FTC launches probe into baby formula shortage

Driving the news: The FTC said it would examine reports of "exorbitant" prices and the "current concentration" of the baby formula industry, which is largely controlled by four companies.

• "The FTC is launching a public inquiry to identify the factors that contributed to the shortage or hampered our ability to respond to it," said FTC Chair Lina Khan in a statement. "Learning from this experience can help determine how we can minimize the risk of similar shortages in the markets for other life-sustaining products."
• The announcement comes ahead of a congressional hearing Wednesday, when officials from Abbott, the FDA and other industry leaders are poised to testify.

Worth noting: The agency said it would coordinate with the USDA, which administers the Special Supplemental Nutrition Program for Women, Infants and Children (“WIC”), which accounts for about half of the baby formula market.

• "Concentration in the infant formula market has created market fragilities that, combined with certain features of the program, may impede WIC’s ability to quickly respond to lengthy product recalls, factory shutdowns, or other disruptions," the FTC said.