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192-3088 

UNITED STATES OF AMERICA

BEFORE THE FEDERAL TRADE COMMISSION

COMMISSIONERS: Rebecca Kelly Slaughter, Acting Chairwoman 

Noah Joshua Phillips

Rohit Chopra

Christine S. Wilson

In the Matter of

BASF SE, a corporation, 

BASF CORPORATION, a corporation, and

DIEM LABS, LLC, a limited liability company, 

et al. 

DOCKET NO. 

COMPLAINT

 The Federal Trade Commission, having reason to believe that BASF SE, a corporation, 

BASF Corporation, a corporation, DIEM Labs, LLC, a limited liability company, Cai Berg, 

individually and as President and CEO of DIEM Labs, LLC, and Tim Prince, individually and as 

an officer of DIEM Labs, LLC (collectively, “Respondents”), have violated the provisions of the 

Federal Trade Commission Act, and it appearing to the Commission that this proceeding is in the 

public interest, alleges:

1. Respondent BASF SE (“BASF”) is a multi-national corporation based in Ludwigshafen, 

Germany. BASF is the publicly-traded parent company of the BASF Group, which has 

subsidiaries and joint ventures in more than 90 countries, including the United States. Through 

its Nutrition & Health division, BASF develops, produces, and markets dietary supplements, 

medical foods, aroma additives, and animal nutrition ingredients in Europe, North America, 

South America and in the Asia-Pacific region. BASF AS is BASF’s main operating company in 

Norway and serves as the head of BASF’s omega-3 business. BASF developed the omega-3 fish 

oil supplements Hepaxa and Hepaxa PD for the North American market to treat Non-Alcoholic 

Fatty Liver Disease (“NAFLD”). NAFLD, also called hepatic steatosis or fatty liver disease, is 

an excessive build-up of fat in the liver from causes other than alcohol use, such as obesity, 

diabetes, or high cholesterol. BASF sponsored human clinical testing of Hepaxa in the United 

States, prepared articles about the benefits of Hepaxa and Hepaxa PD for persons with NAFLD, 

posted the articles on Hepaxa-USA.com, and promoted Hepaxa research at the 2018 American 

Association for the Study of Liver Diseases conference in San Francisco, California. BASF 

supplies Hepaxa products to DIEM Labs, LLC (“DIEM”), the exclusive distributor for the U.S. 
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market. BASF also reviews and approves all Hepaxa-related marketing and advertising 

materials prepared by DIEM for the U.S. market, including content on Hepaxa-USA.com.

2. Respondent BASF Corporation (“BASF US”) is a Delaware corporation with offices at 

100 Park Avenue, Florham Park, New Jersey 07932. BASF US is BASF’s largest subsidiary and 

operates as BASF’s North American headquarters. BASF US retained DIEM to serve as the sole 

U.S. distributor of Hepaxa and Hepaxa PD and issued a press release regarding Hepaxa and 

Hepaxa PD’s benefits. 

3. Respondent DIEM is a Michigan limited liability company, with its principal office or 

place of business at 221 Dino Dr., Ann Arbor, MI 48103-9123. DIEM serves as BASF’s sole 

distributor of Hepaxa and Hepaxa PD in the United States, and engages in marketing activities 

for the products. 

4. Individual Respondent Cai Berg is DIEM’s President and CEO. He is also 50% owner of 

the corporation that owns 99% of DIEM. He is primarily responsible for DIEM’s operations, 

contracting, human resources, finances, and product development. He was copied on all 

correspondence relating to the clinical trial conducted on Hepaxa, including correspondence 

relating to the fact that the trial failed to demonstrate that Hepaxa reduced fatty liver, and he 

engaged in communication with BASF regarding the results of the study. He also reviewed and 

approved DIEM’s advertising for Hepaxa and promoted the product at medical conferences. At all 

times material to this Complaint, acting alone or in concert with others, he formulated, directed, 

controlled, had the authority to control, or participated in the acts and practices of DIEM set forth 

in this Complaint. His principal office or place of business is 221 Dino Dr., Ann Arbor, MI 

48103-9123. 

5. Individual Respondent Timothy Prince is DIEM’s Director of Sales. He was provided 

with access to the raw data from the Hepaxa clinical study and made suggestions for alternative 

analyses of the data in an effort to find a successful sales pitch for the product. Thereafter, he 

participated in preparing deceptive advertising for Hepaxa and trained the Hepaxa sales force. He 

personally promoted Hepaxa as an effective treatment for NAFLD at various medical conferences. 

Individually or in concert with others, he controlled or had the authority to control and 

participated in the acts and practices of DIEM, including the acts and practices alleged in this 

complaint. His principal office or place of business is 221 Dino Dr., Ann Arbor, MI 48103-

9123. 

6. Respondents advertise, label, promote, offer for sale, sell, and distribute Hepaxa and 

Hepaxa PD, products containing omega-3 long-chain polyunsaturated fatty acids (abbreviated as 

“omega-3 PUFAs” or “n-3 PUFAs”) sourced from fish oil. Respondents sell 120-capsule bottles 

of Hepaxa to treat adults with NAFLD. The product label recommends a daily dose of four 

capsules. Respondents also offer 120-capsule bottles of Hepaxa PD to treat children ages ten to 

eighteen with NAFLD. Hepaxa PD’s product label recommends a daily dosage of one to two 

capsules, depending on the child’s body weight. Each Hepaxa and Hepaxa PD capsule contains 

675 mg of omega-3 fatty acids, consisting of at least 320 mg eicosapentaenoic acid (“EPA”) and 

260 mg docosahexaenoic acid (“DHA”). Consumers can purchase a bottle of Hepaxa or Hepaxa 

PD for $48 by calling a 1-800 number, sending a fax, or by ordering online at www.Hepaxa-
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USA.com. Hepaxa and Hepaxa PD are “drugs” within the meaning of Sections 12 and 15 of the 

Federal Trade Commission Act.

7. The acts and practices of Respondents alleged in this complaint have been in or affecting 

commerce, as “commerce” is defined in Section 4 of the Federal Trade Commission Act.

8. Respondents have disseminated or caused to be disseminated advertisements and 

promotional materials for Hepaxa and Hepaxa PD through the Hepaxa-USA.com website, 

Google AdWords that directed consumers to Hepaxa-USA.com, banner advertisements on 

Medscape and WebMD, press releases, and posts on Twitter and LinkedIn. These materials 

contain the following statements and depictions, among others: 

A. Hepaxa-USA.com Landing Page (originally posted October 2018) 

* * * 

 

 
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B. Hepaxa-USA.com Pages Specific to Hepaxa (posted Oct. 2018-Dec. 2019) 

* * * 

 

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C. Hepaxa-USA.com Pages Specific to Hepaxa PD (available online Oct. 2018-Dec. 

2019) 

D. Hepaxa-USA.com Pages Regarding Clinical Evidence (available online Oct. 

2018-Dec. 2019) 

* * * 

 

 
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* * * 

* * * 
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E. BASF Press Release (posted February 22, 2018 at 

www.basf.com/global/en/media/news-releases/2018/02/p-18-130.html) 
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F. BASF Press Release (posted Oct. 29, 2018 at 

www.basf.com/global/en/media/news-releases/2018/10/p-18-356.html) 

 

 
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G. LinkedIn Posts 

H. Twitter Post

 
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I. Online Banner Ads 

 

9. The clinical trial referred to in Paragraphs 8.E, 8.F, and 8.G. was published as Derek 

Tobin, et al., Evaluation of a High Concentrate Omega-3 for Correcting the Omega-3 Fatty Acid 

Nutritional Deficiency in Non-Alcoholic Fatty Liver Disease (CONDIN), 10 Nutrients 1126 

(2018). The CONDIN study was a randomized, double-blind human clinical trial designed to 

evaluate whether Hepaxa raises levels of omega-3 PUFAs in red blood cells and reduces liver fat 

in adults with NAFLD. For six months, 81 subjects in the treatment arm received Hepaxa and 86 

in the control arm took an olive oil placebo. All study participants were advised to reduce 

calorie intake and to maintain stable physical activity levels. Liver fat was measured using 

Magnetic Resonance Imaging in 120 subjects, 60 in each arm. At the end of the study, the MRI 

data showed no statistically significant reduction in liver fat in the Hepaxa patients, as compared 

to the placebo patients. 

10. Due to the CONDIN study’s failure to show an effect on liver fat, BASF, DIEM, and the 

researchers subjected the data to “post hoc” analyses of different subgroups of test subjects, in an 

attempt to find a positive selling message. A post hoc analysis is a statistical analysis conducted 

after the data have been collected in hopes of discovering statistical relationships that suggest 
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cause and effect. Unplanned, post hoc subgroup analyses pose a high risk of generating spurious 

findings and need to be confirmed by further studies. Therefore, post hoc analyses yield results 

that are exploratory, at best. 

11. BASF and DIEM settled on a post hoc analysis that stratified patients by their baseline 

Fatty Liver Index (“FLI”) score. The FLI score derives from an algorithm combining waist 

circumference and body mass index with blood serum levels of triglycerides and a specific liver 

enzyme. The post hoc analysis found that a small subgroup of patients with a baseline FLI over 

40 experienced a statistically significant reduction in liver fat after using Hepaxa, as compared to 

placebo; however, this subgroup included only five Hepaxa patients and twelve placebo patients. 

12. Other than the CONDIN study, Respondents have not conducted a human clinical trial on 

Hepaxa’s effect on liver fat. Respondents have not tested Hepaxa PD on children at all. 

Moreover, there are no competent and reliable human clinical trials of products that are the same 

as Hepaxa. Other liver fat studies on which Respondents rely tested omega-3 PUFAs from a 

variety of sources, many of which contained significantly different amounts of DHA or EPA, 

and/or included omega-3 PUFAs not found in Hepaxa or Hepaxa PD. 

Count I

False or Unsubstantiated Efficacy Claims

13. In connection with the advertising, promotion, offering for sale, or sale of Hepaxa and 

Hepaxa PD, Respondents have represented, directly or indirectly, expressly or by implication, 

that:

A. Hepaxa reduces liver fat in most adults with NAFLD within six months; and

B. Hepaxa PD reduces liver fat in most children with NAFLD within six months.

 

14. The representations set forth in Paragraph 13 are false or misleading or were not

substantiated at the time the representations were made. 

Count II

False Establishment Claim

15. In connection with the advertising, marketing, promotion, offering for sale, or sale of 

Hepaxa and Hepaxa PD, including through the means described in Paragraph 8, Respondents 

have represented, directly or indirectly, expressly or by implication, that: 

A. Tests prove that Hepaxa reduces liver fat in adults with NAFLD; and 

B. Tests prove that Hepaxa PD reduces liver fat in children with NAFLD.

16. In fact:
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A. Tests do not prove that Hepaxa reduces liver fat in adults with NAFLD; and

B. Tests do not prove that Hepaxa PD reduces liver fat in children with NAFLD.

17. Therefore, the representations set forth in Paragraph 16 are false or misleading.

Violations of Sections 5 and 12 

18. The acts and practices of Respondents as alleged in this complaint constitute unfair or

deceptive acts or practices, and the making of false advertisements, in or affecting commerce in

violation of Sections 5(a) and 12 of the Federal Trade Commission Act.

IN WITNESS WHEREOF, the Federal Trade Commission has caused this complaint to 

be signed by the Secretary and its official seal to be affixed hereto, at Washington, DC, this 

_____________ day of ___________, 20__. 

By the Commission. 

April J. Tabor 

Secretary 

SEAL: