Abbott Laboratories To Pay $385M Over Allegations Of Tainted Infant Formula

OAKLAND, CA — Healthcare giant Abbott Laboratories —which has locations in Temecula — will pay $385 million to resolve state and federal civil allegations that it produced powder infant formula under unsafe conditions and false claims, officials announced Monday.

California Attorney General Rob Bonta announced that California joined 39 other states and the federal government in the settlement. Under the agreement, Illinois-based Abbott will pay $348.7 million to the federal government to resolve False Claims Act allegations, alongside $35.5 million to participating state Medicaid programs. California's share includes over $15 million in restitution and other recoveries.

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"Today's settlement holds Abbott accountable for its misrepresentation of its product and production," Bonta said in a statement. "These state and federal regulations are in place to ensure we can provide the highest quality of care and products to mothers and their young children."

The settlement resolves allegations spanning 2018 to 2022 that Abbott knowingly produced powder infant formula and nutritional therapy products in conditions that exposed babies to an "unacceptable risk of microorganism contamination."

The federal government and state Medicaid programs, alongside the U.S. Department of Agriculture's WIC (Women, Infants, and Children) program, purchase more than half of all infant formula sold nationwide.

The civil claims stem from a broader federal and state scrutiny of Abbott's manufacturing practices, most notably at its primary facility in Sturgis, Michigan. In February 2022, Abbott voluntarily recalled several major powder formula brands — including Similac, Alimentum, and EleCare — and halted production at the Sturgis facility following reports of bacterial infections in infants who consumed products made there.

Environmental testing by the U.S. Food and Drug Administration subsequently detected traces of Cronobacter sakazakii bacteria inside the facility, which triggered a months-long shutdown and sparked a nationwide infant formula shortage.

Subsequent testing by state and federal health agencies did not establish a definitive genetic match between the environmental bacteria strains found inside the facility and the clinical samples taken from sickened infants. Abbott ultimately entered into a 5-year FDA consent decree in May 2022 to overhaul its manufacturing controls and safety oversight prior to reopening.

The allegations resolved in the agreement remain allegations only, and the settlement contains no finding or admission of fault or liability by Abbott.

Funding for California's enforcement efforts comes in part through the California Department of Justice's Division of Medi-Cal Fraud and Elder Abuse, which receives 75% of its $103.5 million fiscal year 2026 budget from federal grant funding awarded by the U.S. Department of Health and Human Services.