FDA Finally Admits It Caused the Baby Formula Shortage
The agency is now taking small steps to allow foreign formula manufacturers to import their goods into the U.S.
The Food and Drug Administration (FDA) has finally determined what's to blame for America's recent shortage of baby formula.
The FDA.
More specifically, it's the FDA's unnecessary and protectionist rules that effectively ban foreign-made baby formula from being imported into the United States. On Wednesday, the agency announced plans to tweak those rules so foreign formula manufacturers can permanently import their goods into the U.S., giving American consumers greater choice in the marketplace and ensuring more robust supply chains.
"The need to diversify and strengthen the U.S. infant formula supply is more important than ever," FDA Commissioner Robert Califf said in a statement. "Ensuring that the youngest and most vulnerable individuals have access to safe and nutritious formula products is a top priority for the FDA."
That might be true now, but it clearly hasn't been the case in the past. As Reason has detailed throughout the recent crisis, the FDA's priorities have been protecting the domestic formula industry (and the dairy industry, which provides key inputs for baby formula) from foreign competition. As a result, it's nearly impossible to find foreign-made baby formula in the U.S., even though formula manufacturers based in England, the Netherlands, and Germany are some of the biggest suppliers of baby formula to the rest of the world.
When the Abbott Nutrition plant in Michigan was forced to close temporarily due to an FDA investigation into possible contamination, it created a supply shock that left store shelves empty and parents scrambling to find formula. Because of the FDA's protectionist rules (and high tariffs levied on foreign-made formula), markets could not adapt quickly to the shortage here in America—instead, we got political stunts like the White House's "Operation Fly Formula" that accomplished little.
In testimony to Congress, FDA officials admitted to botching the response to the contamination at the Abbott plant. But the real culprit of the recent shortage was a deeper and more pervasive one. No matter what nationalists like Sen. Josh Hawley (R–Mo.) might suggest, closing off the country to international trade is not a recipe for resilience. The baby formula crisis demonstrated that it is quite the opposite.
So it's good to see the FDA admit those mistakes and crack open the door to allowing foreign formula into the U.S. on a permanent basis.
Unfortunately, the list of policy changes the FDA announced on Wednesday mostly amounts to providing technical assistance to foreign firms that want to sell formula here. That is, offering help in navigating the complex approval process, rather than sweeping aside those regulations entirely. If a formula maker has passed muster under E.U. regulations, that should be good enough for the FDA.
There's also the matter of tariffs on imported formula, which are so high that they effectively make any imported formula uncompetitive in the American market. Why would a foreign manufacturer like Holle or HiPP go through the complicated FDA approval process (even after the announced changes) if it knows in advance that its goods won't be able to compete on a level playing field in America?
Give the FDA credit for identifying itself as one of the major causes of the baby formula shortage. But more changes are needed—including permanent changes to U.S. trade policy—to ensure a disaster like this can't happen again.
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That is, offering help in navigating the complex approval process, rather than sweeping aside those regulations entirely.
To be fair, I don’t know what those regulations are. For instance, some might be reasonable, like, you know, not allowing formula to be laced with Melamine.
The issues blocking baby formula from the EU is almost entirely labeling requirements.
For example, the FDA requires nutrients’ on the nutrition panel of the label to be listed in a specific order. EU regulations require a different order.
FDA: “No you can’t import your perfectly safe baby formula unless you re-do the labeling exactly the way we want.”
And I refuse to acknowledge that there’s a role for the FDA to play in the regulatory process because self-interested capitalism is going to get producers to make a healthy product anyway.
Youre lying. Thats my schtick. Dont horn in on my game, Poser.
Honestly doesn’t matter what the regulations are. Do you think producers of baby formula would lack any incentive to avoid poisoning babies if the FDA weren’t around?
I mean, look into what happened. You had Chinese officials paying hush money to keep the contamination quiet because China didn’t want to be embarrassed right before the 2008 Olympics. It took an outside interest coming from a concern company-capitalism in action-to get the Chinese government to finally go public with the problem. Investigations found that, wouldn’t you know it, government officials are susceptible to bribes, and the regulatory commissions are probably less successful at quality control than self-interested capitalism.
Companies such as Nestle have been caught sending “defective” baby formula to developing countries rather than destroying it, causing some children to become ill and some died.
God forbid they loose money on something they screwed up in the first place.
I mean, that’s 90% bullshit. They never sold defective product knowingly.
They did market formula aggressively in certain areas, pissing people off who thought they were interfering with breastfeeding. They also were accused of not caring about the difficulties with getting sanitary water necessary to mix formula in developing nations.
It’s fine to take issue with some their historical marketing practices. That’s not exactly the same as making something tainted and intentionally selling it overseas.
you’re a loon. get better politics
Last I checked China wasn’t a member of the EU.
I would venture to say that EU law is actually a lot more strict, and the only difference I see in US formula is that the “lactose” is actually corn syrup solids, and in most EU formulas it’s actually just lactose. US formulas also have waaaay too much iron, such that doctors warn about the “iron adjustment” when you switch from breastfeeding (i.e., baby can’t poo).
If a problem was caused by the government, it is 0% Biden’s fault and 100% Trump’s fault.
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Thank you. Delightful.
FDA shuttering Abbott was the “causing the shortage” … FDA stopping imports was a continuation … and ffs it was all on purpose and done by your boy
And prior to the FDA closing the plant, and prior to the FDA continuing the shortage by not allowing imports . . .
You had that whole FDA government regulatory regime, coupled with the WIC and other welfare / social program purchasing contracts, that caused the situation where we only have 3 major domestic suppliers of baby formula in the first place.
^^ both of these.
That might be true now, but it clearly hasn’t been the case in the past. As Reason has detailed throughout the recent crisis, the FDA’s priorities have been protecting the domestic formula industry (and the dairy industry, which provides key inputs for baby formula) from foreign competition.
Let’s not let other ways the government fucked this up off the hook. I know we hate tariffs, but government subsidies like WIC worked to kill off any domestic competition as well.
https://www.cbpp.org/research/food-assistance/wics-competitive-bidding-process-for-infant-formula-is-highly-cost
Infant formula manufacturers provide substantial discounts, in the form of rebates, to state WIC programs in return for the exclusive right to provide their products to the state’s WIC participants.
That’s what they were bragging about, 5 years ago. They negotiated exclusively with certain manufacturers, giving them an effective monopoly, on baby formula. And a huge percentage of all baby formula bought in the US is purchased with WIC funds. When you add this policy to regulatory barriers to entry, you have government killing off any incentive to enter the market and creating an oligopoly. There simply are no smaller manufacturers.
In a healthy economy, when you have a temporary supply shortage, competitors can simply ramp up production to fill in a gap. Beyond that, they’d raise their prices to justify the added expense of having to rapidly expand and rush goods out to areas where the shortages are greatest. But again, most of the formula is purchased with WIC funds, which means it’s essentially price controlled. So even if you wanted to rush something out, scrambling some resources together, you’re not getting rewarded for your efforts. You have no incentive to respond to the emergency because it’s more expensive for you with no profit.
Beyond that, the panic that started the recall was a false alarm. There was no evidence found that the babies got the bacteria from the formula. There was no evidence that the bacteria came from the plant. The plant that was shut down was shut down for basically no reason.
And yes, tariffs, which I’m aware are a major pet issue for many Reason writers, also contribute because they shut out foreign competition. But really, foreign manufacturers should be the final saving grace in an emergency, and not the immediate fallback the instant there’s a problem. The American side of the industry should be robust enough to weather a single closed-down plant. The fact that it wasn’t and it caused shortages lasting many months is a result of years and years worth of failure and failed systems.
And too many people talking about this issue are missing how it takes a fucking LOT of bad policy going for years to create this kind of market failure. It took a ton of government effort to actually create this crisis, and nobody is looking at the type of foundational reforms needed to prevent more failures like this from emerging.
It’s embarrassing the level of shit-show this was. Remember how faith in public institutions is falling? It’s not falling far enough. People still think the FDA has an actual purpose to serve.
Government-managed monopolies and official price caps inhibit competition and supply? Sounds like another failure of the free market.
(Am I democrating correctly?)
I think the Democrat response is to blame the big companies for having a near monopoly, ignoring how the regulatory state and subsidized incentives enforced the monopoly. They would mandate that companies spread out their manufacturing assets to prevent a single plant closure from crippling the supply.
Unfortunately, this raises the costs. And companies were desperate to keep their costs low in order to keep their bid with WIC. The government incentivized the very conditions that lead to a supply shortage.
To be fair, if I’m both-sidesing this one, Republicans are quite eager to blame Biden without getting into the details to explain any of this. This is why we need libertarians to be on point when it comes to government-created market failures.
They would mandate that companies spread out their manufacturing assets”
you would think that would resolve the issue until you realize for some reason 97 food processing plants in teh U.S. have been damaged this year. Is something sinister going on here. Some would say yes but i’m not one to believe in conspiracies during a planned food shortage.
I don’t know about that. The left has been quite fine in trusting government agencies lately.
Personally, I’m a fan of a progressive regulatory regime. The less market share you control, the less regulations you are subject to. The more you control, the more regulations.
Can I also add how shallow the critique of tariffs is? If tariffs were one of the main barriers, we wouldn’t be completely out of formula. We’d still be able to buy it, it would just be really expensive. But what we’re facing are completely empty shelves because it’s not being imported at all. It’s a regulatory issue, not just a trade issue.
And given the number of charities strongly concerned with poor mothers and starving babies, even if formula got really expensive, we’d have domestic buyers for it, if it came down to it. The product was completely prevented from reaching the US.
^correct
Thank you for this. Pointing out the issues with domestic production. Through several articles on this, Reason has focused on import restrictions with hardly a mention of domestic regulations and restrictions. FFS, why would closing one plant cause nation wide shortages!?!
↑Yes! Reason is obsessed with tariffs at the expense of other factors (what, libertarians at Reason are ideologues?). This cannot be stressed enough.
Back when NPR was moderately good, or could accidentally stumble backwards into being good, they did a great investigative report on how formula regulations built around the desire to push women towards breastfeeding (advertising bans etc) essentially created a duopoly in the formula game that wiped out the competition. It was compared to cigarette advertising bans.
Tariffs do NOT shut out competition. It just raises the price of imports.
That has diddly squat to do with supply issues, only cost issues.
“The Food and Drug Administration (FDA) has finally determined what’s to blame for America’s recent shortage of baby formula. The FDA.”
That is an inference only a disaffected, illiterate, anti-government crank would make.
Yes, that’s exactly what it is. We’re all just lying about everything just for you, just to justify your individual beliefs. Kind of like a massive far-right Truman Show……………………
This is a comment only a brain-dead asshole bigot would post.
The only change needed is to close down the FDA.
At least we can all rest assured that federal bureaucrats will learn nothing from this. And more importantly, the incompetent assholes who caused this problem won’t face any consequences for their part in starving out American babies.
The central planning people are simply convinced we need the right people in charge next time.
they will tell you “the right people were in charge they just didn’t have enough monies” or covid or something
+++
Abolish the FDA
I thought it was trump tariffs boehm.
Eric Boehm, “Taxing foreign country goods caused it.”
And on a side note the FDA shut down USA production..
Gee, I wonder why trust in “institutions” is down. Mere coincidence I’m sure………..
This is a sleazy, short-sighted and dangerous attack on the FDA by Reason, especially at this time that the extremist majority on the Supreme Court seems determined to destroy bureaucracy and enable elected officials to operate with no accountability.
In fact, it was two elected officials, one Democrat, one Republican, who were responsible for forcing these protectionist rules on the FDA — former Iowa governor Tom Vilsack, and President Donald Trump.
A “dangerous” attack on the FDA, huh.
Let me guess, we need some common sense limitations on free speech, too?
You’re full of shit.
BTW, this asshole is REALLY confused:
“…Supreme Court seems determined to destroy bureaucracy and enable elected officials to operate with no accountability…”
He seems to think the elected officials are accountable to the bureaucracy!
It reads like parody.
You could be right – referencing Trump as a driver of stronger regs.
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This comment has nothing to do with the topic.
“FDA Finally Admits It Caused the Baby Formula Shortage”
Baby steps.
This will solve nothing. It will outsource baby formula to foreign countries and the USA will not be producing a drop within 2-3 years. Then the next time there are supply issues, we will be right back in the same boat.
Biden’s FDA Finally Admits It Caused the Baby Formula Shortage
Biden’s America, a total bust.
Remember when Trump was president every problem was “Trump’s America” no Biden is president Reason never uses “Biden’s America”.
You have to wonder why the partisan difference?
The FDA is unnecessary and a hindrance in it’s present form and scope.
Personally I would replace it with a much, much smaller agency with a much , much smaller scope.
How typical of government. Claim to do something through one corner of the mouth and then obstruct all paths to do so through the other corner of the mouth. I believe the Native Americans have a term for that, “Forked Tongue”.
On the other hand, if foreign companies can supply the US on an even playing field without satisfying the FDA, then US manufacturers will be at an extreme disadvantage because the FDA is so horrendous.
The FDA needs to be reformed or replaced before trade restrictions are lifted. Having zero manufacturers of baby formula in the US isn’t acceptable.
Hit the nail on the head. People want the EU formula because they have better ingredients and most babies tolerate them better. Period.
“…Having zero manufacturers of baby formula in the US isn’t acceptable.”
And your solution?
Not *merely* dependent on foreign nations for oil, but now for foreign baby formula.
What a time to be alive!
To be fair, in the 60s they just gave babies Carnation evaporated milk instead of formula. lol
Neither nationalist nor internationalist policies make for resilient supply chains. If global production capacity of baby formula matches global demand, then nationalist/internationalist policies just trade two different problems:
Nationalist trade policies immunize you from foreign shocks, but exaggerate domestic ones. As in baby formula and toilet paper.
Internationalist policies dilute domestic shocks, but expose you to every large shock globally. As in computer chips.
The uncomfortable truth is that the world’s manufacturing is getting less elastic, which makes resiliency impossible. If suddenly, there is 20% more demand for toilet paper, computer chips, or baby formula, manufacturers can’t simply add overtime, because the factory was already operating 24/7 at full capacity.
Resiliency can only come if factories run at less than full capacity, but, if companies aren’t compensated for that, they’ll inevitably remove such ‘waste’. It is an interesting externality, in that the opportunity to take market share in the event of a baby formula shutdown isn’t sufficient compensation to maintain the equipment, but lacking resiliency is very harmful to consumers.
Why do all these babies need this “formula”? I remember when my sister was born, my mother bought ordinary milk, warmed it up in a saucepan, then put it in a bottle and fed it to her. I understand that I was fed the same way. (My brother turned out to be allergic to cow’s milk, and had to be fed a special soy-based formula, but that was definitely a special case, not the norm.) The 1% and 2% milk available today may be better choices than whole milk, but I don’t see why there is a need for special-purpose baby formula, except in special cases like that of my brother.
Cow’s milk doesn’t have the right lactose to fat ratio for human infants, and it lacks the oligosaccharides that promote healthy gut bacteria. It’s probably one reason so many boomers are obese and have autoimmune disorders.
Your newsletter? I don’t want it.
In light of the past events of the last two and a half years we could do away with 50 percent of the Federal government, and nobody would know the fucking difference, except the parasites that work there because now they would have to go out and get real jobs.
This includes the woke joke military because right now they’re about as useless as boots on a whore. One day that leviathan is going to collapse on itself, I hope I live to see it.
All the comments about “selfish capitalism” are idiotic. What about “selfish protectionism?”
There isn’t anything wrong with “protectionism,” and if we had more of it, maybe we wouldn’t have shortages of EVERYTHING from China and elsewhere during covid.
The idea that “protectionism” implies allowing critical infrastructure (like formula production) to develop into supply monopolies with no redundancy… um, no. That’s what *selfish capitalism” did.
There’s simply no way to educate a capitalist fundamentalist. They’re as benighted as the communists, socialists, libertarians, anti-racists, Christians, and basically just about any other cult.
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Bullshit.