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Biden Administration Announces More Steps to Address Formula Shortage

— Invoking Defense Production Act, flying formula to areas of scarcity part of the plan

MedpageToday
A photo of nearly empty baby formula shelves in a Walmart grocery store.

WASHINGTON -- The Biden administration continues to try to shore up the baby formula supply, this time by invoking the Defense Production Act (DPA) to increase the availability of formula ingredients.

"The Secretary of Health and Human Services may use the authority under [the DPA] to determine, in consultation with the Secretary of Agriculture ... the proper nationwide priorities and allocation of all ingredients necessary to manufacture infant formula, including controlling the distribution of such materials (including applicable services) in the civilian market," according to a .

The origins of the shortage go back to February 17, when Abbott Nutrition announced a voluntary formula recall following concerns about bacterial contamination at the company's Sturgis, Michigan facility; four infants fell ill and two died after drinking the formula. While the plant has been offline, the administration has been working to ease the shortage, a senior administration official said in a phone call with reporters on May 12. On Monday, the FDA on how to solve the problems at the Sturgis facility, although for the facility to resume production.

At that time, the administration's actions included "cutting red tape to expedite the import of improved formula from other countries ... and we have been working with retailers to impose purchase limits to prevent the possibility of hoarding," the official said. In addition, "we have had ongoing work with all manufacturers of infant formula to bring products to market, and we have really seen that pay off" in terms of increased production.

That same day, President Biden met with representatives of formula retailers and manufacturers, including Walmart, Target, Mead Johnson, and Gerber "to talk to them about the work they're doing and call on them to do all they can to help families purchase and access infant formula," the official said. "The president discussed with Mead Johnson and Gerber their ongoing efforts to increase production. Their work has made up for the loss of production by Abbott."

By invoking the DPA, the administration "can direct firms to prioritize and allocate the production of key infant formula inputs" to speed up supply chains, an official said on a Zoom call with reporters Thursday. For example, making baby formula requires oil, fat blend, labels, and cans. "The company that makes one of those items, like a label, has a lot of customers, one of which happens to be infant formula manufacturers. And those infant formula manufacturers are likely a very small share of the overall market for that good. By having DPA authority available for infant formula, we make sure formula manufacturers are at the top of the list for that item."

The formula supply "seems to vary state by state," the official said. "There are some states in which the local authorities or retailers are saying they are not seeing challenges, and there are some states where people have suggested that there could be, but it has been interesting to hear the number of states who suggest that they're not actually [experiencing a problem]."

Another official added, however, that "it is a little bit difficult to interpret the data on shelf availabilities that retailers and industry analysts typically rely on, because the manufacturers have changed the types of products that they are offering out in the market. And so that is why we are working closely with the retailers and the manufacturers to understand the distribution right now."

On Wednesday, the Biden administration to send available formula from overseas to the areas that need it most. The administration will work with the Defense Department to identify a contracted commercial airline company, and "they will land at airfields that are close to the factory or a manufacturing facility," a senior official explained on the Thursday call. "The manufacturer actually tells us where it needs to be delivered, and that is to one of their facilities here in the United States because a portion of it ... has to go through FDA inspection, and then we will from there work through vendors and retailers to come to that manufacturing facility to pick it up and hopefully get it out to the communities that are most in need."

Also on Wednesday, the Department of Agriculture (USDA) documenting that nearly all states plus the District of Columbia, as well as several territories and Indian tribes, had received a waiver from a regulation requiring medical documentation for infants receiving certain food packages -- including formula -- under the Women, Infants, and Children (WIC) program.

"USDA's Food and Nutrition Service understands that requiring such documentation is not feasible as state agencies quickly respond to the COVID-19 related nationwide supply chain issues that have been exacerbated by this [Abbott] recall," the letter said. "A waiver to provide administrative flexibility to allow for the issuance of non-contract brand infant formula without medical documentation for infants in Food Packages I and II removes a requirement that under current circumstances could prevent the provision of essential program benefits to participants."

Meanwhile, Congress is also taking action. On Wednesday, the House -- mostly along party lines -- to help ease the formula shortage, The Hill reported. The main bill would give the FDA $28 million in emergency funding to improve formula plant inspections and better prepare the industry for supply chain disruptions; it is unclear whether the Senate will also pass the bills.

Some House members also want to learn more about the formula industry -- which is currently dominated by Abbott and two other large formula makers -- including how the shortage became so severe and how to prevent future shortages. The House Committee on Energy & Commerce on the issue next Wednesday.

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    Joyce Frieden oversees 51˶’s Washington coverage, including stories about Congress, the White House, the Supreme Court, healthcare trade associations, and federal agencies. She has 35 years of experience covering health policy.