Abbott Faces $495 Million Verdict in Landmark NEC Lawsuit Settlement

Jury Finds Abbott Liable in Premature Infant Formula Case

A Missouri jury has delivered a significant blow to Abbott Laboratories in the first trial of hundreds of similar claims, ordering the healthcare giant to pay $495 million in damages. This verdict marks a pivotal moment in the ongoing NEC lawsuit settlements against manufacturers of specialized infant formulas.

5 Key Points

• Jury awards $495 million in damages against Abbott Laboratories
• The case involves necrotizing enterocolitis (NEC) in premature infants
• The verdict includes $95 million compensatory and $400 million punitive damages
• Nearly 1,000 similar lawsuits pending against formula manufacturers
• Abbott strongly disagrees with the verdict and plans to appeal

The Origins of the NEC Lawsuit

The lawsuit, brought by Illinois resident Margo Gill, alleged that Abbott failed to adequately warn about the risk of necrotizing enterocolitis (NEC) associated with its specialized formula for premature infants. NEC is a dangerous bowel disease that primarily affects premature newborns, with a fatality rate between 15% and 40%.

Gill’s daughter, Robynn Davis, developed NEC after being fed Abbott’s premature infant formula in a neonatal intensive care unit in 2021. While Davis survived, she suffered irreversible neurological damage, necessitating long-term care.

The Verdict and Its Implications

The jury’s decision, supported by 9 out of 12 jurors, awarded $95 million in compensatory damages and $400 million in punitive damages. This verdict represents a significant milestone in the ongoing litigation against infant formula manufacturers over NEC risks.

Jack Garvey, Gill’s attorney, emphasized the importance of corporate transparency, stating, “Companies need to be honest about their products, about the good and the bad. When there is a risk of using a baby formula for preterm infants, parents have a right to know what the problems are.”

Abbott’s Response and Future Outlook

Abbott strongly disagrees with the verdict and has announced plans to appeal. Company spokesman Scott Stoffel defended the importance of specialized formulas, stating they are “among the only available options to feed premature infants.” He expressed concern that such verdicts might make it challenging to continue supplying these essential products.

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The Broader Context of NEC Lawsuits

This case is part of a more significant wave of litigation against infant formula manufacturers. Close to 1,000 lawsuits have been filed against Abbott and Reckitt Benckiser, the maker of the Enfamil formula, in various courts across the United States. These lawsuits allege that the companies failed to warn doctors about the increased risk of NEC in formula-fed premature infants compared to those fed breast milk or human milk-derived formula.

It’s important to note that these lawsuits specifically involve cow’s milk-based formulas and fortifiers designed for hospitalized infants, not regular store-bought formulas.

The Impact on the Industry and Investors

The ongoing litigation has raised concerns among investors. Following a similar verdict against Reckitt in March, which resulted in a $60 million award, the company’s share price fell by about 15% and has not fully recovered. However, not all stakeholders support these lawsuits. The NEC Society, a patient-led non-profit organization, has criticized the litigation, arguing that “feeding decisions should be made at patients’ bedsides, not in courtrooms.”

Future of NEC Lawsuit Settlements

As this case represents the first of hundreds of similar claims to go to trial, its outcome may influence future NEC lawsuit settlements. The substantial damages awarded could set a precedent for upcoming cases against Abbott and other formula manufacturers.

While Abbott plans to appeal this verdict, the case highlights the ongoing debate about the safety of specialized infant formulas and the responsibilities of manufacturers to inform healthcare providers and parents about potential risks.