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A28 u.s. news
Diaranson 25 Mei 2022

U.S. safety, savings rules set stage for baby formula shortage

WASHINGTON (AP) — "You have to have a lot of contracts.
A massive recall is getting expertise, a lot of resources The competitive effects of
most of the blame for the and a lot of research dollars," these sole-source contracts
U.S. baby formula shortage, White said. have been researched for
but experts say the products There are other hurdles for years. A 2011 study by the
have long been vulnerable to foreign manufacturers look- U.S. Department of Agricul-
this type of crisis due to de- ing to compete. The U.S. ture found that whichever
cades-old policies that have has long imposed tariffs and company wins a state's WIC
allowed a handful of compa- quotas on dairy imports from contract typically sees their
nies to corner the market. abroad, including Canada, market share grow by 74%,
Those government rules in order to shield American on average, as WIC recipients
— aimed at assuring safe, milk producers from compe- switch to their brand.
affordable formula — are tition. But not everyone supports
getting renewed scrutiny as Responding to political pres- overhauling the system. Bri-
President Joe Biden's admin- sure, the Biden adminis- an Dittmeier of the National
istration rushes to import tration has begun airlifting WIC Association says doing
formula from Europe. shipments of formula from away with sole-source con-
"There's perfectly good and Europe. The FDA is also tracts would jeopardize the
safe baby formula available requirements. mula regulations set by the waiving some requirements savings that allow the plan to
around the world. We just Baby formula is one of the Food and Drug Administra- to encourage more imports serve so many Americans. In-
don't have access to it," said few American products es- tion have long limited com- from overseas manufactur- stead he says manufacturers
Bindiya Vakil, CEO of Re- sentially unaffected by glo- petition. ers that are expected to boost should be held accountable
silinc, a supply chain analyt- balization, with 98% of the Beginning in 1980, Congress supplies in coming weeks. for not investing in their own
ics firm. "We've created this supply manufactured do- gave the FDA authority to The biggest driver of the capacity.
problem by not setting up an mestically. Four companies rigorously enforce the nutri- U.S. market, by far, is a mas- "This is a manufactur-
infrastructure for imports." account for roughly 90% of tional content of all formula sive federal nutrition pro- ing failure," Dittmeier said.
Federal regulators are ex- the market: Abbott, Reckitt, sold in the U.S., imposing gram that provides formula "The fact is there just is not
pected to soon allow Ab- Nestle and Perrigo, accord- extra research and manufac- and other foods to lower-in- enough product to fulfill the
bott Nutrition to reopen the ing to industry figures. That turing standards that have come women and children. demand that manufacturers
Michigan plant that's been consolidation mirrors similar few equivalents worldwide. The WIC program accounts have drummed up over the
closed since February due trends across the food indus- The changes came after some for more than 50% of the years." His group supports
to contamination problems. try. babies were sickened by de- U.S. market, providing for- calls by some lawmakers for a
The factory is the largest of But infant formula wasn't ficient formulas in the 1970s. mula for more than 1.2 mil- federal antitrust investigation
its kind in the U.S. and its part of a Biden administra- "They are pretty much the lion babies, according to the into the industry.
shutdown — combined with tion initiative last year spot- strictest food safety guide- National WIC Association, WIC contracts are generally
pandemic-related supply lighting dangerously concen- lines in the U.S. and Amer- which represents state and rebid every four years and
chain problems — hobbled trated industries, including ica has some of the strictest local administrators who run market share swings back and
supplies of popular formulas prescription drugs, airlines, guidelines in the world," said the benefit. forth between the handful of
and specialty formulas for hearing aids and internet ser- Wendy White, a food safety Beginning in 1989, federal players who compete.
children with rare medical vices. expert at Georgia Tech. law has required states to Dr. Steven Abrams, a pedia-
conditions. The Federal Trade Commis- Companies must consult award contracts to a single trician at the University of
Lawmakers will hold three sion announced Tuesday that with the FDA before selling a formula company, based on Texas at Austin, says Con-
hearings on the issue this it has launched an inquiry new formula, altering ingre- whichever one can offer the gress should revisit the WIC
week, calling on company into the formula shortage, dients in an existing one or biggest discounts. program.
executives, government reg- seeking information on any making major manufacturing The effect is that contract "We need to take a com-
ulators and outside experts deceptive or fraudulent busi- changes. The result is only winners quickly squeeze out prehensive look at where
to testify. The attention could ness practices related to it. the biggest manufacturers much of the competition on the failures happened and
spur changes to government The agency said it also aims have plants and procedures store shelves. Today, all 50 where we can fix them" said
safety and contracting rules to shed light on what led to that comply with federal WIC contracts are held by Abrams. "We need to consid-
that have been in place since the concentration in the baby rules. And would-be com- three companies: Abbott, er whether we really want to
the 1980s and favor big U.S. formula market and the weak petitors have little incentive Reckitt and Nestle, accord- have a situation where there's
manufacturers that are capa- supply chains. to enter the field, given the ing to the association. Abbott that much dominance in the
ble of navigating the complex Food experts say strict for- declining U.S. birth rate. is the leader, with 34 state program."

19 indicted in international drug money laundering scheme

BOSTON (AP) — Nine- proceeds from Colombian sachusetts federal court are "If nothing else, this case drug money in suitcases or
teen people have been in- cartels through U.S. banks, the result of a five-year inves- shows that the long arm of bags on the street and then
dicted in a complex money federal prosecutors said tigation into the money laun- the law does not stop at our peso brokers deposited the
laundering scheme to move Tuesday. dering organization based borders," said Joleen Simp- funds into U.S. banks, Rol-
millions of dollars in drug The charges brought in Mas- in Colombia. Authorities son, special agent in charge lins said.
say they laundered at least of the Internal Revenue Ser- To make it appear like it was
$6 million through the U.S. vice's Criminal Investigations legitimate business activ-
banking system. in Boston. ity, the money was deposited
Two people were arrested Those charged played a vari- into bank accounts held by
on Tuesday in Jamaica and ety of roles in the conspiracy, front companies and indi-
three others were arrested including drug suppliers and viduals or through multiple
in Florida, authorities said. dollar purchasers, Massachu- small deposits into different
Last month, another person setts U.S. Attorney Rachael bank accounts, officials said.
was arrested in Florida and Rollins told reporters. Nearly 3,000 kilograms
12 others were arrested in The scheme involved the use (6,600 pounds) of seized co-
Colombia. Prosecutors are of so-called "peso brokers," caine — with a street value
seeking the extradition of the who agreed to give pesos to of more than $90 million —
Colombian and Jamaican de- drug traffickers in exchange have been traced back to the
fendants to the U.S., officials for the profits of U.S. drug money laundering organiza-
said. One person remains at sales, Rollins said. Criminal tion, Rollins said.
large. associates would be handed