Abbott Pays $384,999,040 to WIC After Formula Plant Claims

Abbott Laboratories agreed on September 14, 2026, to pay $384,999,040 to settle U.S. claims that it sold noncompliant powdered formula to WIC and Medicaid. The deal covers powder infant formula and nutritional therapy products from Sturgis, Michigan, and Casa Grande, Arizona, made between January 1, 2018, and December 31, 2022.

Abbott said the payment “does not represent any finding of fault or liability.” The Justice Department, in the same announcement, said the claims are allegations only and that there has been no determination of liability. The check still goes to the nutrition programs that buy more than half of the infant formula sold in the United States.

The Check Goes to WIC, Not to Families

This is a False Claims Act case about what the government paid for, not a payout to the households in the 2022 disease file. Under the civil deal Abbott will pay $348,700,868 to the United States and $36,298,172 to participating states for Medicaid and WIC claims. Three former Abbott employees who brought the whistleblower suit, Scott Millard, Kristine Cooper and Loren Cooper, will receive $69 million as their share of the federal recovery.

THE $384,999,040 SPLIT

The Justice Department said Abbott caused False Claims Act allegations to land on federal and state programs because powder from those two plants did not meet statutory, regulatory and contractual rules. On November 13, 2025, the United States filed a complaint in intervention saying government programs bought Sturgis powder even though the product was made in an environment that put it at “unacceptable risk of microorganism contamination.”

Acting Deputy Attorney General Trent McCotter called the deal “a victory for American families” and said Abbott would pay “a substantial sum to resolve serious allegations it violated federal health and safety requirements designed to protect babies.” U.S. Attorney Timothy VerHey for the Western District of Michigan put the legal theory in plainer terms: the United States is collecting because it paid for product that, in the government’s telling, did not comply.

This settlement demonstrates our commitment to holding manufacturers accountable when the United States pays for noncompliant products.

Timothy VerHey, U.S. Attorney, Western District of Michigan

That is why none of the $384,999,040 is written to the parents in the Centers for Disease Control and Prevention file. The injured buyer, on this docket, is the taxpayer program that reimbursed the cans.

Roof Leaks, Dryer Cracks and Skipped Tests

The complaint the department filed last year is a plant story, and it names two sites. Sturgis is the plant that shut in February 2022 and emptied American shelves. Casa Grande, Arizona, is in the same settlement for powder infant formula and nutritional therapy products that the government says also missed the required standard.

At Sturgis, prosecutors described a wet building that Abbott treated with stopgaps. Roof leaks were common, they said, with water running and dripping over equipment. Rather than fix the roof for good, Abbott used “roof leak umbrellas” to divert water in processing areas, even though company leaders understood that a wet room raised the risk of microorganism contamination, the complaint said.

WHAT THE COMPLAINT SAYS HAPPENED IN THE PLANTS

• Roof water: Leaks were common at Sturgis, and temporary umbrellas were used over processing equipment instead of a lasting repair.
• Spray dryers: Abbott kept running dryers after documenting cracks and pits, which the government said raised “micro” contamination risk when moisture was present.
• Longer campaigns: The company lengthened the number of batches that passed through the dryers between cleanings, which the department said let it raise output.
• Testing gaps: Prosecutors alleged Abbott intentionally did not test for bacterial growth so it would not obtain positive results.
• Inspection answers: In some cases where testing did show contamination, the government said Abbott failed to disclose those results in replies to the Food and Drug Administration during 2019 and 2022 inspections at Sturgis.

Associate Attorney General Stanley E. Woodward Jr. said no company “should be gambling on the health and safety of our Nation’s infants by allowing unsanitary conditions to persist at a facility manufacturing baby formula.” USDA Inspector General John Walk said parents rely on firms such as Abbott “to responsibly follow the rules” and called the alleged conduct inexcusable.

FDA Commissioner Robert Califf told a House panel in May 2022 that the Sturgis plant had a leaking roof, water pooled on the floor and cracks in key production equipment that allowed bacteria to get in and persist. Those are inspection findings and complaint allegations. They are not a jury verdict, and the September 14 deal does not convert them into one.

Four Infants, Two Deaths and No Genetic Match

The public memory of Sturgis is a disease cluster and a nationwide shortage. The laboratory file is narrower, and it never closed the way a classic outbreak story would.

CDC’s investigation, which started on February 17, 2022, and is now closed, lists four Cronobacter infections in infants who had consumed formula made at Sturgis. Two of those infants died in Ohio. The other states on the list are Minnesota and Texas. The powders named were Similac Sensitive, Similac Pro-total Comfort, Similac Advance and Similac PM 60/40. CDC says Cronobacter infections “may have contributed” to the two Ohio deaths.

THE 2022 CDC CASE FILE

• Cases: Four confirmed Cronobacter infections, with no additional cases added after the investigation closed.
• Deaths: Two, both in Ohio, with language that the infections may have contributed.
• Genetics: Whole genome sequencing on the two available patient samples found they were not closely related to multiple Cronobacter strains from the Sturgis environment, and not closely related to each other.
• Salmonella: FDA received one Salmonella complaint in an infant who consumed Sturgis formula; CDC said that illness is not linked to an outbreak.

Abbott has leaned on that lab record for four years. The company said no unopened, distributed Abbott infant formula has ever tested positive for Cronobacter sakazakii, and that FDA testing in early March 2022 of unopened product from the homes of the infants then under investigation also came back negative. It said genetic sequencing on the two available infant samples did not match strains found in the plant, and did not match each other.

Abbott also said CDC scientists later stated there was “no definitive link” between the Sturgis facility and the cases under review, that the cases did not meet the definition of an outbreak, and that powdered formula investigations most often suggest contamination happens in the home after a can is opened. CDC’s own case page does not use the phrase “no definitive link.” It does publish the sequencing result that the two patient samples were not closely related to the plant strains or to one another.

That split is the strange core of the $384,999,040 payment. The government is collecting as a customer that says it bought powder made under the wrong conditions. The same government public-health file still does not show a genetic bridge from those dryers to those four infants.

Why the Criminal File Closed in June

Abbott’s September 14 statement put the criminal outcome in the second paragraph. The government, it said, had already closed its criminal investigation of the matter. That closure became public in late June 2026, about eleven weeks before the civil check was announced.

A Justice Department spokeswoman said at the time that the department “does not believe in regulation by prosecution.” Line prosecutors had spent years on the plant. The department chose a civil clawback of money earned through federally funded nutrition programs rather than a Food, Drug and Cosmetic Act charge. Sen. Adam Schiff of California opened an inquiry into that decision in July 2026.

The civil paper that remained was already a WIC case. By staying off the criminal docket, the department left the science fight where it had been since 2022, in inspection reports, sequencing charts and private lawsuits, and priced the injury as a false claim against public programs. Abbott got the sentence it wanted in writing: no finding of fault. The programs that paid for the powder got the money.

Shares of the company were treated in market notes that day as if a legal cloud had lifted, which is the other half of the same bargain. A no-admission close is expensive in cash and cheap in precedent.

Sole-Source WIC Bids Made Abbott the Default

The Justice Department’s own release explains why a formula plant case becomes a fraud case. USDA funds and regulates WIC, which provides infant formula to eligible families. More than half of all infant formula purchased in the United States is paid for with USDA funds through that program, the department said. State Medicaid programs also pay for some formula.

WIC does not behave like a grocery aisle. Federal law has required state agencies, since 1989, to bid out single-supplier infant formula contracts. The manufacturer that offers the highest rebate off wholesale price becomes the default brand for that state or that multi-state alliance. Other cans can sit on the shelf. The WIC voucher still points at the winner.

A January 2025 Government Accountability Office review found that those rebates saved about $1.6 billion in fiscal 2023, and that two manufacturers held almost all of the contracts. As of August 2024, Abbott held milk-based WIC contracts for 36 states and the District of Columbia. When Sturgis stopped in February 2022, the same rebate design that had concentrated volume in a few plants also concentrated the shortage.

THE STURGIS CALENDAR

1. January 1, 2018: Start of the claims window later settled for $384,999,040.
2. February 17, 2022: Abbott recalls Similac, Alimentum and EleCare powders from Sturgis and idles the plant; CDC’s investigation starts the same day.
3. February 28, 2022: Abbott adds one lot of Similac PM 60/40 after a death associated with that specialty powder.
4. 2022: Millard and the Coopers file the qui tam case in the U.S. District Court for the Western District of Michigan.
5. November 13, 2025: The United States files its complaint in intervention on Sturgis powder bought with WIC funds.
6. June 2026: The department closes the criminal investigation.
7. September 14, 2026: Abbott agrees to pay $384,999,040, with no determination of liability.

Abbott remains on WIC bid lists. A NASPO ValuePoint master rebate contract awarded through Kansas runs from January 29, 2025, through January 28, 2030. The civil payment does not, by its terms, throw the company out of the program that is collecting the check.

Forty States Sign the Medicaid and WIC Recovery

Tennessee Attorney General Jonathan Skrmetti said on September 18, 2026, that the state will recover $2,349,346.04. Tennessee joined 39 other states and the federal government, a pool of 40 states sharing the $36,298,172 state side of the deal. A National Association of Medicaid Fraud Control Units team that included California, Connecticut, Colorado, Florida, Maryland, Massachusetts, Michigan, New York, Ohio, Oregon and Tennessee handled the state negotiations.

Parents across Tennessee have to know with absolute certainty that the food they buy for their babies is safe. When manufacturers fail to meet the standards parents and the law require, we need to hold them accountable. This settlement holds Abbott accountable. If you sell baby food in Tennessee, you’d better follow the rules.

Jonathan Skrmetti, Attorney General of Tennessee

Those recoveries are restitution to programs, not damages for a named infant. The caption of the underlying case is United States, et al., ex rel. Scott Millard, et al., v. Abbott Laboratories, No. 1:22-cv-994, in the Western District of Michigan. The relators’ $69 million comes out of the federal $348,700,868. It is the statutory bounty for bringing the qui tam, which is how a quality-and-maintenance dispute inside a formula company becomes a nine-figure Treasury receipt.

Abbott Paid $670 Million in a Separate Fight

Twenty-five days before the WIC deal, Abbott announced a different check. On August 20, 2026, the company said it had reached agreements covering about 2,000 individuals over specialty formulas for preterm infants, for an aggregate of about $670 million. That bundle includes the Gill case, in which a St. Louis jury awarded $495 million in July 2024. Abbott admitted no liability there either, and said it still faces about 1,700 lawsuits involving claims on behalf of about 12,700 infants.

That docket is necrotizing enterocolitis in premature babies, not the Cronobacter file from Sturgis. Mixing the two is how the week of September 14 gets misread as a single baby-formula verdict. It is two settlements, two theories, two “no admission” clauses, and more than $1 billion in cash in 25 days if the figures are stacked. Only $384,999,040 of that stack is the government’s WIC and Medicaid clawback.

The powder that was on American shelves in 2022 is not on trial in this civil paper. The programs that paid for it are. Abbott keeps the right to say the cans that left Sturgis never tested positive unopened. The United States keeps $348,700,868, the states keep $36,298,172, and the three former employees keep $69 million of the federal share. The four CDC cases stay in a closed investigation with no genetic match to the plant.

Frequently Asked Questions

Which Abbott powdered formulas were recalled in February 2022?

The February 17, 2022, recall covered Similac, Alimentum and EleCare powders whose lot codes started with 22 through 37, included the characters K8, SH or Z2, and carried a use-by date of April 1, 2022, or later. On February 28, 2022, Abbott added one lot of Similac PM 60/40, lot 27032K80 on the can and 27032K800 on the case, after a death in an infant who had consumed that specialty powder.

What court case produced the $384,999,040 settlement?

The whistleblower suit is captioned United States, et al., ex rel. Scott Millard, et al., v. Abbott Laboratories, No. 1:22-cv-994, in the U.S. District Court for the Western District of Michigan. The United States filed its complaint in intervention on November 13, 2025, and the civil deal announced on September 14, 2026, also covers parallel claims by participating state attorneys general.

Did opened cans from the infants’ homes test positive for Cronobacter?

Abbott said that in all five cases then under review, unopened containers tested negative, and that open containers from the homes were tested in four of the five cases, with three of those four negative. The one positive open container, the company said, carried two Cronobacter sakazakii strains that were not found at Sturgis; one matched the infant’s infection and the other matched a strain on a bottle of distilled water used to mix the formula in that home.

How common is Cronobacter in ordinary kitchens?

Abbott pointed to a July 2024 paper in Applied and Environmental Microbiology that swabbed 263 U.S. households and found Cronobacter species in 36 percent of them and Cronobacter sakazakii in 25 percent, on an average of about 10 swabs per house. The company uses that study to argue the bacterium is widespread in homes, bottled water and feeding equipment, not only in formula plants.

Disclaimer: This article is news reporting on a completed civil settlement and related public-health records. It is for information only and is not legal, medical or parenting advice, and it is not a recommendation to sue, to settle, to change feeding practices or to buy or sell any security. Families with questions about an infant’s health should speak with a licensed pediatrician, and anyone considering a claim should consult a qualified attorney licensed in the relevant state. Figures, case counts and remaining lawsuit totals reflect the government, company and agency materials cited here and may change as courts, regulators or Abbott issue later updates.