Abbott Laboratories has agreed to pay $384,999,040 to resolve federal and state allegations involving powder infant formula and nutritional therapy products manufactured from Jan. 1, 2018, through Dec. 31, 2022. The settlement includes $348,700,868 for the United States and $36,298,172 for certain states over claims settled by their Medicaid and Special Supplemental Nutrition Program for Women, Infants, and Children programs.
The United States filed a Complaint in Intervention on Nov. 13, 2025, alleging that Abbott caused government programs to purchase powder infant formula from its Sturgis, Michigan, facility even though the products did not meet statutory, regulatory and contractual requirements. The complaint alleged that Abbott knowingly manufactured formula in conditions that placed the products at an unacceptable risk of microorganism contamination and significantly affected their reliability, quality and safety. The broader settlement also concerns products made at Abbott’s Casa Grande, Arizona, facility.
According to the complaint, roof leaks at the Sturgis plant caused water to run or drip over equipment, while Abbott used temporary measures including umbrellas to divert leaks in processing areas. The government also alleged that Abbott continued operating spray dryers after documenting cracks and pits, extended the number of production batches between cleaning cycles, and intentionally avoided some bacterial testing to prevent positive contamination results. In certain instances, the complaint alleged, Abbott did not disclose contamination test results when responding to FDA requests during inspections in 2019 and 2022.
The affected government programs include WIC, which the U.S. Department of Agriculture funds and regulates, and state Medicaid programs. WIC provides nutritional support, including infant formula, to eligible participants, and USDA funds pay for more than half of all infant formula purchased in the United States.
The settlement resolves a lawsuit filed under the False Claims Act’s qui tam provisions, which permit private individuals to sue on behalf of the United States and receive a share of a recovery. Relators Scott Millard, Kristine Cooper and Loren Cooper, all former Abbott employees, will receive $69 million from the federal settlement. The case is United States, et al., ex rel. Scott Millard, et al., v. Abbott Laboratories, No. 1:22-cv-994, in the U.S. District Court for the Western District of Michigan.
The Justice Department said the resolution resulted from work by its Civil Division and the U.S. Attorney’s Office for the Western District of Michigan, with assistance from the USDA Office of Inspector General. The claims resolved through the settlement are allegations only, and there has been no determination of liability.