Instead of protecting consumers, the FDA ended up harming them by creating a national shortage of baby formula.
Parents with newborns are having a hard time in America these days. They are facing a nightmare when it comes to getting baby formula for their toddlers. The recall of products and temporary closure of a Michigan factory from Abbott Nutrition has left most US supermarkets without stock of this vital product for kids. As of May 8th, the nationwide out-of-stock of baby formula was reported at 43%.
Even though Abbott is a major national supplier, this situation is not entirely the company’s fault. The massive shortage stems from the intrinsic rules of operation of the Food and Drug Administration.
Last February, the FDA recommended everyone avoid purchasing products from Abbott’s Michigan facility because it was investigating certain consumer complaints regarding the presence of a potentially dangerous bacteria coming from that facility.
The FDA did not obligate Abbott to close the place, but the company had no other choice because no one would buy a product after such an announcement. In March, the FDA released a report in which it determined that a similar bacteria was found in the facility but not in the products. After extensive research, the company and the FDA confirmed that there was no linkage between the bacteria found and the complaints from the consumers.
Still, most people would likely agree that the FDA was right to advise caution, even though it led to the factory’s closure. In one sense, the decision is easy to justify: If there really had been a problem with the product coming from the factory, it could have killed babies.
What’s harder to justify is the shortage caused by the FDA’s caution that has affected every baby in America in need of formula.
Here’s the real issue: It’s not as if the FDA had much of a choice in how they proceeded. The rules under which FDA bureaucrats operate skew them towards minimizing the risk of any kind of intoxication, illness, or death without even considering how costly that risk minimization is. That might seem reasonable at first, but as the national shortage shows, it can also result in catastrophe.
Of course it’s desirable to protect babies from deadly bacteria. On the other hand, it’s also desirable to ensure every parent in America is able to feed their baby. The situation at Michigan’s factory required a more careful examination of the costs and benefits. FDA officials took the lowest risk course of action before even giving it a second thought, thus failing to reconcile these two highly complex objectives.
This problem has nothing to do with the people in charge of the FDA. Any reasonable person would act the same way, taking as few risks as possible. As Nobel Laureate economist Milton Friedman said, “The way the FDA now behaves, and the adverse consequences, are not an accident, not a result of some easily corrected human mistake, but a consequence of its constitution.” The political rules of the FDA are the primary determinant of the behavior of the people within it. These people might actually be dedicated civil servants, but the rules they follow are wrong because they are designed to reduce risks without considering the costs whatsoever.
The national shortage of baby formula is a tragedy with unmeasurable consequences. Even though the main cause currently seems to be linked to a plant closure, the root of the problem lies in the rules of the FDA. These rules should be changed so that FDA officials can reduce different risks and simultaneously assess the costs of this risk reduction.
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