Abstract This paper explores the WIC infant formula rebate program, which awards a single-source contract to the firm that offers the lowest net bid price. We study spillover mechanisms derived […]
In this study, the researchers analyzed 2004-09 Nielsen scanner-based retail sales data from more than 7,000 stores in 30 states, to examine the effect of winning a WIC sole-source contract on infant formula manufacturers ; market share in supermarkets. According to the findings, the manufacturer holding the WIC contract brand accounted for the vast majority (84%) of all formula sold by the top three manufacturers. The impact of a switch in the manufacturer that held the WIC contract was considerable.
WIC provides participating infants with free infant formula. This study estimated that between 57% and 68% of all infant formula sold in the US was purchased through WIC, based on 2004;06 data, and that formula costs to the WIC Program have increased. After adjusting for inflation, net wholesale prices increased by an average 73% for 26 fluid ounces of reconstituted formula between states ; contracts in effect in December 2008 and the states; previous contracts. As a result of the increase in real net wholesale prices, WIC paid about $127 million more for infant formula over the course of a year.
This report examines trends in the factors affecting WIC infant formula costs from January 1998 to January 2006. Data on infant formula manufacturers ; bids for rebate contracts, formula manufacturers ; wholesale price lists, and scanner-based retail sales data from supermarkets were used in the study. Results suggested that retail markup accounted for most of the cost to WIC of infant formula in most states. However, both retail markup and net wholesale price had increased over time. The recent increase in these components coincided with the introduction of higher-priced supplemented infant formulas. The authors concluded that conditions might change after the market adjusts to these new formulas.
This report provided information on (1) factors that influence program spending on infant formula; (2) how the level of savings resulting from infant formula cost containment has changed and the implications of these changes for the number of participants served; and (3) steps federal and state agencies have taken to contain state spending on infant formula.
This report developed an economic model that provided the theoretical framework for the econometric analysis presented in the report's companion volume, WIC and the Retail Price of Infant Formula (FANRR No.39-1). The model examines supermarket retail prices for infant formula in a local market area and identified the theoretical effects of WIC and its infant formula rebate program.
This report presented findings from the most comprehensive national study of infant formula prices at the retail level. For a given set of wholesale prices, WIC and its infant formula rebate program resulted in modest increases in the supermarket price of infant formula, especially in states with a high percentage of WIC formula-fed infants. However, lower-priced infant formulas were available to non-WIC consumers in most areas of the country, and the number of these lower-priced alternatives was increasing over time.
Government Accountability Office examines the extent that WIC agencies have restricted the use of non-contract standard formula to lower the cost of the WIC Program.
The researchers examines cost-containment practices in six states, including interviews with the various stakeholders and analysis of WIC administrative data. The authors reached three major conclusions: (1) Cost-containment practices reduced average food package costs by 0.2% to 21.4%, depending on practices implemented and local conditions; (2) the cost-containment practices had few adverse outcomes for WIC participants; and (3) administrative costs of the practices were low, averaging about 1.5% of food package savings.
The objective of this study was to identify the unintended consequences of the WIC formula rebate on the proportion of mothers who breastfed their babies. The results showed that the high and increasing cost of the formula might perpetuate the idea that WICs formula packages are of greater value than the breastfeeding packages that WIC offers.
