The Department of Veterans Affairs (VA) recently announced a significant policy change that will now require drug manufacturers to make drugs that are “covered drugs” under the Veterans Health Care Act (VHCA) available to the VA under the manufacturer’s Federal Supply Schedule (FSS) contract, even if those drugs are not compliant with the requirements of Trade Agreements Act (TAA). The announcement from the VA establishes aggressive deadlines for compliance, which manufacturers should note.

In a posting on the VA’s website, the agency announced that, “[w]e are now requiring that all covered drugs, regardless of country of substantial transformation, be available on a 65 I B FSS contract. In other words, we now accept covered drugs that were formally excluded due to their ‘TAA non-compliant’ nature.” By way of background, the TAA mandates, among other things, that Federal purchasers may only acquire products that are made or “substantially transformed” in either the United States, or certain designated countries. Prior to this policy announcement, products offered under the VA Schedule Program that were end products of countries other than the United States or the permissible designated countries would not be eligible for the award of a FSS contract.

If a manufacturer does not currently have a 65 I B FSS contract in place, the VA states that they will need to establish an Interim Agreement to “bridge the gap while negotiating a VA Schedule contract.” 

The VA announced the following key dates in connection with the new policy announcement:

April 19, 2016

A Constant Contact Notice was distributed with addition procedures and link to Mass Modification 0004.

April 26, 2016

Deadline for submitting Non-FAMP data for the TAA non-compliant covered drugs, if the manufacturer has not already been submitting Non-FAMP data for those products.

May 6, 2016

Deadline for submission of signed Mass Modifications, requests for modification to add TAA non-compliant drugs, and Interim Agreements.

June 6, 2016

Date by which all TAA non-compliant drugs must be on an FSS contract or an Interim Agreement.

Manufacturers should review their current FSS contracts in place with the VA to determine if any changes are necessary, and monitor the VA’s website and other communication channels for additional guidance in the months to come.