Abbott Laboratories has agreed to pay nearly $385 million to settle allegations that it sold contaminated infant formula produced at facilities in Michigan and Arizona to government programs despite failing to meet federal health and safety requirements. According to the Justice Department, this contributed to the 2022 infant formula crisis, which triggered nationwide shortages and sparked concerns about the safety of products used by millions of families. The Justice Department will act decisively against anyone who puts American families at risk and ensure misconduct carries serious consequences.” Under the settlement, Abbott will pay $384,999,040 to resolve allegations under the False Claims Act.
The government alleged that the company knowingly manufactured powdered infant formula in conditions that created an unacceptable risk of microbial contamination and then caused federal and state programs to purchase those products. Abbott agreed to the settlement without admitting liability. Newsweek reached out to Abbott for comment via email.
The settlement is one of the largest financial resolutions tied to the 2022 infant formula contamination crisis. Federal programs such as the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) and Medicaid purchase substantial amounts of infant formula for eligible families, so taxpayers helped fund products that allegedly did not comply with safety standards. More than half of all infant formula purchased in the United States is paid for through WIC, according to the Justice Department.
The allegations center on powdered infant formula produced at Abbott's Sturgis, Michigan, facility between 2018 and 2022. According to the Justice Department's complaint, the plant experienced recurring roof leaks that allowed water to run or drip over manufacturing equipment, creating conditions that increased contamination risks. Federal authorities also alleged that Abbott continued operating formula-processing equipment despite documented cracks and pits that could increase the risk of microbial contamination.
Prosecutors further claimed the company extended production runs between cleaning cycles and, in some cases, failed to disclose contamination-related test results regulators requested during inspections. The infant formula crisis became a major national issue in 2022 after safety concerns and production disruptions led to widespread shortages on store shelves, leaving many parents struggling to find formula. Under the settlement announced by the Justice Department, Abbott will pay $348.7 million to the federal government to resolve False Claims Act allegations and an additional $36.3 million to participating states for claims involving state Medicaid and WIC programs.
Woodward, Jr., in a statement. Instead, the settlement is resolving allegations concerning purchases made through federal and state government programs. As a result, the settlement funds are being paid to the United States and participating states.
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