Abbott Laboratories has agreed to pay nearly $385 million to resolve a federal investigation and lawsuit, as well as lawsuits filed by states, related to allegations over the safety of its powdered infant formulas.
Abbott, based in the north suburbs, recalled the formulas in 2022 after reports of illnesses and deaths among babies who had consumed them, due to Cronobacter sakazakii and Salmonella Newport infections. It was a recall that contributed to parents across the country struggling to find formula for their infants for a time.
The U.S. had alleged in its lawsuit that Abbott submitted false claims to government programs for its formula because it failed to make its formula “under conditions that protected against the risk of contamination of microorganisms.”
“Today’s settlement is a victory for American families and makes clear the safety of our children is not negotiable,” acting Deputy Attorney General Trent McCotter said in a U.S. Department of Justice news release.
The settlement does not include any finding of fault or liability. The government has closed a criminal investigation into the matter, Abbott said.
“Nothing matters more than the safety and quality of Abbott’s products,” Abbott said in a separate news release Monday. “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 noted that no unopened, distributed Abbott infant formulas ever tested positive for Cronobacter sakazakii or Salmonella Newport. The U.S. Centers for Disease Control and Prevention has previously said it did not identify a definitive link between Cronobacter cases and the Sturgis, Michigan, facility where they were manufactured, though inspections by the U.S. Food and Drug Administration uncovered issues at the plant.
More Top Picks Best Face Mask
The government had alleged in its complaint that conditions at the facility included roof leaks that led to water dripping over equipment as well as cracks in spray dryers used to transform liquid formula into a dry powder, among other problems.
Of the $385 million settlement, more than $348 million will go to the U.S. to resolve the false claims allegations. About $36 million will go to certain states. The whistleblowers who brought the case on behalf of the federal government and who were Abbott employees — Scott Millard, Kristine Cooper, and Loren Cooper — will get $69 million as their share of the federal settlement. The False Claims Act allows whistleblowers to file lawsuits on behalf of the federal government and share in any money recovered.
More than half of infant formula bought in the U.S. is paid for with federal funds through the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) program, which provides healthy food, including infant formula, to young children and women who are pregnant or recently gave birth and are below certain income thresholds.
The $385 million agreement follows another unrelated, large settlement for the Illinois-based company. In a separate matter, Abbott recently agreed to pay $670 million to settle a high-profile lawsuit and claims made on behalf of thousands of others related to allegations that its formula for babies born prematurely causes a dangerous intestinal disease. Abbott still faces 1,700 lawsuits across the country over whether its formula for preterm infants causes the diseases.