©Reuters. FILE PHOTO: People walk next to a Walgreens, owned by Walgreens Boots Alliance, Inc., in Manhattan, New York City, U.S., November 26, 2021. REUTERS/Andrew Kelly/File Photo
By Jonathan Stempel
NEW YORK (Reuters) -Walgreens has settled allegations by New York Attorney General Letitia James that it severely inflated the prices of at least 20 infant formula products after a recall by Abbott Labs (NYSE) led to a shortage in national level in early 2022.
The largest U.S. pharmacy chain neither admitted nor denied wrongdoing in submitting a cease-and-desist bond from James’ office, including a $50,000 payment to cover fines and civil costs, made public Monday.
James said Walgreens raised prices on 20 products, including Similac and Abbott Reckit Benckiser (LON:)’s Enfamil, by 10% or more following the February 2022 recall, and in at least one case raised formula prices by more than 70%.
Walgreens allegedly sold more than 3,400 cans, bottles or formulas at “unreasonably” inflated prices.
Without admitting or denying wrongdoing, Walgreens has agreed not to overcharge consumer goods and services vital and necessary to the health and safety of people.
The Deerfield, Illinois-based company also agreed to donate 9,564 containers of formula to benefit low-income New Yorkers with young children.
Walgreens declined to comment.
“During the formula shortage, families were panicking and struggling with how to feed their babies,” James said in a statement. “For Walgreens to take advantage of this crisis and raise formula prices is not only illegal, but downright shameful.
“My office will not tolerate any company that attempts to price gouge consumers in our state,” he added.
The agreement went into effect March 7 and was signed Monday by a Walgreens representative.
Abbott recalled its infant formula and closed its Sturgis, Michigan, plant following reports that infants had become ill after being fed infant formula produced there. The company reopened the plant in July.