The Veterans Health Administration (VHA) transitioned from its historic depot and medical center warehouse system for the acquisition and storage of pharmaceuticals to a pharmaceutical prime vendor concept beginning in 1991.  In July 1993, the Secretary of Veterans Affairs made the decision to close VA’s Depots and endorsed the system-wide implementation of pharmaceutical prime vendors.  The pharmaceutical prime vendor program utilizes just-in-time acquisition/inventory processes, a proprietary web-ordering system, and provides a myriad of contract reports.

The Pharmaceutical Prime Vendor (PPV) is mandatory for VA and is the biggest contract within the National Acquisition Center with approximately $4 billion in annual sales.  The PPV is a concept of support whereby a primary commercial distributor serves as the provider of a broad range of pharmaceuticals to VA facilities and a multitude of Other Government Agencies (OGA).  The PPV services over 750 customers in the 50 United States, the Virgin Islands, Saipan, Puerto Rico and Manila, Philippines, for just-in-time deliveries of Government-contracted pharmaceutical products.  Pricing for the majority of the pharmaceutical products distributed through the PPV are established by the Federal Supply Schedule.

In addition to VA, other Federal Government customers eligible to use VA’s prime vendor contracts are U.S. Public Health Service (Indian Health Service), Bureau of Prisons and the Immigration and Naturalization Service.  Authorized State Veterans Homes that have sharing agreements with VA facilities also are eligible to use the contract.