Marketer of brain supplement Prevagen catches break in court

Josh Long, Associate editorial director, Natural Products Insider

October 19, 2021

3 Min Read
Brain health 2021.jpg

A federal court last month dismissed the Federal Trade Commission’s request for monetary relief in a lawsuit against Quincy Bioscience, a marketer of a brain health supplement called Prevagen.

U.S. District Judge Louis Stanton in New York dismissed the claim for monetary relief “without prejudice,” allowing the government to renew its claim for financial damages if the law is changed to allow such recovery.

FTC is advocating for such authority via legislation after the Supreme Court held in AMG Capital Management LLV v. Federal Trade Commission that the agency can no longer rely on Section 13(b) of the Federal Trade Commission Act to obtain monetary relief. The decision was widely considered a major blow to the agency’s authority.

For several years now, Quincy Bioscience has been fighting FTC and the office of the New York Attorney General over whether the company ran afoul of deceptive advertising laws. Stanton in 2017 dismissed a lawsuit against Quincy Bioscience, but a U.S. appeals court in 2019 vacated his judgment, finding regulators “made plausible allegations that Quincy’s marketing campaign for Prevagen contained deceptive representations.”

Stanton’s recent order doesn’t affect regulators’ request to obtain injunctive relief against Quincy Bioscience to prohibit future deceptive conduct.

Related:Judge keeps alive FTC pyramid scheme lawsuit

Expert discovery and depositions in the case against Quincy Bioscience are scheduled to wrap up later this month, and a status conference with the judge is scheduled for Nov. 12. At that time, Stanton may set a briefing schedule for summary judgment motions.

Neither FTC nor counsel for Quincy Bioscience commented on the recent ruling.

In the lawsuit against Quincy Bioscience, regulators were not concerned with the adequacy of the overall study upon which Quincy Bioscience relied to tout its advertising statements. In fact, to assess the impact of Prevagen on older adults, Quincy Bioscience conducted a randomized, double-blind, placebo-controlled study, what the company’s lawyers described in court documents as the “gold standard" to corroborate the advertising statements.

Instead, the controversy boiled down to an interpretation of the “Madison Memory Study"—what the study’s results showed. Although the study failed to show any statistically significant results for the study population as a whole, statistically significant results were identified among certain subgroups.

According to Prevagen’s website, the supplement “improved certain aspects of cognitive function over a 90-day period in subgroups of individuals who were cognitively normal or mildly impaired.”

Quincy Bioscience is far from the only defendant that has caught a break following the AMG ruling.

In many pending lawsuits, FTC’s requests for monetary damages are being dropped in the wake of the Supreme Court’s decision, observed Katie Bond, a partner with Lathrop GPM, who has extensive experience defending FTC investigations. The rulings don’t affect the agency’s requests for injunctive relief, she added.

At least one law firm has tracked the status of several cases following the AMG decision.

“As AMG recedes further into the past, lower courts are becoming more comfortable disposing of 13(b) actions where the proceedings are attempting to obtain monetary restitution as a matter of course,” attorneys with Kelley, Drye & Warren wrote in an Aug. 6 blog, “Post-AMG Scorecard (Updated): FTC Claims for Monetary Relief in 13(b) Actions Dwindle.”

However, while FTC acknowledged in several cases it cannot obtain monetary relief, the agency in many other instances “refuses to concede defeat on the issue of monetary relief under Section 13(b),” the attorneys’ blog added.

About the Author(s)

Josh Long

Associate editorial director, Natural Products Insider, Informa Markets Health and Nutrition

Josh Long directs the online news, feature and op-ed coverage at Natural Products Insider, which targets the health and wellness industry. He has been reporting on developments in the dietary supplement industry for over a decade, with a focus on regulatory issues, including at the Food and Drug Administration.

He has moderated and/or presented at industry trade shows, including SupplySide East, SupplySide West, Natural Products Expo West, NBJ Summit and the annual Dietary Supplement Regulatory Summit.

Connect with Josh on LinkedIn and ping him with story ideas at [email protected]

Education and previous experience

Josh majored in journalism and graduated from Arizona State University the same year "Jake the Snake" Plummer led the Sun Devils to the Rose Bowl against the Ohio State Buckeyes. He also holds a J.D. from the University of Wyoming College of Law, was admitted in 2008 to practice law in the state of Colorado and spent a year clerking for a state district court judge.

Over more than a quarter century, he’s written on various topics for newspapers and business-to-business publications – from the Yavapai in Arizona and a controversial plan for a nuclear-waste incinerator in Idaho to nuanced issues, including FDA enforcement of the Dietary Supplement Health and Education Act of 1994 (DSHEA).

Since the late 1990s, his articles have been published in a variety of media, including but not limited to, the Cape Cod Times (in Massachusetts), Sedona Red Rock News (in Arizona), Denver Post (in Colorado), Casper Star-Tribune (in Wyoming), now-defunct Jackson Hole Guide (in Wyoming), Colorado Lawyer (published by the Colorado Bar Association) and Nutrition Business Journal.

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