Mississippi Attorney General Lynn Fitch announced a $384 million settlement with Abbott Laboratories over allegations the company defrauded government health programs by selling infant formula and nutritional therapy products made in plants that failed to meet state and federal safety standards.
Fitch announced the agreement alongside 39 other states and the federal government. Under the settlement, Abbott will pay about $348.7 million to the United States to resolve False Claims Act allegations and another $35.5 million to the states for claims tied to Medicaid programs. Mississippi will receive $771,432.52 in restitution and other recoveries.
“Parents should be able to trust that the infant formula they feed their babies is safe, but Abbott betrayed that trust. My office is dedicated to protecting the integrity of the Medicaid program and ensuring that Mississippians receive the necessities that their families rely on. This settlement holds Abbott accountable for knowingly manufacturing formula in substandard conditions and defrauding taxpayers,” Fitch said.
What the governments alleged
The federal and state governments alleged that Abbott knowingly manufactured infant formula purchased with taxpayer dollars in an environment that put the products at unacceptable risk of microorganism contamination, significantly impacting the products’ reliability, quality, and safety.
Investigators also alleged that in certain instances, Abbott failed to disclose test results indicating microorganism contamination when responding to requests from the U.S. Food and Drug Administration during 2019 and 2022 inspections at the company’s Sturgis, Michigan, facility.
The national settlement resolves allegations that Abbott caused false claims to be submitted between January 1, 2018, and December 31, 2022, arising from those failures.
WIC and Medicaid connection
The U.S. Department of Agriculture funds and regulates the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC), which provides nutritional support — including infant formula — to eligible participants. More than half of all infant formula purchased in the United States is paid for with USDA funds through WIC. Many state Medicaid programs also cover and pay for certain powder infant formula.
Medicaid Fraud Control Unit funding
The Mississippi Attorney General’s Office Medicaid Fraud Control Unit receives 75 percent of its funding from the U.S. Department of Health and Human Services under a grant totaling $3,858,572 for federal fiscal year 2026. The remaining 25 percent, totaling $1,286,190, is funded by the State of Mississippi.
Jon Ross Myers is the executive editor and publisher of the Mississippi News Network, Mississippi's largest digital only media company. He can be reached at editor@tippahnews.com
