Editor’s Note: Searcy Denney partner, Jack Scarola, as co-lead counsel with Adam Moskowitz of The Moskowitz Law Firm, has announced the settlement of a major national class action against the manufacturers of Prevagen, a widely and heavily advertised dietary supplement alleged to enhance brain functions. The settlement follows a hung jury and mistrial of similar claims brought by other attorneys in California. The terms of the settlement, which is still subject to final court approval, are described in the below article.
Claims that Prevagen, a popular and pricey memory supplement, does not work have been making headlines for years. MedPage Today called the pills a “clear-cut fraud” while NBC News labeled them “a hoax.” In 2012, the Federal Trade Commission (FTC) charged the company manufacturing Prevagen with false advertising, which the agency detailed in a 32-page letter.
“The FTC brings this action…to obtain permanent injunctive relief, rescission or reformation of contracts, restitution, the refund of monies paid, disgorgement of ill-gotten monies, and other equitable relief for the acts or practices of Defendants’ Quincy Bioscience Holding Company, Inc., Quincy Bioscience, LLC, Prevagen, Inc., Quincy Bioscience Manufacturing, LLC, Mark Underwood, and Michael Beaman (collectively, “Defendants”)…in connection with the labeling, advertising, marketing, promotion, distribution, and sale of Prevagen, a dietary supplement that purportedly improves memory. Prevagen contains one active ingredient, the dietary protein apoaequorin, and it is sold in a variety of strengths and forms,” the letter states. “The People of the State of New York bring this action…for injunctive relief, restitution, damages and costs against any person or business that has engaged in repeated or persistent fraud or illegality in the conduct of his or its business…and penalties whenever any person, firm, corporation or association or agent or employee thereof has engaged in deceptive business practices and false advertising. This action is brought against Defendants in connection with the labeling, advertising, marketing, promotion, distribution, and sale of Prevagen.”
That is a mouthful. Fast forward to 2020, when Quincy Bioscience – still at it with the deceptive business practices and false advertising – was forced to adhere to a settlement reached in federal court on behalf of three million consumers. Each of those three million consumers opened his or her wallet in good faith and was sold a bottle of lies.
“Prevagen’s active ingredient is a dietary protein, apoaequorin, which was first discovered in glowing jellyfish,” according to a Law.com article titled “Prevagen Ruling Could Provide Check on Competitive Field of Consumer Supplements.” “The plaintiffs said that when the protein is digested, it is transformed into common amino acids that are no different from those derived from other dietary proteins. Plaintiffs also asserted that this protein “cannot cross the blood-brain barrier to reach the brain or affect its functioning.” Geoff Castillo, counsel for Quincy, declined to comment.”
Adam Moskowitz, of The Moskowitz Law Firm in Coral Gables, who served as counsel for the plaintiffs along with Jack Scarola, of Searcy Denney Scarola Barhnart & Shipley in West Palm Beach, expressed pleasure with the outcome.
“There is certainly a risk with any case going to trial as we saw in the other Prevagen case pending in California,” Moskowitz was quoted as saying in the article, referring to the West Coast case that resulted in a hung jury. “This settlement provides real, substantive monetary value to millions of customers nationwide that would like to participate and receive refunds, and it provides more and better disclosures of the product.”
According to the settlement, consumers who have proof of purchase are eligible to receive 30 percent of the retail cost of Prevagen, with the total not to exceed $70. Consumers without proof purchase can claim $12 apiece. The overall payouts could reach the tens of millions of dollars.
Additionally, the settlement paves the way for proper checks and balances in the lucrative supplement industry fueled by hyped print advertisements and lengthy television commercials. Now facing a benchmark for the cost of shady business practices, manufacturers like Quincy Bioscience are keeping a close eye on the U.S. Food and Drug Administration (FDA) as it rolls out a plan to overhaul protocols for controlling and monitoring dietary goods. FDA Commissioner Dr. Scott Gottlieb said the overhaul will be the most significant of its kind in the 25 years since the Dietary Supplement Health and Education Act (DSHEA) was passed.
“I’ve personally benefited from the use of dietary supplements and, as a physician, recognize the benefits of certain supplements as a part of a comprehensive care plan,” Dr. Gottlieb says in his “Statement from FDA Commissioner Scott Gottlieb, M.D., on the agency’s new efforts to strengthen regulation of dietary supplements by modernizing and reforming FDA’s oversight.” “It’s clear to me that dietary supplements play an important role in our lives as we strive to stay healthy. It’s also clear that the U.S. Food and Drug Administration plays an important role in helping consumers make use of safe, high-quality dietary supplements while also protecting Americans from the potential dangers of products that don’t meet the agency’s standards for marketing.”
He notes that the supplement industry has ballooned to a $40 billion market with more than 80,000 products – a far cry from the $4 billion market selling 4,000 products a quarter century ago.
“DSHEA imposes a number of requirements around the manufacture and labeling of dietary supplements,” Dr. Gottlieb says in the statement. “We know that most players in this industry act responsibly. But there are opportunities for bad actors to exploit the halo created by quality work of legitimate manufacturers to instead distribute and sell dangerous products that put consumers at risk. As the popularity of supplements has grown, so have the number of entities marketing potentially dangerous products or making unproven or misleading claims about the health benefits they may deliver.”