Abbott agrees to $670 million settlement in infant formula cases

• The 2024 St. Louis jury verdict found Abbott's infant formula caused an Illinois girl to develop necrotizing enterocolitis, which has a mortality rate exceeding 20% and primarily affects premature newborns
• Over 800 similar cases are centralized in Illinois federal court, with additional lawsuits pending in Missouri, Pennsylvania, and other state courts against Abbott (Similac) and Mead Johnson (Enfamil)
• Both companies maintain their formulas do not cause the disease and that breast milk's protective benefits against necrotizing enterocolitis have long been known to clinicians

Abbott Laboratories Settles Infant Formula Litigation for $670 Million

Abbott Laboratories has agreed to a $670 million settlement with three law firms to resolve legal claims from approximately 2,000 plaintiffs alleging harm from the company's specialty formulas for preterm infants.

Key Details:

The settlement incorporates a $495 million judgment from a 2024 St. Louis jury verdict, which found Abbott's infant formula caused an Illinois girl to develop necrotizing enterocolitis (NEC), a severe bowel disease. Abbott had been appealing this decision to Missouri's Supreme Court after a state appeals court affirmed the judgment in May 2026.

Litigation Landscape:

Roughly 1,000 similar lawsuits remain pending against Abbott (maker of Similac) and Mead Johnson, a Reckitt unit that produces Enfamil formulas. More than 800 cases are centralized in Illinois federal court, with additional cases in state courts across Illinois, Missouri, and Pennsylvania.

Medical Context:

Necrotizing enterocolitis primarily affects premature newborns, causing bowel tissue death with a mortality rate exceeding 20%. Both companies maintain their formulas do not cause the disease, arguing that while breast milk provides protection against NEC, the benefits of breastfeeding have long been established in clinical practice.

Market Implications:

This substantial settlement may pressure Abbott's near-term financials but provides clarity by resolving a significant portion of pending litigation. The remaining 1,000 lawsuits represent continued legal exposure for both Abbott and Reckitt. Investors should monitor potential additional settlements and their impact on these companies' infant nutrition divisions, which represent important revenue segments.

The resolution allows Abbott to eliminate ongoing appeals costs while managing reputational risks in the competitive infant formula market.