Abbott agrees to settlement over closure of largest baby formula plant in the US

Abbott Laboratories says that it will pay $385 million to resolve claims tied to an investigation and lawsuit brought by the Justice Department related to its manufacturing and 2022 recall of powdered infant formula at a Michigan facility

Abbott Laboratories will pay $385 million to resolve claims tied to an investigation of contamination at a baby formula factory in Sturgis, Michigan, the largest in the country, which led to the supply shortages in 2022.

Problems at the facility prompted a lawsuit by the Justice Department and recall of powdered infant formula at the facility.

The recall covered several infant formula brands, including Similac, and squeezed inventory that had already been strained by supply chain disruptions and stockpiling during COVID-19 shutdowns.

The settlement, which Abbott says does not represent any finding of fault or liability, also pertains to lawsuits filed by certain relators and the Attorneys General of several states.

Abbott said on Monday that tests by government regulators of unopened product from the homes of the infants under investigation at the time of the 2022 recall were negative for Cronobacter sakazakii, a bacterium that can cause illness in infants. The company also said that no unopened, distributed Abbott infant formulas have ever tested positive for Cronobacter sakazakii.

The Justice Department under President Donald Trump closed its criminal investigation into the matter.

The Biden administration eased import rules for foreign manufacturers, airlifted formula from Europe and invoked federal emergency rules to prioritize U.S. production during the supply shortage.

Abbott closed the Sturgis facility in February 2022 after the Food and Drug Administration began an investigation. The plant was reopened by June of that year.