By Donielle Tigay Stutland, J.D.
The Second Circuit found that the FTC did have plausible claims against the manufacturers of a dietary supplement marketed to help memory function and vacated an earlier judgment to dismiss the case.
A case brought by the FTC and the state of New York against the manufacturers of the supplement Prevagen® was revived by the Second Circuit Court of Appeals. In a non-precedential summary order, the Second Circuit vacated a 2017 judgment of the U.S. District Court for the Southern District of New York and found that the FTC did have plausible claims that the marketing campaign for the supplement Prevagen was deceptive (Federal Trade Commission v. Quincy Bioscience Holding Co., Inc., February 21, 2019, per curium).
In September 2017, the Southern District of New York dismissed the FTC and the State of New York’s complaint that the marketing practices in connection with Prevagen were deceptive. The case was dismissed because the FTC had failed to state a valid claim that the marketers of Prevagen made false, misleading, or unsubstantiated representations that Prevagen improves memory in violation of the FTC Act (see FTC fails to state valid claims against Prevagen® marketers, October 4, 2017).
Background. Quincy Bioscience Holding Company and the other defendants (Quincy) manufacture and sell the dietary supplement Prevagen. The advertising of Prevagen includes representations that "Prevagen improves memory," that it "has been clinically shown to improve memory," that it improved certain memory tasks over 90 days, as well as other claims of memory and brain boosting benefits, and that such benefits were clinically proven. To support its use of the various claims, Quincy provided a randomized, double-blind, placebo controlled study known as the Madison Memory Study, which followed well accepted procedures. The FTC alleged that the claims by the manufacturers are false and deceptive for two reasons, first because they rely on post-hoc and sub-group analysis and that they rely on a theory that the main ingredient, apoaequorin enters the brain to supplement proteins that are lost during the aging process.
The Southern District of New York dismissed the case, and it found the FTC failed to show that the Quincy’s reliance on the post-hoc or sub-group studies was misleading to customers
Plausible Claims. The Second Circuit found that the FTC did make plausible allegations that Quincy’s marketing campaigns contained deceptive statements. First, the court noted that the FTC stated a plausible claim that Quincy’s representations about Prevagen were contradicted by the results of Quincy’s clinical trial, and as such are materially deceptive. The court pointed out that the FTC’s complaint had quoted Quincy’s claim that in a clinical study, "Prevagen improved memory for most subjects within 90 days," yet the complaint also alleges that Quincy’s study, "failed to show a statistically significant improvement in the treatment group over the placebo group on any of the nine computerized cognitive tasks."
The court noted that if these allegations were taken as true, then the FTC has adequately alleged that Quincy’s study undermines Quincy’s representations that "the majority of people" experience cognitive improvement from taking Prevagen and that the FTC has stated a claim that Quincy’s representations that this cognitive improvement is clinically supported is deceptive.
Additionally, the Second Circuit found that the FTC plausibly alleged that Quincy’s representations about Prevagen’s active ingredient entering the brain are false. Quincy claimed that the active ingredient in Prevagen, apoaequorin, "enters the human brain to supplement endogenous proteins that are lost during the natural process of aging." The FTC alleges that Quincy’s "safety studies show that apoaequorin is rapidly digested in the stomach and broken down into amino acids and small peptides like any other dietary protein."
The case is No. 17-3745-cv(L).
Attorneys: Bradley D. Grossman for the FTC. Scott A. Eisman, New York State Office of the Attorney General, for People of the State of New York. Jeffrey S. Jacobson (Kelley Drye & Warren LLP) for Quincy Bioscience Holding Co., Inc., Quincy Bioscience, LLC, Prevagen, Inc., Prevagen, Inc. d/b/a Sugar River Supplements and Quincy Bioscience Manufacturing, LLC.
Companies: People of the State of New York; Quincy Bioscience Holding Co., Inc.; Quincy Bioscience, LLC; Prevagen, Inc.; Prevagen, Inc. d/b/a Sugar River Supplements; Quincy Bioscience Manufacturing, LLC.
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