Overview
- Abbott announced on Monday that it will pay $384,999,040 to resolve Justice Department and state civil False Claims Act allegations covering formula made from 2018 through 2022 and the DOJ has closed a parallel criminal investigation.
- The Justice Department’s complaint alleges specific manufacturing failures at Abbott plants, including persistent roof leaks that dripped onto equipment, cracked and pitted spray dryers, running extra batches between cleanings, intentional avoidance of some bacterial testing, and failure to disclose positive test results to regulators.
- Under the agreement about $348.7 million will go to the federal government, $36.3 million will go to participating states for Medicaid and WIC claims, and the three relators who filed the qui tam suit will receive $69 million.
- The settlement follows Abbott’s February 2022 recall and temporary closure of the Sturgis, Michigan, plant that worsened a national supply shortage; government and company statements note unopened, distributed Abbott containers tested negative for Cronobacter and CDC found no definitive link to the clinical cases.
- The case highlights how whistleblowers and the False Claims Act can recover taxpayer losses tied to federally funded nutrition programs and may sharpen oversight of formula makers that supply WIC and Medicaid.