‘We’re sorry to every family we’ve let down’: Abbott CEO explains the company’s role in the U.S. baby formula shortage

May 23, 2022, 4:03 PM UTC

Abbott CEO Robert Ford has apologized for his company’s role in the nationwide baby formula shortage and promised to make significant investments to ramp up production.

“We’re sorry to every family we’ve let down,” Ford wrote in a Washington Post op-ed, saying the voluntary recall of its infected baby formula—while the right thing to do—exacerbated the shortage.

Abbott recalled its Sturgis, Michigan-manufactured products in February, including some of its Similac, Alimentum, and EleCare products, after four infants fell ill and two died from bacterial infections after consuming the formula produced at the plant.

With supply chains already tangled by COVID-19 and Abbott—with around a 48% share of the formula market—recalling its products, baby formula soon began to disappear from store shelves and panic grew.

By the start of May, 43% of baby formula was out of stock at retailers, according to product data firm Datasembly.

Some children who require EleCare, a specialized Abbott formula for children who cannot digest other formulas and milks, had been hospitalized.

On this Ford wrote: “I will not mince words — this is tragic and heartbreaking, and it is consuming my thoughts and those of my colleagues.”

What went wrong?

Ford explained what led the company to recall its baby formula and detailed what it is doing to fix it.

On Feb. 17, Abbott shut down its large Sturgis site after four children fell ill from drinking formula manufactured at the plant.

Prior to shutting down the plant, a whistleblower report was submitted to the FDA in October 2021, alleging health and safety compliance issues at the facility, which contributed to a formal inspection by the agency in January this year.

“The FDA’s investigation did discover a bacteria in our plant that we will not tolerate,” Ford said.

“I have high expectations of this company, and we fell short of them.”

After recalling its products, the baby formula market—characterized by limited competition, exclusive contracts, and three large suppliers—dried up.

U.S. President Joe Biden, this past week invoked the Defense Production Act to boost production of baby formula and authorized the Defense Department to help fly formula in from overseas.

The plan to fix the shortage

Abbott is also trying to get its Sturgis plant operating at full capacity again to make up for lost supply.

“When we are operating our Michigan facility at full capacity, we will more than double our current production of powdered infant formula for the United States,” Ford wrote in the op-ed.

“By the end of June, we will be supplying more formula to Americans than we were in January before the recall.”

Ford also said Abbott would be enacting several measures to further ease the pain caused by the shortage.

Abbott is first, prioritizing the manufacturing of Elecare for the hospitalized children and establishing a $5 million fund to help the families with medical and living expenses to weather the storm.

Secondly, Ford reassured buyers they can feel safe buying any Abbott product, noting it has passed a rigorous inspection.

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