Abbott Baby-Formula Business Is Under Investigation By SEC, FTC

In addition, Abbott said it received a civil investigative demand from the FTC in January seeking information in connection with the agency’s investigation of companies that bid for infant-formula supply contracts with a federal program.

Abbott, of Abbott Park, Ill., is cooperating with the government investigations, a spokesman said.

Representatives of the SEC and FTC couldn’t immediately be reached for comment.

Disclosure of the inquiries follow the launch of a criminal investigation by the Justice Department into Abbott’s formula manufacturing, after a plant shutdown last year fueled a U.S. formula shortage.

Abbott recalled certain powder baby-formula products, including Similac, that were manufactured at its Sturgis, Mich., plant, and halted production at the plant. 

The recall followed an inspection by the Food and Drug Administration, which found cronobacter bacteria in the Abbott plant. The FDA conducted the inspection after receiving reports that babies who consumed the formula became sick with cronobacter infections. 

The FDA has said it couldn’t conclude that contamination in the Sturgis plant caused bacterial infections in four babies who consumed Abbott formula starting in September 2021, but couldn’t rule it out, either. Abbott has said formula made at Sturgis likely isn’t the source of the infections.

Abbott has said it made improvements to the plant to address the FDA’s concerns about contamination, and production restarted in June.

The FTC’s investigation concerns contracts with the federal Women, Infants and Children program, which provides baby formula at no cost to low-income families.

The FTC has previously said it was exploring whether companies’ competitive bidding on state WIC contracts has had an impact on the number of formula suppliers and total manufacturing capacity.  

In May, the FTC said its staff launched an inquiry into the baby-formula shortage.

Write to Peter Loftus at [email protected]

In addition, Abbott said it received a civil investigative demand from the FTC in January seeking information in connection with the agency’s investigation of companies that bid for infant-formula supply contracts with a federal program.

Abbott, of Abbott Park, Ill., is cooperating with the government investigations, a spokesman said.

Representatives of the SEC and FTC couldn’t immediately be reached for comment.

Disclosure of the inquiries follow the launch of a criminal investigation by the Justice Department into Abbott’s formula manufacturing, after a plant shutdown last year fueled a U.S. formula shortage.

Abbott recalled certain powder baby-formula products, including Similac, that were manufactured at its Sturgis, Mich., plant, and halted production at the plant. 

The recall followed an inspection by the Food and Drug Administration, which found cronobacter bacteria in the Abbott plant. The FDA conducted the inspection after receiving reports that babies who consumed the formula became sick with cronobacter infections. 

The FDA has said it couldn’t conclude that contamination in the Sturgis plant caused bacterial infections in four babies who consumed Abbott formula starting in September 2021, but couldn’t rule it out, either. Abbott has said formula made at Sturgis likely isn’t the source of the infections.

Abbott has said it made improvements to the plant to address the FDA’s concerns about contamination, and production restarted in June.

The FTC’s investigation concerns contracts with the federal Women, Infants and Children program, which provides baby formula at no cost to low-income families.

The FTC has previously said it was exploring whether companies’ competitive bidding on state WIC contracts has had an impact on the number of formula suppliers and total manufacturing capacity.  

In May, the FTC said its staff launched an inquiry into the baby-formula shortage.

Write to Peter Loftus at [email protected]