OAKLAND — The allegations arose from Abbott's failure to manufacture certain powder infant formula and nutritional therapy products in compliance with federal and state statutory, regulatory, and contractual requirements. Federal and state governments alleged Abbott knowingly manufactured infant formula purchased with taxpayer dollars in an environment that put the products at unacceptable risk of microorganism contamination.

The allegations stated the manufacturing environment impacted the products' reliability, quality, and safety. The claims resolved by the settlement are allegations only, and there has been no determination of liability.

Abbott Laboratories is an Illinois-based healthcare company that manufactures and sells infant formula and nutritional therapy products. Many state Medicaid programs cover and pay for certain powder infant formula. Medicaid is a United States social health care program for families and individuals with limited resources.

The U.S. Department of Agriculture funds and regulates the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC). More than half of all infant formula purchased in the United States is paid for with USDA funds through WIC.

California joined 39 other states and the federal government in reaching the settlement agreement with Abbott Laboratories. California will receive over $15 million in restitution and other recoveries as part of the settlement.

"Today’s settlement holds Abbott accountable for its misrepresentation of its product and production," said Attorney General Rob Bonta. "These state and federal regulations are in place to ensure we can provide the highest quality of care and products to mothers and their young children."

Why It Matters

The settlement addresses allegations involving products purchased with taxpayer funds through major public assistance programs. Because more than half of all infant formula purchased in the United States is paid for with USDA funds through WIC, the case involves a portion of the national supply chain. State Medicaid programs also cover certain powder infant formula, extending the reach of the allegations to multiple government funding streams.

The resolution includes payments to both the federal government and 40 states, indicating the broad scope of the claimed violations. The agreement stipulates that the manufacturing environment during the specified period put products at risk, affecting reliability and safety. No determination of liability was made as part of the settlement.

Timeline

On September 21, 2026, Abbott Laboratories will pay $348,700,868 to the United States to settle False Claims Act allegations. On the same date, the company will pay $35,491,288 to participating states to settle claims related to their state Medicaid programs. California joined 39 other states and the federal government in reaching the settlement agreement with Abbott Laboratories on September 21, 2026.

Also on September 21, 2026, Attorney General Rob Bonta stated, "My office is committed to ensuring all products we provide for Californians are truly as high quality as they claim to be." He further commented, "These state and federal regulations are in place to ensure we can provide the highest quality of care and products to mothers and their young children." Bonta added, "This settlement sends the necessary message that these regulations aren’t suggestions."

What's New

Additional context notes that research titled Abbott Laboratories Fined $5 Million for Medical Device Kickback Scheme was published in 2014 in Biomedical Safety & Standards. Further background identifies Medicaid as a United States social health care program for families and individuals with limited resources.