Abbott Laboratories has agreed to pay nearly $385 million to settle federal and state allegations that infant formula and nutritional products were manufactured under conditions that failed to meet required safety standards, bringing a major civil case tied to the 2022 baby formula crisis closer to an end.
The Justice Department said Abbott will pay $384,999,040 to resolve allegations involving powdered infant formula and nutritional therapy products manufactured at facilities in Sturgis, Michigan, and Casa Grande, Arizona, between 2018 and 2022. The government alleged that products were purchased through taxpayer-funded programs even though manufacturing conditions did not comply with federal and state requirements.
Federal allegations describe troubling conditions at the facilities. At the Sturgis plant, the government said roof leaks allowed water to drip over manufacturing equipment, while damaged spray dryers used to turn liquid formula into powder remained in operation. Prosecutors also alleged that Abbott intentionally avoided certain bacterial testing that could have produced positive contamination results and, in some instances, failed to disclose contamination findings during FDA inspections.
The settlement stems from claims involving programs including the Special Supplemental Nutrition Program for Women, Infants, and Children, known as WIC, and Medicaid. The 2022 shutdown of Abbott’s Sturgis plant and recall of several powdered formula products contributed to a nationwide shortage that left parents scrambling to find formula for their babies.
Abbott has not admitted wrongdoing or liability. The company said government testing of unopened products obtained from the homes of infants investigated during the 2022 recall found no Cronobacter sakazakii, and that no unopened, distributed Abbott infant formula has tested positive for the bacterium. Abbott also said the Justice Department has closed its related criminal investigation.
The Readovia Lens
The nearly $385 million settlement closes a major chapter in the government’s civil case, but it also puts renewed attention on how infant formula is manufactured and monitored. For families who depend on formula—and particularly those relying on WIC or Medicaid—the allegations underscore how closely manufacturing safeguards are tied to confidence in products intended for some of the youngest and most vulnerable consumers.
