WIC program benefits from large rebates on infant formula

A chart showing the rebates as a percentage of wholesale price for milk based powder contracts in effects as of February 2013, selected States.

USDA’s Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) provides eligible low-income women, infants, and children with supplemental foods, nutrition education, and referrals for health care and other social services. Fiscal year 2013 expenditures for WIC totaled $6.4 billion and 8.7 million individuals (including 2 million infants) were served. To reduce costs, Federal law requires that WIC State agencies enter into cost-containment contracts with infant formula manufacturers. Typically, a manufacturer is given the exclusive right to provide its formula to WIC participants in the State in exchange for a rebate for each can of formula purchased through the program. These rebates are large; for milk-based powder—the predominant type of formula used in WIC—the average rebate was 92 percent of the manufacturer’s wholesale price for contracts in place in February 2013. Twenty States and the District of Columbia received rebates of 95 percent or more. The statistics in this chart are from the ERS report, Trends in Infant Formula Rebate Contracts: Implications for the WIC Program, December 2013.

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