(May 16, 2022)
7:34 P.M. EDT
MR. MUNOZ: All right, good evening. Happy Monday, everybody. Thank you for joining us on this call tonight to discuss some updates from the administration on efforts to increase the availability of safe infant formula supply across the United States.
As a reminder, this call will be on background, attributable to "senior administration officials." It will be embargoed until the conclusion of the call.
At the beginning, we have a few brief remarks and then we can just get into a couple of questions.
Joining us on the call is [senior administration official] and [senior administration official]. And with that, I will kick it to [senior administration official].
SENIOR ADMINISTRATION OFFICIAL: Great. Thanks, Kevin. As you know, getting more safe infant formula onto shelves across the country is one of the President's top priorities. We understand how stressful it is for parents trying to feed their children - I say that as someone expecting my second child in June - and that's why this administration has been working for weeks to address the infant formula shortage.
It's important to remember that this shortage exists because one manufacturer, Abbott Nutrition, closed a facility in Michigan due to safety concerns from the FDA. That facility was a major producer of formula that families in this country rely on. And you have heard from us about our ongoing, 24/7 work to tackle the issue.
I want to provide an update tonight on just a couple of very recent developments. First, today, FDA and Abbott agreed on next steps to reopen the Michigan plant that is currently closed. This is a critical step in resolving the shortages that are impacting families across the country today.
Abbott and the federal government signed a formal consent decree that outlines the steps to get the facility reopened and produce - and producing formula again.
The consent decree requires that Abbott retain an independent expert to review the facility's operation and ensure compliance with the law. It includes requirements for testing products and for promptly notifying the FDA should any contamination be detected.
And the consent decree also requires the implementation of a detailed sanitation plan, an environmental monitoring plan, a new employee training program. So a robust document outlining a key series of basic steps that the parties have agreed to.
Second, also today, we took another important step with the FDA releasing guidance under which major formula manufacturers can ask to safely import formula that is not currently being produced for the U.S. market.
Companies will need to apply with the FDA, and FDA is prepared to review applications quickly and respond to them rapidly. FDA will prioritize review of applications that are most likely to be successful and will get the most formula to U.S. shelves as quickly as possible.
FDA is going to be closely evaluating quality and safety and safety history to ensure that only safe product will come to American shelves.
At the White House, we have alerted embassies and retailers and manufacturers to identify potential companies that could make use of the new importation process. And we'll continue working with folks as we get this process moving.
Third, I want to highlight that throughout the weekend we've been working closely with manufacturers and retailers that are today producing formula for the U.S. market to identify transportation and logistical needs to increase the amount and speed of approved formula that's being shipped into the country, and to ensure that formula that is being produced here or coming in from abroad is quickly moving from factories to retailers. And we've offered logistical support, and we'll be, you know, continuing to conduct that outreach and identify ways to be helpful.
Fourth, we've also continued to engage with pediatricians and parents' groups and other stakeholders to hear from them and to share information about resources and (inaudible) during this time.
So, taken together, the steps we're announcing today should continue to make a difference for families. And we'll be working overtime to get more formula on shelves.
So, with that, back to you, Kevin.
MR. MUNOZ: Thanks, [senior administration official]. Don't be shy - if you have questions, we have some time. First let's go to Spencer Kimball at CNBC.
Q Hi, thank you for doing the call. So the FDA said that, you know, it streamlined the process at ports, and imports have increased 300 percent since last year. Can you just say where exactly are the imports coming from - what companies, what countries? How long does the administration expect the situation to take until supply is kind of normalized?
And then also, in the consent decree, the Justice Department said that products were adulterated. Abbott has denied that. So did the FDA find contaminated baby powder at the facility? Thank you.
SENIOR ADMINISTRATION OFFICIAL: [Senior administration official], you want to take the first part of that?
SENIOR ADMINISTRATION OFFICIAL: So I can take the piece on the consent decree. So, you know, I don't want to get into a, like, huge back-and-forth on exactly the findings of facts between the agencies or between the parties here.
The consent decree reflects that there was a history of, you know, product disposal at the facility because of concerns about contamination, and so it's consistent with that. But I would refer you to DOJ and to Abbott for, you know, specifics on the terms of the consent decree.
[Senior administration official], if you can jump in. I think you're best positioned to weigh in on where are you seeing imports are coming from.
SENIOR ADMINISTRATION OFFICIAL: Sure.
SENIOR ADMINISTRATION OFFICIAL: And if not, I will (inaudible).
SENIOR ADMINISTRATION OFFICIAL: No, it's working now. I had trouble unmuting my line, so apologies for that.
You know, when we look at our trade data, the sources of imports for formula currently include Ireland, Chile, the Netherlands. You know, as we look at the kind of countries that have health and safety inspection systems similar to our own, may be able to meet that quantity and labeling and nutritional guidance standards that [senior administration official] laid out, we can imagine Australia, New Zealand, the UK also being countries that, you know, product could be imported from.
MR. MUNOZ: Great. Next question. Let's go to Alex Alper at Reuters.
Q Hi there. Can you hear me okay?
MR. MUNOZ: Yep.
SENIOR ADMINISTRATION OFFICIAL: We can.
Q Okay, great. I guess - you know, you mentioned the importance of facilitating transportation. And I was wondering if you could say, you know, what specific transportation help has the White House offered to the companies involved.
And then, just to follow up on something that was mentioned I think late last week, which was the possibility of invoking the DPA. And I wondered if that was still under consideration and how specifically it could help increase production. Thank you.
SENIOR ADMINISTRATION OFFICIAL: Sure. On the - I can take those questions.
On the transportation side, you know, we've talked to the retailers, we've talked to the manufacturers. We've told them, "Let us know if you're having some specific transportation, logistical challenges somewhere in your supply chain where we could offer some help." Thus far, we're still working through those requests, and I have no specific update to report on that side.
What we have seen generally during this supply chain crisis - because we have a Supply Chain Disruptions Task Force that the administration has been running - that, in some instances, we're able to help improve communication between all the firms and the logistics industry, and between suppliers and their customers to help speed up the movement of goods through the supply chain.
On the question of the Defense Production Act, here we are continuing to focus on actions we can take to get more supply available as quickly as possible. That is, like, our primary goal. We're going to continue to look at every option that is on the table there. No additional specific updates to offer you on the DPA there, but I will point you again to the work that the FDA has done today with their new importation guidance. It's is a really critical and crucial step to quickly increasing supply in the country.
MR. MUNOZ: Thanks, [senior administration official]. Let's go to MJ Lee at CNN.
Q Hi, can you hear me? Sorry about that.
MR. MUNOZ: Hey.
Q Hey, thank you so much for doing this. I was wondering if you all could share or know when the last time was that the FDA inspected the Michigan facility that's opening up again. And will FDA officials be there throughout the reopening process? And just if you could walk us through how that would work.
And then just on the new guidance you mentioned for applying to import formula, you said that you hope to go through some of these applications pretty quickly. Do you have a sense of a general timeline for that? Are we talking about days or weeks for approval? And also just what the quantity is that you are estimating.
SENIOR ADMINISTRATION OFFICIAL: Yeah, so on the first question, I would refer you to the FDA. As you know, they're an independent scientific entity that conducts, you know, independent inspections and enforcement activities. So I would refer you to them for details on what they can share about when they have been on site and, you know, the schedule there.
On the timing for reviewing applications, FDA, you know, has asked companies to provide them with information that they can review. FDA has made clear that they will prioritize applications that stand a good chance of being successful, that indicate, sort of, clear quality and safety and nutritional adequacy and all of that, and that have potential to move significant products into the United States quickly.
You know, we expect - well, the process has been designed to move rapidly so that FDA, again, can evaluate those applications that have a clearer chance of success and move forward on those on those quickly.
But I don't have a specific timeline or number of days to give you tonight.
MR. MUNOZ: Next question, let's go to Alyssa Rosenberg, The Washington Post.
All right, Alyssa, we will come back to you.
Ben Gittleson, ABC.
Q Hi. Along the same lines, I was wondering how soon you expect imports could be actually seen on shelves. I know the previous question was about the application process, but as you're planning for supply to become available, if you could give an estimate for parents how long it would take for the imports to actually appear on shelves.
And then also, the White House had said earlier today that the administration had been contacting suppliers for infant formula manufacturers to let them know that their materials were critical for boosting production, and encouraging them to prioritize the production and delivery. I was wondering if you could provide a little bit more specific detail. Like, what does that actually look like? Are these suppliers within the U.S.? What type of impact will this make and how quickly?
SENIOR ADMINISTRATION OFFICIAL: Yeah, sure. On the first question, the FDA commissioner said this morning that we are talking about getting products to the shelves in, you know, a matter of weeks. So we're talking just a couple of weeks to - you know, for - to get some of that imported product into the country and available in U.S. stores.
I'll turn to [senior administration official] on the second piece.
SENIOR ADMINISTRATION OFFICIAL: Yeah. So, on the second one, you know, I can tell you broadly: You can imagine that a manufacturer of infant formula needs to assemble a range of inputs, whether it's specific ingredients, it's labeling, it's packaging materials. And so, you know, in a few instances, they identified how it would be helpful to get some of those supplies in quicker, and we were able to contact the suppliers and let them know. And they were - it was a helpful flag because they were not aware of what that downstream customer was producing and were eager to help make sure that those orders were being sent quickly.
MR. MUNOZ: Great. Let's go back to Alyssa.
Q Hey, sorry about that. So, I - you know, I just hopped off the FDA call. I'm hearing from you guys, from them that it's going to be a couple of weeks. And what efforts are underway to connect families who can't get formula now with the formula they need? Because, clearly, there are families who can't wait a couple of weeks.
I know that, you know, the guidance has referenced trying to identify areas where out-of-stock rates are particularly high and expedite getting formula to retailers there. But can you talk about any resources and efforts that are helping families bridge that couple-of-weeks gap, especially because it could be longer?
SENIOR ADMINISTRATION OFFICIAL: Sure. So, I mean, as you know, we are carefully monitoring data across the country and improving, you know, our ability to understand regional and other variations every minute. As we relayed last week and remains true, we do know that today there is more infant formula coming off of production lines in the U.S. than there was prior to the recall. And similarly, overall sales of infant formula are up 13 percent compared to the pre-recall period.
So there is infant formula available. At the same time, we are absolutely mindful of how challenging this is, and I think we have a couple of key messages for families.
One is we want families to talk to their pediatrician and have confidence that it is - it is generally safe to switch your baby between infant formula products.
If there is a brand available in the store - even if it's not your normal product or, you know, a slightly different formulation or a different brand or, you know, powder versus liquid or, you know, any of those differences - it is - the formula on U.S. shelves is safe, and it is safe to move your baby between products.
We recognize that that's scary and can be challenging, but families should have confidence buying whatever is available and providing that to their family.
At the same time, you know, it is not - it is not safe to provide - to water down formula or to make your own infant formula at home. And so, we think it is important that families hear those messages.
MR. MUNOZ: All right. Last question, let's go to Meredith Lee.
Q Hi there. Can you hear me?
MR. MUNOZ: Go ahead.
Q Hi. I'm wondering if you could just clarify the timeline for when FDA notified the White House about infant formula shortages at the Michigan plant and potential market disruptions from that.
I know Karine said today that the administration has been working on this 24/7 since February, but Politico reported that a whistleblower last October flagged food safety concerns to senior FDA officials. So I'm wondering when the FDA notified the White House about any issues at the Michigan plant and potential shortages stemming from that.
SENIOR ADMINISTRATION OFFICIAL: Yeah, I - I'm not going to - I'm not in a position to comment on any internal communication. The recall became public on February 17th. And, you know, we certainly have been very public about our activity in this space since then. But again, I am - I am not in a position to comment on internal communications that were - you know, that would have happened prior to that.
MR. MUNOZ: All right. Well, thank you, everybody. As a reminder, the call is on background, attributable to "senior administration officials," and the embargo lifts after this. So, thank you for joining tonight.
7:52 P.M. EDT