Consumer News: Abbott to pay nearly $385 million to settle infant formula allegations

The settlement stems from a 2022 recall

By Mark Huffman of ConsumerAffairs

• Abbott Laboratories has agreed to pay nearly $385 million to settle government allegations involving the manufacture of powdered infant formula and nutritional products.

• The Justice Department alleged that conditions at Abbotts Michigan plant put formula at an unacceptable risk of bacterial contamination.

• The settlement includes no finding of liability. Abbott says testing found no Cronobacter sakazakii in unopened formula from the homes of infants investigated during the 2022 recall.

Abbott Laboratories has agreed to pay $384,999,040 to resolve allegations that it supplied powdered infant formula and nutritional products to government programs despite manufacturing conditions that failed to meet safety requirements.

The Justice Department said the allegations cover products made at Abbott facilities in Sturgis, Michigan, and Casa Grande, Arizona, between 2018 and 2022. The civil case focused on purchases made through programs including WIC, which helps eligible families buy infant formula, and Medicaid.

According to the governments complaint, roof leaks at the Sturgis plant allowed water to drip over equipment, while cracks and pits in equipment used to turn liquid formula into powder increased the risk of microorganisms growing. Prosecutors also alleged that Abbott failed to adequately investigate potential contamination and withheld some test results from the Food and Drug Administration.

The case stems from the period surrounding Abbotts 2022 recall of certain Similac, Alimentum and EleCare powdered formulas. The recall and temporary closure of the Sturgis plant contributed to a nationwide formula shortage.

The settlement resolves claims that Abbott caused improper charges to be submitted to government programs for products made under those conditions. About $348.7 million will go to the federal government and $36.3 million to certain states, according to the Justice Department.

The companys position

In its statement, Abbott emphasized that the settlement does not establish fault or liability. The company said government testing of unopened formula from the homes of infants investigated at the time of the recall was negative for Cronobacter sakazakii. It also said no unopened, distributed Abbott formula has tested positive for the bacterium.

That distinction matters: the government alleged an unacceptable risk of contamination from manufacturing conditions; the settlement does not establish that the recalled formula caused an infants illness.

Nothing matters more than the safety and quality of Abbott's products, Abbott said in its statement. We make infant formula with the same care we would for our own families and are deeply committed to earning and maintaining caregivers' trust. As we move forward, Abbott remains focused on serving the families who depend on us every day.

The Justice Department said the resolved claims remain allegations and that there has been no determination of liability.