‘Shameful Exploitation’: Walgreens sued for price gouging baby formula, now must donate to NYers

March 14, 2024 Robert Abruzzese, Courthouse Editor

Attorney General Letitia James announced a settlement with Walgreens after it was sued for price gouging baby formula.
Photo: Brittainy Newman/AP

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Attorney General Letitia James announced a resolution involving Walgreens on Wednesday after an investigation into the company’s pricing of baby formula during the 2022 shortage.

The settlement includes a donation of 9,564 cans of baby formula, valued at $200,000 wholesale, and a $50,000 penalty to address allegations of price gouging.

During a nationwide shortage exacerbated by supply-chain issues and a major recall by formula manufacturer Abbott Laboratories, Walgreens was found to have significantly increased the prices of at least 20 infant formula products. The OAG’s investigation was initiated after consumer complaints about the high costs of essential baby formula.

“Baby formula is the main source of nutrients and absolutely essential for thousands of our most vulnerable residents, our infants,” James said. “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.”

As part of the settlement, Walgreens has agreed to donate the baby formula to the Met Council in Queens County, FeedMore WNY and the Buffalo Prenatal Perinatal Network in Erie County. These organizations are tasked with distributing the formula to families in need across New York.

“The thousands of baby formula cans secured by my office will go directly to help New York families who need it most,” James added. “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.”

The case against Walgreens stemmed from a broader effort by Attorney General James to enforce New York’s price gouging laws, which prohibit excessive price increases on essential goods during abnormal market disruptions.

This settlement follows similar actions taken by the Attorney General’s Office, including a $100,000 settlement with Quality King Distributors Inc. for Lysol price increases during the COVID-19 pandemic and the delivery of 1.2 million eggs to food pantries from a settlement with egg producers.