Abbott Reaches $670 Million Settlement in Premature Infant Formula Lawsuits, Bypassing Appeals Process

Abbott Laboratories reached a major agreement with three law firms on Friday to resolve the Gill litigation and claims from approximately 2,000 individuals.

The disputes centered on the company's specialized infant formula for premature babies and allegations linking the product to necrotizing enterocolitis, a serious inflammatory bowel disease affecting underdeveloped infants.

In July 2024, a St. Louis jury delivered a $495 million verdict against the healthcare company in the Gill trial.

After the Missouri Court of Appeals rejected a subsequent appeal in December 2024, the company faced approximately $600 million in damages and accrued interest.

The manufacturer chose not to pursue further appeals, instead settling the primary lawsuit and an additional 2,000 NEC claims for a total of $670 million.

Maintaining Safety Claims Amid Ongoing Litigation

The manufacturer emphasized that this compromise does not constitute an admission of fault. Executives continue to defend the safety of their premature infant formula.

Major health organizations, including the U.S. Food and Drug Administration and the U.S. Centers for Disease Control and Prevention, maintain that there is a lack of reliable scientific connection between these necessary medical products and NEC.

This comprehensive agreement follows several recent legal victories for formula manufacturers.

In July 2026, a federal appeals court upheld a pretrial ruling favorable to the company. Similarly, courts in Illinois and Florida recently dismissed claims against competitor Mead Johnson or overturned a $60 million verdict, applying the learned intermediary doctrine regarding manufacturers' warning obligations.

While leadership believes this settlement serves the company's long-term best interests, approximately 1,700 lawsuits representing about 12,700 infants remain pending.

The manufacturer is actively seeking to eliminate many remaining cases, citing issues such as jurisdictional overlap, lack of NEC diagnoses, or failure to clearly specify which company's formula was used by hospitals.

Abbott Analyst Views

William Blair noted that 1,700 lawsuits involving 12,700 infants remain pending, with analyst Brandon Vazquez expecting the Gill settlement to potentially provide a precedent for Abbott to advance settlements in remaining outstanding litigation, though timing remains uncertain.

Analyst Vazquez stated: "We expect Abbott's ultimate outstanding exposure to be less than the total 12,700 remaining cases. Abbott noted it still needs to verify matters such as which infants used Abbott formula or which NEC cases were diagnosed before formula use."

ABT Stock Activity: Abbott Laboratories shares fell 0.12% to $114.00 in Friday premarket trading.