Democratic Sen. Ron Wyden wants answers from the nation's largest baby formula manufacturer over its business practices, while suggesting that the GOP tax cuts could have contributed to the ongoing infant formula shortages in the U.S.
In a letter to Abbott Laboratories CEO Robert Ford on Wednesday, Wyden accused the company of spending savings on stock buybacks rather than investing more to maintain and upgrade its Sturgis, Michigan facility, which was shut down in February due to a U.S. Food and Drug Administration investigation.
Wyden, who is chairman of the Senate Finance Committee, said that he was concerned that windfalls from sweeping tax cuts for mega-corporations enacted by the 2017 Republican tax law would be used to padding the pockets of corporate executives and wealthy shareholders. My concerns have been validated by Abbott's decision to buy back its own stock rather than invest in upgrades to a plant essential to feeding our nation's infants. PELOSI SAYS INDICTMENT The Senator from Oregon asked for information and documentation from Abbott, explaining how Abbott's tax rate has averaged just under 12% over the last three years, and how much money the company has spent buying back its own stock since the tax reform passed under President Trump.
Wyden also asked Ford when his company became aware of the safety issues flagged by the FDA at the Sturgis plant, and how much money Abbott plans to invest in the facility so that it can reopen and operate safely for years to come. Abbott shut down its Sturgis plant and issued recalls of certain products after four complaints that babies who consumed formula manufactured at the plant became sick from bacterial infections. Two of the infants died.
The recalls and shutdown exacerbated the baby formula shortage in the U.S. but the company maintains that both internal and FDA testing show no evidence that their products are linked to the infants' illnesses.
In an earlier statement, the company said Abbott has been around for 130 years because we are trusted to do the right thing. We will work hard to re-earn the trust that moms, dads and caregivers have placed in our formulas for decades. It is important to know that there is no conclusive evidence to link our formulas to the reported infant illnesses. Abbott said that the Centers for Disease Control and Prevention concluded its investigation with no findings of a link between Abbott formulas and infant illnesses.