Wednesday, May 18, 2022

Last Call For A Smart Formula

President Biden has invoked the Defense Production Act to get baby formula manufacturers everything they need to immediately ramp up production in response to the national shortage of formula.

The announcement means the federal government will prioritize key ingredients for formula production and compel suppliers to provide the needed resources to formula manufacturers.

In addition to invoking the 1950 law, which allows the government to direct manufacturing production for national defense, Biden also launched a program that will use U.S. military aircraft to import formula from abroad.

The move comes after a bipartisan group of lawmakers called on Biden to invoke the Defense Production Act to bolster formula production amid the worsening shortage and as parents scramble to secure formula.

The Food and Drug Administration in February began warning consumers against purchasing certain baby formula as it investigated a string of bacterial infections in four infants tied to an Abbott Nutrition facility in Sturgis, Michigan.

Abbott Nutrition, which has denied any wrongdoing, said Monday it had agreed to terms set by the FDA to resume operations at the company’s Michigan plant, but the shortage has frenzied parents.

Biden on Wednesday also initiated a program that will use U.S. military aircraft to import formula from abroad. The program, called "Operation Fly Formula," directs the Department of Health and Human Services and Department of Agriculture to use Defense Department commercial aircraft to fly in approved formula from other countries.
Lawmakers: Hey Joe, do the thing
Biden: OK
Really is that simple sometimes.  
Oh, the reasons there's a shortage are 1) Abbott Nutrition made a crapton of pandemic profit and used those billions in stock buybacks to boost their stock prices and executive bonuses rather than repairing machinery in their Michigan factory that was allowing bacteria to infect formula production lines, 2) pandemic supply chain meltdowns and 3) Donald Trump's trade policies protected Abbott's oligopoly on baby formula.

The argument here is when America's manufacturing is concentrated among a few brands, that indispensable product always becomes an oligopoly as government raises barriers to entry to keep newer, "less trustworthy" companies out. That certainly describes what happened with baby formula.

Now parents are paying the price, quite literally.

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