Abby Vesoulis, congressional reporter at Time Magazine, joins Cheddar Politics to discuss the ongoing baby formula shortage, the history of how lawmakers set up the system around the formula industry and how it helped lead to the current crisis.

Cheddar Politics

How Congress Helped Cause The Baby Formula Shortage

Welcome back to cheddar politics. The baby formula shortage has gripped Washington in the past week as lawmakers in the white house scramble for solutions. But did they actually helped create this crisis? A piece in Time magazine this week examines the role politicians have played over decades in constructing the system around the formula market that helped lead us to this place today. So joining us now is Abby Vasilis, congressional reporter at Time magazine and the writer of that piece Abby it's so great to have you back on what spurred you to report on this angle, specifically the role that politicians have to play in what we're facing today. Thanks for having me. So it's really interesting because it's just one factory that has Shuttered temporarily because of a potential safety concern. And I was interested in why one factory had such a huge impact on the nation's baby formula supply, something like 40% of baby formula is out of stock. So I looked into Why one factory had such a huge impact on the supply. And what I found was that in 1989, in order to make this government benefits program called Wick operate more efficiently. Congress decided that each region of the country would only approve one formula manufacturer to be covered by WIC and a huge percentage of people who buy baby formula are with women, infants and Children beneficiaries. And um, so that has made it that it's really difficult now for other uh, companies to succeed because so many um, consumers of baby formula use WIC and Wick only pays for very specific brands of formula. And in this case we're talking about an Abbot factor because I do want to talk about this company specifically because there is news that they may reopen as early as next week, which is great. But how long is that actually going to take to backfill? Because these WIC recipients and I mentioned earlier in the show and my sister is one of them, She hasn't been able to find formula anywhere because if you don't have like a very sort of broad need or your baby can drink a lot of different kinds that you have a very specific need or a um, hypoallergenic need or anything like that. It makes it a lot harder to find what you're looking for. Um, so I want to, I just want to know like even with this reopening even with sort of a broadening of the policy, is this the kind of thing that congress could watch happen again in the future if one domino falls the wrong way? Yes, absolutely. It could. I mean there's only three manufacturers total in the country that have ever in 30 some years gotten approval to be covered by WIC. And so what we're seeing right now, the FDA is working with Abbott to get back up and open and Two weeks time, but from then it could take 6-8 weeks Abbott says to be able to get their formula from this Michigan plant back onto shelves. So that's going to take awhile to happen to see the results of that? We are seeing the White House invoke something called the Defense Production Act, which gives the President Broad Authority during emergency situations. Two to direct manufacturers to prioritize certain, uh, certain production needs of the country. But that too, could take time to see the results play out. And, and as you said, if there's ever another supply chain problem because of something like a bacterial outbreak or some other safety concerns, we're going to be back in the same situation in which only three brands are covered by WIC. And uh, if one thing happens with one of those brands, then then it's going to be very difficult for, um, for people to find formula because it's so difficult for new baby formula brands to survive in such a competitive market. So we also saw that Congress is working on passing a bill. The House passed a bill last night, uh, that will allow WIC to be more flexible during emergency situations. But again, that doesn't, that doesn't solve the long term problem because it's, it's going to be difficult for new brands to start and be successful. So that struggles with competition. You've given me the, how we got here. But let's talk about the, why, why did Congress decide, you know what? We're going to pick one at a time. We're just gonna, we're gonna pick one and one is going to be available, Why not create more of a marketplace even for WIC recipients, right? Because there's something like 50% of the market. So is there a reason that Congress decided we'll just we'll just pick one. Yes. I mean, the reason was because unlike snap the food stamps kind of program, uh, which is not an entitlement program, meaning that just because you meet the income eligibility guidelines doesn't mean that you will get it. It's based on whether each state has enough money. And so ah Congress was thinking, well we could probably help States serve more people if we made these baby formula brands bid in a process to see who would give us the best deal? Who would give States the best deal on formula. And so they did it in order to make quick be able to benefit more people. But then after they created this competitive bidding process, what we saw was that no other baby formula brands except the three that we're getting, all the wit contracts could survive. And then in the 30 year sense, these baby formula brands have increased their prices. So at first, uh it did expand Wick Wicks benefit and Wix reached to serve way more people. But then once there were so few brands, then these baby formula brands started raising their prices and we're kind of back where we started where it's it's no longer competitive pricing. So Abby my last question for you is one, you may or may not be able to answer, but it kind of feels a little hopeless, right? Like everything is going to take a long time, babies are going to suffer. Parents are going to struggle. What is a way that Congress could act today? Or the president could act today that would make it better? Or is it just sort of like, I'm sorry you're going to have to wait to feed your baby? Okay. So it's, it's a pretty dire situation. Help is coming in the sense that in 6 to 8 weeks, this, this michigan Abbott plan restarting should mean that, that, you know, in, in two months time we're going to be back in a better situation. But until then, I don't see the, the defense Production act, uh, doing that much to help the underlying issue. I don't see another thing that Congress did is they lost the house passed last night a bill to give the FDA $28 million in order to, um, two fix this baby formula situation. But things move slow in Washington. And I don't see how an influx of money at a beleaguered agency is going to, uh, you know, help factories quickly create new products. So I think we're starting to throw money at the problem or trying to, uh, but to fix the actual issue, what Congress would need to do is make a long term fix to, to wick and they haven't done that yet. You need to make it so that more baby formula brands can survive in the market and and that hasn't happened. Yeah, it's a lot of finger pointing and it does feel a little bit like too little too late, especially since this factory closed in february. But abby so great. Getting your insight. Thank you for your wonderful reporting. Abby vessels is a Congressional reporter at Time magazine.