Note: This was posted originally on Thursday, May 12 as part of the weekly Covid post. It is being separated out into its own post for future reference, and in case some people are no longer reading Covid posts.
An infant formula plant shutdown triggered by two infant deaths has created a new nightmare for some parents: There’s now a dangerous shortage of specialized formulas that are the only thing keeping many children and adults alive.
The Abbott Nutrition plant in Sturgis, Mich., was not just one of the biggest suppliers of infant formula nationally, but it was also the major supplier of several lesser-known specialty formulas that are a lifeline for thousands of people with rare medical conditions, including metabolic, allergic and gastrointestinal disorders, which can make eating regular foods impossible or even dangerous. The situation has not only rattled parents and medical professionals, but has raised questions about whether the federal government should do more to ensure critical, life-sustaining supply chains don’t break down.
“If this doesn’t get fixed soon, I don’t know how my son will survive,” said Phoebe Carter, whose 5-year old son John — a nature-lover and “paleontologist in training” — has a severe form of Eosinophilic Esophagitis, a rare digestive and immune system disease driven by a dysfunctional immune response to food antigens. “I just can’t stress that enough.”
One of my good friends looked into this a bit and isn’t buying that the shortage could be caused by shutting down this one plant. This article’s primary contribution is that the supply chains were already strained before the shutdown due to demand fluctuations on top of supply issues in the wake of the pandemic. It’s certainly a large contributor, and it’s possible without the shutdown we wouldn’t have a problem.
This one points out that before the recent recall, we were on the edge of disaster to start, through a combination of the usual supply chain disruptions and the usual tariffs. We went out of our way to ensure that the supply of baby formula couldn’t compete against American dairy farmers, and, well, whoops. This quote from that post (the quote is originally from here) is very on the nose:
Canada agreed that, in the first year after the agreement takes hold, it can export a maximum 13,333 tonnes of formula without penalty. In USMCA’s second year, that threshold rises to 40,000 tonnes, and increases only 1.2 per cent annually after that. Each kilogram of product Canada exports beyond those limits gets hit with an export charge of $4.25, significantly increasing product costs….
Canada wanted to attract investment for a baby formula facility because it uses skim milk from cows as an ingredient. Healthy consumer appetites for butter leave provincial milk marketing boards with a surplus of skim. Baby formula looked like a smart use for it, and Canada didn’t have any significant infant formula production before Feihe arrived.
Expanding this plant, or building a second infant formula plant somewhere else in Canada, look like less attractive business propositions under this new trade deal.
I don’t get why even people who generally sound even more infuriated about this than I do, like Scott Lincicome, still produce sentences like this first one:
These regulatory barriers are probably well-intentioned, but that doesn’t make them any less misguided—especially for places like Europe, Canada, or New Zealand that have large dairy industries and strict food regulations. Indeed, as the New York Timesnoted about “illegal” European formula in 2019, “food safety standards for products sold in the European Union are stricter than those imposed by the F.D.A.”
Well-intentioned? If your goal is profits for a politically connected set of rent seekers, sure. If your goal is anything else, I notice I am confused what these intentions are and how they could be defined as falling under this category of ‘well.’ I flat out refuse to buy the argument that this arises out of physical world models that cause genuine concern that Canadian formula would hurt American children.
There are two possibilities. One, the optimistic one, is that this is mostly about getting insiders more money. The other is that this is about expanding a bureaucratic power base or otherwise simply preferring worse outcomes to better outcomes.
Then we created a system whereby a large portion of all formula is heavily (as in >90%) subsidized from a legally mandated single-source, which happens to be the single source that got shut down.
And with that stage set where we restrict supply in order to jack up prices to begin with, guess who is once again going to cause children to not be able to get nutrition and potentially die from that?
That’s right. The FDA. Who shut down the plant after two deaths. Then kept it closed, citing ‘health code violations,’ it has been three months and they won’t say anything about when it might be allowed to reopen.
Still, it’s not clear why the plant is still shut down nearly three months after the recall. Neither FDA nor Abbott will answer specific questions about the status of the investigation or what the plan is to reopen the facility, which has further strained the infant formula supply chain.
One solution would be to import formula from the highly dangerous Europe and Canada, but as noted above that’s not permitted.
In a separate incident last year, Customs and Border Patrol (CBP) bragged in a press release about seizing 588 cases of baby formula that violated other FDA regulations. The seized formulas were made by HiPP and Holle brands, which are based in Germany and the Netherlands, respectively. Both are widely and legally sold in Europe and around the rest of the world.
…
But the new “export fees” included in the USMCA likely make it more costly and difficult for America to import extra supplies of formula from its northern neighbor. Chalk it up to another self-inflicted wound of the trade war with China.
That’s right. It’s not only about not giving people life saving medicine. It’s also about denying young children the ability to eat. My presumption is this won’t reach the point of babies starving to death this time – unlike when the FDA prevented IVs from properly supplying babies with the proper nutrients for years. I hope.
“We are doing everything in our power to ensure there is adequate product available where and when they need it,” said FDA Commissioner Robert M. Califf, M.D. “Ensuring the availability of safe, sole-source nutrition products like infant formula is of the utmost importance to the FDA. ”
They’re holding meetings, expediting reviews, monitoring the supply chain, compiling data, ‘Expediting the necessary certificates to allow for flexibility in the movement of already permitted products from abroad into the U.S’, ‘Exercising enforcement discretion on minor labeling issues for both domestic and imported products to help increase volume of product available as quickly as possible’ and most importantly ‘Not objecting to Abbott Nutrition releasing product to individuals needing urgent, life-sustaining supplies of certain specialty and metabolic formulas on a case-by-case basis that have been on hold at its Sturgis facility.’
However, they note:
It’s important to understand that only facilities experienced in and already making essentially complete nutrition products are in the position to produce infant formula product that would not pose significant health risks to consumers.
So things they are not going to allow while doing ‘everything in their power’ to fix the problem they themselves are causing include: Letting anyone enter the market, letting known-safe formulas approved elsewhere into the USA, waiving procedures of any kind beyond ‘minor labeling issues’ or letting the Abbott Nutrition plant resume production or any at-scale distribution on any known time scale.
“Parents shouldn’t have to pay a price because Abbott has a contaminated product,” DeLauro said, adding that there had to be a way to induce other formula manufacturers to get products onto shelves more rapidly. She also invoked the possibility of using the Defense Production Act to get more formula in the pipeline: “If there was a shortage, why weren’t we in the business of making sure that wasn’t happening? What did we do in times of crisis in the second World War, and so forth? We produced what we needed to produce.”
Earlier, it turns out… there may not have ever been a contaminated product at all?
The worst blow came in February, when Abbott Nutrition recalled formula made in its Sturgis, Mich., plant. Two babies who drank formula from the plant died of bacterial infections, and others were hospitalized. Although bacteria wasn’t found in the samples they drank, Abbott announced the recall as a precaution.
Yes, they uncovered various signs the plant wasn’t as clean as we’d like it to be, but almost nothing is as clean as we’d like it to be, the costs of closure are orders of magnitude beyond plausible costs of contamination in practice, it’s very possible those costs were damn near or actual zero, and it’s now been several months.
While I did consider splitting this off into its own post, Scott Lincicome’s coverage is mostly excellent and contains a lot of great detail, so if you want to link to something on this for general consumption, probably fine to link to him instead.
Formula for Dying Babies
Link post
Note: This was posted originally on Thursday, May 12 as part of the weekly Covid post. It is being separated out into its own post for future reference, and in case some people are no longer reading Covid posts.
There’s a shortage of specialty infant formula. Half of all types are unavailable. Some parents are panicking, without a plan for how to feed a baby that can’t use regular formula.
One of my good friends looked into this a bit and isn’t buying that the shortage could be caused by shutting down this one plant. This article’s primary contribution is that the supply chains were already strained before the shutdown due to demand fluctuations on top of supply issues in the wake of the pandemic. It’s certainly a large contributor, and it’s possible without the shutdown we wouldn’t have a problem.
This one points out that before the recent recall, we were on the edge of disaster to start, through a combination of the usual supply chain disruptions and the usual tariffs. We went out of our way to ensure that the supply of baby formula couldn’t compete against American dairy farmers, and, well, whoops. This quote from that post (the quote is originally from here) is very on the nose:
I don’t get why even people who generally sound even more infuriated about this than I do, like Scott Lincicome, still produce sentences like this first one:
Well-intentioned? If your goal is profits for a politically connected set of rent seekers, sure. If your goal is anything else, I notice I am confused what these intentions are and how they could be defined as falling under this category of ‘well.’ I flat out refuse to buy the argument that this arises out of physical world models that cause genuine concern that Canadian formula would hurt American children.
There are two possibilities. One, the optimistic one, is that this is mostly about getting insiders more money. The other is that this is about expanding a bureaucratic power base or otherwise simply preferring worse outcomes to better outcomes.
Then we created a system whereby a large portion of all formula is heavily (as in >90%) subsidized from a legally mandated single-source, which happens to be the single source that got shut down.
And with that stage set where we restrict supply in order to jack up prices to begin with, guess who is once again going to cause children to not be able to get nutrition and potentially die from that?
That’s right. The FDA. Who shut down the plant after two deaths. Then kept it closed, citing ‘health code violations,’ it has been three months and they won’t say anything about when it might be allowed to reopen.
One solution would be to import formula from the highly dangerous Europe and Canada, but as noted above that’s not permitted.
Meanwhile, what is law enforcement up to?
That’s right. It’s not only about not giving people life saving medicine. It’s also about denying young children the ability to eat. My presumption is this won’t reach the point of babies starving to death this time – unlike when the FDA prevented IVs from properly supplying babies with the proper nutrients for years. I hope.
What is the FDA saying it is doing about this?
They’re holding meetings, expediting reviews, monitoring the supply chain, compiling data, ‘Expediting the necessary certificates to allow for flexibility in the movement of already permitted products from abroad into the U.S’, ‘Exercising enforcement discretion on minor labeling issues for both domestic and imported products to help increase volume of product available as quickly as possible’ and most importantly ‘Not objecting to Abbott Nutrition releasing product to individuals needing urgent, life-sustaining supplies of certain specialty and metabolic formulas on a case-by-case basis that have been on hold at its Sturgis facility.’
However, they note:
So things they are not going to allow while doing ‘everything in their power’ to fix the problem they themselves are causing include: Letting anyone enter the market, letting known-safe formulas approved elsewhere into the USA, waiving procedures of any kind beyond ‘minor labeling issues’ or letting the Abbott Nutrition plant resume production or any at-scale distribution on any known time scale.
Once again: FDA Delenda Est. Tariffs Delenda Est, longstanding but never-highlighted group member, especially when they’re on things like specialty baby formulas and solar panels we’re now going to build less of than we were under the Trump administration thanks to worries about retroactive 240% tariffs, no really. We really, really don’t care. And also of course delenda est to the idea that the solution to all our supply problems is to never use prices to control demand, demand perfect safety and to insist that all necessary production magically happens here in America somehow anyway.
Earlier, it turns out… there may not have ever been a contaminated product at all?
Yes, they uncovered various signs the plant wasn’t as clean as we’d like it to be, but almost nothing is as clean as we’d like it to be, the costs of closure are orders of magnitude beyond plausible costs of contamination in practice, it’s very possible those costs were damn near or actual zero, and it’s now been several months.
While I did consider splitting this off into its own post, Scott Lincicome’s coverage is mostly excellent and contains a lot of great detail, so if you want to link to something on this for general consumption, probably fine to link to him instead.