NEW YORK, March 11 (Reuters) - Walgreens has

settled charges by New York Attorney General Letitia James that

it grossly inflated prices on at least 20 infant formula

products after a recall by Abbott Labs ( ABT ) led to a

nationwide shortage in early 2022.

The largest U.S. pharmacy chain did not admit or deny

wrongdoing in entering an assurance of discontinuance with

James' office, including a $50,000 payment covering civil

penalties and costs, that was made public on Monday.

James said Walgreens raised prices on the 20 products,

including Abbott's Similac and Reckitt Benckiser's ( RBGPF )

Enfamil, by 10% or more following the February 2022 recall, and

in at least one case boosted formula prices by more than 70%.

Walgreens allegedly sold more than 3,400 cans or bottles

or formula at the "unconscionably" inflated prices.

Without admitting or denying wrongdoing, Walgreens

agreed not to charge excessive prices on consumer goods and

services vital and necessary to people's health and safety.

The Deerfield, Illinois-based company also agreed to

donate 9,564 canisters of formula to benefit low-income New

Yorkers with infant children.

Walgreens declined to comment.

"During the formula shortage, families were panicked and

struggling about how to feed their babies," James said in a

statement. "For Walgreens to take advantage of this crisis and

jack up formula prices is not only illegal, but downright

shameful.

"My office will not tolerate any company that attempts

to price gouge our state's consumers," she added.

The settlement was effective as of March 7, and signed

by a Walgreens representative on Monday.

Abbott recalled its infant formula and closed its Sturgis,

Michigan plant following reports that infants became sick after

being fed formula that was produced there. The company reopened

the plant that July.