Abbott Presses Congress for Shield Over Preemie Baby Formula Litigation That Could Cost It Billions
News Summary
Abbott, the manufacturer of one of the two most widely used brands of formula for premature babies, is threatening to cease production unless U.S. health officials and Congress grant it protection from lawsuits related to infant deaths allegedly tied to its product. The company faces hundreds of claims alleging it failed to warn consumers that its specialty formula and fortifiers for preemies heighten the chances of developing necrotizing enterocolitis (NEC), a bowel disease that kills one premature baby daily. A jury previously ordered Abbott to pay $500 million to a family whose baby allegedly suffered NEC-associated brain damage after ingesting the formula. Abbott maintains that current research does not support these allegations, stating that the absence of human milk, rather than the formula, increases NEC risk. However, the company has admitted receiving numerous complaints linking its products to NEC-related injuries and deaths. Facing potentially billions in legal costs, Abbott has invested millions in lobbying lawmakers and proposed transferring control of its preterm formula sales and distribution to the federal government to keep it on the market. The company is now actively pressing Congress for legislation to dismiss all pending suits and shield it from future ones. Last year, following Abbott's CEO's warning of a market exit, the NIH, FDA, and CDC issued a joint statement claiming
Background
Abbott previously faced contamination issues at its Michigan plant, leading to nationwide formula shortages and a nearly four-month shutdown after infants fell ill and two died from consuming its products. The premature baby formula market has been volatile, experiencing shortages in recent years, and a popular upstart is under scrutiny for a botulism outbreak. Necrotizing Enterocolitis (NEC), a severe bowel disease that kills one premature baby daily in the U.S., is not fully understood by the medical community, though babies receiving breast milk are at a much lower risk than those given cow's milk-based formula. In terms of legal precedent, Abbott's strategy mirrors that of the firearm industry in the 1990s and vaccine manufacturers. The gun industry successfully pushed for legislation granting it legal immunity, while vaccine makers protect themselves through a government-instituted compensation fund.
In-Depth AI Insights
What are the true strategic motivations behind Abbott's threat to exit the market? - Abbott's move is not solely a financial calculation; at a deeper level, it leverages market anxieties over the fragility of the preemie formula supply to pressure Congress into granting legal immunity. - This is a high-stakes