Why Formula Costs So Much—Financially and Emotionally

Among the myriad of expenses that the arrival of a new baby portents, the cost of formula particularly stands out. It's usually a necessity, especially so if a new parent cannot or chooses not to breastfeed or chestfeed. And yet, formula can end up costing a family between one and two thousand dollars a year—a large sum for the average American parents.

So, why, exactly, does baby formula cost so much? Is this the case all over the world? And why do certain brands cost more than others? Let's take a closer look at why formula can be so costly, in many aspects of the word.

Formula Is a Precious Commodity

First up? Formula is literally a one-of-a-kind food for babies. While there are about 50 different types of powdered milk in the United States, all of them strictly regulated by the Food and Drug Administration (FDA), the only real substitute to human milk is formula. As such, formula is the number-one source of food for babies under the age of 1. It should come as no surprise, then, that such a precious product is associated with steep prices.

According to the United States' Office of the Surgeon General, the price of formula within the country oscillates between $1,200 and $1,500 per family throughout a baby's first year of life. Specifically, high-end speciality formula brands such as Enfamil and Similac can run as high as $2 per ounce, whereas less costly ones such as Kirkland will set folks back around $0.50 per ounce.

Country Regulations on Baby Formula

Country regulations also play a role in the ingredients, transport, availability of formula, thus affecting cost. According to the World Health Organization, in most European countries, including Spain, France, the United Kingdom, and Germany, the price per ounce is closer to $0.60. The outlier within the continent is Italy, where the cost has sometimes been triple the one from neighboring countries. The local Italian government has been dealing with the problem for years, issuing plenty of ordinances to try and cap the gauge.

In Canada, on the other hand, the cost of powdered milk has doubled every 10 to 15 years, despite increasing rates of breastfeeding in the country—most likely given the fact that the country imports the majority of the baby formula it sells, therefore having to account for currency exchanges and import costs.

Overall, a slew of factors contribute to the price of formula, including local taxes as well as costs related to distribution, raw materials, and registration efforts. The latter is an aspect that is intricately connected to each country's regulatory systems, led by the FDA in the United States and the European Commission on the other side of the Atlantic. Specifically, the ingredient list that each administrative body requires is what affects formula costs.

"In general, European formulas meet most FDA guidelines. But there are some differences," says Kristin Saxena, M.D., board-certified pediatrician in Omaha, Nebraska. "The European Union bans certain added sugars and requires that 30% of carbohydrates come from lactose," which is the same carbohydrate found in human milk. Although high-end American formulas are usually made with lactose, generic ones use more inexpensive carbohydrate sources like sucrose and corn syrup.

There are other differences to take into account, too: "U.S. formulas tend to contain more iron, while European ones tend to contain higher levels of DHA," explains Dr. Saxena. "DHA is not required in U.S. formulas, though most do contain it; it has been demonstrated to be important in brain development."

Although formula in the U.S. is safe and beneficial for infants, some parents may wonder if they are getting the best possible product for their babies, and how much price and profit play a role in formula companies choosing their ingredients.

Market Regulations on Baby Formula

"The price of formula in the U.S. is dictated by the market," says Dr. Saxena. "Obviously, it is important that all families and babies are able to access adequate quality formula. Private insurance does not generally cover other feeding expenses for children, so I don't think that is the most appropriate method for assisting families, except in the case of medical need necessitating a very specialized or prescription formula."

The 1975 expansion of the United States' Special Supplemental Nutrition Program for Women, Infants and Children (WIC) to include non-breastfeeding mothers, rather than increasing overall access, has actually driven up the market price of formula. Parents supported by the program receive state-approved products for free, and the rest have to pay a premium.

According to the U.S. Department of Agriculture (USDA), the agency will typically receive a rebate for each can of formula purchased through the program, "in exchange for the exclusive right to have its formula provided to WIC participants in the state." As a result, companies have increased their in-store prices to recoup losses incurred by offering rebates to WIC agencies. According to an official study by the USDA, "for a given set of wholesale prices, WIC and its infant formula rebate program resulted in modest increases in the supermarket price of infant formula, especially in states with a high percentage of WIC formula-fed infants."

Some parents may also pay more money for imported European formulas if they prefer European regulations and ingredients. "There are large Facebook groups devoted to European formulas, where parents share spreadsheets and detailed notes on ingredients and how these formulas compare to their U.S. counterparts," reports the New York Times.

"Some caregivers report choosing them because European brands offer certain formula options (like those made from goat's milk or milk from pasture-raised cows), which are rare or nonexistent in an FDA-regulated form in the U.S.," the Times continues. "Others seek out European brands because of the perception that the formulas are of higher quality and that European formula regulations are stricter." Dr. Saxena notes, however, that parents should be aware of the fact that the FDA does not review imported formulas.

"If importing a formula, a U.S. parent should ensure that it has been transported and stored in appropriate temperature conditions," says Dr. Saxena. "Additionally, they should ensure that they can understand the preparation instructions, as they may differ from those conventionally used in the U.S., which is 1 scoop per 2 ounces of water."

When queried about the price of the product, Jessica Shepherd, M.D., MBA, FACOG, a board-certified OB-GYN, says we should instead focus on its chemical makeup. "The cost of formula is not as important as what is in the actual product," she says. "More attention should be paid to what the ingredients are."

The Hidden Costs of Baby Formula

But the financial aspects involved in formula-feeding are not the only strains that parents have to deal with when opting for a bottle. In fact, parents like myself, who have chosen not to breastfeed, report feeling judged by family, friends, and the world at large.

Social media, especially across American accounts, is drenched with the catchphrase "breast is best," in no small part due to the fact that formula will inherently always be more expensive than human milk, which is viewed as "free"—because society doesn't attach a value to the unpaid labor of the feeder. And, yet, Dr. Shepherd notes that although "most infants start off breastfeeding (84.1 %), only 58.3% [do so] at 6 months of age." If so many of us make use of the bottle eventually, why is it that we shame each other into doing so almost secretly?

The emotional toll of choosing formula over human milk seems to be just as acute in Europe. "In Italy, they don't give you formula in the hospital," a friend who once lived in Europe recently told me. "They assume you will breastfeed. I had to beg for formula." That being said, once she left the hospital, finding powdered milk across the country was never an issue.

Clearly, decisions involving how to feed our children aren't solely dictated by our own belief systems and freedom of choice. Some parents don't have the financial privilege to purchase higher-end formulas; others who may wish to use formula choose to breastfeed instead to avoid judgment from friends, family, and even the medical community. And while much of the conversation surrounding formula feeding seems to center on the "choice" of feeding, let's hope it can soon turn to better ensuring that all families who want or need formula can access it affordably.