Abbott Will Pay Nearly $385 Million Over the Sturgis Formula Plant Where the Government Says It 'Intentionally Did Not Test' for Bacteria. The DOJ Had Already Killed the Criminal Case.

Abbott Laboratories agreed Monday to pay nearly $385 million to settle a civil False Claims Act case brought by the Justice Department and several states over bacterial contamination at its powdered infant formula plant in Sturgis, Michigan, the facility at the center of the 2022 Similac recall that emptied store shelves across the country.

The government alleged that Abbott caused federal programs to buy formula made "in an environment that put the products at unacceptable risk of microorganism contamination and significantly impacted the products' reliability, quality, and safety." According to the department, the company failed to repair roof leaks at the plant, relying instead on "temporary solutions" that left products exposed, and "intentionally did not test for bacterial growth to avoid obtaining positive test results showing contamination." In cases where testing did turn up evidence of microbial contamination, the department said, Abbott withheld those results from the Food and Drug Administration during inspections in 2019 and 2022.

"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," Associate Attorney General Stanley Woodward said in a statement.

Abbott said the agreement "does not represent any finding of fault or liability." The company noted that the government had already closed its criminal investigation and pointed out that tests regulators ran on unopened formula taken from the homes of the infants who fell ill at the time of the 2022 recall came back negative for Cronobacter sakazakii, the bacterium at issue. Cronobacter infections are rare but can be deadly in newborns, and the FDA's 2022 investigation into illnesses and deaths among infants who had consumed Sturgis-made formula led Abbott to recall several of its best-known brands, including Similac, and to shut the plant for months, deepening a shortage that sent parents hunting across state lines for formula.

The settlement closes a chapter that had already drawn scrutiny inside and outside the Justice Department. CBS News reported earlier this year that federal prosecutors had sought to bring felony charges against the company and had the backing of Tysen Duva, the assistant attorney general in charge of the Criminal Division, but that senior department leadership refused to let the case proceed and ordered it closed. A senior official told CBS in February that a civil False Claims Act resolution was "the best mechanism to achieve accountability, deterrence and protection of the public."

That decision fits a pattern CBS has documented of corporate public-health cases under the Food, Drug and Cosmetic Act being softened, dropped or losing support from top officials in recent months. Earlier this year the department allowed Alibaba to enter a nonprosecution agreement and pay $600 million even though line prosecutors believed they had evidence of felonies tied to the sale of dangerous drugs, chemicals and pill presses to American customers over eight years.

In July, Sen. Adam Schiff of California opened a congressional inquiry into the closure of the Abbott criminal probe. "If prosecuting cases involving the risk of injuries or death to premature infants are not a priority enforcement matter, I have questions about what priorities the DOJ considers worthy of pursuing," Schiff wrote to Attorney General Todd Blanche. Monday's payment answers the question of what Abbott will pay. It does not answer Schiff's.