United States – Abbott (ABT. N), the producer of Similac baby formula, is expected to go to trial on Monday to defend its formula used for premature babies in neonatal ICU causing a deadly bowel disease, which is the second trial out of hundreds of similar cases in the United States.
Lawyers for the company and for Illinois resident Margo Gill will initiate their presentation to the jurors in St. Louis, Missouri, and the trial should continue for the rest of the month. Premature infant children developed necrotizing enterocolitis (NEC) because of consuming Abbott’s products for premature babies – according to Gill in the lawsuit, as reported by Reuters.
Trial Details
NEC, which leads to the death of bowel tissue, is more common in newborns and has a mortality rate of 15-40%. Gill’s child was fortunate to live but continues to live a life with various health complications, as the lawsuit alleges.
As with the other legal cases involving NEC, this one concerns formulas and products that enrich the mother’s milk fed to infants in hospital environments, not consumer products in stores.
“Specialized formulas and fortifiers, like the one in this case, are considered part of the standard of care by the medical community and, along with human milk, are the only available options to feed premature infants,” Abbott said in a statement.
Abbott responded by stating that Gill’s child “sustained a severe head injuries in uterus and at the time of birth and before the mother ingested any Abbott products,” and that “Nobody is to blame. ”
Over nine hundred of these cases are against Abbott or Enfamil formula maker Reckitt Benckiser (RKT. L) in federal or state court claiming that cow’s milk-based formula products for premature infants caused NEC. Over half a thousand are centralized at an Illinois federal court; others are in Illinois and Missouri, and some in Pennsylvania.
The cases state that the companies should have disclosed that using their products exposes infants to a higher risk of NEC than those fed with breast milk, donor milk, or human-derived formula.
Both Reckitt and a plaintiff’s attorney refrained from commenting right away.
Previous Verdict and Investor Impact
A $60 million jury verdict against Reckitt was the result of the first case to go to trial, which took place in Illinois in March. Reckitt contends in his appeal of that decision that the plaintiff’s argument was founded on faulty expert testimony.
Investors are worried about the litigation. Following the ruling, Abbott’s shares dropped by roughly 4% and Reckitt’s by almost 15%. Despite analysts at JPMorgan and Barclays stating that they think the companies’ eventual liability is likely to be limited, both stocks have remained down.
In an effort to stop the disease, the patient-led non-profit NEC Society has attacked the litigation, opening a new tab, stating that “feeding decisions should be made at patients’ bedsides, not in courtrooms.” A spokeswoman for the company stated that there is no financial or other tie between the group and Abbott or Reckitt, as reported by Reuters.
Separate Litigation
The NEC claims are distinct from the litigation that Abbott is currently facing for the closure of its factory in Sturgis, Michigan, and the consequent recall of infant formula batches due to potential contamination. This event had a role in the nationwide formula shortage that occurred in 2022. In those cases, there have been no trials.