Abbott Laboratories Settles Baby Formula Recall Claims for $385M

Abbott Laboratories has reached an agreement to pay approximately $385 million to settle civil claims arising from a baby formula recall linked to bacterial contamination at its manufacturing facility in Sturgis, Michigan. This settlement resolves a civil False Claims Act lawsuit initiated by the U.S.

Department of Justice and several state attorneys general. Of the total amount, $348.7 million will be allocated to federal programs, while $36.3 million will address claims with state programs.

The federal government accused Abbott of knowingly producing powdered infant formula under hazardous conditions that posed risks of contamination, particularly with Cronobacter sakazakii. The Justice Department's complaint highlighted operational issues at the factory, including reliance on temporary fixes for leaks and inadequate bacterial testing.

Three whistleblowers, former Abbott employees, will receive about $69 million from the settlement. Abbott stated that the agreement does not imply any admission of liability.

The closure of a parallel criminal investigation has faced criticism, particularly from California Senator Adam Schiff.