Abbott Laboratories has agreed to pay $384,999,040 to resolve allegations that it caused false claims to be submitted to federal and state programs related to the manufacture of powder infant formula and nutritional therapy products at its facilities in Sturgis, Michigan, and Casa Grande, Arizona, between Jan. 1, 2018, and Dec. 31, 2022, according to a statement from the U.S. Department of Justice.

Under the civil settlement, Abbott will pay $348,700,868 to the United States to resolve False Claims Act allegations and an additional $36,298,172 to certain states for claims related to their Medicaid and WIC programs.

The U.S. government alleged that Abbott manufactured infant formula in conditions that put products at risk of microorganism contamination. Allegations included roof leaks at the Sturgis facility that were addressed with temporary measures rather than permanent fixes, cracked spray dryers that continued to operate, extended production cycles that reduced cleaning frequency, and instances where Abbott did not test for bacterial growth or failed to disclose contamination test results to the FDA during 2019 and 2022 inspections.

Three former Abbott employees — Scott Millard, Kristine Cooper, and Loren Cooper — filed the original qui tam lawsuit and will receive $69 million as their share of the federal settlement. The case is captioned United States, et al., ex rel. Scott Millard, et al., v. Abbott Laboratories, No. 1:22-cv-994 (W.D. Mich.).

The U.S. Department of Agriculture funds the Special Supplemental Nutrition Program for Women, Infants, and Children, through which more than half of all infant formula purchased in the United States is paid. State Medicaid programs also cover certain infant formula costs.

The claims resolved by the settlement are allegations only, and no determination of liability has been made.