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Federal Trade Commission v. Quincy Bioscience Holding Co.

The Federal Trade Commission and the State of New York filed suit against appellee Quincy Bioscience Holding Co. and related entities and individuals for making false or misleading statements in product labeling and advertisements for their product Prevagen, in violation of the Federal Trade Commission Act (FTC Act) and state law. Prevagen is a dietary supplement that Quincy markets for improved memory. On a motion to dismiss, the district court held that the complaint failed to state a claim under the FTC Act on which relief could be granted because Quincy pointed to subgroup analyses of a larger clinical trial, sponsored and run by Quincy, that showed some improvement in memory. The court’s opinion frankly acknowledges that the court did not fully understand the nature of post hoc subgroup analysis or why it is insufficient to substantiate a scientific claim. Without addressing the allegations that Quincy also misrepresented the results of the study as a whole, and although the factual dispute over whether the post hoc subgroup analyses substantiate Quincy’s memory-improvement claims is central to the question whether Quincy’s marketing is deceptive, the court dismissed the FTC Act claim for failure to plead a plausible violation.

The outcome of this case will impact the extent to which the FTC and states can effectively police deceptive claims about products in the marketplace and, conversely, the ability of companies to sell products by touting health benefits that have not been established. Public Citizen, representing itself, the Center for Science in the Public Interest, and Yale University’s Collaboration for Research Integrity and Transparency, submitted an amicus brief to offer a consumer and public-health perspective on the regulatory and advertising issues presented in the case. The amicus brief explains consumers’ vulnerability to claims made for products, such as dietary supplements, that they cannot independently verify, and addresses the significance of post hoc subgroup analyses conducted after a clinical trial.

In a short opinion in February 2019, the court of appeals ruled in favor of the FTC, reversed the district court, and remanded the case back to the district court for continuation of the litigation.