USDA: Infant Formula Rebates Reduce WIC Spending

Rebates for infant formula help reduce costs of the Special Supplemental Nutrition Program for Women, Infants, and Children, or WIC.

USDA’s Economic Research Service reports that from 1989 to 2022, savings to WIC from the rebates totaled $71.9 billion in inflation-adjusted 2022 dollars, or 23 percent. Without the rebates, the Federal Government would have spent about $307.5 billion on the WIC program over that period. With the rebates, the Government spent $235.6 billion. The greatest savings come from strategies used to contain the costs of providing infant formula through the program.

Since 1989, most WIC state agencies have used competitive bidding to award contracts to a single manufacturer to serve as the formula of first choice for infant participants in their state. In return, manufacturers offer WIC State agencies rebates for each unit of formula sold through the program. State agencies responsible for implementing WIC use cost-containment strategies to reduce program costs.