Abbott is being investigated by the Securities and Exchange Commission and the Federal Trade Commission in relation to its infant formula business. In December 2022, Abbott received a subpoena from the SEC’s Enforcement Division requesting information about its powder infant formula business and related public disclosures.
Last month, the FTC sent the company a civil investigative demand for information in connection with its investigation of companies that bid for infant formula contracts with the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) program administered through the USDA. If the investigation reveals Abbott engaged in anti-competitive conduct, such as price fixing, it could lead to a lawsuit by the FTC.
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This is the second inquiry by the FTC, which, last year, launched an inquiry into 2022’s formula crisis, to discover potential unfair and illicit enterprises at Abbott, following U.S. lawmakers’ concerns that consolidation may have helped exacerbate the shortage. At the time, FTC Chair Lina Khan stated the agency would examine whether mergers contributed to the market’s “fragile state." A report with the findings from that investigation is expected to be released this spring.
The second investigative demand follows recent health expert analysis that accuses major formula companies, including Abbott, for "exploitative" marketing and aggressive lobbying practices.
In January, the Department of Justice also began a criminal investigation related to Abbott’s manufacturing of formula. Last May, Abbott and the Department of Justice entered a five-year consent decree that gives the FDA additional oversight of the company's Sturgis, Mich., facility, which produced millions of cans of formula that were recalled, triggering a nationwide shortage of baby formula.