Agriculture

Infant formula shortage suddenly Topic A in Washington

The problem has been brewing for months, but politicians in both parties have recently seized on the issue, as the White House scrambles to ease the crunch.

A national shortage of infant formula that was months, if not years, in the making, is suddenly consuming Washington as both Democrats and Republicans try to wrest control of the political narrative.

Republicans are blaming President Joe Biden for the shortage, claiming it’s part of the fall-out from his economic policies — and that his administration was too slow to act when problems with the formula supply first materialized. The White House, meanwhile, is scrambling to help ramp up production while fellow Democrats in Congress are raising potential antitrust concerns about the infant formula sector, which is dominated by four companies.

The problem has been brewing for months. Infant formula stocking rates started dipping significantly last summer, amid broader supply chain woes, according to data from Datasembly. The shortage worsened over the holidays. A major recall of Abbott Nutrition products in February exacerbated an already strained situation.

The company’s infant plant in Sturgis, Mich. — which made a significant portion of the entire U.S. formula supply — has been shut down since mid-February, the result of a Food and Drug Administration investigation after four infants who consumed formula from the plant were hospitalized with a rare bacterial infection, Cronobacter sakazakii. Two died. Since then, the agency and the company have been in talks about how to reopen the plant, which has been cited for serious food safety lapses. The agency also found five strains of Cronobacter in the plant. A whistleblower had raised concerns about the plant to top FDA officials in October, as POLITICO previously reported.

The company has maintained its products are not the likely source for the infections and that it has worked to address any food safety issues flagged by FDA.

While the infant formula recall has gotten the most attention, the shortage of specialty formulas is an increasingly urgent and potentially life-threatening situation, as POLITICO recently reported, because the Sturgis plant manufactured the lion’s share of these formulas that are sold in the U.S.

Abbott Nutrition has also begun releasing limited supplies of specialty formulas, which are the sole nutrition for thousands of infants, children and adults with rare metabolic, gastrointestinal and allergic conditions (the products were made during the period of recall).

Corporate consolidation: Democrats, for their part, are now raising red flags about market consolidation and what role that may have played in the shortage. Sens. Cory Booker (D-N.J.), Amy Klobuchar (D-Minn.) and Tammy Duckworth (D-Ill.) led a letter to Agriculture Secretary Tom Vilsack Friday urging USDA to use its powers to make the market more competitive. The ask comes a day after Duckworth wrote to the FTC asking for a formal study of the sector.

In 2018, it was estimated that four companies — Abbott Nutrition, Mead Johnson, Nestle and Perrigo — controlled 89 percent of the U.S. market, an “alarming level of corporate concentration,” according the lawmakers. Abbott Nutrition, the company that makes Similac, controls around 40 percent of the infant formula market, they said.

Republican fire: Republicans have been relentless in recent days in trying to pin blame on Biden.

“Bare Shelves Biden needs to STOP passing the buck and address his baby formula shortage,” tweeted House Republican Conference Chair Elise Stefanik. “American families are once again suffering because of him.”

The shortage issue fits into the broader political debate over rising prices in the U.S., as the right tries to push Biden’s approval numbers even lower ahead of the midterms.

“Record-high inflation, skyrocketing gas prices, and a baby formula shortage,” tweeted Sen. Marsha Blackburn (R-Tenn.) this week. “American families deserve better.”

On Friday, former President Donald Trump weighed in, saying in a statement that it was “unthinkable that in the year 2022 American families are unable to get baby formulas for their children,” and calling it “a mark of eternal shame on the Democrat Party.”

House Democrats: House Speaker Nancy Pelosi, in a letter to congressional Democrats, said the shortage was “unconscionable and tragic.” Unlike other Democrats, Pelosi made no effort in the letter to credit the Biden administration for continuing to work with the FDA while taking other steps to resolve the shortage, but said House Democrats would take several steps to try to help resolve the issue.

Pelosi said Rep. Rosa DeLauro (D-Conn.), who chairs the Appropriations Committee, is planning to bring an emergency supplemental spending bill to the House floor “to immediately address the infant formula shortage.” DeLauro and other committee leaders are planning congressional hearings on the matter. Democrats will also work on legislation to “grant emergency authority to the WIC program to address supply chain disruptions and recalls,” Pelosi said, referring to the federal nutrition program for low-income women, infants and children.

White House steps: Pelosi’s letter came shortly after the White House announced on Friday that Abbott has agreed to extend WIC rebates for all their contracted products until the end of August, following a letter requesting the change from Agriculture Secretary Tom Vilsack.

Abbott had previously been resistant to extending the deadline, according to sources familiar with the situation. The flexibility essentially means the company is paying for WIC families to get formula from its competitors — a massive financial and brand hit.

An Abbott spokesperson confirmed the agreement to POLITICO. The spokesperson also added the company has prioritized infant formula production at its Columbus, Ohio facility and air shipped millions of cans of infant formula powder into the U.S. from its FDA-registered facility in Cootehill, Ireland since the Michigan plant shutdown.

Biden, asked by reporters Friday afternoon if the administration should have acted more quickly, replied, “If we’d been better mind readers, I guess we could’ve. But we moved as quickly as the problem became apparent to us.”

“We have to move with caution as well as speed,” Biden added. “Because we gotta make sure what we’re getting is in fact first-rate product. That’s why the FDA has to go through the process.”

White House press secretary Jen Psaki said during a Friday press briefing the WIC rebates and other moves to increase flexibility were the “top issue” formula manufacturers raised with the president during a meeting on Thursday.

Psaki also said the Health and Human Services Department has launched a new web page, hhs.gov/formula, where parents can go to obtain formula and other guidance amid the shortages. She said the administration would announce additional steps in the coming days.

FDA import plans: FDA chief Robert Califf said on Friday the agency will announce plans next week to import more infant formula from abroad. Califf said FDA would “outlin[e] how manufacturers and suppliers abroad may import their products into the U.S. along with additional flexibilities for domestic manufacturers and suppliers.”