Abbott Laboratories agreed in September 2026 to pay $384,999,040 to resolve False Claims Act allegations that it made powdered infant formula and nutritional products at its Sturgis, Michigan and Casa Grande, Arizona plants in conditions that broke federal and state requirements while government programs paid for them. The money goes to the federal government, state Medicaid and WIC programs and the whistleblowers, and families have no claim to file.
What Happened?
On September 14, 2026, the U.S. Department of Justice announced that Abbott Laboratories would pay $384,999,040 to settle allegations that it violated the False Claims Act. The government alleged that Abbott manufactured powdered infant formula and nutritional therapy products at its plants in Sturgis, Michigan and Casa Grande, Arizona in violation of federal and state statutory, regulatory and contractual requirements from January 1, 2018 through December 31, 2022, and that those products were paid for by federal and state programs.Of the total, $348,700,868 goes to the United States and $36,298,172 to states for claims paid by their Medicaid and WIC programs. The California Attorney General, part of the state coalition, said California’s share is more than $15 million. The case began as a whistleblower suit by three former Abbott employees, who will share $69 million. The Justice Department said the claims resolved by the settlement are allegations only and that there has been no determination of liability.
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What the Government Alleged
According to the Justice Department, the case alleged that Abbott knowingly made formula bought with taxpayer money in an environment that put it at unacceptable risk of contamination by microorganisms. The allegations described in the government’s announcement include:- Recurring roof leaks at the Sturgis plant that let water drip onto equipment
- Cracks in the spray dryers used to make powdered formula
- Running production longer between cleaning cycles
- Avoiding certain bacterial testing
- Not disclosing contamination test results to the FDA
These were allegations in a civil case that settled. Abbott did not admit liability, and no court made findings on them.
Why WIC and Medicaid Are at the Center of It
The False Claims Act lets the government recover money when a company causes it to pay for goods or services that do not meet the conditions attached to the payment. Here, the payer was largely the government itself: the Justice Department said more than half of the infant formula bought in the United States is purchased through WIC, the Special Supplemental Nutrition Program for Women, Infants, and Children, and state Medicaid programs also pay for formula and nutritional therapy products.The law also lets private citizens with inside knowledge file suit on the government’s behalf, in what is called a qui tam case, and collect a share of any recovery. The three former employees filed their complaint in the U.S. District Court for the Western District of Michigan in October 2022. The case is United States, et al., ex rel. Millard, et al. v. Abbott Laboratories, No. 1:22-cv-994.
Why Families Will Not Receive Payments
Because the government and the states were the ones who paid for the formula, they are the ones being repaid. The settlement has no class of consumers, no administrator, no claim form and no deadline, and parents who bought Abbott formula with their own money or through WIC benefits are not entitled to a share. Any notice, text or website offering families money from the “Abbott $385 million settlement” is not from this case.The period covered, 2018 through 2022, includes Abbott’s February 2022 recall of powdered formula made at Sturgis and the plant’s temporary shutdown, which contributed to the nationwide formula shortage that year. Families who allege their infants became sick from recalled formula have filed separate personal injury lawsuits, consolidated in federal court as the Similac recall multidistrict litigation. The government settlement does not resolve those claims, and Abbott denies the allegations in them.
What Happens Next
The settlement resolves the civil False Claims Act claims covered by the agreement. The government recovery is paid out under the agreement’s terms, and the whistleblowers’ share comes out of the total. The separate infant formula injury lawsuits, including cases over necrotizing enterocolitis in premature babies, continue on their own schedules.Questions
Can parents file a claim in the Abbott $385 million settlement?
No. The settlement resolves a False Claims Act case brought on behalf of the federal government and states, and the money is paid to the United States, to state Medicaid and WIC programs, and, by law, a share to the former employees who brought the case. It is not a class action and has no claim form, settlement website or payments for families who bought or used the formula.
Did Abbott admit wrongdoing?
No. The Justice Department said the claims resolved by the settlement are allegations only and that there has been no determination of liability.
Why are WIC and Medicaid involved?
The government paid for much of the formula at issue. According to the Justice Department, more than half of infant formula bought in the United States is purchased through WIC, the Special Supplemental Nutrition Program for Women, Infants, and Children, and state Medicaid programs also pay for formula and nutritional therapy products. A False Claims Act case alleges that a company caused the government to pay for goods that did not meet the requirements attached to the payment.
Does this settlement end the lawsuits filed by families?
No. The settlement resolves the government’s False Claims Act claims. It does not resolve personal injury lawsuits filed by families over illnesses they allege were linked to recalled formula, which proceed separately, including in federal multidistrict litigation over the Sturgis recall.
How much do the whistleblowers receive?
The three former Abbott employees who filed the case under the False Claims Act’s whistleblower provisions will share $69 million of the recovery, according to the Justice Department.
Sources
• U.S. Department of Justice: Abbott Agrees to Pay Over $384M to Settle Allegations Related to Contaminated Infant Formula (September 14, 2026).• HHS Office of Inspector General: Abbott infant formula settlement enforcement action.
• United States ex rel. Millard v. Abbott Laboratories docket on CourtListener.
