# North Carolina Settles Abbott Medicaid Fraud Case

The North Carolina Department of Justice, led by Attorney General Jeff Jackson, secured a $384 million settlement with Abbott Laboratories over Medicaid fraud linked to contaminated baby formula that caused a nationwide shortage in 2022. North Carolina will receive approximately $216,594 in restitution to support Medicaid and food assistance programs. This settlement underscores ongoing state and federal efforts to enforce accountability in healthcare product manufacturing and protect public health.

- **Why this matters:** Procurement professionals should note increased scrutiny and enforcement around healthcare product suppliers, particularly those serving Medicaid and public health programs.
- The settlement funds allocated to North Carolina's Medicaid and food assistance programs may influence future procurement priorities and funding availability.
- Organizations involved in healthcare supply chains should evaluate compliance and risk management practices to mitigate exposure to fraud-related liabilities.
- This case highlights the importance of transparency and quality assurance in contracts involving critical healthcare products.

**Jurisdictions:** sled
**Industries:** Healthcare
**Topics:** Regulatory Compliance
**Published:** September 21, 2026

### Government Entities
- North Carolina Department of Justice
- U.S. Department of Health and Human Services (HHS)
- Medicaid Investigations Division (MID)
- North Carolina Department of Health and Human Services

### Vendors
- Abbott Laboratories (defendant)

### Key Quotes
> When parents bought baby formula, they were trusting that the manufacturer was taking every precaution to make sure that product was safe for their child. Abbott failed to meet that standard here, and parents and taxpayers suffered.
> — Jeff Jackson, Attorney General

### Sources
- [Attorney General Jeff Jackson Reaches $384 Million Settlement Over Contaminated Baby Formula That Caused Supply Shortage - NCDOJ](https://ncdoj.gov/attorney-general-jeff-jackson-reaches-384-million-settlement-over-contaminated-baby-formula-that-caused-supply-shortage/) - Ncdoj