Prevagen’s claims curbed, but New York attorney general’s monetary demands denied

In March, I wrote a column with the headline, “Quincy Bioscience wins and loses in jury trial over memory supplement Prevagen.”

On Dec. 6, several months after a jury verdict in New York, U.S. District Judge Louis L. Stanton issued an order that affirmed an earlier judgment. Stanton’s order further underscored that neither the government nor Quincy entirely succeeded in a yearslong court fight over advertising statements concerning Prevagen, a popular dietary supplement marketed to improve memory.

The Federal Trade Commission and New York Attorney General (NYAG) Letitia James did pick up a significant win. Stanton affirmed a judgment, ordering Quincy to remove from promotion eight challenged statements, including “Prevagen is clinically shown to improve memory.”

“Quincy’s loss of the use of all eight challenged statements in its marketing and public relations, at a single blow, is not a trivial event,” the judge wrote in his order. “It involves years of accumulated goodwill, whose loss must be replaced with costs and effort. That relief aligns with the purpose of both the FTC Act and the New York statutes, and it should be administered in proportion to the damage caused by each statement’s tendency to deceive, as found by the jury, whose verdict was discriminating and perceptive.”

Related:Quincy Bioscience wins and loses in jury trial over memory supplement Prevagen

According to the March 11 jury verdict, none of the eight challenged statements were supported by competent and reliable scientific evidence, two of them were materially misleading and all of them had the capacity or tendency to deceive.

Stanton ordered the defendants “to cease the use of the challenged statements in Prevagen’s marketing in a reasonable and practical amount of time and without delay.”

“Following seven years of hard-fought litigation, including a jury trial, we are pleased that the court has ordered Quincy Bioscience to cease making claims about Prevagen that mislead Americans concerned about memory loss,” said Samuel Levine, director of FTC’s Bureau of Consumer Protection, in a statement. “Companies should take note and remember that health claims need to be backed up by reliable scientific evidence.”

He characterized Stanton’s ruling as “another win in the FTC’s efforts to protect older Americans.”

I reached out to the NYAG for comment on Stanton’s Dec. 6 order. The NYAG had no immediate comment, but James proclaimed in a May 8 press release, “New York laws are clear: companies and individuals cannot lie and manipulate consumers. Quincy took advantage of the very real fear of cognitive decline and preyed on elderly New Yorkers to make a profit. Consumers bought Prevagen with the hopes that they could improve their cognitive health.”

Related:Quincy Bioscience tells jurors it relied on FTC guidance in supporting claims for Prevagen

She added, “My office will always use every tool and resource at our disposal to protect New Yorkers and uphold the rule of law. I will not allow modern day ‘snake oil salespeople’ to operate in New York.”

The challenged statements at the heart of the civil lawsuit included the following:

“Prevagen improves memory.”

“Prevagen is clinically shown to improve memory.”

“Prevagen improves memory within 90 days.”

“Prevagen is clinically show to improve memory within 90 days.”

“Prevagen reduces memory problems associated with aging.”

“Prevagen is clinically shown to reduce memory problems associated with aging.”

“Prevagen provides other cognitive benefits, including but not limited to healthy brain function, a sharper mind and clearer thinking.”

“Prevagen is clinically shown to provide other cognitive benefits, including but not limited to healthy brain function, a sharper mind and clearer thinking.”

The jury found only two of the statements were materially misleading: “Prevagen reduces memory problems associated with aging,” and “Prevagen is clinically shown to reduce memory problems associated with aging.”

Related:Quincy’s Prevagen trial was a long time coming

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Stanton’s Dec. 6 order contained welcome news for Quincy, as well. He denied the NYAG’s pursuit of statutory penalties, disgorgement and statutory costs. Among other relief, James’ office had sought to recover from Quincy its “ill-gotten gains” from Prevagen sales.

In a Dec. 2. memorandum, the NYAG also expressed its intent “to seek penalties in an amount sufficient to send a message to corporate defendants that their continued deception of New York consumers for more than seven years following the institution of this litigation is inexcusable, and to send a message to other would-be deceptive advertisers that deceptive claims will not be tolerated.”

The judge denied the NYAG’s request, or motion, before Quincy had a chance to respond to its adversary.

A spokesperson for Quincy said the company “had already started to transition its marketing campaign for Prevagen and is pleased that the judge clarified — as we requested — that the company will be afforded a reasonable amount of time to launch its new advertising.”

“We are also pleased that the judge rejected the NYAG’s efforts to obtain statutory penalties, disgorgement and/or statutory costs,” the company spokesperson added. “Quincy is merely required to make certain changes to its advertising moving forward.”

The NYAG and Quincy had butted heads over financial information that the NYAG had requested in discovery, in preparation for its plan to request that the court award monetary damages against Quincy. On Aug. 21, for example, Assistant Attorney General Kate Matuschak renewed an earlier request that Quincy update discovery responses related to such details as sales information, profits and dissemination of advertising.

I get the strong impression that the jury’s determination that six of the eight statements were not (emphasis added) materially misleading influenced the court’s decision to deny the government’s request for monetary damages.

“The jury’s careful denials that six of the challenged statements were materially misleading counsels forbearance rather than rigor in the calculation of a just judgment, stopping short of the pursuit of monetary penalties, particularly in light of the evidence that the defendants intended no harm,” Stanton wrote.

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So, after years of litigation that began with a complaint filed in January 2017, will Quincy, FTC and the NYAG now move on from this case? The short answer is no.

The Quincy spokesperson described Stanton’s order — requiring changes to advertising for Prevagen — as “based on a misreading of the law and a misunderstanding of Quincy Bioscience’s business practices as well as a misunderstanding of the science that supported the advertising statements.”

“Quincy intends to appeal the judge’s decision,” the company spokesperson added.

Don’t be surprised if the NYAG files an appeal too, leaving the ultimate resolution of this epic fight over advertising claims — and Quincy’s Madison Memory Study — for another day.