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Baby formula shortage: Abbott reaches deal with FDA to reopen plant

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Yahoo Finance’s Anjalee Khemlani joins the Live show to discuss the nationwide baby formula shortage as well as Abbott Laboratories’ deal with the FDA to resume the production of baby formula.

Video Transcript

JULIE HYMAN: Soz.

BRIAN SOZZI: Abbott has reached an agreement with the FDA to reopen its baby formula plant in Michigan to combat the growing shortage overtaking the US. Yahoo Finance senior health care reporter Anjalee Khemlani joins us with the latest. Anjalee.

ANJALEE KHEMLANI: That's right, Brian. As you mentioned, they have come to, basically, a framework of what will happen and when Abbott can restart that plant in Michigan that was shut down in February due to contamination concerns. So right now, what we have is Abbott looking at about a two-week time period to restart its plant, as well as six to eight weeks out before the formula makes it back on the shelves, and that is only once the FDA green lights and says that Abbott has met the criteria to address some of those concerns.

Of course, we recall Abbott had to, really, shut down that plant because of some contamination concerns back in February, also recalled many of its specialty formulas, and that has created the shortage that you are seeing in the grocery stores and online today. We know that, in addition to this FDA action, the FDA has also been looking at ways to import from overseas other companies, as well as similarly-regulated countries, and that is still in the works. There's no set timeline on that.

But we did hear today that Nestle, for example, is importing from Switzerland and the Netherlands some of its products to help fill the shelves. And we also know that Mead Johnson's parent company Reckitt is also increasing production by 30% to help fill this. And this really is a specialty formula market. The White House gave some stats on that. Basically, 20 specialty formulas used by about 5,000 infants. And we have to remember that half of that market is actually individuals on women, infant, and children benefits, and that really is where a bulk of the market is.

But the US does produce 98% of the baby formula it consumes, and it does rely a little bit on imports already. And so that's where the FDA is looking to really increase that. We also do know that the White House has been in touch with retailers like Walmart and Amazon to help increase production from their in-house brands, as well as limit the sales of certain products. So that's where things stand right now. We don't know, really, when things will return to normal, in terms of the products being back on the shelves. But it's a pretty widespread government response, in terms of looking into this and making sure that the products are back. Back to you.

JULIE HYMAN: Yeah. I mean, it is a crisis. And there's been a lot of complaining on the part of parents, rightly so, that they feel the government has not been aggressive enough in dealing with this. There's something else that parents of young children have been complaining about, and that's the fact that there is not yet a vaccine approved-- COVID-19 vaccine approved for children under five. There still isn't. But kids who are a little older than that can now get a booster, Anjalee, right, as of today.

ANJALEE KHEMLANI: That's right, yeah. So we did hear that the agency is going to be announcing that. And that is something that has been in the works. We know that Pfizer, for example, was lobbying for that a couple of weeks ago. And we are still waiting for that June 7 meeting. I want to put that on your calendar. That's when we'll hear about the kids vaccines, the ones that you're speaking about, Julie, specifically from Pfizer and Moderna. Moderna, right now, is ahead of the game, in terms of having submitted all of its data. And we're still waiting for Pfizer to be able to do that in time. So we'll wait and see.