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Herbalife's Early Days (1980-1986)

Stephen Barrett, M.D.

Herbalife International, of Inglewood, California, markets weight-control products, dietary supplements, and personal-care products. The company was founded in 1980 by 24-year-old Mark Hughes, who states he was inspired by his mother's unsuccessful struggle to control her weight with amphetamines. However, this claim was contradicted by an autopsy report which indicyated that she had died of an overdose of Darvon, a painkiller that is a controlled dcontradicted by her autopsy. It indicates she died of an overdose of Darvon, a painkiller classsified as a narcotic [1].

Herbalife's 1993 retail sales totaled $247 million in the United States and $693 million worldwide. Its principal products are Formula #1 (a meal-replacement protein drink mix), Formula #2 (an herbal tablet), Formula #3 (a multivitamin/mineral tablet), and Thermojetics, a weight-control system that includes herbal tablets. The numbered formula products were originally marketed as components of Herbalife's Slim and Trim Program. Today the program is called Herbalife Cellular Nutrition Health and Weight Management System, and some of the ingredients are different.

Hughes dropped out of high school after ninth grade and wound up in legal difficulty that resulted in his staying for three years at a residential school for troubled youngsters. When he was nineteen, his mother died of a drug overdose. According to a 1985 issue of the Herbalife Journal:

Mark became aware of the need for a safe, effective way to lose weight . . . when his mother died as a direct result of following years of unwise dieting practices. This event left him with a vital interest in nutrition and a fervent desire to find a product that would enhance and build health while allowing an individual to take weight off sensibly and safely. . . .

During his search, he had met Richard Marconi, Ph.D., with whom he shared his dream. . . . After a lot of research and testing, Herbalife Slim and Trim was born.

After working for two multilevel companies that sold weight-control products but went out of business, Hughes founded Herbalife with help from Marconi, who had manufactured products for one of these companies. Herbalife publications describe Marconi as a "well-respected nutritional expert" and "the leading authority on nutritional products." His "Ph.D." was obtained from nonaccredited Donsbach University after Marconi hooked up with Hughes. After this fact was brought out at a Congressional hearing (described below), Herbalife's Journal stopped referring to Marconi as "Dr."

Herbalife's initial marketing included lengthy cable television programs that were filled with financial and health-related testimonials. Sales were also promoted with buttons and bumper stickers that said "Lose Weight Now, Ask Me How."

In 1982, the FDA sent Herbalife a Notice of Adverse Findings, which stated that certain products were misbranded because of labeling claims that they were effective for treating many diseases, dissolving and removing tumors, rejuvenating, increasing circulation, and producing mental alertness. A 1984 FDA Talk Paper notes that the agency had received many complaints about side effects that had occurred during the use of Herbalife products and had stopped when use of the products was stopped. In fact, said the Talk Paper, "Literature given Herbalife distributors states that up to 25% of product users will have adverse effects but claims that this is evidence of the body's improving itself." Several suits were filed by people who alleged that the products had harmed them. Some of these suits were settled out of court with substantial payment, but the amounts have not been disclosed and the case records are sealed.

By 1985, Hughes claimed that Herbalife had over 700,000 distributors and an annual income approaching half a billion dollars a year. But trouble was brewing. In May 1985, Senator William V. Roth, Jr. (R-DE) held two days of hearings on weight-reduction programs, during which he grilled Hughes about the "research and testing" done prior to marketing Herbalife's products [2,3]. Hughes said, "We have a lot of scientific data on the herbs," but Roth ascertained that no actual testing of Herbalife products had taken place. The hearing also brought to light a study done by Herbalife of 428 users of its products. About 40% had experienced headache, constipation, diarrhea, nausea, lightheadedness, palpitations, and/or other transient symptoms that might be attributable to Herbalife products. The occurrence of side effects came as no surprise because several ingredients in Herbalife products were potent laxatives and one product (N.R.G.) contained guarana, which is high in caffeine.

In March 1985, the California Attorney General had charged Herbalife with violating California's consumer protection laws. The suit charged that early editions of the Herbalife Official Career Handbook made illegal claims that various herbal ingredients were effective against more than seventy diseases and conditions. Although most of these claims were deleted in subsequent editions of the handbook, the company had not replaced the original pages sent to distributors with the revised pages or asked these distributors to destroy them. Similar testimonial claims had been made in the company's cable television broadcasts. The suit also charged that Herbalife had been operating an illegal pyramid scheme. The case was settled in 1986 when Hughes and the company agreed to pay $850,000 and to abide by a long list of court-ordered restrictions on claims and marketing practices.

Just before the Senate hearings, Cable News Network aired a four-part report which revealed that Herbalife's supposed "research laboratory" was a conference room that housed a large table and books on herbs, located at one of Marconi's factories. Marconi told a CNN interviewer, "We employed hundreds . . . even thousands of Ph.D.s in the research program for our products." But when asked who they were, he replied, "Why, the research papers that are published and printed that we have access to on our computer."

The adverse publicity caused Herbalife's income to drop sharply, but the company survived, expanded into many foreign countries, and is now a publicly held corporation. The claims have toned down and several potentially toxic ingredients have been removed.

References

  1. Evans D. Herbalife CEO died after 4-day binge, autopsy reveals. Bloomberg News, Aug 11, 2000.
  2. Fanning O. Herbalife Criticized at Senate Hearings, Nutrition Forum, Sept 1985.
  3. Fanning O. Herbalife hearings, Part II. Nutriiton Forum, Oct 1985.

This article was revised on Dec 17, 2004.