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1. What Type of Formula is Best?
The vast majority of infants are fed cow's milk-based formulas and do very well. The proteins in these formulas are milk proteins, casein, and whey.
For the small number of infants who demonstrate an allergy or intolerance to these proteins, there are soy formulas which substitute a soybean protein for those found in milk. (Milk allergies should only be diagnosed by a medical professional.)
The lactose-free option is specifically designed for infants who can't digest the sugar component of many formulas. True lactose intolerance, as is found in many adults, is rare in infancy. A severe bout of diarrhea, however, can temporarily cause lactose intolerance by damaging the lining of the gut. In this case, lactose-free formulas are used for a few weeks as your baby's intestines heal.
As a starter formula, unless there is a strong family history of milk allergy, a standard milk-based formula is the best way to go.