Abbott Laboratories, the Illinois-based healthcare company that manufactures and sells infant formula and nutritional therapy products, has agreed to pay $384,999,040 to resolve allegations that it caused false claims to be submitted to federal and state programs.The allegations relate to the company’s failure to manufacture certain powdered infant formula and nutritional therapy products at its facilities in Sturgis, Michigan, and Casa Grande, Arizona, in compliance with federal and state statutory, regulatory and contractual requirements between January 1, 2018, and December 31, 2022.The settlement was announced by the U.S. Attorney’s Office for the Western District of Michigan.
Allegations involved WIC and Medicaid programs
The U.S. Department of Agriculture funds and regulates the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC), which provides nutritional assistance, including infant formula, to eligible participants.More than half of all infant formula purchased in the United States is paid for through USDA funds via WIC. State Medicaid programs also cover and pay for certain infant formula products.According to a complaint filed by the United States in November 2025, Abbott allegedly caused WIC programs to purchase powdered infant formula manufactured at its Sturgis facility despite the products allegedly failing to meet statutory, regulatory and contractual requirements.The complaint alleged that Abbott knowingly manufactured infant formula purchased with taxpayer money in conditions that created an unacceptable risk of microorganism contamination.
Government alleges manufacturing and contamination concerns
The complaint further alleged that Abbott failed to properly maintain manufacturing equipment and failed to control the presence of water that could encourage microorganism growth.It also alleged that the company fostered a culture of concealment that failed to systematically identify, document, investigate and prevent potential contamination.“When someone supplies the government with food that is meant to be given to our infant children, we demand that it meet or exceed every federal nutrition and safety requirement,” U.S. Attorney Timothy VerHey said.“This case demonstrates that anyone who fails this standard will pay a high price.”
Abbott to pay nearly $349 million to US
Under the civil settlement agreement, Abbott will pay $348,700,868 to the United States to resolve the False Claims Act allegations.The company will also pay $36,298,172 to certain states for claims settled by their state Medicaid and WIC programs.The settlement resolves claims brought under the False Claims Act’s qui tam provisions, which allow private individuals to file lawsuits on behalf of the US government concerning alleged false claims submitted to federal programs and potentially share in any recovery.The underlying lawsuit was filed in the U.S. District Court for the Western District of Michigan under the caption United States, et al. ex rel. Scott Millard, et al. v. Abbott Laboratories, No. 1:22-cv-994.
Justice Department and USDA investigated
The resolution resulted from a coordinated effort involving the Justice Department’s Civil Division, the U.S. Attorney’s Office for the Western District of Michigan and the USDA’s Office of Inspector General.The Justice Department said its Civil Division’s False Claims Act enforcement is intended to combat alleged fraud involving federal programs and recover money for taxpayers.The matter was handled by Civil Fraud Section Trial Attorneys Asha Natarajan and Erin Colleran of the Justice Department’s Civil Division, along with Assistant U.S. Attorneys Whitney Schnurr and Jacob Carlton of the U.S. Attorney’s Office for the Western District of Michigan.
Allegations do not establish liability
The government stressed that the claims resolved through the settlement are allegations only and that there has been no determination of liability.The settlement therefore resolves the government’s allegations without a finding that Abbott was liable for the claims described in the complaint.