Abbott to Pay $385 Million to End US Claims Over Infant Formula

Abbott Laboratories agreed to pay $385 million to settle U.S. allegations related to poor manufacturing practices at two facilities, including one involving an investigation of a contaminated facility that made powder infant formula.

The accord resolves claims that the company caused U.S. and state programs to buy powdered formula made in a way that put the products at “an unacceptable risk of microorganism contamination and significantly impacted” their “reliability, quality, and safety,” the Justice Department said in a statement Monday.

Food and Drug Administration inspectors found unsanitary conditions at an Abbott factory in Sturgis, Michigan, during a 2022 visit that led the company to shut down the plant and sparked a nationwide infant formula shortage. Inspectors also found strains of the deadly bacteria called Cronobacter sakazakii at the plant though none definitively linked the facility to sick babies. Several months later, Abbott entered a consent decree that gave the FDA oversight of the Sturgis facility for five years.

“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,” Associate Attorney General Stanley E. Woodward Jr. said in the statement.

Settling the lawsuit in the Western District of Michigan is not admission of fault or liability by Abbott, the company said.

“Nothing matters more than the safety and quality of Abbott’s products,” the company said in a 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.”

Abbott said “no unopened, distributed Abbott infant formulas have ever tested positive for Cronobacter sakazakii.” It also said that unopened product from the homes of the infants under investigation at the time of the 2022 recall tested negative, and the Centers for Disease Control and Prevention later said there was “no definitive link between the Sturgis facility and the clinical cases under investigation at that time,” according to Abbott.

The US complaint alleged, for instance, that roof leaks were common at the Sturgis plant, where water dripped over equipment. Abbott used temporary solutions to divert leaks, “even though Abbott corporate leadership understood that the wet environment put the products at increased risk of microorganism contamination,” according to the U.S. statement.

Under the accord, Abbott will pay $348.7 milllion to the U.S. to resolve a lawsuit under the False Claims Act and $36.3 million to settle additional claims by several states.

Three whistleblowers filed a lawsuit in 2022 under the False Claims Act, which allows private citizens to sue companies on behalf of the government and share in any recovery. The three employees will receive a total of $69 million as their share of the federal settlement, the US said.

In August, Abbott agreed to pay $670 million to settle some lawsuits alleging that it hid the risk that its infant formula for premature babies could cause a deadly bowel disease.

Top photo: The Abbott Nutrition factory in Sturgis, Michigan, on Thursday, May 19, 2022. Bloomberg.