The Baby Formula Shortage and Bad Governance

A reporter recently highlighted President Biden on his administration’s response to the infant formula crisis: “Some of the steps you and your administration are taking now, including the loosen these import requirements next week, if you take those steps earlier, before the parents have to make these shelves and can’t find the recipe?” The president’s response: “What if we As better readers, I guess we could, but we moved quickly when the problem became clear to us.”

Anyone listening to this exchange is probably not convinced by Mr. Biden’s response. In a recent CBS News survey, just 35% of Americans said the president responded promptly to important issues and events, compared with 65% who felt that he was “slow to react.” Responding to problems before they turn into crises demonstrates a leader’s ability and ability to control his or her government, and staying ahead of events – as Mr. Biden did with Ukraine – is a great lesson. critical test of leadership and public trust in government.

In a modern society, people cannot be aware of — let alone monitor — all the complex processes that affect their lives, so we ask the government to do this on behalf of the people. we. We grant the government a substantial measure of discretionary authority, and in return, we expect officials to scan the horizon for potentially harmful developments. We cannot expect them to predict an unpredictable future, but we do expect them to understand the reasonably foreseeable consequences of events — and their reactions to them.

This first brings us to the Food and Drug Administration. On October 21, 2021, FDA received a report from a whistleblower who raised serious concerns about conditions at an Abbott Laboratories plant that manufactures infant formula. . It took the agency about two months to interview the whistleblower, another month to inspect the plant, and more than two weeks until Abbott issued the recall notice and closed the plant. Members of Congress from both parties are asking tough questions about the pace of this expansion.

The consequences of the plant shutdown were foreseeable. The infant formula market is highly concentrated, with two companies accounting for more than 80% of total domestic production. Abbott is the single largest producer, and plant shutdowns account for about 20% of the total. Conventional wisdom assumes that when you suddenly remove a fifth of the supply from the market, a shortage is inevitable.

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Compounding the problem, foreign companies cannot fill the void. High regulatory and tariff barriers ensure that 98% of all infant formula consumed in the US is produced in the US, which is good news for US manufacturers but not for US consumers. I am not the only one wondering why we impose tariffs as high as 17.5% on formula produced in the European Union, or why our regulations exclude imports from countries with food safety standards at least as strict as ours.

Three months ago, most Americans were unaware of these facts about the infant formula industry, but this leads one to believe that the White House is not. When the Abbott factory shut down, alarms should have sounded at 1600 Pennsylvania Avenue, and planning should have begun to prevent the inevitable shortages. Judging by the tumultuous situation of the past 10 days, any plans that have been laid out don’t go very far.

For example, if regulatory hurdles had been resolved in time, the United States could have imported enough infant formula to mitigate the impact of the factory closures. Instead, the president had to use the military to conduct an emergency airlift from abroad. If formula from the EU is safe for US consumers today, it was three months ago — and probably three years ago.

I hope Mr. Biden reflects on this episode and makes the necessary changes in the White House (and elsewhere) to make sure it doesn’t happen again.

This is also an opportunity to make other changes, starting with tariffs and regulations and extending to some unnecessary rigidity in the Women, Infants and Children programs, which help cover the cost of living. formula costs for those who cannot afford it. Governments should better balance efficiency in normal operations and resilience in times of stress. More broadly, it’s time to reconsider a long-standing proposal — supported by everyone from the Government Accountability Office to the Trump administration — to split the FDA into two agencies, one dedicated to food safety, the other authority on drugs. Multiple GAO reports have shown that the US food safety system is fragmented between different ministries and agencies with overlapping responsibilities and that a single food safety agency improves efficiency. and the effectiveness of food safety regulation. Odds are that such an agency would respond to the infant formula crisis more soberly than the FDA.

Even if these reforms are implemented, confronting this crisis will require an entire government effort that only the White House can direct — and at least one bearded senior staff member. politics is good enough to warn the president that something is about to happen. blow in his face.

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