I'd go back to the ped and ask him about reflux. My ped said that baby's GI system starts to make acid right around 1 month old and if they are going to have reflux, that is when it hits. Your friend's newborn is almost exactly on that schedule. (My guess from what you describe is that he's been spitting up all along, but his stomach didn't make acid before and so it didn't hurt, and just now, at 3 weeks, his stomach started making acid and so the spitup now is suddenly hurting him, like constant hearburn).
If it is reflux, you can try putting the crib at an angle, during the day, put him in a sling/front carrier and let him nap upright. This things helped marginally for my son - the only thing that really helped was medicine. In the short term, the ped can tell her doses of mylanta to use while they wait for an acid preventer, like Prevacid, to kick in.
For what it's worth, babies with reflux are also more likely to have dairy and soy allergies. So switching to a formula like Nutramigen or Alimentum also wouldn't hurt.