Michigan baby formula plant owner reaches deal to restart production

Washington — The U.S. Department of Justice confirmed Monday that it reached a tentative agreement with baby formula manufacturer Abbott Laboratories to resolve safety issues at its plant in Sturgis, Michigan, where a recall has helped to fuel a nationwide formula shortage. 

In a Monday evening statement, the federal agency said it had filed a legal complaint against Abbott over allegations of quality and safety violations and that the company had already agreed to a proposed consent decree to resolve the issues. The decree is subject to court approval.

The agreement, which was announced earlier in the day by Abbott, could eventually clear a path for the manufacturer to restart formula production at the Michigan facility in as soon as two weeks. The Sturgis plant is the country's largest manufacturing plant for infant formula.

Abbott's recalled products included powder formula sold under the labels Similac, Alimentum and EleCare labels after four children became ill with bacterial infections and two died.

Several Abbott employees are accused of manufacturing the baby formula under conditions that did not meet regulatory standards for quality and safety, according to a federal court filing. The consent agreement would require Abbott Laboratories to take a series of steps aimed at increasing safety at the facility and bring the company into compliance with federal regulations before it could resume operations.

“The actions we are announcing today will help to safely increase the supply of baby formula for families,” Attorney General Merrick Garland said in the statement. 

Abbott has stressed that tests by the FDA and the company showed that infant formula produced at the Sturgis facility is not likely the source of infection in the reported cases of illness. The company said earlier Monday that the Centers for Disease Control and Prevention had concluded its investigation with "no findings of a link between Abbott formulas and infant illnesses."

In the court filing, however, the Justice Department said separate findings from the FDA and from Abbott show that conditions at the plant support bacterial growth. Earlier this year, the FDA detected Cronobacter sakazakii in the facility, while Abbott detected an unspecified strain of the bacteria. According to the federal agency, the unspecified Cronobacter that the company detected should be treated as if it's the same strain that sickened infants.

Abbott on Monday said it could restart production the site within two weeks pending approval from the Food and Drug Administration, and after that, it could take six to eight weeks before its product reaches store shelves. In the meantime, Abbott will continue importing formula from its FDA-registered facility in Ireland to help ease the shortage in the supply of powder infant formula, the company said. 

Food and Drug Administration (FDA) Commissioner Dr. Robert Califf speaks at a news conference in Washington, May 5, 2016.

Abbott CEO and Chairman Robert B. Ford hailed the agreement as a "major step toward re-opening our Sturgis facility so we can ease the nationwide formula shortage."

"We look forward to working with the FDA to quickly and safely re-open the facility," Ford said in a statement.

"We know millions of parents and caregivers depend on us, and we're deeply sorry that our voluntary recall worsened the nationwide formula shortage. We will work hard to re-earn the trust that moms, dads and caregivers have placed in our formulas for more than 50 years."

How plant reopening would work

Under the proposed consent decree, Abbott would have to retain an outside expert to review its operations at the Sturgis facility and bring the plant into compliance. The company would also be forced to add testing requirements and establish plans for environmental monitoring, sanitation and employee training, according to the Justice Department.

“Parents who feed their babies formula must have confidence these products are safe,” U.S. Attorney for the Western District of Michigan Mark Totten said in a statement. “This proposed consent decree aims to protect one of our most vulnerable populations.

Abbott's February recall of products made at the Sturgis plant has exacerbated a nationwide shortage of baby formula caused by supply chain issues. 

For three months, the Abbott plant in Sturgis has remained "voluntarily" closed, according to the FDA. The company has said it's working to correct findings related to the processes, procedures and conditions cited by FDA inspectors in March that raised concerns that powdered infant formula produced at the facility carried a risk of contamination.

"Of course, every step of the way we have an obligation to watch to make sure that the problems have been rectified, and that the formula will be safe and also contain the constituents that are needed — remembering that the normal formula has over 30 constituents that must be there as a substitute for breast milk," FDA Commissioner Robert Califf said Monday on NBC's Today Show.

After the FDA confirms that Abbott has met requirements for the Sturgis plant to restart production, the company said it could restart the site within two weeks. Abbott would begin production of EleCare, Alimentum and metabolic formulas first and then begin production of Similac and other formulas, according to a statement.

Califf said there would be a full investigation about why his agency didn't immediately look into an October whistleblower complaint about safety issues at the Sturgis plant. A team wasn't sent until the end of January. 

"We always want to be as fast as we can possibly be, while also being diligent, remembering, as shown by this example, that if we do close a plant, then we have a supplier shortage. So we have to get this right," Califf said. 

"Having said that, there will be a full investigation of the timeline, and we'll do everything possible to correct any errors in timing that we had, so that we don't repeat any mistakes that may have been made."

Formula imports could increase

The FDA on Monday announced new guidance outlining increased flexibility for the importation of certain infant formula products to further boost availability. With the new process, the agency said it would not object to the importation of certain infant formula products, for example, intended for a foreign market.

The White House over the weekend also contacted all major manufacturers and retailers of infant formula to offer federal resources including transportation and logistics support, said Brian Deese, the director of the White House’s National Economic Council.

Deese said officials “made clear to all of them that federal resources, including transportation and logistics resources, are available and on call and we are prepared to move assets in coordination with them as and when we identify need.”

Califf denied reports that the formula shortage could last until the end of the year. The Biden administration has secured pledges from other formula manufacturers to boost production, and is working on "importing or bringing to bear product that was intended for other countries," Califf said. 

"That's well underway now, and in fact I expect by the end of the day today, we're likely to have an announcement about that path forward," he said. 

Abbott Laboratories manufacturing plant in Sturgis, Mich., Sept. 23, 2010.

The U.S. House is set to consider this week a spending package that would allow the import of FDA-approved baby formula.

Michigan has temporarily expanded the types of formula that qualify for assistance under the Women, Infants and Children program and notified individuals that received recalled formulas through the state on recommended next steps.

White House Press Secretary Jen Psaki said Friday that Abbott had agreed to continue paying rebates through August in states like Michigan where the company holds the contract for the federal WIC program.

The company said this means WIC program participants will continue to be able to obtain formula, free of charge through August, whether it is Similac or formula from another manufacturer.

The U.S. Department of Health and Human Services also set up a website to provide families with resources in response to the formula shortage at www.hhs.gov/formula/index.html

Several congressional committees have set hearings for the next two weeks to investigate the formula shortage, with the first up next Thursday featuring Califf before a House Appropriations subcommittee. 

Michigan Gov. Gretchen Whitmer said she spoke Friday with Michigan-based Abbott leadership and department heads of key social service and consumer protection departments to address the nationwide baby formula shortage. 

In a statement, Whitmer said she offered Abbott support "to help get production back on track" and is working with private and federal stakeholders to "fix supply logistics and ensure every baby has what they need."

"I know how anxious parents must feel right now, and it’s crucial that they have confidence that a product is safe for their babies," Whitmer said. "I urge federal leaders to use every tool at their disposal to boost formula production."

Whitmer said she also met with Michigan Attorney General Dana Nessel, who will be monitoring against price gouging of baby formula products, as well as other relevant department heads.

"While we have not seen a significant influx of complaints thus far, my team will remain vigilant in ensuring this shortage isn't compounded by illegal business practices that will only inflict additional harm on parents of infants right now," Nessel said in the statement. 

The state health department recommended families attempt to find a different brand of formula than the one they currently use if they have difficulty finding it as most "are enough alike that most healthy babies can switch with no problems." Parents should not try to make homemade formula or water down the formula they have, the state said.


Staff Writer Beth LeBlanc contributed.