The law has also been used to prevent hoarding, most recently of personal protective equipment, under President Donald Trump. Hoarding, an understandable impulse for parents trying to feed their children, has intensified this acute shortage. Using the law, for example, to limit the amount of formula a retailer can sell to each customer and redistribute supplies to low-supply areas, coupled with increased production of formula, could send new supplies to shelves in weeks, while limiting hoarding can keep it there.
The shortage stems in part from a February recall of products made at an Abbott plant in Sturgis, Michigan. Concerns about this Abbott factory date back to September 2021, when the Food and Drug Administration inspected Abbott factories for the first time in two years. In October 2021, a whistleblower alerted authorities that the company was falsifying records, releasing untested formula products and not properly cleaning the plant. (The FDA said it was investigating; the whistleblower’s report has not been independently verified. On Monday, the FDA reached an agreement with Abbott on the steps needed to reopen the facility. plant.)
But a deeper problem with the infant formula industry is market concentration. Four companies – Mead Johnson, Gerber and Perrigo, in addition to Abbott – account for about 90% of the market. Abbott alone owns around 40%, and at this level of concentration, the infant formula supply is more vulnerable to disruption. Additionally, imported infant formulas are subject to excessive customs duties, making it difficult for retailers to import at prices competitive to consumers. (This week, the FDA said it was easing some restrictions on which manufacturers can sell infant formula in the United States, but there has been no indication of pricing yet.)
In addition, contracts for infant formula covered by the Special Supplemental Nutrition Program for Women, Infants and Children have often been awarded to major manufacturers, with Abbott alone taking nearly 50% of the states.
This crisis is also the latest example of why the more than century-old Food and Drug Administration needs to be reformed and streamlined to separate its drug approval and food safety functions into specialized agencies. – which is the case in other advanced countries and in the European Union, which has a food safety agency and a separate medicines agency – so that it can more effectively investigate the failures of the food supply while being able to expedite the drug approval process. And Congress must exercise its constitutional role to provide adequate oversight of the agency.
In the long term, Congress and the executive branch need to bring more urgency and enact a holistic competition policy for our economy. Decades of lax antitrust enforcement have led to the highest levels of market concentration in decades across the entire US economy. Too many supply chains are vulnerable because our economy is built on efficiency rather than resilience.
There have been several efforts by members of both parties in Congress on competition policy. Among the antitrust bills, two promising approaches include the Competition and Antitrust Enforcement Act, introduced by Senator Amy Klobuchar, Democrat of Minnesota, which would make sweeping changes at the federal level, among other things. , enforcement resources, and enforcement of state antitrust law. Venue Act of 2021, introduced by Senators Klobuchar and Mike Lee, Republican of Utah (and in the House by Representative Ken Buck, Republican of Colorado), which would focus on the state’s antitrust efforts.