Paragon USA Gouges Families, Forced to Donate $45K in Formula

BROOKLYN, NY – New York Attorney General Letitia James isn’t letting profiteers off the hook. Today, baby formula supplier Paragon USA & Co., LLC (Paragon) was forced to deliver over $13,500 worth of formula to desperate families in Brooklyn, a direct result of James’ investigation into their predatory price gouging during the 2022 national shortage. It’s a small victory for parents, but a harsh lesson for anyone thinking of exploiting a crisis for profit.

The Attorney General’s Office (OAG) found that Paragon raked in tens of thousands of dollars in extra revenue by hiking prices by over 20% after Abbott Laboratories shuttered a major plant and recalled its formula in 2022. Abbott, responsible for over 40% of the U.S. infant formula market, and the closed plant accounted for roughly one-fifth of national production, leaving shelves bare and parents scrambling. Paragon, supplying retailers across New York, saw an opportunity to squeeze extra cash from panicked consumers.

“Companies should never be able to raise prices and squeeze extra profits from struggling New Yorkers during a crisis,” Attorney General James stated bluntly. “At a time when families were desperately searching for baby formula, Paragon raised its prices to unconscionable levels. As a result of my office’s investigation, we have secured another delivery of free baby formula to Brooklyn families in need. I will continue to go after any company for price gouging New Yorkers.” The donation will be distributed by Mixteca, a community organization serving Latino communities in Brooklyn.

This isn’t a one-off. The $13,500 Brooklyn donation marks the fourth and final delivery secured as part of a settlement with Paragon. James previously secured over $1,500 in formula for Westchester families in February, $6,300 for Brooklyn families in March, and another $13,500 for Rochester families earlier this month – bringing the total value of the forced donations to $35,000. Paragon also paid a $10,000 penalty to the state.

Mixteca Executive Director Lorena Kourousias expressed gratitude, stating, “This support ensures that families in our community have access to essential nutrition for their little ones during a time of great need. Thank you, Attorney General James, for standing with our immigrant and Indigenous families and helping us care for the youngest members of our community with dignity and love.” But the sentiment rings hollow knowing the hardship Paragon inflicted in the first place.

New York’s price gouging laws are clear: vendors can’t exploit vital goods during emergencies. Attorney General James issued warnings to over 30 retailers in May 2022 after receiving reports of inflated formula prices. This case sends a message: preying on desperate parents won’t be tolerated. James promises to continue her crackdown on price gougers, ensuring New Yorkers aren’t left to pay the price for corporate greed.