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1 1 (May 21, 2022)

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May 21, 2022

Infant Formula Shortage: FDA Regulation and
Federal Response

Some media sources report that as of May 8, 43% of infant
formula was out of stock nationwide. This garnered
widespread concern and significant congressional attention.
This shortage may pose severe health risks for some infants.
This In Focus provides an overview of initial federal
response actions to the infant formula shortage.
On February 17, 2022, the Food and Drug Administration
(FDA), in collaboration with the Centers for Disease
Control and Prevention (CDC), announced it was
investigating consumer complaints received from
September 2021 to January 2022 of infant illness attributed
to powdered infant formula. FDA's initial findings
identified, among other concerns, positive results for
bacterial contamination in a manufacturing facility owned
by Abbott Nutrition (Abbott). FDA advised consumers to
cease using certain infant formula products from Abbott.
Subsequently, the manufacturer initiated a voluntary recall
of select powdered infant formula products. As FDA's
investigation continued, the recall was expanded to include
additional specialty powdered infant formula products. On
March 22, 2022, FDA released its initial inspectional
observations of the conditions found in the facility and
determined that the manufacturer had not yet minimized the
threat to public health. These initial observations did not
constitute final FDA determination on whether the
conditions in the facility were in violation of the Federal
Food, Drug, and Cosmetics Act (FFDCA). As of April 29,
2022, Abbott had committed to completing enhanced
testing of stored product batches before deciding whether to
release those products.
Abbott's voluntary recall of infant formula product, coupled
with other factors such as ongoing supply-chain issues,
contributed to a widespread shortage of infant formula
products.
Infant Formula Manufacturer Overview
Infant formula is typically available in one of three forms: a
dehydrated powder that is added to water before serving; a
ready-to-feed formula that can be given directly to an
infant; or a concentrated liquid tat must be diluted. In
recent years, manufacturers reduced infant formula
manufacturing to increase production of products meant to
supplement breastfeeding and formula derived from
nondairy sources. Some industry experts have attributed
this shift to broader U.S. trends showing a general increase
in breastfeeding.
According to a 2020 IBISWorld industry report on the
infant formula industry in the United States, the industry is
dominated by four major manufacturers (see Table 1).

Disruptions in the infant formula supply chain were noted
as early as August 2020. The report notes that the COVID-
19 pandemic caused both a surge in demand and a
disruption in global supply chains for infant formula
products.
Table I. U.S. Infant Formula Manufactures and
Market Share, August 2020
Manufacturer     Market Share (%)
Abbott Laboratories       48.1
Mead Johnson              20.0
Perrigo                   11.6
Nestle                    7.7
Othera                    12.6
Source: Jack Curran, Infant Formula Manufacturing, IBISWorld,
August 2020.
a.  The report states that in 2020, no manufacturer in the other
category accounted for more than 10% of total revenue. These
manufacturers are individually characterized as small,
independent operators.
Infant Formula Imports
According to FDA, the United States normally produces
98% of the infant formula it consumes, with the primary
source of imports coming from trading partners in Ireland
and the Netherlands. FDA infant formula regulations apply
equally to infant formula manufactured domestically or
abroad. Manufacturers whose infant formula products are
imported into the United States may have to contend with
higher costs of manufacturing to meet FDA specifications.
Additionally, those products face compound duties that
have averaged approximately 25% on imports over the past
decade for a small market share of American consumers.
These factors may make the United States a relatively
unattractive market for foreign manufacturers.
FDA    Re ulation of Infant Formula
Products cad R esponrst         Shortage
FDA Regulation of Infant Formula Products
The FFDCA defines infant formula as a food which
purports to be or is represented for special dietary use solely
as a food for infants by reason of its simulation of human
milk or its suitability as a complete or partial substitute for
human milk (FFDCA §201(z)). FDA regulations define an
infant as an individual aged not more than 12 months old
(21 C.F.R. §105.3(e)). As a food product, infant formula
must comply with the laws and regulations governing food

9ttps://crsreports.congress.gov

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