Court finds veracity of study claiming effectiveness of Prevagen is an issue for trial

A single study of effectiveness is not sufficient evidence to preclude claims that a product does not produce the results claimed in marketing and on the label.

A magistrate judge found that a study purporting to show the effectiveness of a dietary supplement intended to boost memory may be relevant to a manufacturer’s defense that the product’s marketing is false or misleading, but it does not automatically preclude such claims. The judge noted that the study was extrinsic evidence and its reliability was not an issue to be taken up in a motion to dismiss and recommended that the district court deny the motions (Engerat v. Quincy Bioscience, LLC, October 8, 2019, Hightower, S.).

Product claims. Quincy Bioscience, LLC (Quincy) manufactures, markets, sells and distributes Prevagen, which is a dietary supplement made with the protein apoequorin. Prevagen advertising and labeling claim that the product supports a “sharper mind,” “clearer thinking,” and “healthy brain function” and will “improve memory within 90 days.” Three consumers brought a class action lawsuit against Quincy alleging claims under the Texas Deceptive Trade Practices Act, breach of express and implied warranties, and a violation of the Magnuson-Moss Warranty Act. The consumers allege that the advertisements regarding Prevagen were false and misleading and designed to dupe customers into purchasing a product that has no effect on the brain.

Apoequorin. According to the complaint, Prevagen’s only active ingredient, apoequorin, is a protein that when digested is broken down into amino acid constituent parts. As a result, Prevagen never reaches the bloodstream as apoequorin and the broken down amino acids are no different than any other protein such as those found in a regular diet, which do not improve memory or brain function. Further, if Prevagen did somehow enter the bloodstream as apoequorin, it cannot pass through the blood-brain barrier and therefore can have no effect on brain function. The consumers contend that there has never been an independent, randomized, controlled clinical trial subject to a peer review process that supports the products claims and that there is no scientific basis for the representations made about the product.

Extrinsic evidence. Quincy claims that a clinical drug trial was done on Prevagen that is made available on the product’s website, and on which the advertising claims are based. Based on this study, Quincy argued that all of the claims asserted should fail because the study demonstrates that the marketing statements were truthful and fully substantiated. The judge held that in a motion to dismiss, it can only look to the facts set forth in the complaint, the documents attached to the complaint, and matters of which judicial notice may be taken. Here, the consumers may have mentioned the study in their original complaint, however they never mentioned it in or attached it to their First Amended Complaint which supersedes the original complaint.

Additionally, the public records that a court generally may take judicial notice of, include things like government-provided records. A commercial website may be available to the public, but it is not a public record. Finally, the reliability of the study is a disputed issue of fact in the case and therefore, not appropriate for determination in a motion to dismiss. Therefore, the judge found that the study was extrinsic evidence that could not be considered and the argument that the claims should be dismissed based on the study were meritless.

Failure to plead. Quincy made the alternative argument that an element of each of the claims requires the consumers to show that the product did not comply with a promise made in the marketing or labeling or that the marketing or labeling were false or misleading. Quincy argued that the consumers failed to plead these claims because they could not show that the labels were false or misleading or the product didn’t live up to the claims made on the label, in light of the study. The judge noted again that it could not rely on extrinsic evidence when considering a motion to dismiss and the reliability of the study is a fact issue inappropriate at this stage. It therefore held that the motions to dismiss based on this theory should be denied.

Lunada settlement settlement halts false marketing of Amberen®

Lunada Biomedical, Inc., and its principals (Lunada, collectively) agreed to settle charges by the Federal Trade Commission (FTC) that it deceptively marketed Amberen®, a dietary supplement, to perimenopausal and menopausal women over 40 by making a range of unsupported claims about the drug’s ability to aid in weight loss and relieve menopause-related symptoms. The proposed stipulated order prohibits Lunada from making unsubstantiated efficacy or health benefit claims for any dietary supplement, food, or drug or conducting any other illegal activities related to consumer satisfaction claims, “risk-free trial” offers, and consumer endorsements. Lunada will pay $250,000 of a $40 million judgment, based on its inability to pay the full amount.

Allegations

The FTC filed a complaint in May 2015 and amended it in December 2015. The amended complaint alleges that Lunada made unsubstantiated claims that Amberen causes substantial and sustained weight loss, loss of belly fat, and an increase in metabolism in women over 40 who are perimenopausal or menopausal and that it is clinically proven to cause substantial and sustained weight loss in such women. The FTC also alleged that Lunada made unsubstantiated claims that the drug was clinically proven to alleviate nearly all common symptoms of menopause, including hot flashes, night sweats, sleep problems, fatigue, and irritability. According to the FTC, a 2001 clinical trial by the scientists who developed the formula used a double dose of Amberen and did not specifically measure weight loss. A subsequent clinical study failed to show a statistically significant difference in the weight lost by control group and test group participants.

In addition to making unsubstantiated claims, the FTC alleged that Lunada failed to disclose its relationship with certain consumer endorsers and made false claims of consumer satisfaction and success rates of nearly 93 percent. It also falsely told consumers they could try Amberen “risk-free” for 30 days. In fact, instead of receiving a 30-day supply, consumers were given a 90-day supply of the product and, to qualify for a refund, were required to return two unopened product boxes at their own expense within 30 days of placing the order.

Settlement Terms

The proposed stipulated order bars Lunada from:

  • claiming that any dietary supplement, food, or drug causes weight loss, sustained weight loss, or loss of belly fat; boosts metabolism; relieves hot flashes, night sweats, and other specific symptoms of menopause; or cures, mitigates, or treats any disease, unless they have human clinical testing that meets certain requirements and is sufficient to substantiate that the claims are true;
  • making any misleading or unsubstantiated claim about the health benefits or efficacy of any dietary supplement, food, or drug;
  • misrepresenting the results of any test of the product;
  • misrepresenting any material fact about the product or any material terms and conditions of any offer for it; and
  • failing to disclose any material connections (such as financial relationships) they have with endorsers.