Infant formula manufacturers’ discounts reduced costs to WIC

USDA’s Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) provides iron-fortified infant formula to low-income nutritionally vulnerable infants. To reduce formula costs, most WIC State agencies, either alone or jointly through alliances with other agencies, use competitive bidding to award contracts to issue a single manufacturer’s infant formula as the first-choice formula to WIC participants. In return, the manufacturer offers a discount in the form of a rebate on each unit of formula bought through WIC. WIC State agencies awarded 28 new infant formula contracts between October 2018 and March 2023. Under their previous contracts, those agencies received a discount of 100.2 percent on the manufacturers’ wholesale price for a unit of infant formula, on average. Under the new contracts, WIC State agencies received a discount of 108.6 percent, on average. In March 2023, 18 contracts representing 42 State agencies stipulated discounts of more than 100 percent, and 5 contracts representing 7 State agencies stipulated discounts of more than 120 percent. Manufacturer rebates are a significant source of cost savings to WIC, and larger discounts allow the program to serve more eligible participants on its fixed budget. This chart appears in the USDA, Economic Research Service report, Manufacturers’ Bids for Infant Formula Rebate Contracts, 2013-23, published in April 2025.