That sounds more like DARE style bullshit to justify getting angry at people stealing formula. I've definitely heard of baby powder or baby laxative but that's because they react similar to coke by dissolving in water like blow or acting like a numbing agent. Baby formula doesn't numb and it gets milky in water.

It makes no sense from a economic stand point either. People cut drugs to make more money. Most of the shit they use costs next to nothing, isn't watched and definitely isn't locked up.