Jurors in state court in Chicago found Abbott liable over claims that the company knew premature babies could develop necrotizing enterocolitis, or NEC, by ingesting the company’s cow-milk-based formula, but continued to market the product to hospital intensive-care units.
After awarding the mothers US$53 million in compensation for their losses on Thursday, the jury on Friday imposed US$17 million in punitive damages on Abbott.
Company shares fell about 2.4% at the close of trading Friday in New York. The stock is down 20% for the year.
“We disagree with the verdict and will appeal,” Abbott said in a statement, adding that four similar lawsuits have been dismissed by federal and state courts. “This verdict, and the continued pursuit of a theory at odds with regulators and the medical community, risks eliminating vital options for doctors and the most vulnerable infants.”
It’s the second trial defeat for Abbott Park, Illinois-based Abbott in the litigation targeting products such as Similac Special Care and Similac NeoSure and may open the door to more multi-plaintiff trials. The company faces more than 1,700 lawsuits in federal and state courts, with potentially billions of dollars at stake.
In brief arguments Friday morning, an attorney for the plaintiffs urged jurors to award a combined US$530 million in punitive damages, saying it would take a significant sum to incentivise Abbott to protect the most vulnerable newborns going forward.
“This now is about protecting those premature babies, that are yet to be born, from a company that prioritises profits over preemies,” said Kenzo Kawanabe.
Arguing for Abbott, lawyer Hariklia Karis repeatedly said the company takes the jurors’ prior findings seriously, but there wasn’t proof Abbott disregarded others’ safety or acted “in a manner that showed it did not care.”
The formula is a crucial “last line of defense” for premature infants when no mother’s milk or donor milk is available, said Karis.
Abbott contends extensive independent research shows its formula brands don’t cause NEC and points to the US Food and Drug Administration’s finding there’s no conclusive evidence linking the product to the disease.
In 2024, a St. Louis jury said Abbott should pay almost US$500 million to the family of an infant allegedly injured by its formula. Another St. Louis jury cleared Abbott of liability in a separate trial.
The case that Abbott lost in St. Louis sent the company’s shares down 5%, while the stock gained about the same percentage following the company’s victory in the other trial — showing that the issue is sensitive for investors.
After Friday’s verdict, juror Jim Schmidt said the panel settled on a modest award of punitive damages to send a message, “but we don’t want to bury Abbott.”
“I hope Abbott, they listen, they get something from this, and make some changes,” he said. “And at least put a frickin’ warning on the label.”
Abbott has indicated it may pull the formula products off the market if juries continue to hit the company with costly verdicts.
Holly Froum, a Bloomberg Intelligence analyst who has been following the litigation, has said that Abbott and Mead Johnson – which also makes premature infant formula — may have to pay a total of as much as US$3 billion to resolve their liability.
The Chicago case marks the first time multiple formula suits were tried together. The four complaints were filed in 2022 and focused on babies born prematurely at Chicago-area hospitals over an eight-year period ending in 2019, according to court filings.
Each of the babies was born at 32 weeks instead of the normal 40 weeks, court filings show. The newborns weighed in at just 3 pounds (1.36kg). The average baby is more than 7 pounds at birth, according to Nemours KidHealth.
Kawanabe, the lawyer for the mothers, told reporters after the verdict he and his clients were grateful to jurors.
“If they could turn back the clock and not have their kids infected with necrotizing enterocolitis, I’m sure they would do that in a heartbeat,” he said. “But to have the justice system dispense justice to their children is unbelievable.”