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Abbott Agrees to $385 Million Settlement Over Sturgis Formula Plant Closure
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In Short: Abbott Laboratories has agreed to a $385 million settlement in connection with the closure of its Sturgis, Michigan, facility and subsequent infant formula recall.
Abbott Laboratories has agreed to a $385 million settlement in connection with the closure of its Sturgis, Michigan, facility and subsequent infant formula recall. The company stated that tests by government regulators of unopened product from the homes of infants under investigation at the time of the 2022 recall were negative for Cronobacter sakazakii, a bacterium that can cause illness in infants. No unopened, distributed Abbott infant formulas have ever tested positive for this bacteria, according to the company.
The closure of the Sturgis facility in February 2022 followed an investigation by the Food and Drug Administration. The recall covered several infant formula brands, including Similac, and was prompted by problems at the facility. This recall, combined with supply chain disruptions and stockpiling during the COVID-19 shutdowns, led to significant shortages of infant formula in the U.S.
The settlement pertains to lawsuits filed by the Justice Department and certain relators, as well as the Attorneys General of several states. Abbott stated that the resolution does not represent any finding of fault or liability. The Biden administration took steps to address the shortage, including easing import rules for foreign manufacturers and invoking federal emergency rules to prioritize U.S. supply.
The Justice Department under President Donald Trump had previously closed its criminal investigation into the matter. Abbott's Sturgis facility, the largest in the country, was the source of the recall and subsequent supply issues. The company's actions and the resulting settlement reflect the significant impact of the incident on the infant formula market and public health concerns.
What's confirmed
- Abbott said on Monday that tests by government regulators of unopened product from the homes of the infants under investigation at the time of the 2022 recall were negative for Cronobacter sakazakii, a bacterium that can cause illness in infants.
- The company also said that no unopened, distributed Abbott infant formulas have ever tested positive for Cronobacter sakazakii.
- Abbott closed the Sturgis facility in February 2022 after the Food and Drug Administration began an investigation.
- Abbott Laboratories will pay $385 million to resolve claims tied to an investigation of contamination at a baby formula factory in Sturgis, Michigan, the largest in the country, which led to the supply shortages in 2022.
- Problems at the facility prompted a lawsuit by the Justice Department and recall of powdered infant formula at the facility.
- The recall covered several infant formula brands, including Similac, and squeezed inventory that had already been strained by supply chain disruptions and stockpiling during COVID-19 shutdowns.
- The settlement, which Abbott says does not represent any finding of fault or liability, also pertains to lawsuits filed by certain relators and the Attorneys General of several states.
- The Biden administration eased import rules for foreign manufacturers, airlifted formula from Europe and invoked federal emergency rules to prioritize U.S.
What's still developing
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Sources
- Orlando Sentinellink