Abbott settles preterm formula NEC lawsuits
Analysis based on 21 articles · First reported Aug 20, 2026 · Last updated Aug 21, 2026
The settlement removes a significant legal overhang for Abbott, potentially reducing future litigation costs and uncertainty, which may be viewed positively by investors. However, the ongoing litigation and potential for further settlements or adverse verdicts could continue to pressure Abbott and Reckitt's stock prices.
Abbott Laboratories agreed to pay $670 million to settle a portion of the litigation alleging that its preterm infant formulas cause necrotizing enterocolitis (NEC), a deadly bowel disease. The settlement, announced on August 21, 2026, resolves claims brought by about 2,000 plaintiffs, including the high-profile case of Margo Gill, whose daughter developed NEC after being fed Abbott's formula. A jury had awarded Gill $495 million in 2024, and Abbott had been appealing that verdict. The settlement is not an admission of liability, and Abbott maintains the safety of its products. Abbott still faces approximately 1,700 lawsuits involving claims from up to 12,700 infants, with cases pending in federal and state courts. The litigation also involves Reckitt Benckiser — Mead Johnson, a unit of Reckitt, which manufactures Enfamil formulas. Regulatory agencies, including the FDA, CDC, and NIH, have stated there is no conclusive evidence that preterm formula causes NEC.
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