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HHS spends $21.5 billion in healthcare contracts in 2014, report says

Merck & Co. received $1.4 billion from HHS in 2014, while Pfizer scored $856 million.

Susan Morse, Managing Editor

The Department of Health and Human ServicesThe Department of Health and Human Services

The Department of Health and Human Services spent $21.5 billion on contracts in fiscal  2014, an increase of 6.6 percent over last year, according to a new report card on government spending.

The second annual report card published by analytics firm Govini offers the private sector insights into the buying habits of the public sector.

Drug companies, government health insurance programs and IT are among HHS’s top vendors, according to the report.

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The amount of money to pharmaceutical companies has declined over the past three years, according to Director of Analytics Matt Hummer, though Big Pharma continues to head the list of top 10 vendors.

Merck & Co. received $1.4 billion from HHS in 2014, and Pfizer, $856 million, putting those companies in the number one and two spots respectively. GlaxoSmithKine came in fourth at $767.9 million. Sanofi Pasteur was listed in the seventh spot at $630.9 million, coming up in rank from number eight the year before.

[Also: Fitch Ratings bullish on for-profit healthcare]

Much of the money to drug companies is for vaccines, Hummer said. Sanofi secured an additional $35 million in government spending by providing the vaccinations HHS is buying, he said.

Meanwhile, business management consultant Livanta LLC moved up from number 572 in 2013 to 15 in 2014, capturing $123.5 million in funds. This was based on being awarded a quality improvement contract in the category of Dependent Medicare, according to Hummer.

Aerospace companies also captured HHS money through information technology contracts. DynCorp International is listed as third under top vendors, getting $627 million in contracts from HHS; Lockheed Martin Corp. scored $306.5 million.

[Also: These states had the most Obamacare grants]

Govini CEO Eric Gillespie founded the market intelligence platform three years ago, with offices in Washington, D.C. and San Francisco. The first two years were spent building the platform by collecting government data released by thousands of agencies, he said. Sometimes the information is only available for 48 hours.

“It’s impossible for businesses to catch that stream of data and make sense of it,” Gillespie said.

Govini sells the information to private businesses that use it for business development and sales; as business intelligence plotting the future of a company; and for potential mergers and acquisitions. Wall Street uses the information for equity analysis, Gillespie said.

“We’ve been selling the product now for 11 months,” Gillespie said. “We have 41 top government contractors as clients; 300 clients overall.”

This is the second annual scorecard based on the federal fiscal year, which runs from October through September.

Twitter: @SusanMorseHFN