Abbott Reaches $385 Million Settlement Over Infant Formula Allegations
Abbott Laboratories has agreed to pay nearly $385 million to resolve allegations that it manufactured powdered infant formula and nutritional therapy products in conditions that failed to meet required safety standards. The settlement involves claims related to products supplied to government-funded programs, including those supporting families and infants across the United States.
The agreement addresses allegations concerning Abbott’s manufacturing facilities in Sturgis, Michigan, and Casa Grande, Arizona, during the period from January 2018 through December 2022.
Settlement Covers Federal and State Claims
Under the agreement, Abbott will pay a total of $384,999,040. The settlement includes payments to the federal government and participating states over allegations involving the manufacture and sale of products that allegedly did not comply with applicable requirements.
The payment is divided into two main parts:
- $348,700,868 to the United States to resolve allegations under the False Claims Act.
- $36,298,172 to certain states for claims involving their Medicaid and Women, Infants, and Children (WIC) programs.
The WIC program provides nutritional assistance, including infant formula, to eligible families. Medicaid programs also help cover certain infant formula products.
The case originated with a whistleblower lawsuit filed by former Abbott employees. Under the settlement, the three whistleblowers are set to receive $69 million from the federal recovery.
The allegations cover products manufactured between January 1, 2018, and December 31, 2022.
Allegations Involve Manufacturing Conditions and Contamination Risks
The allegations focus on conditions at Abbott’s Sturgis facility, where powdered infant formula was manufactured. The government claimed that the company failed to maintain equipment properly and allowed conditions that could increase the risk of microorganism contamination.
Among the concerns described in the case were roof leaks, moisture in production areas and problems involving spray dryers used to convert liquid formula into powder.
The government also alleged that Abbott failed to conduct certain bacterial testing and did not properly disclose some contamination-related test results during regulatory inspections.
The allegations further included claims that the company continued production despite equipment problems and did not adequately address conditions that could affect product safety.
These claims relate to products supplied through federal and state programs and form the basis of the civil settlement.
Abbott Denies Wrongdoing as Criminal Investigation Ends
Abbott has maintained that the settlement does not establish fault or liability. The company also said that government testing of unopened formula from the homes of infants involved in the 2022 investigation did not detect Cronobacter sakazakii.
Abbott stated that no unopened, distributed infant formula has tested positive for the bacterium and reaffirmed its commitment to product safety.
The settlement follows the 2022 recall of powdered infant formula from Abbott’s Sturgis facility. The recall contributed to a major U.S. baby formula shortage, which was already worsened by pandemic-related supply chain disruptions.
The U.S. Justice Department has closed its related criminal investigation, according to the settlement announcement. The civil agreement resolves the allegations without a determination of liability.
