How Safety Concerns At An Abbott Facility Fueled A Crisis

Topline

When Abbott Laboratories, one of the largest manufacturers of baby formula in the U.S., closed a facility in Michigan in February after the Food and Drug Administration announced it was investigating links between infants who contracted bacterial infections—which possibly led to two deaths—and formula produced at the plant, it sparked the major shortage that’s exacerbated by supply-chain delays and rising inflation.

A sign posted at a CVS pharmacy indicates a shortage in the availability of baby food on Tuesday, … [+] May 10, 2022, in Charlotte, N.C. (AP Photo/Chris Carlson)

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Key Facts

Abbott produces Similac, one of the few brands of formula available for sale in the U.S. due to strict regulations from the FDA—a 2011 report from the USDA found that Abbott accounted for 43% of total market sales.

The FDA warned consumers in February not to use certain formulas produced in Abbott’s facility in Sturgis, Michigan, as it investigated reports that several children who contracted serious bacterial infections from Cronobacter sakazakii and Salmonella had links to the formula—and two of the infected children died, with cronobacter a possible contributor to the deaths, according to the FDA.

The same day, Abbott issued a voluntary recall for Similac, Alimentum and EleCare produced in the Michigan facility, and shut down the facility—which remains shuttered nearly three months later.

In March, the FDA released initial findings of its investigation, stemming from in-person inspections of the plant that started in late January, which included a history of contamination with the cronobacter bacteria—eight instances between fall 2019 and February 2022—and a failure to maintain clean surfaces used in handling and producing the formula.

Abbott said in a statement last month that samples of formula from the Sturgis, Michigan, facility separately tested by Abbott and the FDA did not test positive for Cronobacter sakazakii or Salmonella, though the FDA noted in a statement that there were a limited number of samples tested.

Shares of Abbott Laboratories are down nearly 23% so far this year.

Key Background

Rep. Rosa DeLauro (D-Conn.) released a whistleblower complaint last month that showed a former Abbott employee documented concerns about the Michigan facility and sent them to the FDA in October—months before the FDA began inspecting the plant and issued a recall. DeLauro said in a statement the FDA did not interview the whistleblower until late December. “Why did the FDA not spring into action?” DeLauro asked. “How many infants were fed contaminated formula during this time, by parents who trusted that the formula they were buying was safe?” Abbott said in a statement it is reviewing the complaint and “will thoroughly investigate any new allegations.” Several retailers, like CVS, Target and Walgreens, have limited sales of all brands of baby formula due to the shortage.

Surprising Fact

In the first week of May, the out-of-stock percentage for baby formula reached 43% nationwide, according to Datasembly, which tracks product data for retailers. The percentage rose from 30% at the start of April.

Big Number

4. That’s how many major companies manufacture baby formula for sale in the U.S.—Abbott, Mead Johnson, Nestlé and Perrigo.

What To Watch For

Abbott said in a statement Wednesday that production could begin again in the Michigan facility within two weeks, after receiving permission from the FDA. Once production begins, it takes about six to eight weeks to reach shelves.

Tangent

White House Press Secretary Jen Psaki said earlier this week the FDA is working “around the clock” to address the formula shortage, and President Joe Biden is getting involved. The Wall Street Journal and Reuters report Biden will speak with retailers and formula manufacturers Thursday before announcing new actions the administration is taking to address the shortage.