Implementation of the Access to Baby Formula Act of 2022 - PL 117-129

Background

On May 21, 2022, President Biden signed into law the Access to Baby Formula Act of 2022 (ABFA; PL 117-129). ABFA amends Section 17 of the Child Nutrition Act of 1966 (CNA; 42 USC 1786) to 1) add requirements to state agency infant formula cost containment contracts and 2) establish waiver authority for the Secretary of Agriculture to address certain emergencies, disasters, and supply chain disruptions impacting the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC). This memorandum sets forth applicable parameters for implementation of the infant formula cost containment contracts and waiver authority legislative provisions, effective immediately. The provisions set forth in this policy memorandum will also be incorporated into the federal WIC regulations through future rulemaking.

Procurement of Infant Formula

Pursuant to section 17(h)(8)(L), WIC state agencies are now expressly required by law to include language in their WIC infant formula rebate contracts that describes remedies in the event of an infant formula recall, including how an infant formula manufacturer would protect against disruption to program participants in the state (i.e., ensure that WIC participants can purchase formula using WIC benefits). An infant formula manufacturer contracted to provide infant formula is now expressly required by law to comply with these contract requirements. All contracts entered into or renewed on or after May 21, 2022, the date of enactment of the ABFA, must meet this requirement. FNS considers a new contract to be entered into upon award after a competitively bid process. Therefore, this requirement does not apply to contracts that were awarded and/or signed prior to May 21, 2022. FNS considers a contract that is renewed to refer to a new contract that is awarded through a competitively bid process to the same contractor that previously held the contract. Therefore, this requirement does not apply to the exercise of contract option years under current contracts, nor to any modifications or agreements made in response to the May 24, 2022 letter to state agencies encouraging state agencies and manufacturers to come to agreement related to the issuance of an expanded set of contract brand products and non-contract brand infant formula.

FNS recommends that contract language addressing this provision requires that manufacturers allow issuance of, and pay rebates on, both contract brand and non-contract brand formula in any available unit size, type, or form authorized by the Food and Drug Administration (FDA) or for which FDA is exercising enforcement discretion. Additionally, state agencies may address supply chain disruptions, as determined by USDA under the ABFA, in their contracts. If additional shortage clauses are included, FNS recommends clearly outlining criteria that will be used to identify a shortage, as well as the remedies associated with such shortages.

Waiver Authority During Emergencies and Disasters

Prior to enactment of the ABFA, USDA had limited authority to waive regulatory requirements, and only upon individual state agency request, during a presidentially declared major disaster as defined under section 102 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 USC 5121 et seq.). Pursuant to section 17(r) of the CNA, as added by ABFA, USDA now has permanent expanded waiver authority to aid program participants in obtaining and redeeming WIC benefits during an emergency period.

The emergency period is defined as a period during which one of the following conditions is met:

• A presidentially declared major disaster as defined under section 102 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 USC 5121 et seq.).
• A presidentially declared emergency as defined under section 102 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 USC 5121 et seq.).
• A public health emergency declared by the Secretary of HHS under section 319 of the Public Health Service Act (42 USC 247d).
• A renewal of such a public health emergency pursuant to section 319.

USDA has authority under ABFA to waive or modify any statutory requirement under Section 17 of the CNA or any regulatory requirement, provided that the following two conditions are met: 1) such requirements cannot be met by WIC state agencies under the conditions that prompted the emergency period, and 2) exercising the waiver authority is necessary to serve participants and does not substantially weaken the nutritional quality of supplemental foods. ABFA also provides USDA with the ability to issue the waiver or modification to multiple WIC state agencies or on a nationwide basis. Waivers under this authority may remain in effect through the duration of and up to 60 days after the end of the emergency period.

Waiver Authority During Supply Chain Disruptions

Pursuant to the new Section 17(s), USDA now also has authority to issue state agency waivers during a supply chain disruption, including a recall, for statutory requirements appearing under Section 17 of the CNA or regulatory requirements. Section 17(b)(24) defines the term “supply chain disruption” as a shortage of supplemental foods that impedes the redemption of food instruments, as determined by the Secretary. USDA may issue waivers during a supply chain disruption provided that the following two conditions are met: 1) the requirement cannot be met by WIC state agencies during any portion of the supply chain disruption, and 2) exercising the waiver authority is necessary to serve participants, and the waiver does not substantially weaken the nutritional quality of supplemental foods.

USDA may issue waivers in response to a supply chain disruption for the duration of and up to 60 days after the supply chain disruption ends. These waivers may be granted for a period of up to 45 days and may be renewed when USDA provides a 15-day notice of such renewal. Additionally, USDA will notify each state agency affected by such a disruption and include an explanation of such a determination. USDA will make such determinations publicly available on the public website. If a WIC state agency receives a waiver related to infant formula, the affected state agency shall notify each of its contracted infant formula manufacturers about the waiver.

Additional guidance regarding both infant formula cost containment contracts and the process for state agencies to request waivers under the authority described in this memorandum will follow. WIC state agencies may direct any questions related to this memorandum to their respective FNS regional offices.

SARA OLSON
Director
Policy Division
Supplemental Nutrition and Safety Programs