Abbott agrees to settlement over closure of largest baby formula plant in the U.S.

Abbott Laboratories will pay $385 million to resolve claims tied to an investigation of contamination at its baby formula factory in Sturgis, Michigan — the largest such plant in the U.S. — which led to supply shortages in 2022. Problems at the facility prompted a Justice Department lawsuit and a recall of powdered infant formula made there. Abbott says the settlement does not represent any finding of fault or liability, and it also pertains to lawsuits filed by certain relators and the Attorneys General of several states.

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

Abbott said 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. Abbott closed the Sturgis facility in February 2022 after the FDA began an investigation; the plant was reopened by June of that year.