US-based pharmacy chain Walgreens Boots Alliance has reached a settlement following accusations of illegally raising prices of infant formula in 2022.

New York Attorney General Letitia James said Walgreens raised prices on at least 20 products, including Abbott’s Similac and Reckitt Benckiser’s Enfamil, by 10% or more following the February 2022 recall during the national shortage.

The pharmacy chain will now pay a $50,000 penalty to resolve the investigation, as well as donate 9,564 cans of baby formula to the Met Council in Queens County, and FeedMore WNY and the Buffalo Prenatal Perinatal Network in Buffalo, Erie County, according to a statement from James’ office.

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

“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.”

Walgreens refused to comment on the settlement.

In 2022, the recall of infant formula products by major supplier Abbott Laboratories – and the closure of one of its factories – roiled the US market.

According to retail-tracking company Datasembly, in the week ending 28 May 2022, nationwide infant formula out-of-stocks stood at 74%.

Three companies – Abbott Laboratories, Mead Johnson Nutrition (owned by Reckitt Benckiser) and Nestlé – accounted for more than 90% of US baby-milk sales in the US in 2020, GlobalData research shows.