On December 14, 2023, the Food and Nutrition Service (FNS) released a final rule to implement the Access to Baby Formula Act of 2022, a law that requires contracted manufacturers to continue to pay rebates on their formulas in the event of a product recall. In a new insight, Director of Health Care Policy Laura Hobbs considers the shortcomings of the FNS final rule.

Key points:

• The current state infant formula contract model provides the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) with approximately $1.5 billion in manufacturer rebates in 2022, and only a few domestic baby formula manufacturers operate to supply about 98 percent of all formula.
• Therefore, increased regulatory liability during a potential formula recall could create additional risk for a single manufacturer.
• Policymakers should consider if the FNS final rule will further limit manufacturer competition within an already consolidated market with a poor food safety record without expanding beneficiary choice in WIC.

Read the analysis