Abbott Laboratories Pays $385 Million Over Formula Safety Allegations

Abbott Laboratories agreed to pay approximately $385 million to settle civil allegations that it manufactured infant formula and nutritional products in violation of health, safety, and quality standards between 2018 and 2022. The settlement resolves a lawsuit brought by the United States Department of Justice under the False Claims Act, alongside claims from several state Attorneys General and whistleblowers.

The allegations center on facilities in Casa Grande, Arizona, and Sturgis, Michigan. Authorities alleged that the Sturgis plant, the largest in the U.S., suffered from roof leaks that allowed water to drip over production equipment. The government further claimed the company failed to adequately test products or disclose positive bacterial test results to the Food and Drug Administration. These conditions contributed to a 2022 product recall and plant closure, which exacerbated a nationwide infant formula shortage.

Of the total settlement, $348.7 million will go to the federal government and $36.3 million to state Medicaid and WIC programs. Three whistleblowers are set to receive $69 million from the federal portion. Abbott maintains that the agreement is not an admission of fault or liability and asserts that no unopened, distributed formulas ever tested positive for Cronobacter sakazakii.