Abbott Reaches $385 Million Infant Formula Settlement
Abbott Laboratories has agreed to pay $385 million to resolve claims connected to a federal investigation and litigation over conditions at its powdered infant formula plant in Sturgis, Michigan. The facility, described as the nation’s largest formula factory, became central to the supply shortage that affected families in 2022.
The dispute followed manufacturing and contamination concerns that prompted the Food and Drug Administration to investigate the plant in February 2022. Abbott subsequently shut the facility and recalled several powdered formula products, including Similac. The plant resumed operations by June 2022.
The recall intensified a shortage caused in part by pandemic-era supply chain disruptions and consumer stockpiling. In response, the Biden administration relaxed import requirements for foreign producers, arranged formula shipments from Europe, and used federal authorities to give priority to domestic production.
Abbott said the settlement does not constitute an admission or finding of fault or legal liability. The agreement also addresses lawsuits brought by certain whistleblowers and the attorneys general of several states. The Justice Department later closed its criminal investigation into the matter under President Donald Trump.
The company also reiterated that government testing of unopened formula collected from the homes of infants examined during the recall found no Cronobacter sakazakii. The bacterium can cause illness in infants. Abbott further stated that no unopened, distributed infant formula produced by the company has tested positive for the organism.
The $385 million payment resolves a major set of claims arising from one of the most disruptive infant formula episodes in recent U.S. history. While the settlement closes civil disputes involving federal and state parties, Abbott’s position remains that available product testing did not establish contamination in unopened formula distributed to consumers. The episode nevertheless highlighted vulnerabilities in formula manufacturing capacity and national supply chains.