A jury has ordered Abbott Laboratories to pay $495 million for failing to warn that its formula for premature infants increased the risk of a bowel disease.
This verdict includes $400 million in punitive damages, which may be reduced or overturned on appeal.
Abbott, the maker of Similac, saw its shares drop by approximately 5 percent in after-hours trading following the decision.
An Abbott spokesman said: “We strongly disagree with the verdict.
“We will pursue all avenues to have the erroneous decision overturned.”
This case is part of a broader issue facing the industry.
Nearly 1,000 similar lawsuits have been filed against Abbott and Mead Johnson, a subsidiary of UK-based Reckitt Benckiser.
The firm was recently ordered to pay $60 million in a related case.
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During a recent earnings call, Abbott CEO Robert Ford said regulators have deemed the company’s preterm infant formulas safe.
He said removing these products could lead to a public health crisis.
He noted that Abbott generates about $9 million annually from the products involved in the lawsuits.
The plaintiff’s lawyer, Jake Plattenberger, argued that Abbott failed to adequately warn of the risks associated with the Similac Special Care 24 High Protein formula.
He highlighted the severe and long-term impact on the plaintiff’s daughter, who suffers from chronic pain and cannot eat regular meals following her illness.
