Requirements and Best Practices for Oversight of the Infant Formula Suppliers List

Resource type

Technical Assistance & Guidance

Requirements

At least once a year, the state agency (SA) must provide all authorized WIC vendors a list (“the list”) that includes:

The names and addresses of the infant formula wholesalers, distributors, and retailers licensed in the state in accordance with state law, and
Infant formula manufacturers registered with the Food and Drug Administration (FDA) that provide infant formula.

The SA also must:

Only authorize vendor applicants that obtain infant formula from sources included on the SA's list.
Apply its selection criteria consistently throughout its jurisdiction and must terminate the agreements with those vendors that fail to meet them.
Provide the list in writing or by other effective means.
Notify vendors that they may only:
- Purchase infant formula from providers included on the list.
  - Note: The SA may have a policy to allow vendors to purchase infant formula from a source on another SA’s list.
- Provide the specific infant formula prescribed in a participant’s benefit balance.

Purpose

All WIC SAs, including Indian Tribal Organizations and U.S. Territories, help to safeguard the health of WIC infants through oversight of WIC vendors in their purchase of infant formula. This includes ensuring WIC authorized vendors purchase infant formula only from the SA’s list of licensed wholesalers, distributors, retailers, and FDA-registered infant formula manufacturers. This oversight limits the risk of stolen or adulterated infant formula being sold to WIC participants.

Additionally, by providing the list, with the names and addresses of licensed businesses (i.e., wholesalers, distributors, and retailers), SAs make it easier for WIC authorized vendors to find legitimate suppliers and avoid situations like inadvertently contacting an unlicensed business with a similar name to a licensed one.

For the purpose of this requirement, “infant formula” applies to any infant formula provided by the program (inclusive of exempt infant formula; see 7 CFR 246.2 and 7 CFR 246.16a(e)).

Creation of the List

When creating the list, the SA may:

Choose which type of licensing to consider, if more than one type of license applies.
- The SA does not have to use all of the licenses which might apply to one of the state licensed categories (i.e., wholesaler, distributor, retailer).
- If a SA does not have license that specifically covers infant formula, the SA may use another type of license to compile the list (e.g., health or business licensing).
Add the state-specific licensed infant formula wholesalers, distributors, and retailers to the federally provided list of infant formula manufacturers registered with the FDA.

The SA may exclude from the list a state-licensed business only in the event of the following instances:

When specifically required or authorized by state law or regulations. The SA should consult with its legal counsel to determine the correct process for restricting its list of infant formula sources;
When the business does not carry infant formula.

The SA may not exclude any business from the list in a discriminatory manner against any protected class, or in any manner that would have a disparate impact on a protected class.

Provision of the List to WIC Vendors

The SA must provide the list to authorized WIC vendors in writing or by other effective means, per 7 CFR 246.12(g)(10). The SA can satisfy this requirement by:

Providing a hard copy of the list to each vendor.
Providing a telephone number or e-mail address for vendors to verify the license status of a business.
Posting the list on the SA’s website or linking to a list on the state licensing agency’s website.
- Note: It is acceptable for the website to provide a search function for the license status of a business, instead of an actual list.

Oversight of the Infant Formula Purchase Requirements

Before authorizing vendor applicants, the SA:

May ask vendors where they purchase their infant formula via the vendor application and confirm the business is on the SA’s authorized list.
Must ensure that their vendor agreements require vendors to maintain documentation of their infant formula purchases and make such records available to the SA upon request (per 7 CFR 246.12(h)(3)(xvi)).

To ensure ongoing compliance with this requirement, the SA may:

Review infant formula invoices to verify that vendors have purchased infant formula from licensed businesses on the list during routine monitoring visits.
Develop a high risk indicator to identify those vendors that may be more likely to purchase infant formula from an unallowable source. Promising practices may include an indicator based on the type of infant formula supplier used, the size of authorized vendor, or a past history of non-compliance.
Conduct inventory audits on infant formula to ensure the infant formula was purchased from licensed businesses on the list.

The SA must:

Notify and remind vendors of the requirements when issuing the list.
Include the requirements in training materials (7 CFR 246.12(i)(2)).
Terminate the agreements with those vendors determined to be out of compliance with 7 CFR 246.12(g)(3)(i).
Include the list, and the policies and procedures for compiling and distributing the list in their state plan (7 CFR 246.4(a)(14)(xviii)).

SAs have the discretion to establish sanctions for vendors obtaining infant formula from businesses not on the list (per 7 CFR 246.12(l)(2)).

Vendor Appeal Rights

The SA's decision to include or exclude an infant formula manufacturer, wholesaler, distributor, or retailer from the list is not subject to administrative review. However, a vendor retains the right to seek review of a denial of authorization, termination of the vendor agreement, or imposition of a sanction based on the vendor’s alleged non-compliance with the infant formula supplier list policies and procedures.

Definitions

Contract brand infant formula: All infant formulas (except exempt infant formulas) produced by the manufacturer awarded the infant formula cost containment contract. If under a single solicitation the manufacturer subcontracts for soy-based infant formula, then all soy-based infant formulas covered by the subcontract are also considered contract brand infant formulas (see § 246.16a(c)(1)(i)). If a state agency elects to solicit separate bids for milk-based and soy-based infant formulas, all infant formulas issued under each contract are considered the contract brand infant formula (see § 246.16a(c)(1)(ii)). For example, all of the milk-based infant formulas issued by a state agency that are produced by the manufacturer that was awarded the milk-based contract are considered contract brand infant formulas. Similarly, all of the soy-based infant formulas issued by a state agency that are produced by the manufacturer that was awarded the soy-based contract are also considered to be contract brand infant formulas. Contract brand infant formulas also include all infant formulas (except exempt infant formulas) introduced after the contract is awarded.
Non-contract brand infant formula: All infant formula, including exempt infant formula, that is not covered by an infant formula cost containment contract awarded by that state agency.
Exempt infant formula: An infant formula that meets the requirements for an exempt infant formula under section 412(h) of the Federal Food, Drug, and Cosmetic Act (21 USC 350a(h)) and the regulations at 21 CFR parts 106 and 107.
WIC-eligible nutritionals: Certain enteral products that are specifically formulated to provide nutritional support for individuals with a qualifying condition, when the use of conventional foods is precluded, restricted, or inadequate. Such WIC-eligible nutritionals must serve the purpose of a food, meal or diet (may be nutritionally complete or incomplete) and provide a source of calories and one or more nutrients; be designed for enteral digestion via an oral or tube feeding; and may not be a conventional food, drug, flavoring, or enzyme. WIC-eligible nutritionals include many, but not all, products that meet the definition of medical food in Section 5(b)(3) of the Orphan Drug Act (21 USC 360ee(b)(3)).