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May 26, 2022

Baby formula shortage: What the US is doing now

Daily Briefing

    As families continue to struggle with the ongoing infant formula shortage, the federal government has implemented several measures to help bolster supply, including importing formula from Europe and easing regulations for foreign manufacturers.

    Cheat sheet: Infant health inequity

    Background

    Over the last few months, supply chain and staffing problems have contributed to a growing shortage of infant formula—a situation that was further exacerbated by a recall of several formulas produced by Abbott Nutrition, which makes up almost 50% of the market. The recall occurred after at least four infants developed bacterial infections and two died after consuming the formulas.

    So far, other manufacturers have had to fill the void and have largely been unable to ramp up their production quickly enough to meet surging demand.

    According to research from Datasembly, the national out-of-stock rate for infant formula reached 43% the week ending May 8, up 10% from last month's average. In addition, some states, including Arizona, Nevada, Tennessee, and Texas, had even higher out-of-stock percentages at 50% or more. With supply continuing to dwindle, many retailers, including CVS, Kroger, and Walgreens, have limited purchases of formula.

    Currently, many parents are trying to stretch their dwindling formula supplies as long as possible as they search for more formula or test alternative options.

    Families who rely on subsidies from the federal Women, Infants, and Children (WIC) program to purchase formula have been particularly affected by the shortage. Under the programs, recipients can only purchase formula from a state-contracted manufacturer, meaning that they cannot easily switch brands if the approved brand becomes available.

    "[U]nlike other food recalls, shortages in the infant formula supply affects a major — or even exclusive — source of nutrition for babies," said Brian Dittmeier, senior director of public policy at the National WIC Association, adding that insufficient nutrition "could have long-term health implications."

    Current efforts to expand supply and access to baby formula

    Following an agreement with FDA to reopen its formula plant in Michigan, Abbott on Tuesday said it plans to restart production on June 4, with batches of new formula available on or around June 20.

    In particular, the company said it would prioritize manufacturing Elecare, a specialty formula for infants with digestive issues or allergies. Abbott also said it will release around 300,000 cans of Elecare on a case-by-case basis to families who need it for free.

    The federal government has also launched several efforts to increase supply. For example, President Joe Biden last week invoked the Defense Production Act, which will require suppliers to prioritize baby formula manufacturers.

    In addition, the Biden administration launched "Operation Fly Formula," which aims to import 1.5 million 8-ounce bottles of three Nestlé S.A infant formulas that are currently in short supply in the United States. On Sunday, the first shipment of 500,000 bottles arrived in Indianapolis, and another shipment is expected to arrive at Washington Dulles International Airport in Virginia this week.

    "Typically, the process to transport this product from Europe to U.S. would take two weeks. Thanks to Operation Fly Formula, we cut that down to approximately three days," said White House press secretary Karine Jean-Pierre. "This is a testament of the president's commitment to pulling every lever to get more infant formula onto the market."

    FDA has also eased regulations surrounding imports of infant formulas from different countries. According to Susan Mayne, who leads FDA's food safety division, the adjusted guidelines will allow the agency more flexibility to allow overseas formulas into the United States after a quality control and safety review. These guidelines are a temporary measure and will be in place for the next 180 days.

    Currently, companies that can provide large shipments of formula, as well as documentation showing their products are safe and compatible with U.S. nutrition guidelines are being prioritized. So far, FDA is allowing Kendal Nutricare, a U.K.-based company, to import around 2 million cans of formula to help ease the shortage. Around 40,000 cans are ready for immediate shipment, and HHS said it is working to bring them to the United States as quickly as possible.

    "We continue to do everything in our power as part of the all-of-government efforts to ensure there's adequate infant formula available wherever and whenever parents and caregivers need it," said FDA Commissioner Robert Califf.

    Still, FDA acknowledged it could take weeks for new product to hit store shelves.

    The Federal Motor Carrier Safety Administration also issued a national emergency declaration to waive hours-of-service requirements for commercial drivers who transport baby formula ingredients and packaging, which will help speed up delivery of necessary supplies to manufacturers. These supplies include whey, casein, corn syrup, and hydrolyzed protein, among other ingredients and items.

    FTC to probe baby formula industry

    On Tuesday, the Federal Trade Commission (FTC) announced it began an inquiry into the baby formula industry. Through the inquiry, FTC will examine mergers and acquisitions among baby formula manufacturers, as well as potential deceptive practices, including price gouging, among sellers. The agency will also assess federal regulations and trade barriers preventing foreign companies from entering the U.S. baby formula market.        

    "The FTC is launching a public inquiry to identify the factors that contributed to the shortage or hampered our ability to respond to it," said FTC Chair Lina Khan. "Learning from this experience can help determine how we can minimize the risk of similar shortages in the markets for other life-sustaining products." (Aboulenein/Rajash, Reuters, 5/24; Christensen, CNN, 5/24; Whyte, Wall Street Journal, 5/16; Kollewe, The Guardian, 5/25; Shepardson, Reuters, 5/23; Perrone/Miller, Associated Press, 5/16; Bomey, Axios, 5/24; Ngo, New York Times, 5/24; CBS News, 5/23; Hutzler, ABC News, 5/22; Wile, NBC News, 5/17)

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