Abbott Will Pay $385 Million Over the Sturgis Formula Plant. Three Former Employees Get $69 Million of It. Parents Get Nothing From This One — the Money Goes to the Treasury and to State WIC and Medicaid Programs, and the NEC Lawsuits That Actually Pay Families Are a Different Case Entirely

The Sturgis plant is the one the Food and Drug Administration shut in February 2022, setting off the national formula shortage. The government's civil case, filed as a whistleblower suit in 2022 and joined by the United States on November 13, 2025, is not about whether a particular can hurt a particular baby; it is about whether formula “purchased with taxpayer dollars” was made in conditions that met the rules the government's purchase contracts required. The department's complaint in intervention alleged that Abbott “knowingly manufactured infant formula purchased with taxpayer dollars in an environment that put the products at unacceptable risk of microorganism contamination and significantly impacted the products' reliability, quality, and safety.”

The specifics, as the department describes its own complaint: “roof leaks were a common occurrence in the Sturgis plant, leading to water running and dripping over equipment. Rather than permanently addressing the root causes, Abbott used temporary solutions, such as roof leak umbrellas, to try to divert leaks in product processing areas even though Abbott corporate leadership understood that the wet environment put the products at increased risk of microorganism contamination.” On the spray dryers that turn liquid formula into powder: Abbott “continued to run spray dryers ... even after Abbott documented cracks and pits in the dryers, which also increased the risk of 'micro' contamination, particularly in the presence of moisture,” and “made its spray dryer conditions worse by lengthening the number of product batches that passed through the dryers between cleaning cycles — enabling Abbott to increase production.” On testing: the complaint “alleges that Abbott intentionally did not test for bacterial growth to avoid obtaining positive test results showing contamination, and that in certain instances where testing demonstrated 'micro' contamination, Abbott failed to disclose the test results when responding to requests from FDA during 2019 and 2022 inspections at the Sturgis facility.”

Those are allegations, and the department says so in the same release: “The claims resolved by the settlement are allegations only and there has been no determination of liability.” Abbott's statement, as reported by Bloomberg: “Nothing matters more than the safety and quality of Abbott's products. We make infant formula with the same care we would for our own families and are deeply committed to earning and maintaining caregivers' trust.” The company also repeated, per the same report, that no unopened, distributed Abbott infant formula has ever tested positive for Cronobacter sakazakii, and that the CDC found no definitive link between the Sturgis facility and the 2022 clinical cases.

Readers arrive at a headline like this looking for a way to claim. There is none, and the reason is structural. The False Claims Act makes a company liable to the government for “false claims submitted to federal programs”; the injured party in law is the United States, and the states whose Medicaid and WIC programs paid. So “Under the civil settlement agreement, Abbott will pay $348,700,868 to the United States to resolve the False Claims Act allegations and an additional $36,298,172 to certain States for claims settled by their State Medicaid and WIC programs.” The two figures sum to the $384,999,040 in the headline (our check).

The programs matter because of who buys formula in America. In the department's words: “More than half of all infant formula purchased in the United States is paid for with USDA funds through WIC. State Medicaid Programs also cover and pay for certain infant formula.” That is why a manufacturing case became a fraud-on-the-government case: the government was the customer, and, the theory goes, it was billed for product that did not meet the terms it had paid for.

A parent who bought formula at retail, a parent whose WIC benefits covered it, a family who could not find formula in the spring of 2022 — none of them is a party to this settlement, none receives money from it, and there is no process through which they could. The department's release names no consumer restitution, and the settlement is not a class action. Anyone offering to “file your Abbott formula claim” against this $385 million is describing something that does not exist.

The quotes accompanying the announcement are from the government side only. Acting Deputy Attorney General Trent McCotter: “Abbott will pay a substantial sum to resolve serious allegations it violated federal health and safety requirements designed to protect babies.” Associate Attorney General Stanley E. Woodward, Jr.: “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.” U.S. Attorney Timothy VerHey for the Western District of Michigan: “This settlement demonstrates our commitment to holding manufacturers accountable when the United States pays for noncompliant products.”

The one route by which False Claims Act money reaches private individuals is the statute's qui tam provision, which, as the department puts it, allows “private individuals to bring suit on behalf of the United States for false claims submitted to federal programs and to share in any recovery.” Here the relators are three Abbott employees: “Relators Scott Millard, Kristine Cooper, and Loren Cooper, who were Abbott employees, will receive $69 million as their share of the federal settlement.” The case is United States, et al., ex rel. Scott Millard, et al., v. Abbott Laboratories, No. 1:22-cv-994, in the Western District of Michigan.

Our arithmetic: $69 million is 19.8 percent of the $348,700,868 federal share, and 17.9 percent of the total. The statute's general rule for a case in which the government intervenes is a relator share of between 15 and 25 percent of the federal recovery, so this sits near the middle of that band. The release does not say whether the relators also receive a share of the $36.3 million paid to states, and we will not assume it.

The case was investigated by the Civil Division's Commercial Litigation Branch, Civil Fraud Section, and the U.S. Attorney's Office for the Western District of Michigan, “with assistance from USDA's Office of Inspector General.” USDA Inspector General John Walk's line in the release: “This behavior is inexcusable and will not be condoned.”

The department publishes its False Claims Act totals every January. For the fiscal year that ended September 30, 2025, “Settlements and judgments under the False Claims Act exceeded $6.8 billion,” which the department called “the highest in a single year in the history of the False Claims Act.” Of that, “over $5.7 billion related to matters that involved the health care industry.” Whistleblowers “filed 1,297 qui tam lawsuits, the highest number in a single year,” and recoveries since 1986 “now total more than $85 billion.”

Against that record year, Abbott's $385 million is about 5.7 percent of the annual total (our division; the Abbott settlement falls in fiscal 2026 and will be counted in next January's figures, not last year's). It is large for a single food-safety matter and ordinary for the statute, which routinely produces nine-figure health-care settlements. The release folds the case into the administration's fraud framing: “This year, the Trump Administration launched the Task Force to Eliminate Fraud and the National Fraud Enforcement Division to enhance the Administration's war on fraud, waste, and abuse in federal programs.”

One thing the government's release does not do is connect the payment to any harm to a child. The theory is contractual and regulatory: the government bought product that did not meet the standards it had specified. Whether any infant was injured by Sturgis formula is the question in an entirely different set of courtrooms.

Families whose premature infants developed necrotizing enterocolitis (NEC) after being fed cow's-milk-based formula are not in this case; they are in product-liability suits against Abbott and Mead Johnson, individually and in a federal multidistrict litigation (MDL No. 3026, Northern District of Illinois, Judge Rebecca R. Pallmeyer). The money there moves through verdicts and negotiated agreements, not through a government settlement. On August 20, 2026, Abbott told the SEC it would pay “an aggregate amount of approximately $670 million” to resolve the $495 million Gill verdict and NEC claims “on behalf of approximately 2,000 additional infants,” while “roughly 1,700 lawsuits ... on behalf of approximately 12,700 individual infants” remained pending — our report on that filing is linked below. Those agreements, too, carry no claim form: they run through the families' own lawyers.

Two other 2022 threads sit outside today's settlement. The FDA's inspection findings led to a consent decree that placed the Sturgis plant under agency oversight for five years, per the Bloomberg report; that decree is a regulatory instrument, not a payment. And the formula shortage itself — the empty shelves of spring 2022 — generated no compensation for families in any proceeding we are aware of. If a settlement notice ever appears claiming otherwise, the first question is which court authorised it.

What we could not verify and say so: whether Abbott had reserved for this settlement (its August 8-K on the NEC deal does not mention the False Claims Act matter, and we found no separate filing by September 19); the exact list of states sharing the $36.3 million; and the terms of the settlement agreement itself, which the department describes but has not posted alongside the release. Period covered by the allegations: January 1, 2018 to December 31, 2022.