Oregon gets $977k from settlement over baby formula safety allegations
(KTVZ) -- Abbott Laboratories will pay more than $384 million in a settlement after allegations that the company manufactured powder infant formula and nutritional therapy products under unsafe conditions and sold them to taxpayer-funded programs. Oregon will receive $977,558 from the settlement.
Investigators found that Abbott produced formula products at its facilities in Sturgis, Mich. and Casa Grande, Ariz. without meeting federal and state safety requirements between January 2018 and December 2022. The affected products were purchased through government assistance programs, including Medicaid and WIC.
Oregon Attorney General Dan Rayfield criticized the company while announcing the resolution. “As a parent, few things are more frightening that the possibility that our kids' food is unsafe,” Rayfield said. “We trust that everyone who touched these products are doing their jobs and following safety standards. Abbott Laboratories broke that trust and used taxpayer dollars to do it. We will hold companies accountable when they put people – in this case babies – at risk.”
According to federal complaint allegations, Abbott failed to maintain manufacturing equipment and failed to control water in the facilities, creating conditions that increased the risk of microorganism contamination. Settlement documents show Abbott also withheld test results during Food and Drug Administration inspections in 2019 and 2022 that revealed contamination present at the Sturgis plant.
Under the terms of the settlement, Abbott will pay $348,700,868 to the federal government and $35,491,288 to 39 states for claims tied to their Medicaid programs. A team from the National Association of Medicaid Fraud Control Units negotiated the settlement on behalf of the states, with representatives from Oregon, Calif., Conn., Colo., Fla., Md., Mass., Mich., N.Y., Ohio and Tennessee.
The Special Supplemental Nutrition Program for Women, Infants and Children, known as WIC, is funded and regulated by the U.S. Department of Agriculture and covers infant formula for eligible families. WIC pays for more than half of all infant formula purchased in the United States, while state Medicaid programs also cover powder formula.
The Oregon Department of Justice Medicaid Fraud Control Unit investigated the case as part of its role in prosecuting fraud and abuse in health care services. The unit receives 75% of its funding from the U.S. Department of Health and Human Services through a grant award totaling $6,539,396 for October 2025 through September 2026, with the remaining 25%, totaling $1,634,848, funded by the State of Oregon.
