WASHINGTON -- President Joe Biden on Wednesday invoked the Defense Production Act to speed production of infant formula and authorized flights to import supply from overseas, as he faces political pressure over a domestic shortage caused by the safety-related shutdown of the country's largest formula manufacturing plant.
The Defense Production Act order requires suppliers of formula manufacturers to fulfill orders from those companies before other customers, in an effort to eliminate production bottlenecks. Biden is also authorizing the Defense Department to use commercial aircraft to fly formula supplies that meet federal standards from overseas to the U.S., in what the White House is calling "Operation Fly Formula."
Supplies of baby formula across the country have been severely curtailed in recent weeks after a February recall by Abbott Nutrition exacerbated ongoing supply chain disruptions among formula makers, leaving fewer options on store shelves and increasingly anxious parents struggling to find nutrition for their children.
"I know parents across the country are worried about finding enough formula to feed their babies," Biden said in a video statement released by the White House. "As a parent and as a grandparent, I know just how stressful that is."
The announcement comes two days after the Food and Drug Administration said it was streamlining its review process to make it easier for foreign manufacturers to begin shipping more formula into the U.S.
In a letter Wednesday to the Department of Health and Human Services and the Department of Agriculture, Biden directed the agencies to work with the Pentagon to identify overseas supply of formula that meets U.S. standards over the next week, so that chartered Defense Department flights can swiftly fly it to the U.S.
"Imports of baby formula will serve as a bridge to this ramped-up production," Biden wrote.
Regulators said Monday that they'd reached a deal to allow Abbott Nutrition to restart its Sturgis, Mich., plant, the nation's largest formula plant, which has been closed since February due to contamination issues. The company must overhaul its safety protocols and procedures before resuming production.
After getting the FDA's OK, Abbott said it will take eight to ten weeks before new products begin arriving in stores. The company didn't set a timeline to restart manufacturing.
"I've directed my team to do everything possible to ensure there's enough safe baby formula and that it is quickly reaching families that need it the most," Biden said in the statement, calling it "one of my top priorities."
HOUSE TO VOTE
House lawmakers are set to vote as soon as Wednesday on two bills to combat a national baby formula shortage, as Democrats looked to ratchet up the pressure on Abbott Laboratories, a top manufacturer, for its role in the crisis.
The proposals aim to aid low-income Americans and provide $28 million to the Food and Drug Administration, part of a broader strategy to address the supply crunch, prevent future disruptions and enhance safety inspections in the wake of a major plant shutdown in Michigan over sanitation concerns.
The shutdown of that plant, operated by Abbott, also drew fresh scrutiny from other Democrats on Wednesday. Party lawmakers fired off sharply critical letters questioning the company's business practices -- including its decision to spend recent record revenue on stock buybacks rather than safety improvements.
One bill expected to have wide bipartisan support would give the secretary of the Department of Agriculture the ability to issue a narrow set of waivers in the event of a supply disruption. The goal is to give participants in an assistance program commonly known as WIC the ability to use vouchers to purchase formula from any producer rather than be limited to one brand that may be unavailable. The WIC program accounts for about half of infant formula sales in the U.S.
The other measure, a $28 million emergency spending bill to boost resources at the Food and Drug Administration, is expected to have less bipartisan support and it's unclear whether the Senate will take it up.
"This is throwing more FDA staff at a problem that needs more production, not more FDA staff," said Rep. Bill Huizenga, R-Mich.
Rep. Rosa DeLauro, the Democratic chair of the House Appropriations Committee, said the money would increase FDA staffing to boost inspections of domestic and international suppliers, prevent fraudulent products from getting onto store shelves and acquire better data on the marketplace.
Democrats have promised additional actions still to come: At a news conference earlier this week, DeLauro and others suggested they could next try to require formula suppliers to report more to the government about their production. They teased a hearing next week featuring the FDA and witnesses from top formula manufacturers. And they said they had asked for a federal investigation into the specific causes of the current crunch that has depleted store shelves nationally.
But Republicans have signaled they are likely to vote against awarding $28 million to the FDA. They have argued that the agency just received a bigger budget, and they raised questions as to whether the money would even make an immediate difference for families in great need.
The partisan split raised the odds that the bill could falter in the Senate, where Democrats require Republican votes to proceed. Privately, GOP aides have expressed skepticism in recent days about the need for any new spending in response to the formula shortage. And publicly, the party's top lawmakers assailed the Biden administration, arguing it should have anticipated the crisis and acted sooner to address it.
"We need to help families solve it. It should have been foreseeable. And it's unfortunate. And I'm willing to look at any solution," Sen. Roy Blunt, R-Mo., said this week.
But, he added of the Democrats' new bill: "I'm not sure it's a solution. You know, every problem can't be solved with immediate money."
ILLNESS LED TO RECALL
Abbott's voluntary recall was triggered by four illnesses reported in babies who had consumed powdered formula from its plant. All four infants were hospitalized with a rare type of bacterial infection, and two died.
Abbott said its products are not to blame for the illnesses and deaths. Top FDA officials said on a call with reporters Monday evening it was too early to tell.
After a six-week inspection, FDA investigators published a list of problems in March, including lax safety and sanitary standards and a history of bacterial contamination in several parts of the plant. Under Monday's agreement, Abbott must regularly consult with an outside safety expert to restart and maintain production.
Chicago-based Abbott has emphasized that its products have not been directly linked to the bacterial infections in children. Samples of the bacteria found at its plant did not match the strains collected from two babies by federal investigators.
But FDA officials pushed back on that reasoning Monday on the call with reporters -- their first time publicly addressing the company's argument. FDA staffers noted they were unable to collect bacterial strains from two of the four patients, limiting their chances of finding a match.
"Right from the get-go we were limited in our ability to determine with a causal link whether the product was linked to these four cases because we only had sequences on two," FDA's food director Susan Mayne said.
Fixing the violations uncovered at Abbott's plant will take time, according to former FDA officials. Companies need to exhaustively clean the facility and equipment, retrain staff, repeatedly test and document there is no contamination.
As part of the FDA's new import policy, regulators said companies would need to provide documentation of their factory's inspections.
No further cases of children being sickened by formula have since been reported, according to the Centers for Disease Control and Prevention, which closed its investigation of the outbreak last week.
TAX RATES SCRUTINIZED
Senate Finance Committee Chairman Ron Wyden is investigating Abbott Laboratories' low tax rates and alleging the company's investments in stock buybacks may have driven the nationwide baby formula shortage.
Wyden, in a letter to Abbott Chief Executive Officer Robert Ford, highlighted the company's tax rate -- which has averaged 12% over the past three years -- and $8 billion in stock buybacks in recent years.
"I have long been concerned that windfalls from sweeping tax cuts for mega-corporations enacted by the 2017 Republican tax law would be used for padding the pockets of corporate executives and wealthy shareholders," Wyden said in the letter, which was obtained by Bloomberg News. "It appears my concerns have been validated in this case, as Abbott chose spending billions on buying back its own stock instead of investing in critical upgrades to a plant essential to feeding our nation's infants."
Wyden's announcement comes one day after the House Energy and Commerce Committee announced a May 25 hearing with Abbott Senior Vice President Christopher Calamari. Also testifying in the coming days are FDA Commissioner Robert Califf, as well as Nestle SA' Gerber vice president Scott Fitz and Reckitt Benckiser Group Plc senior vice president Robert Cleveland. Califf also is scheduled to testify at an Appropriations Committee hearing today.
Wyden's investigation, which asks Abbott to provide details about their tax strategy and what investments have been made into the Michigan plant, is the latest step in a broader inquiry into how large pharma companies use the tax code to slash their tax rates. In January, Wyden asked Bristol-Myers Squibb Co. for details about an offshore tax arrangement that allowed them to get a refund from the IRS.
Vicky Assardo, a spokeswoman for Abbott, stressed in response that the company is a "responsible and transparent taxpayer, paying all of its taxes owed in every country in which it operates." She added that stock buybacks "are not impacting our ability to invest in or reopen" the facility in Sturgis, Mich., as the company's "strong balance sheet helps us respond more quickly to the current challenge."
Information for this article was contributed by Zeke Miller and Kevin Freking of The Associated Press; Laura Davison of Bloomberg News (WPNS); and Tony Romm, Mike DeBonis and Laura Reiley of The Washington Post.
People wait in line during a baby formula drive to help with the shortage Saturday in Houston. The disruption in the supply prompted President Joe Biden to invoke the Defense Production Act to help increase supplies. (AP/David J. Phillip)