Wednesday’s investigation by the Senate Finance Committee was opened. Abbott LabsThe baby formula crisis in America has centered on a company called.

Senator Ron Wyden (D-Ore.) was the Chairman of the Committee and requested information about Abbott’s tax practices abroad. $8 billion in stock buybacksThe company is authorized to do so since 2019.

Wyden asked for information about how much Abbott spent in Sturgis to improve an infant formula factory before it was closed due to bacterial infection. Wyden also demanded details on whether tax cuts were used by Abbott to buy back shares instead of investing in the plant.

In the wake of the closing of Michigan’s plant, parents have been left scrambling for infant formula. Many communities are without food stores. Four manufacturers — Abbott, Mead Johnson Nutrition, Nestle USA and Perrigo — control 90% of the infant formula market in the U.S.

Wyden stated that Abbott had spent billions on buying back stock and failed to repair a Michigan-based critical infant formula manufacturing facility. The senator stated that the closure of the facility had contributed significantly to the national shortage in infant formula and put families at risk.

Abbott stated in a statement that it adheres to all U.S. tax laws and international regulations. John Koval, spokesperson for the company said that stock buybacks had not affected its ability to invest or reopen the Michigan facility.

Abbott’s tax rate on its earnings has declined substantially since the Republican-controlled Congress passed a massive tax cut in 2017 that lowered the corporate rate to 21%. Abbott’s 2021 tax rate was 14%, which is a drop from 25% in 2016. according to securities disclosures.Abbott’s net earnings increased approximately 90% in the time of the pandemic. They went from $3.69 Billion in 2019 to $7 Billion in 2021.

Wyden stated that Abbott may have profited from the use of tax havens overseas. Abbott, in its annual report for 2021According to, it has benefited from reduced tax rates and exempts from foreign income from operations in Puerto Rico (Switzerland, Ireland, Costa Rica), Singapore, and Malta.

Abbott’s Michigan infant formula manufacturing plant was closed in February after contamination from Cronobacter. Two infants died after they were infected with Cronobacter from consuming powered formula at the facility. Four other children received treatment.

Abbott claimed that “no conclusive proof” has been provided to prove the connection between the infections and the bacteria in the plants. The company has recall Similac PM 60/40 and Similac, Alimentum, and EleCare infant formulas made at Sturgis.

Abbott has reached an agreement with FDA this week to allow Sturgis’ facility to be reopened through a consent order with terms that can only be enforced by a federal judge. The consent decree requires Abbott to hire a group of experts independent from him to create a plan to ensure that the Michigan facility is in compliance with U.S. safety regulations. According to the company, it is possible to restart the plan in two weeks subject to FDA approval. However, it could take as long as eight weeks before products can be restocked.

If any of the products tested positive for Salmonella or Cronobacter, Abbott must shut down the facility again. The FDA can then confirm that the contamination is gone.

In a Monday statement, Robert Califf (FDA Commissioner) stated that the FDA will make every effort to ensure infant formulas manufactured by Abbott are safe and meet quality standards.

Califf will be answering questions about infant formula shortages during Thursday’s hearing at the House Appropriations Agriculture subcommittee. House Oversight and Investigations subcommittee members will be asking Christopher Calamari, executive of Abbott, questions about the infant formula shortage.