NEW JERSEY — In the year before the U. S. infant formula shortage. Abbott Nutrition, one of the nation’s largest infant formula makers, spent nearly a billion dollars on “distributions to shareholders and executives,” according to Sen. Cory Booker. Now, he and Sen. Elizabeth Warren of Massachusetts are accusing the company of “putting profit before safety” and contributing to a crisis that existed in the first place.
Across the country, parents continue to struggle with a frustrating and “terrifying” lack of formula. Read more: Formula shortage gets worse; FDA works ’24 hours a day’
Shortages have also led to higher prices.
In the New Jersey state of Booker’s home, Gov. Phil Murphy declared a state of emergency earlier this week in an effort to restrict predatory pricing. Read more: Infant formula shortage triggers NJ’s state of emergency
Garden State has been among the states hardest hit by the shortage, according to Datasembly. While stockout rates increased 31 from November to April, New Jersey is among the seven states with a stockout rate of more than 40Array.
Many experts blame chain problems, inflation and a recent recall and temporary closure of Abbott’s Sturgis, Michigan, plant for shortages.
But some elected officials and experts, in addition to Booker and Warren, have pointed to a serious concentration of corporations in the market that began long before the existing crisis.
“The infant formula industry has reached an alarming point of corporate concentration with 4 corporations, Abbott Nutrition, Mead Johnson, Gerber and Perrigo, controlling nearly 90% of the infant formula market,” Booker, Warren and six other senators wrote in a letter. to the United States Department of Agriculture on May 13.
Abbott, which makes Similac, Alimentum and EleCare, controls about 40 of the infant formula market, the senators wrote.
“This concentration point has created a fragile formula that cannot adequately respond to shocks in the chain,” the lawmakers argued. Read more: U. S. Senators Want to Trust Infant Formula Manufacturers in Case of Shortages
On Wednesday, Booker and Warren sent a letter to Abbott CEO Robert Ford, blowing up the company’s “iron control of the market,” which they say has been boosted through more than $4 million in 2020, and more than $95 million since 1998. .
In their letter, the senators asked Ford to disclose the company’s actions and investments that led to the shortage.
They wrote:
Booker and Warren continued:
Citing a whistleblower complaint, senators accused Abbott of seeking to lower prices with below-average “clean-in-place” procedures, adding the inability to exercise or rent well enough to ensure some hygiene at his Sturgis, Michigan, site and the inability to take “reasonable steps. “to correct poor exercise protocols and falsify records to hide deficiencies.
“Even after those disorders were discovered through Food and Drug Administration inspections last fall and before this year, his company failed to act,” Booker and Warren alleged.
The senators added:
Meanwhile, Abbott continues to rack up profits, Booker and Warren said.
“In the current quarter of 2021, Abbott Laboratories doubled its profit from last year,” they wrote. “Instead of making an investment in protection or training, Abbott Labs used its higher profits to spend more than $800 million to buy more than 6. 5 million shares of its shares in buybacks in 2021, and increase its repayment from about $20. 5 million in 2020 to nearly $25 million in 2021, more than 250 times that of the average Abbott employee. “
“His company had a choice, and instead of prioritizing public fitness and making sure families across the country have an abundant source of infant formula, he has stockpiled money, made billions in profits for shareholders and executives,” the lawmakers said.
On Monday, Abbott announced that he had signed a consent order with the U. S. Food and Drug Administration. The U. S. department of operations is in the U. S. to restart operations at its Sturgis plant. two weeks. The company would first begin production of EleCare, Alimentum and metabolic formulas, and then begin production of Similac and other formulas.
From the moment Abbott restarts the site, it will take six to eight weeks before the product is available on shelves, the company said.
“Our number one priority is to provide infants and families with the formula they need, and this is a major step toward reopening our Sturgis plant so we can alleviate formula shortages across the country,” Ford said.
“We look forward to working with the FDA to reopen the facility temporarily and safely,” Ford continued. “We know that millions of parents and caregivers are counting on us and we deeply regret that our voluntary retirement has exacerbated formula shortages across the country. “
“We will work hard to regain recognition as truth that moms, dads and caregivers have put into our formulas for more than 50 years,” Ford said.
According to Abbott’s first quarter 2022 results, which were released on April 20, the company recorded strong monetary functionality despite the withdrawal of its Sturgis plant due to its “diversified business model,” which totaled $3300 million in global COVID-19 testing sales. . in the first trimester.
Abbott reported:
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