FDA officials see themselves as an elite priesthood, pursuing excellence merely by dint of being at the FDA. From this perspective, there is zero incentive to let new players into the baby formula market when, in their view, there are already excellent quality companies serving the market, such as Abbott Labs, Mead Johnson, and Nestle. It’s true that baby formula is overpriced in the U.S., costing about twice as much as it does throughout much of Europe. But to an FDA official, price is incidental.
Source: Big Bottle: The Baby Formula Nightmare
I mean, of course. How could it have been otherwise?
In my opinion, stock buybacks should simply be illegal at this point. They always seem to be a key part of every story about large corporations crippling our economy, and hurting the average person in favor of the executives running them.
This country was supposed to have been built on Capitalism with a capital “C,” meaning “free markets” should be providing “competition” and settling on appropriate prices. And yet every market of significance in this country is now being run by 2 or 3 large companies, who collude and “stay in their lane,” with governmental regulatory cover to preclude new entrants coming in at a lower price. And if there is a successful startup in some space, as soon as they start making enough difference to be noticed in the public filings of one of the “2 or 3” established companies in the space, they will be “aquihired,” and the FTC and SEC will stroke their chins and say, “ok.” And then whatever made the startup interesting will wither and die, ala Heroku and Salesforce.
Finally, the FDA needs wholesale reform, since this kind of crisis seems to happen a lot. I mean, the relationship between the FDA and Abbott Labs was also behind the rapid Covid testing scandal, where FDA official Tim Stenzel – who had worked at Abbott – then approved Abbott as one of two firms to make those tests, and blocked all other entrants. That’s why rapid Covid tests were both in shortage and much more expensive in the U.S. than they are in Europe. The FDA needs to be broken up so that its drugs and food divisions are separate, and it needs to take its mandate seriously for a resilient supply chain.
When Rockefeller encompassed the core of all of American business, and 25% of the government was funded by the taxes he paid alone, we got serious about not letting large companies run our country. We called it “trustbusting,” and there was a long history of it. I’m doubting that this era of American history is still being taught. We’re certainly not doing it any more.