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By Suzanne Blake
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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.
“Today’s settlement is a victory for American families and makes clear the safety of our children is not negotiable,” said acting Deputy Attorney General Trent McCotter on Monday. “Abbott will pay a substantial sum to resolve serious allegations it violated federal health and safety requirements designed to protect babies. The Justice Department will act decisively against anyone who puts American families at risk and ensure misconduct carries serious consequences.”
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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.
Why It Matters
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.
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What to Remember About Abbott's Contaminated Baby Formula in 2022
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.
Key Allegations Against Abbott
- Formula was allegedly manufactured in conditions that increased the risk of contamination.
- The Sturgis facility reportedly experienced recurring roof leaks above production equipment.
- Spray dryers allegedly continued operating despite cracks and pits that could harbor contamination.
- The government claims Abbott extended production runs between cleaning cycles.
- The complaint alleges certain contamination-related test results were not disclosed during regulatory inspections.
Abbott Labs Agrees to Pay $384M in Settlement for Contaminated Baby 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.
“No company should be gambling on the health and safety of our Nation’s infants by allowing unsanitary conditions to persist at a facility manufacturing baby formula,” said Associate Attorney General Stanley E. Woodward, Jr., in a statement. “The Department will hold accountable bad actors that knowingly misrepresent compliance with essential health and safety standards designed to protect American families.”
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How to Claim Payout From Abbott Labs Baby Formula Settlement
Unlike many consumer class-action settlements, the Justice Department's announcement does not establish a customer claims process for parents or families who purchased Abbott formula products. 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. So, individual consumers currently have no way to file claims for compensation.
The only individuals identified as receiving a portion of the recovery are the whistleblowers who brought the False Claims Act lawsuit on behalf of the government.
According to the Justice Department, former Abbott employees Scott Millard, Kristine Cooper, and Loren Cooper will receive approximately $69 million as their share of the federal recovery under the law's whistleblower provisions.
What Happens Next
The settlement resolves the government's False Claims Act allegations, but it is unlikely to end scrutiny of infant formula safety. The case could serve as a warning to manufacturers that the Justice Department intends to pursue companies accused of supplying federally funded programs with products that fail to meet health and safety requirements in the future.
Contact Newsweek editors on this story: Jenna deJong and Sam Wilson.
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