Abbott Faces SEC Investigation Over Infant Formula Debacle

Abbott Laboratories is facing investigations by the Securities and Exchange Commission and the Federal Trade Commission (FTC) in connection with its formula business, the company revealed in a recent SEC filing. 

The developments are the latest in a series of inquiries into the factors that precipitated the company's Michigan factory shutdown and kickstarted a nationwide formula shortage. 

Abbott received a subpoena from the SEC's Enforcement Division soliciting "information relating to Abbott's powder infant-formula business and related public disclosures" last December, the company said. 

Then, in January, the FTC issued the manufacturer a civil investigative demand connected with an investigation into companies that bid for infant formula contracts with federal nutritional programs such as the Special Supplemental Nutrition Program for Women, Infants, and Children, or WIC, program. That same month, Abbott also confirmed the U.S. Justice Department is investigating operations at its Michigan plant. 

Abbott Laboratories made headlines in February 2022 after the FDA sent inspectors to Abbott's infant formula manufacturing facility in Sturgis, Michigan, to investigate a whistleblower report alleging the company had engaged in activities to cover up substandard cleaning practices at its facilities and had shipped untested and potentially contaminated formula to retailers. 

Abbott recalled select Similac, EleCare and Alimentum as well as powdered infant formulas manufactured at the Sturgis plant, and closed down the factory later that month when investigators found evidence of cronobacter sakazakii bacteria at the facility. The recall came shortly after four infants drank Abbott's formula and contracted cronobacter infections; two of the infants died. 

At least two dozen families are now suing Abbott over the allegedly contaminated formula. Abbott's representatives say there's no conclusive evidence linking its formula to the infants' illnesses, as none of the cronobacter strains found at their plant matched samples genetically sequenced from the sick infants.

Food and Drug Administration Commissioner Robert Califf said his agency's inspections found conditions at Abbott's Sturgis, Michigan plant "shocking" and "egregiously unsanitary."

The Michigan plant closure took a massive toll on families nationwide, forcing parents and caregivers to turn to local food pantries to procure formula and spurring collection initiatives at breast milk banks.

Abbott Nutrition, a subdivision of multinational health conglomerate Abbott Laboratories that oversees the conglomerate's formula business, controlled 40% of the baby-formula market in the U.S. at the time of its Michigan plant shutdown last year.

Public health organizations have for decades criticized formula makers for aggressively marketing their products to the detriment of breastfeeding. The World Health Organization last year detailed how big formula companies use aggressive marketing practices to promote the use of infant formula over breast milk, leaving many families dependent on commercial products and vulnerable to formula shortages. A series of papers published in the medical journal The Lancet this month describes what its authors call the commercial milk industry's "underhand marketing strategies, designed to prey on parents' fears and concerns, to turn the feeding of infants and young children into a multibillion-dollar business."