CHARLESTON, W.Va. – U.S. Senator Shelley Moore Capito (R-W.Va.) joined her Republican colleagues in a letter—led by U.S. Senator Deb Fischer (R-Neb.), a member of the Senate Agriculture Committee—to the Government Accountability Office (GAO) seeking answers on recent baby formula shortages and asking for an investigation into the impact sole-source contracts in the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) program may have had. The share of formula in the United States that is consumed by WIC infants is estimated to be over 50%.

“We have heard concerns expressed about the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) impact on the infant formula market, in particular in the light of current supply shortages,” the senators wrote. “The shut-down of the Abbott manufacturing plant led to foreseeable shortages of certain infant formula products for WIC participants, but also affects non-WIC formula buyers, retailers and grocers.”

“To address the high cost of infant formula under WIC, states were required to pursue cost containment systems in 1989 under the Child Nutrition and WIC Reauthorization Act. As a result, all states pursued sole-source contracts with infant formula manufacturers, who then sends rebates to the WIC state agency. These rebates have saved the WIC program between $1 to $2 billion annually. While these savings have allowed the WIC program to stretch funding farther, some stakeholders have expressed concerns with unintended consequences these contracts have on the market,” the senators continued.

The senators requested a GAO analysis that answers the following questions: 

  • How did the price of infant formula change for both WIC and non-WIC customers after the introduction of sole-source rebates?
  • How did particular market characteristics such as market concentration, methods of marketing, and barriers to entry impact the size of the rebates offered by manufacturers?
  • How have sole-source contracting and minimum infant formula stocking requirements impacted independent and small retailers?
  • What legislative or regulatory changes could improve sole-source contracting? What other measures could address cost containment of infant formula under WIC?

Additional cosigners to the letter include U.S. Senators John Boozman (R-Ark.), John Cornyn (R-Texas), Susan Collins (R-Maine), Roger Marshall (R-Kan.), Chuck Grassley (R-Iowa), Thom Tillis (R-N.C.), and James Risch (R-Idaho).

GAO recently shared confirmation that they will conduct the study.

The full text of the letter is available here.

BACKGROUND:

Earlier this year, Senator Capito cosponsored the Access to Baby Formula Act, which was signed into law on May 21, 2022. The legislation helps ensure families who rely on the WIC program can buy affordable formula. Senator Capito also cosponsored the Urgently Feeding America’s Babies Act, which would direct the administration to invoke the Defense Production Act and establish a process to approve the sale of European-produced infant formulas to address the shortage.

In May, Senator Capito, along with Senator Marshall, led a letter to the U.S. Food and Drug Administration (FDA) about its inadequate investigation into Abbott Nutrition’s Michigan manufacturing facility and the agency’s failure to mitigate the nationwide baby formula shortage. In September, Senators Capito, Marshall, and Boozman led a follow up letter to the FDA questioning why the agency had not fulfilled its commitment to approve applications for more formula products to restore baby formula supplies or to prevent another shortage from occurring. 

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