Easing labeling and WIC rules is expected to get more baby formula to consumers. The Food and Drug Administration (FDA) has emerged as one major impediment to ending America’s current shortage of baby formula. Now, the agency is taking small steps to get out of the way.
The infant formula shortage arose in response to a recall of formulas produced at an Abbott Laboratories facility in Michigan and the temporary shutdown of that plant.
In a healthy and competitive environment, the shutdown of one facility shouldn’t have sent such shock waves through the formula market of the entire country. But the American baby formula market is both highly concentrated and a beneficiary of immense government protectionism in the form of trade restrictions and other regulations. Easing some of these rules and fees could allow more foreign formula to flood U.S. shelves, alleviating the current shortage and ending the state-created hold that a few big companies have over the U.S. market.
Baby formulas made in the European Union could be a good substitute since many of them already meet most safety and nutritional standards set by the FDA. But because a lot of these formula brands don’t meet all FDA labeling requirements, they’ve been placed on the agency’s “red alert” list, meaning they cannot be imported, sold, or purchased here and shipments will be detained if discovered.
Formula brands can be placed on this list for “transgressions” that are incredibly minor, such as not listing nutrients in a specific order or failing to include step-by-step pictures of how to prepare the formula in close proximity to the written directions for use. This means failure to meet these very specific yet arbitrary labeling rules can keep perfectly safe and nutritious formula from getting to U.S. customers.
On Monday, the FDA announced that it would temporarily ease enforcement of some labeling rules in order to allow for the importation of foreign formulas that meet U.S. safety and nutrition regulations but may run afoul of label requirements. To this end, the FDA issued new guidance for baby formula manufacturers, foreign and domestic, effective now through November 14, 2022.
“Today’s action paves the way for companies who don’t normally distribute their infant formula products in the U.S. to do so efficiently and safely,” said FDA Commissioner Robert M. Califf in a statement. “We anticipate that those products that can quickly meet safety and nutrition standards could hit U.S. stores in a matter of weeks.”
Current regulations “require an infant formula manufacturer to submit notice (i.e., a new infant formula submission) to FDA at least 90 days before the infant formula is introduced or delivered for introduction into interstate commerce,” notes the agency in the new guidance. To be permitted, infant formula must contain specified levels of protein, fat, essential fatty acids, 15 vitamins, and 12 minerals, as well as meet FDA labeling requirements.
Under the new guidance, the FDA will decide on a case-by-case basis whether “to allow the introduction into interstate commerce (including importation) of infant formula that is safe and nutritionally adequate, but that may not comply with all statutory and regulatory requirements.” Formula manufacturers can submit safety and nutrition information to the FDA to be granted a reprieve from enforcement of these regulations.
“The extent to which we exercise enforcement discretion may vary,” states the new FDA guidance on baby formula:
For example, an infant formula whose label does not list the nutrients in the order required … would need an exercise of enforcement discretion regarding that particular labeling requirement, and FDA may determine that enforcement discretion is appropriate. In contrast, an infant formula whose level for a specific nutrient is below the minimum that we require or does not contain a specific nutrient we require might not be an appropriate candidate for enforcement discretion, especially if the low level or absence of the nutrient could present a safety issue for infants.
The Biden administration is also urging states to loosen up other regulations that are making it harder for American families to find and buy baby formula right now.
“About half of infant formula nationwide is purchased by participants using WIC benefits,” noted the White House in a fact sheet last week, referring to the federally run nutrition program for low-income women, infants, and children. Because of this, WIC program requirements for eligible formula (set by both the federal government and states) greatly influence the type of formula that U.S. manufacturers produce.
The U.S. Department of Agriculture “is urging states to allow WIC recipients to use their WIC benefits on a wider variety of products so that if certain sizes or types of formula are out of stock, they can use their benefits on those that are in stock,” stated the White House. “And, USDA is urging states to relax their requirements that stores keep a certain amount of formula in stock. This will offer relief to retailers and allow companies to manage inventories to meet demand.”
During the height of the COVID-19 pandemic, officials eased rules regarding everything from telemedicine to take-out sales of alcoholic beverages, showing that many of these rules weren’t necessary in the first place. Perhaps one silver lining of the current formula crisis is that it will do the same thing for excessive regulation of baby formula.
FREE MINDS
Ted Cruz, campaign finance, and free speech. The U.S. Supreme Court has ruled that “Section 304 of the Bipartisan Campaign Reform Act of 2002—which limits the amount of post-election contributions that may be used to repay a candidate who lends money to his own campaign—unconstitutionally burdens core political speech,” SCOTUSblog explains. The case was filed by Sen. Ted Cruz (R–Texas), who challenged the Act’s rule that only allows candidates to use up to $250,000 in post-election contributions to repay loans to themselves.
“A lower court ruled that the $250,000 limit is unconstitutional because the government had not shown either that it serves an interest in preventing politicians from trading favors for contributions or that the limit is sufficiently targeted to serve that interest. The Supreme Court on Thursday upheld that ruling,” notes Amy Howe.
Because the loan-repayment limitation burdens First Amendment speech in elections, [Chief Justice John] Roberts wrote [in the court’s opinion], it can only pass muster if it is justified – which, Roberts concluded, it is not. The only acceptable reason for restricting political speech, Roberts noted, is to prevent quid pro quo corruption – that is, politicians trading favors for contributions – or the appearance thereof. But in this case, Roberts observed, federal campaign finance law already seeks to prevent quid pro quo corruption by limiting individual contributions to $2,900 per election and requiring their disclosure. And indeed, Roberts added, the government has not pointed to “a single case of quid pro quo corruption in this context — even though most States do not impose a limit on the use of post-election contributions to repay candidate loans.”
FREE MARKETS
California’s attempt to mandate gender diversity on corporate boards is unconstitutional, a state court says. “Superior Court Judge Maureen Duffy-Lewis said the law that would have required boards have up to three female directors by this year violated the right to equal treatment,” reports the Associated Press:
The conservative legal group Judicial Watch had challenged the law, claiming it was illegal to use taxpayer funds to enforce a law that violates the equal protection clause of the California Constitution by mandating a gender-based quota.
David Levine, a law professor at the University of California Hastings College of the Law, said he was not surprised by the verdict. Under state and federal law “mandating a quota like this was never going to fly,” Levine said.
The ruling follows an April decision saying that another California law meant to ensure diversity on corporate boards is unconstitutional. That law required that publicly-traded companies headquartered in California must have at least one member of an “underrepresented community” on their boards of directors.
QUICK HITS
• In case you need another depressing reminder that COVID-19 is never going away.
• President Joe Biden has authorized sending U.S. troops back to Somalia.
• Turkish President Recep Tayyip Erdogan said he’ll block Finland and Sweden from joining NATO.
• Florida Gov. Ron DeSantis, a Republican, advances the state’s perpetual assault on free speech by signing a bill that makes it illegal to protest outside private homes.
• “Starbucks announced on Monday that it would reimburse travel expenses for employees who need abortions and cannot get them within 100 miles of their homes, joining the small group of companies that have moved to protect employee abortion access as the Supreme Court appears likely to soon overturn Roe v. Wade,” reports The New York Times.
• Elon Musk won’t go forward with his purchase of Twitter until the company clarifies the number of bot and spam accounts.
20% fake/spam accounts, while 4 times what Twitter claims, could be *much* higher.
My offer was based on Twitter’s SEC filings being accurate.
Yesterday, Twitter’s CEO publicly refused to show proof of <5%.
This deal cannot move forward until he does.
— Elon Musk (@elonmusk) May 17, 2022
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