It Was Too Good to Last; 2nd Circuit Overturns District Court’s Dismissal of FTC’s Complaint against Marketers of Prevagen

On February 21, the U.S. Court of Appeals for the Second Circuit issued a summary order reversing the dismissal by the District Court of the Southern District Court of New York of an action by FTC and New York State (“FTC”) action challenging the marketing claims for Prevagen.

As we reported previously, the marketers of Prevagen claimed that a “landmark double-blind and placebo controlled trial demonstrated” that Prevagen improved short-term memory, learning, and delayed recall over 90 days.  However, although the company did in fact perform the claims study, according to the FTC the study did not support the claims; in fact, the study failed to show a statistically significant improvement in the experimental group over the placebo group.  Only after Defendants conducted more than 30 post-hoc analyses of the results did they find some statistically significant differences.  Nevertheless, the lower court dismissed the action, finding that the FTC challenge to the study “never proceed[ed] beyond the theoretical” because the complaint only showed that there were “possibilities that the study’s results do not support its conclusion.”  The Second Circuit disagreed.  Without going into detail on the statistical (mis)understanding by the lower court, the Court of Appeals concluded that the complaint adequately alleges that the results of the study contradict representations made in the marketing materials, and therefore, the lower court erred in dismissing the action.