Mar 11, 2024 - Business

Walgreens settles with N.Y. AG over baby formula prices

 People make their way near a Walgreens pharmacy on March 09, 2023 in New York City.

A Walgreens pharmacy in New York City. Photo: Leonardo Munoz/VIEWpress

Walgreens has settled a New York case alleging it overcharged for at least 20 baby formula products, following a nationwide Abbott Nutrition recall in 2022, N.Y. Attorney General Letitia James confirmed on Monday.

The big picture: The pharmacy giant neither admitted nor denied wrongdoing in the settlement, which included payment of $50,000 to cover costs including civil penalties, in news first reported by Reuters. But it did agree to not overcharge on such items.

Why it matters: The move comes as elected officials try to address the public's frustration over high prices on certain goods — and the effects of "shrinkflation" and "skimpflation," which effectively force consumers to pay more for less.

Flashback: The shortage caused panic among the millions of parents and caregivers in the U.S. who rely on formula to feed their children. Three in four babies are fed formula by six months old, per Axios' Nathan Bomey.

What they're saying: "Baby formula is the main source of nutrients and absolutely essential for thousands of our most vulnerable residents, our infants," James said in an emailed statement Monday evening.

  • "During the formula shortage, families were panicked and struggling about how to feed their babies. For Walgreens to take advantage of this crisis and jack up formula prices is not only illegal, but downright shameful," she added.
  • "The thousands of baby formula cans secured by my office will go directly to help New York families who need it most. Today's agreement should also send a clear message that my office will not tolerate any company that attempts to price gouge our state's consumers."
  • A spokesperson for Walgreens declined to comment on the settlement.

Go deeper: Baby formula shortages lead to higher profit margins

Go deeper