TITLE:  Boehringer Ingelheim Pharmaceuticals, Inc., B-294944.3; B-295430, February 2, 2005

BNUMBER:  B-294944.3; B-295430

DATE:  February 2, 2005

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   Decision



   Matter of:   Boehringer Ingelheim Pharmaceuticals, Inc.



   File:            B-294944.3; B-295430



   Date:              February 2, 2005



   John A. Burkholder, Esq., and Frank Rapoport, Esq., McKenna Long &

Aldridge, for the protester.



   John S. Pachter, Esq., Jonathan D. Shaffer, Esq., and Sophia R.

Zetterlund, Esq., Smith Pachter McWhorter & Allen, for AstraZeneca

Pharmaceuticals LP, an intervenor.



   Melbourne A. Noel, Jr., Esq., Phillipa L. Anderson, Esq., and Philip S.

Kauffman, Esq., Department  of Veterans Affairs, for the agency.



   Ralph O. White, Esq., and Christine S. Melody, Esq., Office of the General

Counsel, GAO, participated in the preparation of the decision.



   DIGEST



   Protests arguing that solicitations for formulary drugs are unduly

restrictive because the solicitations limit competition to those drugs

within the class that treat certain conditions is denied where the limits

on competition reasonably reflect the agency's needs.   



   DECISION



   Boehringer Ingelheim Pharmaceuticals, Inc. (BI) protests the terms of two

solicitations issued by the Department of Veterans Affairs (VA) for

Angiotensin II Receptor Antagonists, also known as Angiotensin II Receptor

Blockers (or ARBs), for inclusion on the VA's National Formulary.  One

solicitation (request for proposals (RFP) No. RFP-797-NC-04-0016) seeks

one of two identified ARBs for the treatment of patients with both

hypertension and type 2 diabetes mellitus with nephropathy; the other (RFP

No. RFP-797-NC-05-0003) seeks one of two identified ARBs for the treatment

of patients with heart failure.  BI, the manufacturer of an ARB not

identified under either solicitation, argues that these solicitations are

unduly restrictive because they exclude ARBs that treat simple

hypertension, but do not treat the other conditions identified.



   We deny the protests.



   BACKGROUND



   BI manufactures one of seven ARBs available in the U.S., all of which are

approved by the Food and Drug Administration (FDA) for the treatment of

hypertension.  Drug Class Review at 1-2.  BI's ARB is referred to as

Telmisartan, and is marketed as Micardis(R).  All seven FDA-approved ARBs

are viewed as equally effective in treating hypertension.  Id. at 6. 



   The RFP seeking an ARB for the treatment of both hypertension and diabetic

nephropathy (RFP 0016) was issued on August 23, 2004, and is the subject

of a recent decision by our Office (Bristol-Myers Squibb Co., B-294944.2,

Jan. 18, 2005, 2005 CPD PA ___).  On its face, the RFP limited this

competition to two ARBs--Irbesartan (manufactured by BMS and Sanofi,

marketed as Avapro(R)) and Losartan (manufactured by Merck, marketed as

Cozaar(R)).



   The RFP seeking an ARB for the treatment of heart failure (RFP 0003) was

issued on October 14, 2004.  It limits competition to two other

ARBs--Candesartan Cilexetil (manufactured by AstraZeneca, marketed as

Atacand(R)) and Valsartan (manufactured by Novartis, marketed as

Diovan(R)).  Both RFPs anticipated award of a fixed-price,

indefinite-quantity contract for a base period of 1 year, with up to four

1-year options. 



   Prior to releasing these solicitations, the VA made several decisions that

are reflected in these two limited competitions.  In summary--but

discussed in greater detail below--these decisions were:  (1) to not add

an ARB to the VA's National Formulary for the treatment of hypertension;

(2) to select for the formulary one of the two ARBs shown to be effective

in treating diabetic nephropathy; and (3) to select for the formulary one

of two other ARBs shown to be effective in treating heart failure. 



   These decisions were made by doctors from the VA's Pharmacy Benefits

Management (PBM) Section, together with the VA's Medical Advisory Panel

(MAP)--a panel of 13 physicians throughout the VA and the Department of

Defense.  The process began with a Drug Class Review of all available

ARBs, which is appended to both RFPs.  Using the findings of the Drug

Class Review, the VA's PBM and MAP doctors prepared a second document

explaining the VA's approach to purchasing ARBs.  This document--also

appended to both RFPs--is entitled "Medical Determination of Minimum Needs

for VA National Formulary Selection of an [ARB]," hereinafter the "Medical

Needs Determination." 



   The VA decided not to add an ARB to its National Formulary for the

treatment of simple hypertension because ARBs are not the VA's preferred

method of treating simple hypertension.  Medical Needs Determination at 3;

Declaration of the MAP Chairperson, Dec. 13, 2004, at 3-4.  In fact, the

VA noted that there are four different classes of antihypertensive

medications, several of which should be tried prior to prescribing an ARB

for simple hypertension.  Medical Needs Determination at 3-4.  As a result

of the VA's guidelines establishing a hierarchy of preferred drug classes

for the treatment of simple hypertension--which places ARBs as a third or

fourth line of defense--the VA expects the use of ARBs to treat simple

hypertension to be rare.  Declaration of the MAP Chairperson, Dec. 13,

2004, at 4. 



   The second and third decisions described above--i.e., to select an ARB for

the formulary shown to be effective in treating diabetic nephropathy, and

to select a second ARB shown to be effective in treating heart

failure--are also set forth in the VA's Medical Needs Determination. 

Specifically, the VA took notice of medical literature describing research

showing that two of the seven ARBs available in the U.S. had been shown to

be effective in the treatment of diabetic nephropathy, and two others had

been shown to be effective in the treatment of heart failure.  Drug Class

Review at 1; Medical Needs Determination at 2-3.  The VA decided it could

enhance the care of its patients by holding a limited competition to

select one ARB from each of these two groups for the treatment of these

conditions.  Medical Needs Determination at 1. 



   As indicated above, BI's ARB, Telmisartan, is not one of the four ARBs

selected for these two limited competitions, as it was not one of the four

ARBs identified by the Drug Class Review as effective in the treatment of

diabetic nephropathy or heart failure.  This protest followed.



   DISCUSSION



   BI argues that these solicitations are unduly restrictive of competition. 

In BI's view, the two medical conditions for which the VA is limiting its

procurement of ARBs--i.e., diabetic nephropathy and heart failure--reflect

only a small percentage of the likely use of ARBs by VA patients for

simple hypertension.  Since BI contends that its drug could be used to

treat simple hypertension as well as the four drugs identified in these

solicitations--but effectively will not be available for this use because

it will not be on the formulary--BI argues that the agency is restricting

competition improperly.



   As a preliminary matter, we recognize that this protest reflects a larger

disagreement between VA officials and certain pharmaceutical

manufacturers, like BI, about the role of ARBs in the treatment of VA

patients with simple hypertension.  We also recognize that once a drug

within a class is placed on the VA's National Formulary, access to the VA

market, as a practical matter, is largely unavailable to other drugs

within that class.  See, e.g., Protester's Comments (B-294944.3), Jan. 10,

2005, at 4.  As a result, our discussion of these challenges necessarily

begins with the fact that the VA has decided that it does not need an ARB

on its National Formulary for the treatment of simple hypertension. 

Instead, the VA has recommended several other classes of antihypertensive

medications for the treatment of simple hypertension, before the use of an

ARB to treat this condition.   Medical Needs Determination atA 3a**4. 



   First and foremost, BI argues that the VA's conclusion that its need for

ARBs is limited to those that will treat the two conditions reflected in

these solicitations is flawed, and results in an unduly restrictive

competition.  Specifically, BI argues that there is no basis in fact for

the VA's conclusion that "there is presently no significant medical need

in VA for a national procurement of an ARB to treat simple hypertension." 

Declaration of the MAP Chairperson, Dec. 13, 2004, at 4.  In support of

its position, BI points out that ARBs are already being prescribed to

treat VA patients with simple hypertension, and that the need for ARBs to

treat hypertension is greater than the need for ARBs to treat either of

the two conditions the VA has used to limit the competition here. 



   While a contracting agency has the discretion to determine its needs and

the best method to accommodate them, Mark Dunning Indus., Inc., B-289378,

Feb. 27, 2002, 2002 CPD P 46 at 3-4; Parcel 47C LLC, B-286324; B-286324.2,

Dec. 26, 2000, 2001 CPD P 44 atA 7, those needs must be specified in a

manner designed to achieve full and open competition; solicitations may

include restrictive requirements only to the extent they are necessary to

satisfy the agency's legitimate needs.  41 U.S.C. SSA 253a(a)(1)(A),

(2)(B) (2000).  Where a protester challenges a specification as unduly

restrictive, the procuring agency has the responsibility of establishing

that the specification is reasonably necessary to meet its needs.  The

adequacy of the agency's justification is ascertained through examining

whether the agency's explanation is reasonable, that is, whether the

explanation can withstand logical scrutiny.  Chadwick-Helmuth Co., Inc.,

B-279621.2, Aug. 17, 1998, 98-2 CPD P 44 at 3.  A protester's mere

disagreement with the agency's judgment concerning the agency's needs and

how to accommodate them does not show that the agency's judgment is

unreasonable.  See AT&T Corp., B-270841 et al., May 1, 1996, 96-1 CPD P

237 at 7-8.  Specifically here, while we will review the reasonableness of

the agency's determination of its needs, we defer to the judgment of

agency medical officials on matters of medicine.  See GlaxoSmithKline,

B-291822, Apr. 7, 2003, 2003 CPD PA 77 atA 5. 



   We note first that there is no dispute in the record about BI's claim that

ARBs are already being prescribed for hypertension.  In fact, the VA

itself acknowledges that ARBs are appropriate for the treatment of

hypertension, after other antihypertensive medications have been used. 

Medical Needs Determination at 3-4.  In addition, there seems to be little

doubt that the incidence of simple hypertension in the VA patient

population is probably greater than the incidence of the two conditions

used to limit the competition here; for the sake of argument, we will

assume that this is true.



   That said, neither of these matters renders the VA's medical judgment

about its preferred prescribing practices, or its decision not to list an

ARB on the formulary for the treatment of simple hypertension,

unreasonable.  As we indicated in our decision in Bristol-Myers Squibb,

supra, at 6, the VA prefers that its doctors first prescribe diuretics and

beta blockers, then ACE inhibitors,[4] and then ARBs for the treatment of

simple hypertension.  Given these guidelines--which are clearly matters of

medical judgment entitled to deference here--the VA concludes that there

will not be any significant use of ARBs to treat simple hypertension. 

Based on our review, and with little evidence from BI to support a

different conclusion, we find reasonable the VA's estimate about the

extent to which ARBs will be used to treat VA patients with

hypertension.[5]  See Lederle-Praxis Biologicals Div., Am. Cyanamid Corp.,

B-257104 et al., Aug. 22, 1994, 94-2 CPD PA 205 atA 5. 



   With respect to any specific challenges to these solicitations--separate

and apart from its complaint that the VA should instead be purchasing an

ARB for the treatment of simple hypertension--BI lacks the direct economic

interest necessary to be considered an interested party in this protest. 

4 C.F.R. SA 21.0(a).  This is because BI's ARB has not been shown to be

effective in the treatment of either of the two medical conditions

identified in these solicitations, and thus does not qualify for inclusion

in the competition.  At best, BI complains that it should not be excluded

from the competition for an ARB to be used to treat heart failure (RFP

0003) because studies are underway that "might prove Micardis to be more

effective than either of the two selected drugs."  Protester's Comments

(Ba**295430), Dec. 23, 2004, at 8.  This argument, on its face, admits

that BI's drug has not yet been shown effective in this regard, and

supports our conclusion that BI is not an interested party here.[6]  In

addition, the VA suggests that if BI's ARB is later shown effective in the

treatment of heart failure, the agency may elect not to exercise its

option to continue this contract, and may instead hold a new competition. 

Agency Report (AR) (B-295430) at 11.



   In fact, it does not appear that BI is raising any challenge to these

solicitations that is separate from its complaint that the VA should be

placing an ARB on the formulary for the treatment of simple hypertension. 

For example, BI complains that the VA's decision to procure an ARB for the

treatment of heart failure is flawed because ACE inhibitors are the

primary therapeutic choice for patients with heart failure, and ARBs are

only a secondary choice for heart failure patients who cannot tolerate ACE

inhibitors.  In fact, the VA concurs with BI's description of the primary

and secondary therapeutic choices for patients with heart failure. 

Declaration of the MAP Chairperson, Dec. 13, 2004, at 4.  Nonetheless, BI

asks our Office to conclude that it is unreasonable for the VA to procure

an ARB for the second-line treatment of heart failure because of the

relatively small number of patients who will need the drug for this

purpose.  Tellingly, BI argues that by purchasing an ARB for the treatment

of heart failure, "the VA is eliminating competitive sources and

decreasing the likelihood of getting a lower price for the primary

treatment of hypertension."  Protester's Comments (B-295430), Dec. 23,

2004, at 7 (italics in original). 



   While this argument is framed as an attack on the solicitation for an ARB

to treat heart failure, we think it remains, essentially, an attack on the

decision not to select an ARB for the treatment of simple hypertension--a

decision we find reasonable, as explained above.  More importantly, we do

not think it falls to our bid protest forum to tell the VA that not enough

patients will need the second-line treatment for heart failure to justify

the agency's selection of those drugs for its formulary.  This is again a

matter of medical judgment within the agency's discretion.  See

GlaxoSmithKline, supra.



   With respect to BI's contention that the solicitations here include an

impermissible bundling of agency requirements--i.e., bundling the

requirement for a drug to treat simple hypertension with the requirement

for a drug to treat either diabetic nephropathy or heart failure--we

disagree.  As shown above, the VA has not identified any significant

requirement to use an ARB for the treatment of simple hypertension.  Nor

does the agency have an estimate, at this juncture, of how frequently ARBs

will be used for the treatment of simple hypertension, given the agency's

stated hierarchy of preference in the treatment of this condition. 

Accordingly, the facts do not support a conclusion that this procurement

is combining two concrete requirements--a necessary ingredient of

bundling.  See EDP Enters., Inc., B-284533.6, May 19, 2003, 2003 CPD PA 93

at 4; Phoenix Scientific Corp., B-286817, Feb. 22, 2001, 2001 CPD PA 24 at

5.



   As a final matter, we feel compelled to address the undercurrent of

arguments throughout these pleadings implying that VA personnel are acting

in bad faith--e.g., BI's assertions that the VA doctors are "hiding the

ball," or have "a real objective" different from the objectives the agency

claims.  Protester's Comments (B-294944.3), Jan. 10, 2005, at 3;

Protester's Comments (B-295430), Dec. 23, 2004, at 3.  Based on our review

of these protests--as well as our review of two other protests filed

against these procurements--we have seen nothing in the record to support

such a conclusion.  Specifically, our review does not indicate that VA

officials are hiding information about their decisions, or that they have

an objective other than those claimed. 



   The protests are denied.



   Anthony H. Gamboa



   General Counsel



   ------------------------



   [1] A formulary is a list of prescription drugs, grouped by therapeutic

class, which a health care organization prefers that its physicians

prescribe.  Drugs are chosen for a formulary on the basis of their medical

value and price.  The formulary system seeks to standardize drug use,

ensure availability and consistency of the product for nationwide usage,

increase the continuity of care, standardize the process for evaluating

the safety and efficacy of drugs, and manage cost growth.  Schering Corp.,

B-286329.3, B-286329.4, Feb. 2, 2001, 2001 CPD PA 19 at 2 n.2; VA Health

Care:  VA's Management of Drugs on its National Formulary,

(GAO/HEHS-00-34, Dec. 14, 1999) at 4.



   [2] For ease of reference, the remainder of this decision will refer to

the medical condition of type 2 diabetes mellitus with nephropathy as

"diabetic nephropathy."



   [3] BI also contends that these solicitations are violating terms of the

company's Federal Supply Schedule (FSS) contract with the General Services

Administration.  In our view, BI's complaint that the solicitation here is

usurping requirements that BI contends should be placed against its FSS

contract is a matter of contract administration beyond the scope of our

bid protest jurisdiction.  See Bid Protest Regulations, 4 C.F.R.

SA 21.5(a) (2004). 



   [4] "ACE inhibitors" is a short-hand reference to angiotensin-converting

enzyme inhibitors.  Id. at 3 n.4.



   [5] As also indicated in our decision in Bristol-Myers Squibb, supra, at

8, we recognize that these procurements will result in the first listing

by the VA of ARBs on its National Formulary.  To the extent that dosing

data is developed over the life of the contract that suggests heavier than

expected use of ARBs to treat simple hypertension, the VA may want to

reconsider whether it should procure an ARB for the treatment of simple

hypertension.  



   [6] For the record, we also do not think BI can reasonably claim that the

VA engaged in unequal treatment by including AstraZeneca's ARB,

Candesartan Cilexetil, in this solicitation because that drug is not

FDA-approved for the treatment of heart failure.  The VA cited several

medical studies which determined that AstraZeneca's ARB is effective in

the treatment of heart failure.  Supp. Declaration of MAP Chairperson,

Jan. 14, 2005, at 3.  In addition, AstraZeneca points out that there is no

requirement that the VA limit its use of drugs to the indication for which

the drug was approved by the FDA.  Based on our review, there is nothing

in this record to indicate that the VA cannot reasonably rely upon the

studies it cites to include AstraZeneca's ARB in this procurement.