U.S. nearing deal to fly in baby formula from Australia

The Biden administration is close to reaching a deal to transport 1.25 million cans of baby formula from an Australian company into the U.S. amid shortages that have sent parents scrambling for supplies.

The company, Bubs Australia, and the Department of Health and Human Services were finalizing the shipping details Wednesday morning, according to two people familiar with the planning. The formula is expected to be transported via flights similar to recent operations that carried formula from Europe into the U.S.

President Joe Biden is trying to quell a political firestorm facing his presidency over the baby formula shortages and amid criticism from lawmakers and others that his administration was too slow to respond, despite warnings last fall. FDA Commissioner Robert Califf recently admitted that agency officials “were too slow and some decisions in retrospect could have been more optimal” in their response to reports of infants being hospitalized after consuming formula from the Abbott Nutrition plant in Sturgis, Mich., now at the center of the current shortages. The plant shut down and issued a recall in February.

The White House is hoping to announce the shipping plans this afternoon when Biden meets virtually with Bubs and other infant formula companies. Biden announced the initial deal that Bubs would provide 27.5 million bottles worth of infant formula to the U.S. several days ago. Australia's former Ambassador to the U.S. Joe Hockey and his firm Bondi Partners helped broker the initial deal between Bubs and the Biden administration. The company’s stock shot up after.

The current shortages are especially dangerous for babies, children and adults who rely on specialty formulas for their only source of nutrition. The Bubs deal was made possible after FDA temporarily relaxed some of its strict import restrictions on formula from abroad.

In addition to Bubs, Biden is meeting at the White House this afternoon with representatives from Reckitt, Perrigo Co., Nestle’s Gerber and ByHeart, according to the White House.

Notably, absent from the list: Abbott. The White House has left out the company from similar meetings in recent weeks. Two Biden officials described it as an attempt to apply public pressure to the company, which initially resisted such steps as paying for rebates so low-income parents and babies using WIC benefits could buy another brand of infant formula. Rather than attending White House meetings, the company needs to focus on meeting health and safety requirements at its Sturgis plant under an agreement with the FDA to reopen the facility, a White House official said.

Abbott was estimated to control about one-fifth of the U.S. infant formula supply before the recall. The FDA and Abbott have offered conflicting timelines about when the plant will reopen.

Abbott and three other companies dominate the U.S. infant formula market, leading lawmakers to question a federal nutrition program that has helped companies maintain their market power. White House officials have been considering several measures to help boost competition in the highly consolidated U.S. infant formula market. The Federal Trade Commission is also probing consolidation and any potential anti-competitive behavior in the U.S. infant formula market along with scams targeting parents and caregivers.

During Wednesday's meeting, Biden plans to tout small manufacturers like ByHeart, a Pennsylvania-based baby formula company attending the meeting, as part of the solution to the consolidation that's contributed to the current shortages.