Maker of Brain Supplement Prevagen Asks Appeals Court to Affirm Dismissal of FTC, NY AG Lawsuit

Quincy Bioscience, the maker of Prevagen, a dietary supplement marketed to support healthy brain function, has asked a federal appeals court to uphold a decision dismissing a lawsuit filed against the company.

The 2017 complaint alleged violations of federal and state deceptive advertising laws, but was dismissed in September, dealing a defeat to the FTC and former New York Attorney General Eric Schneiderman.

State and federal regulators filed an appeal, arguing U.S. District Judge Louis L. Stanton “committed serious and fundamental errors in dismissing” the lawsuit.

Madison, Wisconsin-based Quincy Bioscience made several arguments why Stanton’s decision should be affirmed, including the company followed FTC’s own guidance to support its advertising claims concerning Prevagen, which contains an ingredient derived from jellyfish, apoaequorin.

“We relied on the FTC’s own guidance for dietary supplement marketing claims and have backed our claims with a double-blind, placebo-controlled human study, as well as other evidence,” Quincy Bioscience proclaimed in a statement after its May 30 brief was filed with the U.S. Court of Appeals for the Second Circuit. “We respectfully submit that, if the FTC wants to change its guidance for dietary supplement marketing, they do not try to do so through litigation.”

Largely at issue in the case: interpretation of a double-blind, placebo-controlled trial of 218 subjects who took either Prevagen or placebo, and were evaluated on nine cognitive tasks. The “Madison Memory Study” failed to show any statistically significant results over the entire study population. However, Quincy Bioscience identified statistically significant results among a few different subgroups.

“Of the 218 older adults included in this ‘Madison Memory Study,’ two large and distinct subgroups comprising more than 76% of the study population had normal cognitive function or mild-to-moderate cognitive impairment,” Quincy Bioscience explained in its 51-page brief. “Those two large subgroups undisputedly saw statistically significant and clinically meaningful cognitive improvements after taking Prevagen.”

The government previously argued the data Quincy Bioscience relied on from the subgroups wasn’t adequate to support its advertising claims.

Quincy Bioscience’s clinical trial “showed no statistically significant treatment effect, either for the entire study population or for the vast majority of subgroups,” government attorneys explained in their appeals brief. “The complaint plausibly alleges that experts would not accept cherry-picked data showing a few positive findings for small subgroups on isolated tasks as support for unqualified claims of improved memory.”

Stanton, the district court judge, concluded the complaint failed to demonstrate “reliance upon the subgroup data ‘is likely to mislead consumers acting reasonably under the circumstances,’ as is necessary to state its claim." The judge, Quincy Bioscience wrote in its brief, was correct in determining the complaint never went “’beyond the theoretical.’”

The government agencies attacked Quincy Bioscience’s “reliance on subgroup analysis, but they ‘neither explain the nature’ of the purported risks associated with such analysis nor ‘show that [such risks] affected the subgroups’ performance [in the Madison Memory Study] in any way or registered any false positives,’” Quincy Bioscience observed, quoting the lower court’s decision. “Appellants pointed to no precedent in support of their arguments because none exists: Never before has the FTC suggested that advertisers cannot advertise in reliance on positive results from subgroup analysis.”

Quincy Bioscience further argued it not only satisfied FTC’s standard of “competent and reliable scientific evidence” to substantiate its advertising claims, but FTC lacked the proper authority or “quorum” to initiate the lawsuit. Two Democrats at the commission—typically a five-member agency—approved the lawsuit: former FTC Chairman Edith Ramirez and former FTC Commissioner Terrell McSweeny.

According to Quincy Bioscience, congressional intent, common-law rules and FTC’s own policies barred the agency from acting unless it had a vote of at least three commissioners.

“We also respectfully submit that companies like Quincy Bioscience be given the opportunity to be heard before a bipartisan commission and that a proper quorum must exist prior to any vote to proceed with the filing of a complaint,” the company said in its statement.

Quincy Bioscience also argued regulators’ “claims fail because any attempt to preclude undisputedly truthful statements about the results of a ‘gold standard’ RCT [randomized controlled trial] would constitute an impermissible restraint on commercial speech” in violation of the First Amendment under a doctrine articulated by the U.S. Supreme Court in a 1980 case, Central Hudson Gas & Electric Corp. v. Public Service Commission.

In the appeal, Quincy Bioscience is being represented by attorneys with Amin Talati Upadhye LLP and Kelley Drye & Warren LLP. Both law firms have experience representing dietary supplement companies in federal regulatory matters.