- A multistate coalition of 40 state AGs and the federal government have reached an agreement with Abbott Laboratories (Abbott) to settle allegations that the company defrauded government health programs by selling them infant formula and nutritional therapy products manufactured in plants that failed to meet state and federal safety standards for preventing contamination. Abbot will pay about $348.7 million to the United States to resolve False Claims Act allegations and another $35.5 million to the states for claims related to Medicaid programs.
- The national settlement addresses allegations concerning infant formula manufactured between January 1, 2018, and December 31, 2022, at its Michigan and Arizona facilities, which the federal and state governments allege were knowingly manufactured without complying with federal and state regulatory and contractual requirements designed to protect against contamination and ensure product quality, reliability, and safety. The lawsuit also alleged that Abbott experienced frequent roof leaks in the Sturgis plant, ran machines with documented cracks and pits, and intentionally reduced the frequency or scope of bacterial growth testing to avoid obtaining positive test results showing contamination, and that, in certain instances when testing did show contamination, Abbott did not disclose the test results to the U.S. Food and Drug Administration.
- The settlement comes from a whistleblower lawsuit initially filed in 2022 in the U.S. District Court for the Western District of Michigan. The U.S. intervened in 2025, joined soon after by California, Connecticut, Maryland, Massachusetts, and Tennessee. A larger group of states that had purchased Abbott’s products then participated in the multi-state coalition that negotiated this settlement.