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Non-TAA-Compliant Covered Drugs Must be Offered to the VA in the Coming Weeks

April 20, 2016, Covington Alert

The United States Department of Veterans Affairs (“VA”) recently announced a significant change in policy that will allow it to purchase drug products that were previously unavailable due to the Trade Agreements Act (“TAA”) because they were manufactured in countries with whom the United States does not have a procurement agreement in place. The VA has issued a mass modification to its Federal Supply Schedule (“FSS”) contracts for pharmaceutical products, Schedule 65 I B, requiring that contractors offer to the Government all single source and multiple source drug products (also referred to as SIN 42-2A products) that do not comply with the TAA (i.e., they are not U.S.-made or designated country end products). Despite its prior position, less than three years ago, that it would “remove all [SIN] 42-2A covered/branded drug products manufactured in a non-designated country . . . from all 65 I B Schedule contracts,” the VA has decided that “[w]e now accept covered drugs that were formally excluded due to their ‘TAA non-compliant’ nature.” Although this change in policy could represent significant opportunities for drug manufacturers to sell non-TAA-compliant drug products to the Government, the VA’s anticipated timeline may present a cause for concern.

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