U.S. states and manufacturers will decide whether government benefits apply to imported infant formula

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Soldiers load boxes of infant formula ready for first shipments to the United States from Europe at the U.S. Army Base in Ramstein, Germany, May 21, 2022, in an attempt to tackle a critical shortage in the United States REUTERS/Erol Dogrudogan

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May 24 (Reuters) – State officials and manufacturers are trying to determine whether infant formula imported from outside the United States to address severe supply shortages will be available to families who rely on government rebates to make it affordable, a U.S. Department of Agriculture (USDA) official said Tuesday.

Infants enrolled in the Women, Infants, and Children’s (WIC) special supplemental nutrition program for low-income families consumed approximately 56% of all infant formula in the United States in 2018, according to available data from the USDA.

About 1.71 million infants were enrolled in the program in 2018 — less than half of all U.S. infants — according to the USDA, which administers the program.

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Whether the imported formula will be made available to WIC attendees is “an emerging question,” said Brian Dittmeier, senior director of public policy at the National Women, Infants and Children Association.

WIC purchasers are generally limited to purchasing formula from the company that has a contract with their state, territory, or tribal organization, unless a physician has prescribed a specialty formula for them. These companies offer discounts to reduce the cost of the formula to WIC buyers.

Abbott Laboratories (ABT.N), the leading formulas maker whose Michigan plant closure due to possible bacterial contamination greatly exacerbated the current national shortage, holds about 55% of WIC contracts. Nestlé SA (NESN.S) and the Mead Johnson unit of the Reckitt Benckiser group share the rest. L2N2XB1H5

Abbott said it will honor the discounts even if shoppers purchase competing formulas. Nestlé and Reckitt did not immediately respond to requests for comment on whether they, too, would pay those rebates.

The first shipment from Europe on Sunday under Operation Fly Formula — the Biden administration’s effort to make up for the shortage with imports — was for specialized formulas that will be available to eligible WIC infants, said a USDA official. Read more

Whether future non-specialty formula imports will be available for WIC infants will be decided by states and their contracted formula supplier, the official said.

The United States typically produces about 98% of the formula it consumes domestically, according to the White House.

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Reporting by Leah Douglas; additional reporting by Richa Naidu and Jessica DiNapoli; Editing by Bill Berkrot

Our standards: The Thomson Reuters Trust Principles.

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