sizes (Damian-Medina et al., 2024; Sylvetsky et al., 2024). Larger tub sizes meant that, even with purchasing limits, consumers were able to purchase large amounts of infant formula at once.

Furthermore, families who only needed small amounts of infant formula (e.g., those who feed mostly breast milk with supplemental formula) were forced to buy more infant formula than needed. Inadvertent stockpiling was also an unexpected outcome from infant formula leftover after caregivers switched brands. Many families purchased several types of infant formula during the shortage because of gastrointestinal issues resulting from unexpected brand switching, causing an inadvertent “stockpiling” of unused formula. The commonality of this experience was evidenced by parental sharing of opened infant formula cans through informal networks (NASEM, 2023d; Sylvetsky et al., 2024).

The Role of Cronobacter sakazakii in Precipitating the 2022 Infant Formula Shortage

Cronobacter sakazakii contamination of powdered infant formula in the United States was an important factor in the development of the 2022 infant formula shortage. Cronobacter sakazakii is a gram-negative bacterium that produces a yellow pigment and ferments lactose, producing a gas during fermentation (Farmer, 2015). According to the Bacteriological Code, Cronobacter sakazakii was initially called Enterobacter sakazakii in 1980, but, as more information became available, a new genus, Cronobacter, was proposed to include Enterobacter sakazakii and other organisms (Farmer, 2015). The first documented cases of neonatal meningitis attributable to this organism were published in 1961 (Urmenyi and Franklin, 1961). Between 1961 and 2018, 183 unique infants with either bacteremia or meningitis from 24 countries were identified by a literature search,¹² World Health Organization (WHO)/Food and Agriculture Organization (FAO) report, and the Centers for Disease Control and Prevention (CDC) (Strysko et al., 2020). The most common source of the infection was opened containers of powdered infant formula, and the case counts were significantly higher during the later years of the study (Strysko et al., 2020). CDC receives two to four reports of infant Cronobacter sakazakii infection each year; however, as it was not a notifiable disease in many states, the true incidence is not known (CDC, 2023a).

Cronobacter sakazakii is a serious, often deadly infection for infants younger than 2 months of age or who were born prematurely, as well as for the elderly and those who are immune suppressed (CDC, 2023a;

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¹ Meaning there is bacteria present in the blood (Smith and Nehring, 2017).

² Inflammation of the membrane covering the brain and spinal cord (CDC, 2022a)

Strysko et al., 2020). Neonates can develop sepsis,³ meningitis, and necrotizing enterocolitis.⁴ Infants who develop meningitis and survive may experience lifelong neurological complications (Ling et al., 2022). Studies suggest that Cronobacter sakazakii has the ability to cross the intestinal and blood brain barrier, which allows for a potential path for infection of the central nervous system after ingestion (Almajed and Forsythe, 2016).

Cronobacter sakazakii is commonly found in the environment; on food preparation surfaces; on vegetable matter, meats, cheeses, and fish; in dried products such as teas, cereals, herbs, and spices; and in many other foods (CDC, 2023a; FDA, 2023b). As mentioned, Cronobacter sakazakii has been found in opened containers of powdered infant formula, as well as the apparatus used by mothers to pump breast milk (Bowen et al., 2017; Strysko et al., 2020). Cronobacter sakazakii cannot survive pasteurization, but it can survive spray drying (Arku et al., 2008), a process often used in the preparation of powdered infant formulas. It is possible for Cronobacter sakazakii to form a biofilm, which can become a significant problem if the biofilm occurs on the equipment used to process foods (Ling et al., 2020).

Because Cronobacter sakazakii is found in the environment, infant formula that does not undergo terminal pasteurization can become contaminated from the ingredients, from the processing plant itself, and from the employees (EFSA, 2004; Feder and Pugno, 1986). In addition, Cronobacter sakazakii may not be evenly distributed in a low-moisture product, such as powdered infant formula; as a result, a sample may test negative but still be contaminated (Arku et al., 2018; Jongenburger et al., 2011). Most recently, concern for contamination of powdered infant formula was noted in a plant where standing water was present in equipment that should have been dry (Berfield and Edney, 2022). Finally, powdered infant formula can become contaminated in the home environment once a can is opened, from surfaces or utensils used in preparing the infant formula (Bowen et al., 2016). Of note, Salmonella spp. contamination was also identified at the Sturgis plant, and these bacteria can affect infants of any age (Abbott Nutrition, 2022a).

U.S. GOVERNMENT RESPONSE TO THE 2022 INFANT FORMULA SHORTAGE

This section includes a description of the actions taken by various government entities in response to the closure of the Abbott plant and

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³ Sepsis occurs when chemicals released in the bloodstream to fight an infection trigger inflammation throughout the body (CDC, 2023b).

⁴ Inflammation of the intestine leading to bacterial invasion causing cellular damage and necrosis of the colon and intestine (Ginglen and Butki, 2024).

the infant formula shortage in 2022. The committee developed a timeline of key events (see Figure 5-1) based on information provided to the committee (see Appendix C).

Centers for Disease Control and Prevention

As soon as the initial illnesses were reported, CDC collaborated with FDA as appropriate on the investigation (CDC, 2022b; FDA, 2022b) analyzed infant formula samples from batches that were part of the Cronobacter sakazakii investigation, and in March 2023, CDC released results of genome-wide sequencing from the infected infants (CDC, 2022b; FDA, 2022b), and produced information that could be accessed directly by parents and repurposed by health care providers for dissemination to families (CDC, 2022c). CDC also provided advice for caregivers, provided information on Cronobacter sakazakii, and described the cases identified (CDC, 2022b).

Flexibilities Related to USDA Programs

Initial Response

More than half of infant formula is consumed by participants in the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC), which is administered by the U.S. Department of Agriculture’s (USDA) Food and Nutrition Service (FNS). Shortly after FDA notified USDA of the possibility of a disruption to the infant formula supply, USDA acted to mitigate the effect on WIC participants.

On February 18, 2022, the day after the recall was announced, USDA issued a series of resources, including a public-facing webpage on infant formula safety⁵ and guidance⁶ on returns and exchanges of recalled product, questions and answers about the recall, and information on how state WIC agencies could request waivers related to infant formula shortages (see Appendix C). Rules that could be waived included the requirement for medical documentation to issue non-contract non-exempt infant formula to healthy infants and requirements regarding the container sizes and amount of infant formula provided. USDA also issued a questions and answers document to help guide operators to support families with infants in the care of providers participating in the Child and Adult Care Food Program (USDA, 2022a).

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⁵ https://www.fns.usda.gov/fs/infant-formula (accessed April 21, 2024).

⁶ https://www.fns.usda.gov/wic/voluntary-recall-certain-abbott-powder-formulas (accessed April 21, 2024).

effect through June 30, 2023 (USDA, 2023a). Products sold by companies that notified FDA of their intent to take steps for imported exempt infant formulas to remain on the U.S. market continue to be allowable within WIC through 2025. Table 5-1 describes the number of waivers that were issued during the 2022 infant formula shortage.

Prior to February 2022, USDA’s only WIC-related standing waiver authority was in the event of a major disaster declaration, which was authorized under the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 USC § 5121-5207). In February 2022, USDA was able to use this authority because the major disaster declarations related to COVID-19 were in place nationwide. Had the shortage not occurred during the COVID-19 pandemic, USDA would not have been able to issue waivers to respond to an infant formula recall and would not have had the authority to issue nationwide waivers (7 CFR § 246). In August 2022, USDA transferred the existing waivers to its new waiver authority under the Access to Baby Formula Act (ABFA) to allow them to remain in effect to provide state agencies with 60 days’ notice following the expiration of the major disaster declaration (USDA, 2022f).

Exempt infant formula for infants with special medical needs is not covered by WIC contracts and waivers were not needed to issue it, but state WIC agencies took steps to facilitate access to it. In June 2023, USDA sent a letter to state WIC agencies reminding them of ongoing flexibilities that did not require a waiver (USDA, 2023b). These included obtaining medical documentation by phone before obtaining it in writing to expedite issuance; encouraging health care providers to prescribe multiple WIC infant formulas; revising the WIC medical documentation form to list product-specific options (e.g., by creating a checklist of state-authorized infant formulas, including store brands); and establishing a way for health care providers to submit medical documentation to WIC directly (USDA, 2023b).

WIC Contract Flexibilities

State WIC infant formula contracts generally require WIC to issue only contract-brand non-exempt infant formula in specific container sizes and forms. Even if a state WIC agency has a waiver from federal rules, the contract must have a provision relaxing its usual constraints under specific circumstances to allow the issuance of infant formula in other container sizes, physical forms, or brands. Following the recall, Abbott agreed to relax these provisions in the contracts they held so those state WIC agencies could make use of federal waivers. These states also needed more non-exempt infant formula sold by other companies because, as described in Chapter 4, the WIC contract brand tends to dominate the

state market. Reckitt Benckiser-Meade Johnson (RBMJ) and Nestlé/Gerber sent some of their infant formula to alleviate the shortages.

States that held contracts with Nestlé/Gerber and RBMJ also experienced shortages (Stamm, 2022). While these companies were still obligated to provide infant formula under their WIC contracts, they had a financial incentive to send infant formula to states in which they did not hold the WIC contract where the state would pay the full wholesale price (and obtain a rebate from Abbott). When shortages emerged in the states contracting with Nestlé/Gerber and RBMJ, some of these WIC state agencies sought to issue non-contract-brand infant formula without medical documentation. To do so, they needed a waiver from USDA and also needed to make sure that it would be allowed under their infant formula contract. Some states had to modify their contracts to allow for this flexibility. In a May 2022 letter to state health commissioners, USDA encouraged state WIC agencies to work with their contract-holding manufacturer on flexibilities (USDA, 2022g).

WIC Infant Formula Costs

If state WIC agencies had to pay full price on non-contract infant formulas, their food costs would increase substantially, possibly jeopardizing their ability to serve all eligible families that sought to participate. Thus, a critical question was whether the state WIC agencies that had contracts with Abbott would receive rebates from Abbott if they issued another manufacturer’s infant formula. Although state infant formula contracts varied in their requirements, as soon as the recall was announced, Abbott began voluntarily providing rebates on non-contract-brand formulas to the state WIC agencies with which it held contracts (Abbott Nutrition, 2022c). USDA negotiated for an extension of the rebates at points when Abbott had announced they would end (Abbott Nutrition, 2022b), and they remained in place until January 31, 2023.

In contrast, however, when state WIC agencies that had contracts with RBMJ or Nestlé/Gerber received waiver and contract flexibility to issue non-contract infant formula, these companies did not provide rebates on the non-contract brands. The lack of rebates raised a concern for states about whether they would be permitted to use federal funding to cover the additional cost and whether sufficient federal funding was available. In the May 2022 letter to state health commissioners mentioned above, USDA clarified that state WIC agencies contracting with RBMJ and Nestlé/Gerber could use federal funds to cover the cost of issuing non-contract infant formula (USDA, 2022g). To contain costs, state WIC agencies used this flexibility on a limited basis.

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⁷ Public Access File available by request via the National Academies. https://www.nationalacademies.org/our-work/challenges-in-supply-market-competition-and-regulation-of-infant-formula-in-the-united-states (accessed April 11, 2024).

health of infants (FDA, 2023c). Twenty-two non-exempt infant formulas (from the United Kingdom, Australia, Ireland, New Zealand, Singapore, and Spain) made by eight companies (two of which already operate in the United States) received a letter of enforcement discretion (FDA, 2023c). Seven exempt infant formulas (from Mexico, Spain, and the Netherlands) made by six companies received a letter of enforcement discretion, with two of the six companies currently operating in the United States (FDA, 2023c). The guidance document noted that the enforcement discretion would remain in effect until November 14, 2022 (FDA, 2022c).

In September 2022, FDA, in updated guidance, noted that companies that received a letter of enforcement discretion could continue to sell infant formula in the United States, as long as they took actions to achieve compliance with the statutory and regulatory requirements by October 18, 2025 (FDA, 2022c,d). This updated guidance also indicated that companies that had not received a letter of enforcement discretion from FDA could continue to seek FDA review in accordance with FDA regulations (FDA, 2022d).

Operation Fly Formula

On May 19, 2022, the White House announced that it would begin transporting infant formula from other countries into the United States (U.S. Embassy, 2022). The infant formula importation was referred to broadly as “Operation Fly Formula” and initially focused on exempt infant formulas but quickly moved to include non-exempt infant formulas (White House, 2022). In addition, tariffs on infant formula were removed at that time. The tariffs were reinstated in January (Boehm, 2023).

Access to Baby Formula Act

On May 21, 2022, the bipartisan ABFA (P.L. 117-129) was enacted. In June 2022, USDA implemented the ABFA provisions with a letter to WIC state agencies (USDA, 2022h). In December 2023, USDA published a final rule, which took effect on February 12, 2024, specifying in more detail how the ABFA would be implemented.

WIC Provisions

The legislation included several WIC-related provisions. First, the ABFA created a standing waiver authority to be used to address a supply chain disruption or emergency. The waiver authority covered regulatory provisions that had been waived during the 2022 infant formula shortage—

regarding returns and exchanges; medical documentation for non-contract, non-exempt infant formula for healthy babies; container sizes; and monthly allowances. It also allowed for waivers of other provisions, as needed, to provide WIC benefits, so long as the waiver does not substantially weaken the nutritional quality of the foods provided by WIC. Waivers last for up to 45 days, with extensions requiring at least 15 days’ notice, and ending no later than 60 days after the end of a supply chain disruption or emergency.

Second, the ABFA required USDA and HHS to enter into a formal agreement to facilitate communication and coordination regarding supply chain disruptions, including recalls.

Third, the ABFA requires each state WIC agency’s infant formula contract to include “remedies in the event of an infant formula recall, including how an infant formula manufacturer would protect against disruption to program participants in the State” (USDA, 2022i). Through the Final Rule published on December 23, 2023, USDA established more specific implementation requirements. The state WIC agency had to be the entity to determine when remedies take effect and remain in effect. In addition, each state’s infant formula contract had to include certain provisions and may include additional remedies to protect WIC participants. These remedies included allowing infant formula to be issued in all unit sizes, even if they exceed the maximum monthly allowance (but the state WIC agency and infant formula manufacturer had to prioritize unit sizes that most closely provide the maximum monthly allowance); and allowing non-contract-brand infant formula to be issued without medical documentation to infants.

The Final Rule also required the company of any contract-brand infant formula that is subject to a recall, to provide an action plan that includes supply data within a time frame established within the contract to meet infant formula demand and limit the disruption to WIC participants, and to pay rebates on competitive, non-contract-brand infant formula.

The requirement for an infant formula manufacturer to pay rebates on competitive, non-contract infant formula when its products are subject to a recall is particularly important. As described above, during the 2022 Abbott recall, Abbott voluntarily provided rebates on non-contract infant formula when it was available to WIC participants. Requiring such payments instead of relying on voluntary action by companies puts USDA and state WIC agencies in a better position to respond to future recalls.

Bidder Requirements

Although not addressed in the ABFA, USDA’s implementing Final Rule changed the requirements regarding bidders on infant formula WIC

contracts. To bid, the Final Rule required infant formula companies to register with HHS, certify that their infant formulas comply with FDA regulations, and be “responsive” (see Chapter 4 for USDA definition of responsive). Through ABFA rulemaking, USDA eliminated the requirement that bidders be “responsive,” which also eliminated the opportunity for state WIC agencies to establish technical requirements related to resiliency or quality.

Emergency Preparedness

The ABFA implementing rule also required state WIC agencies to include an emergency preparedness plan, referred to as a plan for alternative operating procedures, in their state WIC plan. The alternative operating procedure plans are required to meet the criteria in 7 C.F.R. § 246.4(a)(30), including adjustments to certification, benefits, food package issuance, and vendor requirements; a procedure to ensure continuity of services for especially vulnerable participants; a communications plan; and a plan for working with emergency planning and response agencies covering the state. USDA’s 2021 Guide to Coordinating Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) Services When Regular Operations Are Disrupted (2021 USDA Guide; USDA, 2021) has not been updated since the shortage to fully incorporate these changes. Both the 2021 USDA Guide and requirements regarding state alternative operating procedure plans lack guidance for how USDA and states should design a governance structure for crisis response that clearly articulates all private-sector stakeholders, civil society stakeholders, and government agencies that need to be involved; what is expected of them; and how the response will be coordinated at the state level. Such governance structures and accompanying dashboards for crisis management were suggested in other contexts (e.g., COVID-19 testing) (Anupindi et al., 2020). Moreover, there is no template or infrastructure for a dashboard for WIC staff to track critical data on the supply and shortages of infant formula at the state level. There is also a lack of guidance for states that lack infrastructure to build a data analytics team to track product availability at WIC-authorized vendors.

In addition, current plan protocols (including those related to 7 CFR § 246.12) emphasized the provision of information about supply from the contract manufacturer and information about demand from vendors to the state WIC agency. However, a distributor may serve a region that includes multiple states and territories, complicating this provision of information to state WIC agencies. In addition, manufacturers may not

be cognizant of final points of sale, since in some cases that decision is made by a wholesaler or distributor. Even large vendors do not always realize when their in-house distributor routes product to one state, leaving shelves bare in another WIC contract state. Currently, under 7 CFR § 246.12, vendors are not required or encouraged to provide information about which wholesaler or distributor they use to supply WIC state or territory agencies, nor are they required to notify WIC agencies in the event of an unusual increase in sales or decrease in product availability in real time.

During the shortage, state WIC agencies reported sending staff to individual retail sites to determine where products were in short supply, exacerbating staffing shortages (NASEM, 2023a).

Federal Trade Commission Investigation

On May 24, 2022, the Federal Trade Commission (FTC) launched an investigation into the infant formula shortage (FTC, 2022a). FTC took three steps to examine and address any anticompetitive, unfair, or deceptive acts or practices that contributed to or exacerbated the infant formula shortage (FTC, 2022b). First, FTC investigated and took enforcement actions against persons that deceived, exploited, or scammed American families trying to buy infant formula. Second, it examined whether infant formula manufacturers and distributors were “engaging in unlawful forms of economic discrimination” that may have been “limiting the availability of formula at certain retailers.” Third, FTC issued a request for public comments on “factors that contributed to the shortage or hampered our ability to respond to it.” As part of this effort, FTC noted it would work with USDA to determine if any changes to WIC policy may be “necessary to promote competition and resiliency in the infant formula market to prevent future shortages” (FTC, 2022c). FTC solicited comments from the public on factors that may have contributed to the shortage and other relevant topics (see Box 5-1) (FTC, 2022c).⁸ FTC released the results of their investigation on March 13, 2024 (FTC, 2024). The FTC report did not make specific recommendations, but observed generally the level of concentration in the infant formula market and explored whether policy changes had the potential to promote greater resiliency in the marketplace (FTC, 2024).

Formula Act and Bulk Infant Formula to Retail Shelves Act

On July 21, 2022, the Formula Act (P.L. 117-160) was enacted in an attempt to encourage more imports of infant formula ingredients and final

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⁸ https://www.regulations.gov/docket/FTC-2022-0031 (accessed April 21, 2024).

product into the United States. The law temporarily suspended the 17.5 percent tariff on imports of infant formula. The Bulk Infant Formula to Retail Shelves Act (P.L. 117-192), which was enacted on October 10, 2022, expanded a limiting quota on tariffs on imports of bulk infant formula base powders and suspended the tariff of $1.035/kg plus 13.6 percent between October 13, 2022, and December 31, 2022 (CBP, 2022). Base powders are a key input into the manufacture of infant formula, requiring only the addition of nutrients and other additives to be transformed into the final product. Reducing tariffs on this input was intended to encourage increases in domestic manufacture of infant formula (Larson, 2022).

The tariff waivers took months to put in place. The suspension of tariffs may have helped mitigate costs during the shortage, but, as already discussed, the Congressional Research Service noted that tariffs were

not likely the main factors limiting imports at the onset of the shortage (CRS, 2022). They noted in late May 2022 that imports from Ireland had increased faster than imports from U.S. free trade area partners and suggest instead that non-tariff barriers in the form of regulations likely played a role. Figure 5-2 shows U.S. imports of infant formula (products for infants ages 0–12 months only) from various country sources.

While imports from an FDA-registered plant in Ireland did spike briefly during the summer that tariffs were suspended, they began rising months before the suspension of tariffs. The differential between imports from Ireland and imports from U.S. trade agreement partners does not appear to be driven for any extended period by the suspension of tariffs. The suspension of tariffs in late July 2022 may have encouraged slightly higher imports from New Zealand. To the degree that non-tariff barriers, such as quality factors, may be the primary limiting factors, the sudden and temporary suspension of these non-tariff barriers (as through FDA enforcement discretion) could be too short-lived to justify a shift in the

long-term output for exports of infant formula to the United States from New Zealand (Moodie, 2022).

To increase imports into the United States in 2022, FDA used enforcement discretion and the White House airlifted product into the country (FDA, 2022c; White House, 2022). These conditions are an indication that during normal times, trade barriers prevent formula produced in other countries from entering the U.S. market.

The very small percentage of imported formula consumed in the United States combined with the difficulty that manufacturers, retailers, and the U.S. government faced when the need to bring more formula into the country was acute implies that the U.S. infant formula market can be characterized as almost completely closed to imports owing to extremely high trade barriers, a condition economists call autarky.⁹

It is plausible that prior to the shortage, tariffs may have deterred some overseas producers from undertaking large, fixed costs involved in getting necessary approvals to export to the United States, making it harder to pivot to these products when urgently needed. However, the Congressional Research Service concluded that tariffs did not seem to be the major barrier keeping infant formula from entering the United States during the crisis, noting that imports from Ireland which face the full tariff grew faster than imports from Chile and other free trade partners that face no tariffs (CRS, 2022). Therefore, the general tariffs (of under 20 percent) on the final product are not likely, by themselves, to have been a prohibitive factor for imports during shortage. Reducing tariffs during the shortage may have helped prevent or mitigate some increases in costs to consumers.

Actions by the FDA Commissioner

Evaluation of Infant Formula Response

In September 2022, Dr. Steven Solomon,¹⁰ director of FDA’s Center for Veterinary Medicine, released his internal agency review of the response to the 2022 infant formula shortage in response to FDA Commissioner Dr. Robert Califf’s May 25, 2022, request (FDA, 2022a). Dr. Solomon’s report included five major areas of need within his findings and recommendations for FDA (see Box 5-2). In December 2023, FDA provided an update

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⁹ https://www.britannica.com/money/autarky (accessed April 21, 2024).

¹⁰ Dr. Solomon previously worked in the Office of Regulatory Affairs which houses the inspectional programs and he was not involved in from day-to-day activities of the offices/centers directly involved in the response.

on its actions to strengthen supply chain resiliency in response to the evaluation (FDA, 2023b).

Reagan-Udall Foundation Report and FDA Reorganization

On December 6, 2022, an independent expert panel, convened and facilitated by the Reagan-Udall Foundation at the request of FDA Commissioner Dr. Califf in July 2022, submitted its report, Operational Evaluation of the FDA Human Foods Program, to FDA (Reagan-Udall Foundation, 2022). The aim of Dr. Califf’s request was to evaluate ways to strengthen FDA’s food regulatory role. The report produced a set of recommendations on how to move toward a more enabling and effective culture; change the structure within FDA to address challenges facing the Human Foods Program; increase and expand its financial, personnel, and technological resources; and it suggested new authorities that could strengthen the Human Foods Program (Reagan-Udall Foundation, 2022).

Following the release of the report, in January 2023, FDA announced it would develop a proposal to create a unified Human Foods Program and new Office of Regulatory Affairs. The proposal was released, and

as of December 2023, was under review by the Secretary of HHS (FDA, 2023d,e).¹¹ The Unified Foods program areas include:

Food and Drug Omnibus Reform Act of 2022

On December 29, 2022, the Food and Drug Omnibus Reform Act of 2022 (FDORA) as part of the Consolidated Appropriations Act of 2023 (P.L. 117-328) was enacted (see Box 5-3). Each provision is described in more detail below.

Section 3401, “Protecting Infants and Improving the Formula Supply,” of FDORA amended the Infant Formula Act to require FDA to review the nutrients in infant formula “every 4 years as appropriate” (21 USCS § 350(a)(i)). Congress additionally authorized FDA to “revise the list of nutrients and the required level for any nutrient” in accordance with its findings from the review (21 USCS § 350a(i)). During such review, FDA is required to “consider any new scientific data or information related to infant formula nutrients, including international infant formula standards” (21 USCS § 350a(i)).

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¹¹ As of May 30, 2024, the reorganization has been approved and implementation will begin on October 1, 2024. https://www.fda.gov/news-events/press-announcements/fdas-reorganization-approved-establishing-unified-human-foods-program-new-model-field-operations-and (accessed June 3, 2024).

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¹² In 1982, FDA promulgated regulations on Infant Formula Requirements Pertaining to Current Good Manufacturing Practice, Quality Control Procedures, Quality Factors, Records and Reports, and Notification (21 CFR § 106). The good manufacturing practices are designed to ensure that infant formula provides the required nutrients and “is manufactured in a manner designed to prevent adulteration of the infant formula” (21 USCS § 350a(b)).

backfill the supply of the manufacturer’s infant formula supply if the current domestic supply of such infant formula has fallen, or is expected to fall, below the expected demand for the formula” (21 USCS § 350a-1(h)). After submission of the plan of action, FDA shall promptly submit a report to the Committee on Health, Education, Labor, and Pensions of the Senate and the Committee on Energy and Commerce of the House of Representatives (21 USCS § 350a-1(h)). The report must include “information concerning the current domestic supply of infant formula, including a breakdown of the specific types of formula involved; and an estimate of how long current supplies will last.” If the recall will affect more than 10 percent of the domestic production of infant formula intended for sale in the United States, FDA’s report must additionally include “actions to work with the impacted manufacturer or other manufacturers to increase production,” “any additional authorities needed regarding production or importation to fill a supply gap, and any supplemental funding necessary to address the shortage” (21 USCS § 350a-1(h)). This provision also sunsets on September 30, 2026.

FDORA’s new provisions require FDA to complete an inspection of an infant formula manufacturing facility “impacted by a recall” (21 USCS § 350a-1(i)). FDA must also provide the manufacturer a list of actions necessary to “address deficiencies contributing to the potential adulteration or misbranding of product at the facility, and safely restart production at the facility” (21 USCS § 350a-1(i)). The manufacturer must provide a “written communication” to FDA listing the “corrective actions to address manufacturing deficiencies identified” during the facility inspection. A time frame for the manufacturer’s written communication is not clearly written into the law and may be an area for FDA regulation; however, within 7 days of FDA receiving the manufacturer’s written response, FDA must “provide a substantive response to such communication concerning the sufficiency of the proposed corrective actions” (21 USCS § 350a-1(i)). FDORA states that if a reinspection is required “to ensure that such manufacturer completed any remediation actions or addressed any deficiencies,” FDA “shall reinspect such facility in a timely manner” (21 USCS § 350a-1(i)). Importantly, FDORA requires HHS to “prioritize and expedite an inspection or reinspection of an establishment that could help mitigate or prevent a shortage of an infant formula” (21 USCS § 350a-1(i)).

Inspections

In terms of standard inspections, FDORA clarified that “in accordance with a risk-based approach,” FDA must “conduct inspections, including unannounced inspections, of the facilities (including foreign facilities) of

each manufacturer of an infant formula” not less than one time per calendar year (21 USCS § 350a-1(i)). FDA is also required to “ensure timely and effective internal coordination and alignment among” its Office of Regulatory Affairs and Center for Food Safety and Applied Nutrition.

Regarding foreign infant formula manufacturing facilities, FDORA requires the Secretary of HHS to meet with “representatives from other countries to discuss methods and approaches to harmonizing regulatory requirements for infant formula, including with respect to inspections” (21 USCS § 350a-1(f)). Moreover, FDA is permitted to “rely on inspections conducted by foreign regulatory authorities, under arrangements or agreements, and conducted by state agencies under contract, memoranda of understanding, or any other obligation” (21 USCS § 350a-1(i)). FDORA also permits FDA to “recognize the inspection of foreign establishments that manufacture infant formula for export to the United States” through agreements or arrangements with foreign governments (21 USCS § 350a-1(f)).

National Strategies

FDORA also requires both the U.S. government and infant formula manufacturers to create strategies to protect the infant formula supply chain. Congress required the Secretary of HHS, in consultation with other departments and agencies, including USDA, to develop and issue

The law required development of both immediate and long-term national strategies.

FDA’s immediate strategy must increase resiliency of the infant formula supply chain by

1. “assessing causes of any supply disruption or shortage of infant formula in existence as of [December 29, 2022] and potential causes of future supply disruptions and shortages;
2. assessing and addressing immediate infant formula needs associated with the shortage; and
3. developing a plan to increase infant formula supply, including through increased competition” (21 USCS § 350a-1(j)).

infant formula that provide a similar assurance of safety and nutritional adequacy as the requirements” of the FDCA (21 USCS § 350a-1(m)).

FDORA stated that “persons considering the personal importation of infant formula should consult with their pediatrician about such importation” (21 USCS § 350a-1(m)). Moreover, the law required that if a “health care provider becomes aware of any adverse event,” which they “reasonably” suspect was associated with infant formula imported by consumers for personal use, the health care provider “shall report such adverse event” to FDA (21 USCS § 350a-1(m)). While during the shortage, FDA exercised enforcement discretion for imported infant formulas entering interstate commerce, this authority is separate from personal importation by consumers.

FDORA also required FDA to post on its website information for consumers, including that infant formula imported for personal use may not have been manufactured in a facility that has been inspected by FDA, the labeling of such infant formula “may not meet the standards and other requirements” applicable to infant formula under the FDCA, and that the nutritional content of such infant formula “may vary from that of infant formula meeting such standards and other requirements” (21 USCS § 350a-1(m)).

Labeling

FDORA required the Secretary of HHS to participate in meetings with representatives from other countries to discuss methods and approaches to harmonize regulatory requirements, including labeling requirements (21 USCS § 350a-1(f)).

Office of Critical Foods

FDORA established a new category of food, “critical foods” (21 USCS § 350a-1), which includes infant formula and medical foods, as defined in section 5(b)(3) of the Orphan Drug Act. FDORA required FDA to establish an Office of Critical Foods to be responsible for oversight, coordination, and facilitation of activities related to critical foods (21 USCS § 350a-1). As of May 2024, FDA had started the process of establishing an Office of Critical Foods within the Center for Food Safety and Applied Nutrition (FDA, 2023e).

Meaningful disruptions

New requirements for critical food include provisions relating to the “meaningful disruption” of the infant formula supply. Meaningful disruption is defined as “a change in production that is reasonably likely to lead to a significant reduction in the supply of a

critical food by a manufacturer that affects the ability of the manufacturer to meet expected demand for its product” (21 USCS § 350m(a)(4)(A)). The law considers both “interruptions” and “permanent discontinuations” to be meaningful disruptions. The law also clarifies that “meaningful disruptions” do not include disruptions caused by routine maintenance issues or those caused by “changes or discontinuance of flavors, colors, or other insignificant formulation characteristics, or insignificant changes in manufacturing so long as the manufacturer expects to resume operations in a short period of time” (21 USCS § 350m(a)(4)(B)).

In case of a meaningful disruption in the infant formula supply, such as through interruption or permanent discontinuance of the manufacture of a critical food, the manufacturer must notify FDA “as soon as practicable, but not later than 5 business days after such discontinuance or such interruption” (21 USCS § 350m(a)(1)). Within 5 calendar days of receiving this notification, if FDA determines the disruption resulted in, or is likely to result in, a shortage of a critical food, FDA shall distribute information on such shortage to the Secretary of Agriculture and “to the maximum extent practicable to the appropriate entities, as determined by the Secretary” (21 USCS § 350m(a)(2)). This information distribution date triggers additional measures. FDORA amended the Infant Formula Act to require FDA to waive the 90-day premarket notification requirement “and apply a 30-day premarket submission requirement” to the introduction of, or delivery for introduction of, any new infant formula into interstate commerce to commence on this information distribution date (21 USCS § 350a(j)). The waiver of the 90-day premarket notification must remain in effect for 90 days from the information-distribution-date, or “such longer period” as FDA determines is appropriate, “to prevent or mitigate a shortage of infant formula” (21 USCS § 350a(j)).

To further reduce any negative effects of any future disruption, FDORA further amended the Infant Formula Act to allow FDA to “waive any requirement” under the Infant Formula Act “to facilitate the importation of [exempt] infant formula” during a shortage of [exempt] infant formula (21 USCS § 350a(m)). FDORA suggests that such a waiver “may be applicable to (A) the importation of [exempt] infant formula from any country” that is determined by FDA to be “implementing and enforcing requirements for infant formula that provide a similar assurance of safety and nutritional adequacy as the requirements” of the Infant Formula Act; or (B) “the distribution and sale of such imported [exempt] infant formula” (21 USCS § 350a(m)).

Redundancy risk management plans

FDORA also requires each manufacturer of critical foods to “develop, maintain, and implement, as appropriate, a redundancy risk management plan that identifies and evaluates

risks to the supply of the food, as applicable, for each establishment in which such food is manufactured” (21 USCS § 350m(b)). The law suggests that the risk management plan “may identify and evaluate risks to the supply of more than one critical food, or critical food category, manufactured at the same establishment” and “may identify mechanisms by which the manufacturer would mitigate the impacts of a supply disruption through alternative production sites, alternative suppliers, stockpiling of inventory, or other means” (21 USCS § 350m(b)). FDA may inspect this plan under its authority to inspect factories, warehouses, establishments, and vehicles for the introduction of infant formula into interstate commerce, which includes providing FDA with access to relevant records (21 USCS § 374).

In November 2023, FDA shared information on the new requirement for manufacturers of a critical food to develop a redundancy risk management plan (FDA, 2023g,h), as required by FDORA. FDA repeated FDORA’s requirements in a resource for industry, stating that the risk management plan may

As of April 2024, FDA is developing guidance for manufacturers in response to the FDORA requirements.

National Strategy to Increase Resiliency

In March 2023, FDA released its Immediate National Strategy to Increase the Resiliency of the U.S. Infant Formula Market (FDA, 2023a). This strategy documented FDA’s observations during the 2022 infant formula shortage and described its immediate actions and further plans to improve the resiliency of the infant formula market. A brief description of FDA’s strategy to increase resiliency of the infant formula market can be found in Box 5-4, including the role that this current report will play in FDA’s strategy.

The Immediate National Strategy also describes FDA’s efforts to provide education and communication materials for parents, caregivers, and medical providers, and it summarizes the new authorities received in FDORA (FDA, 2023a). These actions include improving accessibility of existing FDA educational materials, coordinating with WIC to distribute consumer education materials, and enhancing partnerships with health

care providers and professionals to build a consumer education program (FDA, 2023a). In addition, the strategy describes FDA’s operational improvements, including revising its consumer complaint procedure, expanding required infant formula training for investigators, expanding the agency’s capacity to analyze infant formula samples and to facilitate infant formula reviews, and issues instructions for improved routine surveillance inspections (FDA, 2023a).

purchasing these exempt formulas for infants who did not have a medical need for them (Abrams and Duggan, 2022; Marino et al., 2023; Sylvetsky et al., 2024).

The marketplace dynamics led to substantial shortages of key exempt infant formulas even though relatively small amounts of these are used in the marketplace, compared to non-exempt formulas (FDA, 2023a; Sylvetsky et al., 2023). When production was restarted at the Sturgis facility, exempt hydrolyzed amino acid–based formula and exempt metabolic formulas were among the first to be produced (Abbott Nutrition, 2022b).

Non-exempt infant formula

Prior to the closure of Abbott’s plant in Sturgis, Michigan, there were no recalls on any non-exempt infant formula. However, Abbott’s plant closure in February 2022 caused a decrease in the availability of non-exempt infant formula (Sylvetsky et al., 2024). After the recall and closure of the Abbott Sturgis facility, other U.S. infant formula manufacturers worked to increase production of infant formula to compensate for the disruption (FDA, 2023a).

To increase the volume of infant formula leaving the manufacturing facility, infant formula was packaged in larger cans (NASEM, 2024a). Abbott also increased imports of infant formula from its plant in Ireland (an FDA-registered plant). Abbott indicated in May 2022 that it was “making daily air deliveries from Ireland and this year [2022] will triple the amount of powder imported from Ireland” (Kulisch, 2022). RBMJ indicated in December 2022 that “its formula factories are operating 24/7, and that it was feeding more than 40 percent of all low-income WIC infants” (Reuters, 2022a). Coordinating this increase in production by federal officials and manufacturers was challenging (NASEM, 2024a). As mentioned in Chapter 4, caprine-based (goat’s milk) infant formula was a new type of non-exempt product that entered the market during the shortage under enforcement discretion (Jung et al., 2023a).

Downstream Supply Chain

This section of the report covers how distribution and retail portions of the supply chain functioned during the 2022 infant formula shortage.

Distribution

A lack of transparency in how distributors move infant formula through the supply chain did not trigger any major concerns before the 2022 infant formula shortage. However, during the shortage, the lack of transparency made it impossible for officials to adequately target the source of insufficient stock of infant formula reported by retailers (NASEM, 2024b). In a public session, the committee heard that, during

the shortage, manufacturers submitted relatively routine updates (i.e., data) on production, but the location of the infant formula between the manufacturer and the retailer was unknown (NASEM, 2024b).

Vendors

Retail

Anticipating shortages, in response to the Sturgis plant closure and recall initiation, in February 2022 (see Appendix C) FDA requested that the Food Industry Association (FMI) ask retailers to limit sales to no more than five cans per shopper, which was relayed to retailers immediately (NASEM, 2023d). However, it was unclear how effectively these measures were implemented by retailers across the nation (Reuters, 2022b). According to congressional testimony offered by an owner and manager of a small grocery in Georgia, his company limited the number of canisters customers could purchase at one time, as well (Gay, 2022). In spite of these measures, shortages of infant formula in the United States peaked during the summer of 2022. Out-of-stock rates, typically measured as non-availability of products on retail shelves, ranged from 18 to 70 percent (Jung et al., 2023b), with rates above 90 percent in several states including Arizona, Mississippi, California, Nevada, Tennessee, Rhode Island, Louisiana, Florida, and Washington, many of which were states that held WIC contracts with Abbott (see Figure 5-3) (USDA, 2022j). Measures of out-of-stock rates on shelves,¹³ however, did not account for availability of substitute products that consumers may have had access to during this period; in fact, on-shelf availability rates showed slightly better product availability (Nielsen IQ, 2022).

While multiple news organizations reported that infant formula manufacturers increased production over time, some store shelves remained minimally stocked owing to multiple causes, including potential difficulties in moving stock from one distribution center to another, as well as long-standing disparities in food access and distribution for those living in rural communities, neighborhoods without major grocery stores, and tribal communities (Bustillo, 2022; Ketels, 2022). These smaller retailers are likely not part of the data collected by third-party data collection companies such as Nielsen and Information Resources, Inc., calling attention to the scarcity of real-time data (NASEM, 2024b).

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¹³ Note that third-party data collection companies used different metrics and methodologies for measuring shortages of infant formula, resulting in sometimes wide differences in the reported out-of-stock rates as seen in FDA’s Immediate National Strategy to Increase the Resiliency of the U.S. Infant Formula Market (FDA, 2023j).

hospital after discharge (NASEM, 2023d). The committee heard from a senior advisor from the Centers for Medicare and Medicaid Services that at least one hospital delayed discharge for fear that patients would not be able to obtain infant formula on their own (NASEM, 2024a). For metabolic formulas, in April 2022, FDA issued an updated advisory and worked with health care providers to ensure awareness of Abbott Nutrition’s process for releasing metabolic formulas on a case-by-case basis from the Sturgis plant (see Appendix C).

For healthy term-born infants with a brief postnatal stay, it was not clear—as reported during the committee’s information-gathering sessions (see Appendix D)—whether there were additional incremental efforts in maternity, neonatal, and pediatric wards to support breastfeeding given the infant formula shortage. However, it is noteworthy that rates of breastfeeding initiation, which generally occurs in-hospital, among both WIC-eligible participants and WIC-eligible nonparticipants increased during the shortage and fell again post-disruption, but remained higher than pre-disruption levels (Thoma et al., 2024).

Given the clinical expertise in larger hospital centers on how to substitute one type of infant formula (exempt and non-exempt) for another, and the greater resources available in a larger center, the effects on infants and their families were mitigated somewhat while in-hospital. For example, clinicians in larger hospital centers typically had the support of a purchasing department and a designated academic or sales representative from the manufacturer or the distributor to help navigate the crisis (NASEM, 2023d). An understanding of the inventory at larger hospitals by the infant formula manufacturer or distributor allowed for the movement of available supplies where needed. Larger hospitals within a network sometimes provided support to smaller hospitals (NASEM, 2024a). In addition, the electronic medical record usually contains only the infant formula or infant fortifier in the hospital’s dispensary, so some time is required to make infant formula substitutions, as it needs to go through a review process and health care providers cannot pivot quickly (NASEM, 2023d).

During a public session, a supply chain administrator from a major hospital chain mentioned that during the shortage, hospitals began increasing buffer stock inventories (NASEM, 2023d). According to the supply chain administrators, inventories peaked at an approximately 6-month supply of some products, but the hospital has since found this large inventory both far exceeded what was needed and was excessively costly and disruptive to maintain (NASEM, 2023d). Some concern was expressed in a public session with hospital providers about possible con-

version to just-in-time ordering at some hospitals,¹⁴ which may reduce their effectiveness in managing a future shock, as the goal is to keep as little inventory on hand as possible and only order as needed (NASEM, 2023d).

Information Flow

During the 2022 infant formula shortage, FDA partnered with the software company Palantir to develop a data analytics platform that could be used to compile and analyze supply chain information. That platform, 21 Forward, was originally developed as a cross-agency effort to identify supply chain interruption risks during the COVID-19 pandemic, but its power to bring together disparate data to provide a common operating picture for organizations to operationalize decisions made it a valuable tool in addressing the infant formula shortage (see Appendix D). Manufacturers voluntarily reported data to help track supply chain shortages, which allowed USDA, FDA, and the White House to conduct analyses and run reports using the same set of data points.

However, in a public session, it was suggested that the system had data gaps in downstream flows of infant formula products to consumers (NASEM, 2024b). Further because the system was not completely developed and input data were limited, 21 Forward could not be used to proactively surveil and identify likely risks to avert a shortage (NASEM, 2024b). In September 2023, 21 Forward was moved to FDA’s Office of Digital Transformation with the hope that it could remain a secure system and evolve into a tool for anticipating shortages and facilitating inter- and intra-agency dialogue to avert a future infant formula shortage (FDA, 2023b). As of April 2024, there has been no further update on how FDA plans to design, build, and maintain this platform.

CHARACTERIZING DEMAND DURING THE SHORTAGE

This section describes how the demand for infant formula was affected by the 2022 infant formula shortage. It includes descriptions of consumer behavior, as well as the effect the shortage had on families.

Consumer Behavior During the 2022 Infant Formula Shortage

The infant formula shortage that occurred in 2022 was a traumatic time for U.S. families of all income levels that rely on infant formula to

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¹⁴ Just-in-time is an inventory managing method that focuses on keeping as little inventory on hand as possible (Baluch and Bottorff, 2023).

feed their infants. A study conducted by Sylvetsky et al. (2024), surveyed mothers of infants under 8 months old in the District of Columbia and found that the infant formula shortage resulted in:

1. adverse effects on mothers’ mental and emotional health,
2. significant financial and intangible costs for families,
3. changes in infant feeding practices,
4. social and family networks coming together to navigate the shortage, and
5. mothers feeling fortunate to have resources to breastfeed or obtain infant formula (Sylvetsky et al., 2024).

The shortage of infant formula that began in 2022 followed periodic and location-specific shortages experienced by some families during the COVID-19 pandemic. However, when Abbott shut down its Sturgis plant after its recall of powdered infant formulas, shortages became widespread. Options that were available to families with formula-fed infants in the United States were to purchase breast milk from donor banks, purchase available infant formula at retail locations, or purchase domestic or imported infant formula online (Cernioglo and Smilowitz, 2023; Sylvetsky et al., 2024). The infant formula that was available for purchase in-store or online may not have been the usual brand or container size purchased, however. The committee is aware that during the 2022 infant formula shortage, a small amount of pasteurized donor human milk was accessed by families of healthy term-born infants when breast milk and infant formula was unavailable (Cernioglo and Smilowitz, 2023).

Consumer Experience

During the 2022 infant formula shortage, caregivers spent substantial time and financial resources to obtain infant formula, including travel and the mobilization of extensive social networks (NASEM, 2023d,e; Sylvetsky et al., 2024). Access to time, financial resources, and a larger social network resulted in a greater probability of obtaining infant formula, exacerbating income-based disparities (Damian-Medina et al., 2024; Sylvetsky et al., 2024). Parents also relied upon gray market sources of infant formula,¹⁵ including obtaining opened cans of infant formula from other families (NASEM, 2023d).

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¹⁵ Obtaining infant formula via social networks, including family, local parents’ groups, and strangers connected via the Internet. These practices included sharing and trading opened cans of infant formula (Boak and Eaton-Robb, 2022).

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¹⁶ WIC participant experiences were collected via e-mail (a convenience sample). All 50 state WIC agencies were contacted via e-mail asking to collect participants to “describe their experiences during the shortages.” All comments can be accessed in the project’s Public Access File: https://www8.nationalacademies.org/pa/managerequest.aspx?key=HMD-FNB-23-04 (accessed May 21, 2024).

tracted with Abbott (USDA, 2022j). By concentrating state infant formula markets and reducing the availability of alternatives to the WIC contract brand, WIC’s competitive bidding process has a potentiating effect on shortages of the WIC contract brand and results in other brands being less available to buffer such a shortage. While states holding Abbott contracts were the first to be affected, all states were eventually affected by the shortage, as RBMJ and Gerber diverted some of their infant formula to states with Abbott WIC contracts and consumers with more means began purchasing more infant formula to keep at home (Neuberger et al., 2022). In 2022, some WIC contracts, such as from Minnesota and Iowa, required manufacturers to provide 120 days’ notice to the state for discontinuation of a contract-brand infant formula, while others did not (see Public Access File).¹⁷

During the infant formula shortage, WIC participants experienced several unique challenges in acquiring infant formula that were not experienced by families that did not participate in WIC (see Box 5-5). These challenges included lack of stock at WIC-authorized vendors; prohibitions on benefit redemption at non-WIC-authorized vendors, including online retailers; time and cost involved in traveling to more distant WIC-authorized vendors to find infant formula; challenges updating electronic benefit transfer (EBT) cards to provide access to an infant formula that was available and approved; and specificity of physician prescriptions for exempt infant formulas The specificity of medical documentation required for WIC participants to switch to a non-contract infant formula made it difficult for WIC participants to pivot quickly to another brand of exempt or non-contract infant formula during the shortage (NASEM, 2023a).

In many states, waivers issued by USDA, described in more detail earlier in this chapter, allowed WIC participants experiencing challenges in purchasing the contract brand of non-exempt infant formula to request changes to their EBT cards to allow them to purchase any infant formula that was available (NASEM, 2023a). A WIC participant could call the WIC office while in the store and let the WIC staff know which brand was available. The WIC staff could then update the EBT card to reflect that available brand, and the WIC participant was able to purchase the brand on the spot. For example, the Chickasaw WIC program in Oklahoma was able to make changes in real time electronically using its online EBT system (NASEM, 2023a). Although cumbersome, this process sometimes allowed participants to obtain the infant formula that was available. How-

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¹⁷ Public Access File available by request via the National Academies. https://www.nationalacademies.org/our-work/challenges-in-supply-market-competition-and-regulation-of-infant-formula-in-the-united-states (accessed April 11, 2024).

ever, this solution only worked if the required Universal Product Codes had been updated in the state EBT system, which was not the case in all states and for all products (NASEM, 2023a). It also required the caregiver to shop when their WIC clinic was open.

In nine states, EBT cards are operated through an “offline” system, which means that the EBT card could only be adjusted in-person at a WIC clinic (Lane-Gavin and Ungar, 2022). In Texas, for example, caregivers had no option to call in to request a change in infant formula benefit (NASEM, 2023a). Instead, they had to travel to a WIC clinic and have the staff manually update their EBT card. Texas caregivers did, however, have an online option (via an app and curbside checkout) for purchasing infant formula, which saved time and money for some families (Texas HHS, 2024).

Caregivers who needed to find exempt infant formulas for their infants during the shortage were especially challenged, as there are limited substitution options available. Moreover, WIC requires a written prescription by a health care provider to issue exempt infant formulas, which is referred to in program rules as “medical documentation” (7 CFR § 246.10(d)) (NASEM, 2023a; USDA, 2014). Health care providers were accustomed to writing the prescription for a single exempt infant formula.

If that infant formula was not available, the caregiver would have to contact their health care provider for a new prescription for an infant formula that was available locally and would sometimes have to spend time and money to travel to an in-person appointment for the new prescription. Unless the health care provider wrote a prescription that covered a whole category of exempt infant formula, this process might have been repeated.

In the wake of the 2022 infant formula shortage, there has been an increase in the proportion of WIC participants choosing to breastfeed (Hodges et al., 2024). Furthermore, Neuberger et al. (2024) observed that the percentage of WIC participants breastfeeding (both partial and full) increased between 2021 to 2022 and in 2023. Examining newer data as they become available will be useful to evaluate if this trend continues.

Infant formula is the most highly redeemed category of food within WIC, with a 98 percent redemption rate of infant formula benefits when infant formula is readily available (Li et al., 2021). During the 2022 infant formula shortage, the odds of incomplete infant formula redemption increased relative to 2020 (>200% higher)¹⁸ (Anderson and Whaley, 2024). Little is known about the effects of the shortage on non-WIC consumers, however, beyond the press and other anecdotal reports about families seeking infant formula from outside of their neighborhoods, ordering infant formula online, consumer hoarding, and seeking help from family and friends from other communities. Some of these options may not have been as readily available to WIC families or other low-income families (Cernioglo and Smilowitz, 2023; Damian-Medina et al., 2024).

Low Income—Not Participating in WIC but Eligible

During the infant formula shortage, individuals who were eligible for WIC but not participating (discussed more in Chapter 4) were more likely to use suboptimal coping strategies (e.g., using dairy or non-dairy milks, toddler drinks or formula; stopping or cutting back on infant formula without increasing breastfeeding; watering down infant formula; or making their own infant formula) when compared with WIC participants (Cernioglo and Smilowitz, 2023; Sanjeevi and Monsivais, 2023).

Some of these families might have been receiving Supplemental Nutrition Assistance Program (SNAP) benefits. Like WIC participants, SNAP participants were only able to purchase infant formula from authorized retailers. In situations where infant formula was not available at these retailers, participants would not have been able to use SNAP benefits to purchase infant formula (USDA, 2024e).

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¹⁸ This sentence was modified after release of the prepublication version of the report to clarify the change in infant formula redemption.

redirect the available product, as needed. As a result, redemption rates for infant formula dropped sharply in some locations. Meanwhile, there was a striking increase in the proportion of WIC participants who chose to breastfeed their newborns.

Multiple federal agencies, the White House, and Congress took actions both during and after the 2022 infant formula shortage to mitigate the shortage and its effect on U.S. families and to address vulnerabilities that predated the shortage to prevent future shortages. Although many actions were taken, if stronger emergency preparedness plans had been in place, these steps could have been taken more quickly. When the 2022 shortage occurred, no federal entity had been charged with overseeing infant formula resiliency planning or emergency preparedness by the federal government or manufacturers. Two pieces of 2022 legislation—ABFA and FDORA—laid the groundwork for permanently addressing vulnerabilities by making critical changes to the regulatory framework and clarifying responsibilities of infant formula companies. Nonetheless, the committee identified key implementation gaps that must be addressed to effectively prevent and mitigate future supply disruptions.

ABFA provided USDA with permanent waiver authority to allow states flexibility with regard to issuing formula during emergencies and supply disruptions. It also requires contracts between state WIC agencies and infant formula companies to have provisions that allow state WIC agencies to take advantage of these flexibilities to make sure participants can obtain whatever formula is available. These contract remedies only apply to disruptions caused by recalls, however, leaving WIC participants vulnerable to disruptions caused by other factors.

FDORA designated infant formula as a critical food, which facilitates heightened oversight. It included temporary provisions to speed recoveries from shortages by requiring prompt communications between companies, FDA, and Congress. FDORA also recognized the importance of sector-wide resiliency planning and charged FDA with developing an immediate national strategy to increase the resiliency of the infant formula supply chain, prevent supply disruptions, and ensure access to formula for caregivers. That strategy is to be updated based on this report to include how to protect and increase the supply of infant formula in the long term.

One of FDORA’s key contributions is that it requires manufacturers to develop redundancy risk management plans (RRMPs). RRMPs are an important starting point for more robust resiliency planning by infant formula companies. For these plans to be effective, however, companies need evidence-based standards regarding what to include, there must be a process for FDA to review the plans for compliance with those standards, and there must be incentives to develop and implement strong plans. FDA

has the authority under the Food Safety Modernization Act (see Chapter 3) to promulgate regulations establishing evidence-based standards and a review process for RRMPs as a component of required written food safety plans.

Moreover, the provision that manufacturers must submit a plan of action after the initiation of a recall will sunset on September 30, 2026, which the committee notes may be appropriate if the manufacturers’ RRMPs incorporate the requirements identified prior to then.

Because WIC provides more than half the infant formula consumed in the United States, infant formula companies holding WIC contracts have a heightened responsibility to adequately prevent infant formula supply disruptions and mitigate the impact of disruptions that do occur. Likewise, the federal government has a heightened role to play in overseeing and incentivizing planning and implementation of resiliency measures by these companies. Yet the WIC program currently awards contracts based solely on net price to the program, which means that it does not incentivize companies to invest in resiliency measures. WIC’s competitive bidding process offers a mechanism to ensure that bidders have RRMPs that meet the regulatory standards and implement them. It is premature, however, to determine whether any revisions to WIC’s competitive bidding process are needed to facilitate bidding by additional companies because it is still unclear how the shortage itself and its ripple effects through the industry will affect WIC’s competitive bidding process.

The committee notes that ongoing actions are being taken in response to the shortage. As noted in FDA’s national strategy, FDA refers to engaging with U.S. government partners in executing several components of the strategy, such as ensuring access to infant formula for WIC participants, support of breastfeeding, addressing Cronobacter sakazakii, harmonization of regulatory requirements, and expanded hiring authorities. These and other measures aim to strengthen resiliency planning by infant formula companies, speed recoveries from shortages, and protect consumers from the adverse effects of supply disruptions. Nonetheless, the committee identified key implementation gaps that must be addressed to effectively prevent and mitigate future supply disruptions. In the subsequent chapter, the committee will provide its findings, conclusions, and recommendations to address these gaps.

REFERENCES

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