Weakness in Food and Drug Administration authority and a lack of risk management planning made it harder for the government and industry to recover from the 2022 infant formula shortage, according to a report by the National Academies of Sciences, Engineering and Medicine.
An extended shutdown of an Abbott Nutrition infant formula production plant in Michigan in 2022 caused a widespread infant formula shortage. Following the incident, there have been calls from Congress and consumer groups to revise some of FDA’s authorities and take action to better protect U.S. infant formula supply chains.
The NASEM report, contracted by the FDA as directed by the fiscal 2023 appropriations bill, reiterated some recommendations but examined the entire supply chain’s status.
Under the Food and Drug Omnibus Reform Act, FDA must review the list of nutrients and data related to international infant formula standards and consider revisions. The law also requires manufacturers to notify FDA ahead of supply disruption but grouped permanent discontinuation with interruption in notifying the agency, the report says.
These gaps, among other holes in FDA’s authorities, made it more difficult to respond, the report says.
To address these issues, the report recommends creating a database of global nutrition and labeling requirements to expedite importing formula during shortages. It also suggests setting a trigger to suspend tariffs and tariff-rate quotas on imported infant formula during market disruptions.
The report notes that, while producers of critical foods like formula must notify FDA about a potential disruption in supply, the reporting requirements may leave the agency with insufficient warning. To address this, the report recommends Congress amend the Federal Food, Drug and Cosmetic Act to require these manufacturers give proper notice, with FDA determining the minimum time necessary.
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The report found that the top three infant formula firms accounted for over 80% of the market in 2021 and 2022. Additionally, formula production was also concentrated in a few large facilities, which created vulnerabilities that led to supply disruptions.
WIC is not a driver of market concentration but is affected by it, said Ali Hard, policy director at National WIC Association. She said that the concentration causes concern abut the cost of formula and the ability to offer participants choice.
WIC purchases make up more than half of the U.S. infant formula market, making the program a significant stakeholder in the supply chain. The report found that WIC’s competitive bidding process is effective and saves up to $2 billion annually.
One of the biggest remaining gaps for WIC is potentially reforming infant formula procurement, Hard said.
However, she said it’s important to shift WIC from discretionary congressional appropriations to mandatory funding to provide stability for the program.
“We really see that opportunity to look at that kind of program reform on the funding side for WIC, and then that would allow us to really improve the way that the program operates and allow our staff to focus on what they do best,” Hard said.
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