Abbott Laboratories Agrees to Pay Over $384 Million to Settle False Claims Act Allegations Related to Infant Formula and Nutritional Therapy Products

TRENTON — Attorney General Jennifer Davenport announced today that New Jersey has joined 39 other states and the federal government to reach an agreement with Abbott Laboratories to settle allegations that the company caused false claims to be submitted to federal and state programs arising from its failure to manufacture certain powder infant formula and nutritional therapy products in compliance with federal and state requirements.

Abbott, an Illinois-based health care company that manufactures and sells infant formula and nutritional therapy products, will pay $348,700,868 to the United States to resolve the False Claims Act allegations and $35,491,288 to participating states for claims related to state Medicaid programs.

“We have to protect New Jersey babies and their parents from a corporation that was willing to sell them risky infant formula they knew was being made in substandard facilities that were not following critical health and safety requirements,” said Attorney General Davenport. “These allegations are deeply troubling, particularly because products were purchased through taxpayer-funded programs as this company put its profits ahead of the safety of our children.”

The U.S. Department of Agriculture (USDA) funds and regulates the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) program, which provides nutritional support — including infant formula — to eligible participants. More than half of all infant formula purchased in the United States is paid for with USDA funds through WIC. Many state Medicaid programs also cover and pay for certain powder infant formula.

The settlement resolves allegations that, between January 1, 2018, and December 31, 2022, Abbott caused false claims to be submitted to federal and state programs arising from Abbott’s failure to manufacture certain powder infant formula and nutritional therapy products at its Sturgis, Michigan, and Casa Grande, Arizona, facilities in compliance with federal and state statutory, regulatory, and contractual requirements. The federal and state governments allege Abbott knowingly manufactured infant formula purchased with taxpayer dollars in an environment that put the products at unacceptable risk of microorganism contamination and significantly impacted the products’ reliability, quality, and safety. Specifically, Abbott allegedly failed to maintain its manufacturing equipment, failed to control the presence of water that put the products at increased risk of microorganism contamination, and, in certain instances, failed to disclose test results indicating the presence of microorganism contamination when responding to requests from the U.S. Food and Drug Administration during 2019 and 2022 inspections at the Sturgis facility. Abbott’s misrepresentations allegedly caused the WIC program and state Medicaid programs to purchase powder infant formula and nutritional products manufactured at these facilities despite the products’ failure to meet statutory, regulatory, and contractual requirements.

This settlement arises out of the qui tam lawsuit filed in 2022 in U.S. District Court for the Western District of Michigan under the federal False Claims Act and various state false claims statutes. On November 13, 2025, the United States filed its Complaint in Intervention alleging that Abbott caused WIC programs to purchase powder infant formula manufactured at the Sturgis facility despite the products’ failure to meet statutory, regulatory, and contractual requirements. On December 1, 2025, California, Connecticut, Maryland, Massachusetts, New York, and Tennessee filed a Consolidated Complaint of the Intervening States against Abbott, asserting claims arising from their Medicaid programs.

The portion of the settlement attributable to the New Jersey Medicaid program is $904,569. That includes a federal share of $391,876, and an estimated state relator share of $153,808. The net state share to New Jersey totals $358,885.

A National Association of Medicaid Fraud Control Units (NAMFCU) Team participated in the investigation and conducted settlement negotiations with Abbott on behalf of the states. The Team included representatives from the Offices of the Attorneys General for the states of California, Connecticut, Colorado, Florida, Maryland, Massachusetts, Michigan, New York, Ohio, Oregon, and Tennessee.

New Jersey MFCU’s total funding for federal fiscal year 2026 is $11.6 million. Of that total, 75 percent is awarded under a grant from the U.S. Department of Health and Human Services. The remaining 25 percent is funded by the State of New Jersey.

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