Economic Research Report No. (ERR-22) 44 pp

August 2006

Recent Trends and Economic Issues in the WIC Infant Formula Rebate Program

Over half of all infant formula sold in the United States is purchased through the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC). Typically, WIC State agencies obtain substantial discounts in the form of rebates from infant formula manufacturers for each can of formula purchased through the program. This analysis suggests that retail markup accounts for most of the cost to WIC of infant formula in most States. However, both it and net wholesale price have increased over time. The recent increase in these components coincides with the introduction of higher priced supplemented infant formulas. Conditions may change after the market adjusts to these new formulas.

Keywords: WIC, Special Supplemental Nutrition Program for Women, Infants, and Children, infant formula, rebates, net wholesale price, retail markup, wholesale price

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Last updated: Tuesday, August 29, 2006

For more information, contact: Victor Oliveira and David E. Davis