PRESS RELEASE: NEW REPORT: BIDEN TAKES SWIFT ACTION TO ADDRESS BABY FORMULA SHORTAGE

FOR IMMEDIATE RELEASE
June 1, 2022

Contact: 
Jack Miller, Communications Director
[email protected]

NEW REPORT: BIDEN TAKES SWIFT ACTION TO ADDRESS BABY FORMULA SHORTAGE

The Baby Formula Shortage is Result of a Monopolistic and Broken Industry

The national baby formula shortage is a crisis putting all young families at risk. Millions of Americans rely on formula to feed their youngest and the national recall, and subsequent supply shortage, highlighted the extreme market concentration of baby formula producers.

In the last few weeks, President Biden took swift and aggressive action to ease the shortage, ordering the U.S. military to airlift millions of containers of formula and enacting the Defense Production Act to boost production.

These steps stand in stark contrast to the 192 House Republicans who voted against a bill that would support the Food & Drug Administration’s efforts to address the shortage.

Today, Invest in America released a short report detailing the Biden-Harris Administration’s actions to address the formula shortage, the monopoly risk in the baby formula industry, and steps to lower costs for all Americans.

Actions Taken to Address the Baby Formula Shortage

To tackle the baby formula crisis, President Biden is using the power of the presidency to take action:

The Baby Formula Industry is Highly Monopolized

One Factory Closure Creates a Crisis

Abbott Execs Spent $5B on Stock Buybacks Instead of Fixing the Factory That Closed

  • At the Michigan site that closed, equipment associated with the drying process was failing and in need of repair for several years. This allowed bacteria to enter the system and, “at times, led to bacteria not being adequately cleaned out in clean-on-place washes.”

  • The origin of the crisis was Abbott management’s refusal to repair old drying machines that were bound to fail. 

  • Instead, they used $5.73 billion for stock buybacks. While the factory became a “proverbial petri dish,” Abbott executives got rich.

  • As laid out by Senate Finance Committee Chair Ron Wyden: “As Abbott spent billions buying back its own stock, it appears that it failed to make necessary repairs to fix a critical manufacturing plant of infant formula located in Michigan. As a result of the company’s mismanagement, the plant’s condition deteriorated to the point where it was shut down by the Food & Drug Administration (FDA) in February over safety concerns after several infants who consumed formula made at the plant fell ill from bacterial infections.”

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