Abbott Laboratories agrees to pay more than $384 million to settle infant formula allegations
TRENTON, N.J. — Abbott Laboratories has agreed to pay more than $384 million to settle allegations that the company caused false claims to be submitted to federal and state programs involving certain powdered infant formula and nutritional therapy products, New Jersey Attorney General Jennifer Davenport announced.
The Illinois-based health care company will pay $348.7 million to the federal government to resolve False Claims Act allegations and about $35.5 million to participating states for claims involving state Medicaid programs. New Jersey joined 39 other states and the federal government in the settlement.
“We have to protect New Jersey babies and their parents from a corporation that was willing to sell them risky infant formula they knew was being made in substandard facilities that were not following critical health and safety requirements,” said Attorney General Davenport. “These allegations are deeply troubling, particularly because products were purchased through taxpayer-funded programs as this company put its profits ahead of the safety of our children.”
The settlement resolves allegations involving products manufactured between Jan. 1, 2018, and Dec. 31, 2022, at Abbott facilities in Sturgis, Michigan, and Casa Grande, Arizona.
Federal and state authorities alleged Abbott failed to manufacture certain powdered infant formula and nutritional therapy products in compliance with statutory, regulatory and contractual requirements.
Authorities alleged Abbott knowingly manufactured products in conditions that placed them at an unacceptable risk of microorganism contamination. The allegations include failures to properly maintain manufacturing equipment and control the presence of water that increased the risk of contamination.
Abbott was also accused of failing in certain instances to disclose test results indicating the presence of microorganism contamination when responding to requests from the U.S. Food and Drug Administration during inspections of the Sturgis facility in 2019 and 2022.
Authorities alleged the company’s actions caused the Special Supplemental Nutrition Program for Women, Infants, and Children, commonly known as WIC, and state Medicaid programs to purchase products that did not meet applicable requirements.
The settlement stems from a whistleblower lawsuit filed in 2022 in U.S. District Court for the Western District of Michigan under the federal False Claims Act and various state false claims laws.
The portion of the settlement attributable to New Jersey’s Medicaid program is $904,569. That includes a federal share of $391,876 and an estimated state whistleblower share of $153,808. New Jersey’s net state share totals $358,885.
A National Association of Medicaid Fraud Control Units team participated in the investigation and negotiated with Abbott on behalf of the states.
The settlement resolves the allegations and does not constitute a finding of liability.
