARE East Region contract from the Department of Defense. This contract encompasses the provision of healthcare program benefits to a substantial population, including 4.6 million military service members, retirees, and dependents. The contract spans a one-year base period, with the possibility of eight annual option periods, allowing for a maximum contract duration of nine years if all options are exercised.
McKesson Corporation
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- Revenue: $264 billion
- Year founded: 1833
- Headquarters: Irving, Texas
- Founders: Charles Olcott and John McKesson
About the Company
McKesson is an American distributor of pharmaceuticals and a provider of health information technology, medical supplies, and care management tools, delivering a third of North America’s pharmaceuticals. Headquartered in Irving, Texas, McKesson operates in the U.K., Canada, and the U.S.
Early beginnings
McKesson started in 1833 when Charles Olcott and John McKesson opened Olcott & McKesson, a drug import and wholesale business. This formed one of the country’s first wholesale pharmaceutical drug distribution networks and became the largest supplier of wholesale chemicals, beverages, and pharmaceutical drugs.
Notable Government Contract in 2022
In March 2023, McKesson Medical-Surgical Government Solutions achieved a significant milestone by winning a five-year contract with the U.S. Department of VA. This contract falls under the Federal Supply Schedule (FSS) 65 II A, medical equipment, and supplies contract, specifically focusing on medical equipment and supplies. Through this contract, McKesson ensures enhanced accessibility to a wide range of medical surgical supplies, including disposable surgical instruments, respiratory equipment, bandages, and other products, more accessible.
Merck & Co.
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- Revenue: $59 billion
- Year founded: 1891
- Headquarters: Rahway, New Jersey
- Founder: George Merck
About the Company
Merck, a renowned German multinational science and technology company, plays a pivotal role in numerous critical areas, including oncology, vaccines, infectious diseases, and COVID-19, significantly impacting millions worldwide’s lives. Merck goes by the name MSD outside of the U.S. and Canada, which resulted from its merger in 1953 with Sharp & Dohme, one of the world’s leading pharmaceutical companies based in Philadelphia.
Early Beginnings
The roots of Merck & Co. trace back to its founding in January 1891 by George Merck. The company initially focused on distributing fine chemicals in New York City and the surrounding regions. Since then, Merck has evolved into a global powerhouse in healthcare.
Notable Government Contract in 2022
A notable government contract for Merck & Co., Inc. transpired in June 2021 when the company awarded a contract to the U.S. Army. This contract involved procuring 1.7 million courses of Molnupiravir (MK-4482), Merck’s experimental COVID treatment.
The agreement came to fruition after receiving Emergency Use Authorization approval from the Food and Drug Administration. The Department of Health and Human Services (HHS) and the Department of Defense (DoD) funded the project.
Pfizer
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- Revenue: $100 billion
- Year founded: 1849
- Headquarters: New York, New York
- Founders: Charles Pfizer and Charles F. Erhart
Pfizer, a publicly-traded multinational pharmaceutical and biotechnology company based in New York City, holds a prominent position in the healthcare industry and has been at the forefront of pioneering medical advancements over the past century. The pharmaceutical giant played a groundbreaking role by introducing mRNA technology, a revolutionary approach that departed from traditional viral components. Pfizer was also the first COVID-19 vaccine provider to the European Union and Japan.
Early Beginnings
Pfizer’s journey began in 1849 when Charles Pfizer and Charles Erhart established a fine chemicals business in a Brooklyn Factory with Charles Pfizer’s father’s funding. Their pioneering product is an anti-parasitic drug with a toffee-like flavor. It was an easy success due to the combined expertise of Pfizer as a chemist and Erhart’s experience as a confectioner, kickstarting the company’s development.
Notable Government Contract in 2022
In June 2022, Pfizer and BioNTech were awarded a $3.2 billion contract to manufacture, produce, and store 105 million COVID-19 doses with a maximum of up to 300 million. The companies were also responsible for developing variant-specific vaccines and single-dose vials to save on materials.
Triwest Healthcare Alliance Corp
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- Revenue: $1.4 billion
- Year founded: 1966
- Headquarters: Phoenix, Arizona
- Founders: David J. McIntyre, Jr.
About the Company
TriWest Healthcare Alliance manages health benefits for the U.S. Department of Veterans Affairs Patient-Centered Community Care (VAPCC) programs across Regions 3, 5, and 6. TriWest has emerged as a leading company, boasting an impressive annual revenue of $1.4 billion.
Early Beginnings
Triwest Healthcare Alliance was founded in 1996 when David J. McIntyre, Jr. co-founded and led the corporation. His goal was to provide high-quality healthcare to Veterans across a significant portion of the United States. Recognizing the gap in direct healthcare support from the Veterans Administration, McIntyre set out with a noble vision to ensure Veterans received the care they deserved. In its founding year, TriWest secured its first major contract for the TRICARE Central Region, an initiative to cover 16 states in the central part of the country.
Notable Government Contract in 2022
In December 2022, the Defense Health Agency awarded TriWest a$65 billion contract to provide managed care support for the TRICARE program in the West Region. This included supporting the healthcare delivery systems operations.
UnitedHealth Group
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- Revenue: $324 billion
- Year founded: 1977
- Headquarters: Minnetonka, Minnesota
- Founders: Richard Burke
About the Company
UnitedHealth Group is a Minnesota-based multinational managed healthcare and insurance company dedicated to improving the health and well-being of millions of individuals. With a vast presence, UnitedHealth Group serves over 85 million people in the U.S. and more than 125 countries worldwide.
UnitedHealth Group operates through two distinct yet complementary businesses:
- Optum leads the information and technology-enabled health services business and combines clinical expertise, technology, and data to empower partners and providers with the guidance and tools for better health.
- UnitedHealthcare delivers medical and dental benefits worldwide to provide affordable coverage, simplify the healthcare experience, and enable access to high-quality care.
Early Beginnings
UnitedHealth Group has a rich history, with UnitedHealthcare being founded in 1977. Fourteen years later, in 1991, the company rebranded as UnitedHealth Group, reflecting its expanded scope and diversified healthcare offerings. UnitedHealth Group has since become a prominent player in the healthcare industry, delivering comprehensive health benefits and services to millions of individuals.
Notable Government Contract in 2022
UnitedHealth Group’s continued success can be attributed to several factors, including its strong performance in serving members through Medicare Advantage and Medicaid programs, favorable pricing trends, and growth across its Optum businesses. The company’s health plans have entered into a contract with the federal government to provide essential services to seniors, including disease management, nurse help hotlines, vision, dental care, and wellness programs.
Top Federal Agencies Providing Healthcare Contracts
- Department of Health and Human Services
- Centers for Disease Control and Prevention
- Agency for Healthcare Research and Quality (AHRQ)
- Agency for Toxic Substances and Disease Registry (ATSDR)
- Food and Drug Administration (FDA)
- Health Resources and Services Administration (HRSA)
- National Institutes of Health (NIH)
- Indian Health Service
- Substance Abuse and Mental Health Services Administration (SAMHSA)
