Abbott Laboratories has agreed to pay nearly $385 million to settle a civil case brought by the US Justice Department and some states over contamination risks at its powdered baby formula plant in Sturgis, Michigan.
The settlement follows allegations that the company allowed conditions at the facility to put formula purchased by government programmes at an unacceptable risk of microorganism contamination, affecting its reliability, quality and safety.
The department said Abbott failed to properly address roof leaks at the plant, relying instead on temporary measures that left products exposed to potential contamination. It also alleged that the company deliberately avoided testing for bacterial growth to prevent positive results from being recorded.
In some cases, the government said, testing had shown evidence of microbial contamination but the results were not disclosed to the Food and Drug Administration during inspections in 2019 and 2022.
“No company should be gambling on the health and safety of our nation’s infants by allowing unsanitary conditions to persist at a facility manufacturing baby formula,” Associate Attorney General Stanley Woodward said.
Abbott said the agreement did not amount to an admission of wrongdoing. “The settlement with the government does not represent any finding of fault or liability,” the company said.
It added that the Justice Department had closed its criminal investigation into the matter. The company also said government tests of unopened formula taken from the homes of infants involved in the investigation were negative for Cronobacter sakazakii.
Abbott recalled several powdered formula brands, including Similac, in 2022 after complaints of infant illness linked to products made at its Abbott Nutrition facility in Sturgis.
The decision to resolve the matter through a civil False Claims Act settlement came after federal prosecutors had sought to pursue felony charges. The criminal case was later closed by senior Justice Department officials, who said a civil resolution was the best way to achieve accountability, deterrence and public protection.
California Senator Adam Schiff launched a congressional inquiry into the closure of the criminal investigation. In a letter to Attorney General Todd Blanche, he questioned whether cases involving the risk of injury or death to premature infants were being treated as a priority by the department.
