Existing law establishes the State Department of Public Health to implement various programs throughout the state relating to public health.

This bill would require the State Department of Public Health and the Office of Emergency Services, in coordination with other state agencies as appropriate, to, upon appropriation and as necessary, establish an infant formula stockpile. The bill would require the department to establish guidelines for the procurement, management, and distribution of infant formula, taking into account, among other things, the amount of each type of infant formula that would be required to meet shortages, as specified. The bill would also establish the Infant Formula Advisory Committee to to, among other things, make recommendations for the development of guidelines for the procurement, management, and distribution of infant formula, as specified. specified, and advise the development and implementation of the program. The bill would require the committee to provide an annual report to the Legislature with feedback regarding the implementation of the program and updates regarding policy changes and public comments.

Existing law establishes the State Department of Public Health to implement various programs throughout the state relating to public health.

This bill would require the State Department of Public Health and the Office of Emergency Services, in coordination with other state agencies as appropriate, to, upon appropriation and as necessary, establish an infant formula stockpile. The bill would require the department to establish guidelines for the procurement, management, and distribution of infant formula, taking into account, among other things, the amount of each type of infant formula that would be required to meet shortages, as specified. The bill would also establish the Infant Formula Advisory Committee to make recommendations for the development of guidelines for the procurement, management, and distribution of infant formula, as specified.

Date of Hearing: April 19, 2023

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Chris Holden, Chair

ABPCA Bill Id:AB 228

Author:(Wilson) – As Amended Ver:March 9, 2023

Urgency: No State Mandated Local Program: No Reimbursable: No

SUMMARY:

This bill requires the California Department of Public Health (CDPH) and the Governor’s Office of Emergency Services (OES), in coordination with other state agencies as appropriate, by January 1, 2025, to establish an infant formula stockpile, upon appropriation and as necessary. This bill also establishes an advisory committee to make recommendations to OES and CDPH for developing guidelines and implementing the program.

FISCAL EFFECT:

CDPH states it will require $530,000 annually, ongoing for staff and resources for the storage of sufficient formula for the share of infants younger than one year old in California who are Medi-Cal beneficiaries who consume formula (General Fund (GF)). (This bill does not specify Medi-Cal beneficiaries.)

CDPH estimates the cost for a six-month supply of infant formula would range from approximately $200 million to $300 million (GF).

CDPH notes the costs of rotating and disposing of expiring products, product distribution, and providing formula from the stockpile to infants who are not Medi-Cal beneficiaries are unknown.

COMMENTS:

1. Purpose. According to the author:

In 2022, the United States experienced a severe shortage of infant formula as a result of the 2021-2022 global supply chain crisis compounded by a large scale product recall. The import restrictions and market concentration also exasperated this issue. As a result many California parents were met with the unimaginable plight of not having enough food for their babies. Unlike other food products, infant formula often does not have an available and acceptable substitute as a source of nutrition for those who rely on it.

For these reasons, Food and Drug Administration (FDA) Commissioner Robert Califf recommended that lawmakers consider an initiative to have a stockpile of infant formula that could be used to maintain a surplus and avoid any future shortages.

The California government has always been there for its residents in their time of need, from the pandemic to natural disasters. AB 228 will put California in the unique position of being the only state to secure a stockpile of infant formula so that families, particularly those that are low-income, can be served during this and future shortages.”

1. Background. On February 17, 2022, the federal Food and Drug administration (FDA) warned consumers not to use certain powdered infant formula products from Abbott Nutrition’s Sturgis, Michigan, infant formula production facility, due to a series of Cronobacter sakazakii (“Cronobacter”) contaminations. Cronobacter is found naturally in the environment and can live in dry foods, such as powdered infant formula, powdered milk, herbal teas, and starches. Cronobacter infections can be fatal for babies younger than two months or who were born prematurely. Abbott voluntarily ceased production at the facility, initiated a voluntary recall of certain products, and eventually closed the factory after the FDA began investigating Cronobacter infections in four infants who consumed powdered formula from the Sturgis plant. FDA inspectors uncovered several violations at the plant, including bacterial contamination, a leaky roof, and lax safety protocols.

Abbott is one of four companies that produce 90% of U.S. infant formula. Abbott’s recall of several leading brands squeezed supplies that had already been strained by supply chain disruptions during the COVID-19 shutdowns. The shortage was especially acute for children with allergies, digestive problems, and metabolic disorders who rely on specialty formula because the Abbott factory is the only source of many of these products.

1. National Strategy. On March 28, 2023, the FDA outlined its “Immediate National Strategy to Further Increase the Resiliency of the U.S. Infant Formula Market.” The strategy seeks to advance long-term stability in the market and mitigate future shortages, strengthen and diversify the market, and ensure manufacturers produce infant formula under the safest conditions possible.
   
2. Implementation. CDPH notes stockpiling infant formula would be different from its personal protective equipment stockpiling because infant formula expires relatively quickly and CDPH lacks a system for distribution or regular rotation and disposal of products.

Analysis Prepared by: Allegra Kim / APPR. / (916) 319-2081

Date of Hearing: March 21, 2023

ASSEMBLY COMMITTEE ON HEALTH

Jim Wood, Chair

ABPCA Bill Id:AB 228

Author:(Wilson) – As Amended Ver:March 9, 2023

SUBJECT: Infant formula stockpile.

SUMMARY: Requires the California Department of Public Health (DPH) and the Office of Emergency Services (OES), by January 1, 2025, in coordination with other state agencies as appropriate, to establish an infant formula stockpile, upon appropriation and as necessary. Specifically, this bill:

1. Defines “infant formula” as food that purports to be or is represented for special dietary use as a food for infants by reason of its simulation of human milk or its suitability as a complete or partial substitute for human milk.
   
2. Requires DPH and OES, by January 1, 2025, in coordination with other state agencies as appropriate, to establish an infant formula stockpile, upon appropriation and as necessary.
   
3. Requires DPH to establish guidelines for procurement, management, and distribution of infant formula by DPH. Requires DPH and OES to consider the recommendations of the Infant Formula Advisory Committee (advisory committee), described in 4) to 5) below, in developing these guidelines. Requires at a minimum, the guidelines to take into account all of the following:
   
   1. The various types of infant formula, including specialty formula, that may be required during a shortage or other health emergency;
   2. The shelf life of each type of infant formula that may be obtained from DPH and how to restock and distribute a portion of each type of baby formula to ensure the procurements and distributions consist of unexpired formula;
   3. The amount of each type of infant formula that would be required to meet shortages, particularly for families enrolled in California programs, including, but not limited to, the California Special Supplemental Food Program for Women, Infants, and Children (WIC);
   4. Lessons learned from previous supply chain issues, pandemics, and state emergencies, including, but not limited to, supply procurement, management, and distribution;
   5. Geographical distribution of infant formula storage;
   6. The policies and funding that would be required for the state to establish an infant formula stockpile; and,
   7. How distribution from any procurement will be prioritized in the event there is insufficient formula to meet the needs of infants.
      
4. Establishes the advisory committee to make recommendations to OES and DPH necessary to develop guidelines for the procurement, management, and distribution of infant formula (as specified in 3) above), and advise the development and implementation of the program; work with OES and DPH to ensure adequate distribution of formula to disadvantaged community members; and, take into account public comments and recommendations as the program operates.
   
5. Establishes the following members of the advisory committee:
   1. One representative from the State Department of Social Services;
   2. One representative from DPH;
   3. One representative from First 5 California;
   4. One representative from a county health department appointed by the Governor;
   5. One industry representative appointed by the Governor;
   6. One representative from a local authority appointed by the Governor;
   7. One public member appointed by the Assembly;
   8. One public member appointed by the Senate; and,
   9. One public member appointed by the Governor.
      
6. Requires the advisory committee to annually provide feedback to the Legislature on implementation of the program.

EXISTING LAW:

1. Defines, under federal law, infant formula to mean a food which purports to be or is represented for special dietary use solely as a food for infants by reason of its simulation of human milk or its suitability as a complete or partial substitute for human milk. [21 United States Code (USC) §321(z)]
2. Defines infants as persons not more than 12 months old. (Title 21, Code of Federal Regulations §105.3]
3. Establishes the federal Food, Drug, and Cosmetic Act, which among various functions regulates food, dietary supplements, and cosmetics. [21 USC §310 et.seq.]
4. Establishes the state Sherman Food, Drug and Cosmetics Law (Sherman Law), administered by DPH, which regulates the packaging, labeling, and advertising of drugs and devices, including dietary supplements. [Health & Safety Code (HSC) §109875-111929.4]
5. Adopts, under Sherman Law, the federal definition of infant formula. Requires DPH to review all changes to the federal definition of infant formula before those changes are incorporated by reference to the Sherman Law, as specified. [HSC §109951]
6. Establishes the California Retail Food Code, enforced by local enforcement agencies, which establishes uniform statewide health and sanitation standards for retail food facilities. Defines a food facility to mean an operation that stores, prepares, packages, serves, vends or otherwise provides food for human consumption at the retail level, as specified. [HSC §113700-114437]
7. Prohibits a retail food facility from selling or offering for sale after the “use by” date, infant baby formula or baby food that is required to have this date on its packaging pursuant to federal law and regulations, as specified. [HSC §104094.5]
8. Establishes the California Emergency Services Act, which provides the Governor with broad powers to declare local and state emergencies, and to coordinate all emergency services functions for the mitigation of the effects of an emergency in California. [Government Code (GOV) §8550, et seq.]
9. Establishes the OES, and requires OES to be responsible for the state’s emergency and disaster response services for natural, technological, or manmade disasters and emergencies, including responsibility for activities necessary to prevent, respond to, recover from, and mitigate the effect of emergencies and disasters to people and property. [GOV § 8585]

FISCAL EFFECT: Unknown. This bill has not yet been analyzed by a fiscal committee.

COMMENTS:

1. PURPOSE OF THIS BILL. According to the author, in 2022, the United States experienced a severe shortage of infant formula as a result of the 2021-2022 global supply chain crisis compounded by a large scale product recall. Import restrictions and market concentration also exacerbated this issue. As a result many California parents were met with the unimaginable plight of not having enough food for their babies. Unlike other food products, infant formula often does not have an available and acceptable substitute as a source of nutrition for those who rely on it. For these reasons, Food and Drug Administration (FDA) Commissioner Robert Califf recommended that lawmakers consider an initiative to have a stockpile of infant formula that could be used to maintain a surplus and avoid any future shortages. The California government has always been there for its residents in their time of need, from the pandemic to natural disasters. The author concludes this bill will put California in the unique position of being the only state to secure a stockpile of infant formula so that families, particularly those who are low-income, can be served during this and future shortages.
2. BACKGROUND. On Feb. 17, 2022, the FDA warned consumers not to use certain powdered infant formula products from Abbott Nutrition’s Sturgis, a Michigan infant formula production facility, due to a series of Cronobacter sakazakii (or “Cronobacter”). Cronobacter is a germ that is found naturally in the environment that can live in dry foods, like powdered infant formula, powdered milk, herbal teas, and starches. It has also been found in contaminated feeding items such as breast pump equipment. Cronobacter infections are often very serious and can be fatal for babies who are younger than two months or were born prematurely. Infections can also be very serious for older people and people whose bodies have trouble fighting germs (like people with human immunodeficiency virus, organ transplants, or cancer). Abbott subsequently voluntarily ceased production at the facility, initiated a voluntary recall of certain products, and eventually closed the factory after the FDA began investigating four bacterial infections among infants who consumed powdered formula from the plants. FDA inspectors uncovered several violations at the plant, including bacterial contamination, a leaky roof, and lax safety protocols. It has been reported that the FDA investigated as many as nine children who died since 2021 after consuming baby formula produced at Abbott’s Sturgis facility.
   
   Abbott is one of just four companies that produce 90% of U.S. formula and Abbott’s February recall of several leading brands, including Similac, squeezed supplies that had already been strained by supply chain disruptions during the COVID-19 shutdowns. The shortage was especially acute for children with allergies, digestive problems, and metabolic disorders who rely on specialty formula because the Abbott factory is the only source of many of these products.
   
   In response to the shortage, the Biden administration invoked the Defense Production Act which allowed infant formula manufacturers to go to the front of the line and get raw materials from their suppliers. Additionally, the Biden Administration imported infant formula to get more formula to stores (Operation Fly Formula). According to the White House website, 10 Operation Fly Formula missions have been announced or completed – totaling 32 flights and carrying the equivalent of 19 million 8-ounce bottles of formula. The FDA and the United States Department of Agriculture (USDA) have also been working closely with other infant formula manufacturers to increase production domestically and abroad.
   
   In May 2022, the FDA Commissioner Robert Califf, during a U.S. Senate committee hearing, suggested that the US government should consider creating a stockpile of infant formula to avoid the possibility of future shortages. The FDA Commissioner also indicated the FDA needs better insight into the different infant formula manufacturers’ supply chains. Currently, infant formula manufactures are not required to tell the FDA when they have an impending shortage, or when they find contamination in a sample at their facility that has not yet been shipped. The manufacturers are also not mandated to have a back-up or contingency plan to avoid a shortage if the plant goes offline.
   
   On March 8, 2023, the FDA sent a letter to manufacturers, packers, distributors, exporters, importers, and retailers involved in the manufacturing and distribution of powdered infant formula and called on the industry to mitigate potential safety risks by controlling water in dry production areas and verify the effectiveness of controls through environmental monitoring; implementing effective supply-chain controls for biological hazards; and, identifying all biological products. The firms were also asked to voluntarily notify the FDA any time a product is found to be positive for Cronobacter or Salmonella. It should be noted that the Federal Trade Commission and the Security and Exchange Commission are investigating Abbot.
   1. Examples of Public Stockpiles.
      1. Federal. According to the 2020 Congressional Research Service report, in 1999 the Department of Health and Human Services established a stockpile of vaccines and antidotes to respond to biological or chemical agents attacks on the United States. In 2002, Congress named this initiative the Strategic National Stockpile (SNS). The SNS has large quantities of medicine and medical supplies to protect the American public if there is a public health emergency (terrorist attack, outbreak, or earthquake) severe enough to cause local supplies to run out. Examples of supplies in the SNS include the 12-hour push pack where each push pack weighs about 50 short tons (100,000 lb; 45 t; 45,000 kg), its contents include broad-spectrum oral and intravenous antibiotics, emergency medicines, IV fluids and kits, airway equipment, bandages, vaccines, antitoxins, and ventilators. The SNS also has adequate vaccines and countermeasures in its stockpile, including 300 million smallpox treatment courses and enough anthrax vaccines to handle a three-city incident. The CHEMPACK, also part of the SNS contains nerve agent antidotes to help in the event of a nerve agent attack or industrial accident.
         
         The Department of Veterans Affairs (VA) maintains its own stockpile of drugs and medical supplies at VA facilities. The Department of Defense maintains a range of stockpiles for defense needs in times of war and for other contingencies.
      2. State Stockpile. SB 275 (Pan), Chapter 301, Statutes of 2020, requires DPH and OES to establish a personal protective equipment (PPE) stockpile, and requires certain health care employers, including hospitals and skilled nursing facilities, to maintain an inventory of PPE at least sufficient for 45 days of surge consumption, effective on January 1, 2023, or one year after regulations are adopted defining 45 days of surge consumption, whichever is later. SB 275 defines PPE as protective equipment for eyes, face, head, and extremities, protective clothing, respiratory devices, and protective shields and barriers, including, but not limited to, N95 and other filtering facepiece respirators, elastomeric air-purifying respirators with appropriate particulate filters or cartridges, powered air purifying respirators, disinfecting and sterilizing devices and supplies, medical gowns and apparel, face masks, surgical masks, face shields, gloves, shoe coverings, and the equipment identified by or otherwise necessary to comply specified regulations.
         
         In 2006, citing the threat of avian flu, then-Governor Schwarzenegger announced the state would invest in emergency and disaster preparedness. According to a Los Angeles Times article published on March 27, 2020, the state invested more than $200 million for three mobile hospitals and a related Health Surge Capacity Initiative to stockpile medicines and medical gear for use in outbreaks of infectious disease. In addition to the three 200-bed mobile hospitals, the state purchased 50 million N95 respirators, 2,400 portable ventilators, and kits to set up 21,000 additional patient beds wherever they were needed. However, according to the article, in 2011, in the midst of a recession and plunge in state revenues, the state cut off the money to store and maintain the stockpile of supplies and the mobile hospitals. Much of the medical equipment, including the ventilators, were given to local hospitals and health agencies, and the respirators that were not given away or used during wildfires were allowed to expire without being replaced. According to the Los Angeles Times, by the time COVID-19 arrived in California, there were 21 million expired N95 masks in the state stockpile. The state released these masks, but stated because they were past their expiration date, they were approved for use only in limited, low-risk circumstances, not for treating patients with COVID-19.
   2. California response to the infant formula shortage. In 2022, DPH/WIC worked closely with the USDA and California WIC formula contractors, Abbott and Mead Johnson, to help WIC families get the formula they needed. One action taken included temporarily adding more formula products to WIC's Approved Product List. This gave families more choices at the store during the shortages. Following the period of 2022 shortages, the availability of infant formula in California has significantly improved. California WIC contract formulas, Similac Advance, Similac Sensitive, and Similac Total Comfort, are now more accessible at WIC authorized stores. On December 19, 2022, the USDA announced a three-phase plan to end the temporary expanded WIC formula options. The phase out of the temporary expanded formula options will start March 1, 2023, and will be completed on July 1, 2023.
   3. Recent infant formula recall. In February 2023, Reckitt, a producer of nutrition products, announced that, out of an abundance of caution, it has chosen to voluntarily recall two select batches of ProSobee 12.9 oz. Simply Plant-Based Infant Formula (about 145,000 cans) due to a possibility of cross-contamination with Cronobacter sakazakii.
3. SUPPORT. Supporters such as the American Federation of State, County, and Municipal Employees, California Alternative Payment Program Association, and the California Black Health Network state in support that this bill would ensure that California has safe and reliable infant formula in case of shortages.
4. REQUEST FOR AMENDMENTS. The California Breastfeeding Coalition (coalition) does not have an official position on this bill but indicates it is not supportive of the establishment of a state managed infant formula stockpile and infant formula stockpile advisory committee. Instead, the coalition requests amendments to broaden the focus of this bill to establish an Infant and Young Child Feeding in Emergencies Taskforce to develop a statewide emergency preparedness, response and recovery plans that considers the specific needs of infant and young children children with the goal of protecting and maximizing nutrition, health and development of children.
5. RELATED LEGISLATION. AB 899 (Muratsuchi) requires an in-state or out-of-state manufacturer of infant formula or baby food for sale or distribution in this state to test their final infant formula or baby food product, as defined, for toxic heavy metals, including levels of lead, mercury, cadmium, and arsenic, and to make publicly available on its internet website the name and level of toxic heavy metals present in the final infant formula or baby food product. AB 899 is pending hearing in Assembly Health Committee.
6. POLICY COMMENTS. In establishing the stockpile, there will be costs associated with the procurement and storage of these infant formulas. Although the shortage has improved, there are reports that families especially those in rural communities continue to experience purchase limitations, empty shelves, and fewer options for infant formula. Thus, it is unclear if the current manufacturing or supply chain would be capable of meeting a stockpile order, and that a stockpile may be more appropriate to be established on the federal level. Additionally, since infant formulas expire within a year, the state should have a plan on how to distribute them to consumers before their expiration. A potential unintended consequence for establishing and maintaining an infant formula stockpile is the possible cost pressure on the current infant formula market. Although supply is improving, will consumers now have to compete with the state to procure infant formula and potentially pay more?
   

REGISTERED SUPPORT / OPPOSITION:

Support

American Federation of State, County, and Municipal Employees, California

California Alternative Payment Program Association
California Black Health Network

California School Employees Association

Opposition

None on file.

Analysis Prepared by: Rosielyn Pulmano / HEALTH / (916) 319-2097