Manufacturing

Biden Invokes Defense Production Act To Require Manufacture Of Baby Formula Ingredients


Topline

President Joe Biden is invoking the 1950 Defense Production Act (DPA) to make companies produce vital baby formula ingredients as part of a raft of new measures to lessen the ongoing national baby formula shortage, the White House announced Wednesday.

Key Facts

First enacted to avoid wartime shortages, the DPA enables the president to require companies to enter into contracts to produce materials considered necessary for national defense.

The DPA also lets the president prohibit hoarding and profiteering from certain materials.

Biden will invoke the PDA to order businesses to step up production of necessary baby formula ingredients and to direct those ingredients to formula manufacturers in order to accelerate the return of formula to store shelves, the White House said.

Biden also ordered federal agencies to use Department of Defense commercial aircraft to fetch baby formula that meets U.S. standards from sites overseas, the White House announced.

The Department of Defense will speed up the importing of baby formula by using contracts with air cargo lines to bypass usual freight routes, a measure also employed during the early months of the Covid-19 pandemic, the White House said.

The announcement came two days after Abbott Laboratories, the formula manufacturer whose voluntary product recall in February helped trigger the nationwide shortage, laid out a plan to reopen a key formula plant and ease the shortage within as little as eight weeks.

Key Background

Abbott closed its Sturgis, Michigan, baby formula plant in February, after regulators launched an investigation into possible links between formula manufactured there and a string of infant bacterial infections and two deaths. By early May, stores had 43% less formula in stock and profiteers had begun to hoard remaining supplies, selling them online at a large markup, the New York Times reported. An investigation into the infections by the Centers for Disease Control and Prevention concluded last week and found no additional cases. Monday, Abbott announced it had reached an arrangement to reopen its Sturgis plant with the Food and Drug Administration’s approval. However, it could take well over a month before Abbott baby formula begins to reappear on shelves, the company said.

Big Number

43%. That’s the proportion of total U.S. baby formula sales accounted for by Abbott, according to a 2011 Department of Agriculture report.

Tangent

The DPA was first used during the Korean War to channel production of metals and other materials toward the war effort, giving a boost to defense industries that had experienced a lull after World War II. Though rarely invoked, the act has been applied for a wide variety of purposes: To incentivize building a decentralized industrial system that would be less vulnerable to a nuclear strike, to keep California supplied with adequate energy imports and to crack down on Chinese spyware. During the Covid-19 pandemic, former President Donald Trump used the act to order the acquisition of masks, ventilators and other public health supplies, and Biden used it in 2021 to boost production of Covid-19 tests and vaccine components.

Further Reading

“Abbott Strikes Deal With FDA To Reopen Baby Formula Plant At Center Of National Shortage” (Forbes)



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