Saturday, May 30, 2020

BREAKING: FTC Loses Challenge to Popular Cognitive Enhancer Prevagen

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Richard B. Newmanhttp://www.hinchnewman.com
Richard B. Newman is an Internet Lawyer at Hinch Newman LLP focusing on advertising law, Internet marketing compliance, regulatory defense and digital media matters. His practice involves conducting legal compliance reviews of advertising campaigns across all media channels, regularly representing clients in high-profile investigative proceedings and enforcement actions brought by the Federal Trade Commission and state attorneys general throughout the country, advertising and marketing litigation, advising on email and telemarketing best practice protocol implementation, counseling on eCommerce guidelines and promotional marketing programs, and negotiating and drafting legal agreements.

Earlier this week, a New York federal judge dismissed a highly-publicized Federal Trade Commission and New York Attorney General action against Quincy Bioscience, targeting claims regarding the jellyfish-protein supplement Prevagen.

The issue in this matter was the clinical trial that Quincy conducted to substantiate the efficacy of the product. While the trial showed no difference between Prevagen and a placebo, some subgroups appeared to benefit from the product.

The FTC’s position was that the parsing out subgroup trial data was not a proper basis for substantiating advertising claims.

In their complaint, state and federal regulators noted “researchers conducted more than 30 post hoc analyses of the results looking at data broken down by several variations of smaller subgroups for each of the nine computerized cognitive tasks.”

The court disagreed.

“Findings based on post hoc exploratory analyses have an increased risk of false positives, and increased probability of results altered by chance alone,” the court opined. “But [they] neither explain the nature of such risks nor show that they affected the subgroups’ performance in any way or registered any false positives.” The court also observed that “the subgroup concept” is “widely used in the interpretation of data in the dietary supplement field.”

The complaint, the judge concluded, 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.”

It is believed that the FTC is presently evaluating whether to file an amended complaint. The New York attorney general also joined the FTC’s complaint and brought state law fraud and false advertising claims. The court stated “[t]he New York state courts may find merit in the remaining claims under New York statutes, which are best left to them.”

The decision is not the first significant victory against the FTC for the dietary supplement industry in recent years. In 2015, a federal judge ruled in favor of Bayer Corp. in a dispute pertaining to the evidence required to substantiate supplement advertising claims.

The case is FTC et al. v. Quincy Bioscience Holding Co. Inc. et al., case number 1:17-cv-00124, in the U.S. District Court for the Southern District of New York.

Contact an FTC compliance lawyer if you are being threatened with a regulatory investigation or enforcement action.

ADVERTISING MATERIAL. These materials are provided for informational purposes only and are not to be considered legal advice, nor do they create a lawyer-client relationship. No person should act or rely on any information in this article without seeking the advice of an attorney. Information on previous case results does not guarantee a similar future result. Hinch Newman LLP | 40 Wall St., 35th Floor, New York, NY 10005 | (212) 756-8777.

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