Abbott Pays $385M to Settle Contaminated Infant Formula Claims
Abbott agrees to pay $385 million to settle claims over contaminated infant formula.
Why it matters: This settlement highlights the critical importance of compliance and risk management in manufacturing healthcare products, especially those for infants. It underscores the high stakes companies face in product liability relating to safety and quality standards.
- Abbott's $385 million settlement resolves lawsuits from DOJ, state Attorneys General, and others, with no admission of liability.
- Payments include $348.7 million to the U.S. and $36.3 million to states covering Medicaid and WIC claims.
- The Sturgis, Michigan plant closed in February 2022 during FDA investigation, reopening in June 2022.
- Whistleblowers received $69 million from the federal settlement under the False Claims Act qui tam provisions.
Abbott Laboratories has agreed to a $385 million settlement related to claims stemming from contamination concerns at its Sturgis, Michigan infant formula plant in 2022. The agreement resolves lawsuits brought by the U.S. Department of Justice, several state Attorneys General, and other parties without Abbott admitting fault or liability. The plant was voluntarily shut down in February 2022 amid an FDA investigation and later reopened in June 2022.
The settlement includes $348.7 million paid to the United States and $36.3 million paid to certain states to settle claims related to Medicaid and the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC), which funds more than half of all infant formula purchases in the U.S.
Government testing did not find contamination in unopened Abbott formula products from consumers' homes or distributed unopened products, according to reports. The Department of Justice's civil claims were brought under the False Claims Act's qui tam provisions, with whistleblowers Scott Millard, Kristine Cooper, and Loren Cooper sharing $69 million from the federal portion of the settlement.
The Biden administration responded to the formula shortage caused by the recall with emergency measures, including easing import restrictions and invoking federal production priorities.[AP News]
Officials emphasized the importance of infant safety throughout the litigation process. Acting Deputy Attorney General Trent McCotter called the settlement a "victory for American families" that affirms child safety as non-negotiable, while Associate Attorney General Stanley E. Woodward, Jr. stressed no company should gamble with infant health by allowing unsanitary manufacturing conditions.[Justice Department]
Abbott maintains a commitment to product safety and caregiver trust, asserting its formula is made with care comparable to what it would for its own families.[Abbott]
By the numbers:
- $385 million — total settlement amount
- $348,700,868 — paid to U.S. government
- $36,298,172 — paid to certain states
- $69 million — awarded to whistleblowers
- February 2022 — Sturgis plant closure
- June 2022 — Sturgis plant reopening