Abbott Laboratories has agreed to pay $385m to settle US government claims linked to the 2022 recall of infant formula made at its Sturgis facility in Michigan.
The US-headquartered healthcare group said the agreement resolves the investigation and lawsuit from the Department of Justice (DOJ), as well as separate legal cases filed by the "Attorneys General of several states".
Abbott added in a statement that the settlement “does not represent any finding of fault or liability” related to the recall amid complaints of Cronobacter sakazakii infections from consuming infant-formula powders produced at Sturgis.
The plant was consequently closed, sparking a shortage of formula across the US, which prompted the government to take measures to allow imports from overseas.
Abbott acknowledged the US government had already concluded its criminal investigation in June.
The recall included Abbott’s Similac, Alimentum and EleCare powdered formula products.
The DOJ, in its own announcement, framed the resolution as “accountability” for alleged non-compliance at Abbott’s plants.
The agency accused Abbott of failing to meet statutory, regulatory and contractual requirements in the production of its formula and nutritional therapy products at Sturgis and also at its plant in Casa Grande, Arizona.
According to the DOJ, the government complaint filed in intervention last year also argued Abbott “knowingly manufactured” infant formula in an environment that put the products at “unacceptable risk of microorganism contamination”.
Under the settlement, Abbott will pay $348.7m to the federal government and an additional $36.3m to certain states over claims tied to Medicaid and the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC), the DOJ said.
The settlement also resolves claims filed under the False Claims Act, with three former Abbott employees set to receive $69m as their share of the federal recovery.
US acting Deputy Attorney General Trent McCotter said: “Today’s settlement is a victory for American families and makes clear the safety of our children is not negotiable.
“Abbott will pay a substantial sum to resolve serious allegations it violated federal health and safety requirements designed to protect babies. The Justice Department will act decisively against anyone who puts American families at risk and ensure misconduct carries serious consequences.”
However, Abbott continues to defend the safety of its infant formula.
Abbott reiterated that regulators never found Cronobacter sakazakii in unopened, distributed products. The company added that FDA testing in early March 2022 of unopened products from the homes of infants under investigation at the time of the recall also returned negative.
It further cited conclusions from the Centers for Disease Control and Prevention (CDC) that there was “no definitive link” between the facility and the clinical cases being reviewed.
The agreement comes nearly a month after Abbott settled around 2,000 legal cases brought by parents who alleged the company's infant formula caused the intestinal necrotizing enterocolitis (NEC) disease in babies. The company paid about $670m as part of the litigation agreements.
