Nobel Prize Winner Didn't Disclose His Herbalife Contract

Bloomberg News/December 6, 2004
By David Evans

Louis Ignarro, who won a Nobel Prize for Medicine in 1998, endorsed a diet supplement for the heart sold by Herbalife International Inc. in exchange for royalties and then touted the ingredients in a scientific journal, without disclosing his financial interest to the publication. Ignarro's consulting company received at least $1 million as its share of sales of Herbalife's Niteworks between June 2003 and September 2004, according to a filing with the Securities and Exchange Commission. The bottles sell for $90 each for a month's supply and display Dr. Ignarro's signature and Nobel Laureate status on the label.

"He's a paid consultant, so it should have been disclosed,'' said Marcia Angell, editor in chief of the New England Journal of Medicine in 1999 and 2000, now a senior lecturer on ethics at Harvard Medical School in Cambridge, Massachusetts. "He had an interest in the substance he was evaluating.''

Herbalife pays Ignarro's consulting firm - Hermosa Beach, California-based Healthwell Ventures LLC - a share of Niteworks revenue "sold with the aid of Dr. Ignarro's consulting, promotional or endorsement services,'' Herbalife wrote in a Dec. 2 SEC filing.

Herbalife has 1 million distributors in 59 countries with reported 2003 revenue of $1.16 billion.

Ignarro, 63, is the featured speaker in a one-hour Los Angeles based-Herbalife promotional video in which he claims Niteworks protects against heart disease, strokes, Alzheimer's and other diseases.

Hearts of Mice

The Nobel Prize winner didn't return telephone calls to his office and to the public relations department of the University of California at Los Angeles, where he teaches. Herbalife spokeswoman Barbara Henderson said the company won't comment, on advice from its lawyers, because it's planning an initial stock sale to the public. Ignarro's article, which appeared in the June 8 issue of the Proceedings of the National Academy of Sciences, described positive affects on the hearts of mice fed vitamins C and E, and arginine, an amino acid that produces nitric oxide in the body. All of those are in the Herbalife product.

Ignarro didn't disclose his Herbalife ties to the journal, according to Bridget Coughlin, managing editor of the Washington- based publication. "There is indeed a conflict of interest that should have been included in this article,'' she said. "There's a financial disclosure that should have been made.'' She said the journal has decided to issue a correction.

'They Jumped the Gun'

Ignarro formed Healthwell, the consulting company, in January 2003 with David Brubaker to receive royalties from Herbalife, according to state corporation records. Brubaker, 58, said in an interview that he estimates Herbalife has sold $50 million of Niteworks. Brubaker said Herbalife pays Healthwell 1% of Niteworks sales revenue, and it received an advance against royalties in 2003.

Ignarro shared the Nobel Prize for discoveries about nitric oxide's function in the cardiovascular system. Pharmacologist Robert Furchgott, 88, who won the 1998 Nobel Prize with Ignarro for his own, independent research on nitric oxide, said in an interview that Ignarro's claims about Herbalife's effectiveness are improperly founded. "They jumped the gun,'' he said." I haven't seen any properly controlled studies. It just seems to me a mouse model isn't transferable to humans.''

Sued in 1985

Herbalife spends less than $2 million each year on research and development, according to its prospectus filed with the SEC on Dec. 2. The company, previously named Herbalife International, was sued by the California attorney general in 1985 for making false claims about its products. It settled the suit in 1986 for $850,000, agreeing not to make misleading statements. It didn't admit wrongdoing.

Mark Hughes, who started the company in 1980, served as Herbalife chairman and chief executive officer until 2000, when he died from an overdose of alcohol and antidepressants, according to the Los Angeles coroner. Michael Johnson, who became CEO of Herbalife in April 2003, was an executive at Walt Disney Co. for 17 years before joining Herbalife. He was president of its Walt Disney International unit when he departed. He didn't answer written questions, referring comment to the company spokeswoman.

IPO This Month

Herbalife has hired Merrill Lynch & Co. and Morgan Stanley, both based in New York, to raise as much as $193 million in an initial public offering later this month. Herbalife is incorporated in the Cayman Islands, with its headquarters in Los Angeles.

UCLA summarized the journal article in a May news release. Vitamins C and E, taken with arginine, along with moderate exercise, significantly reduce the risk of heart disease, the release said. The release didn't name Herbalife and didn't say Ignarro is a paid company consultant. He is a professor of pharmacology at the university's school of medicine.

"It shows that supplements work well even in the absence of exercise,'' Ignarro was quoted as saying in the release, which recommended humans take dietary supplements." What's good for mice is good for humans.''

UCLA Conflict

Angell, the Harvard ethics lecturer, said UCLA had the responsibility to include Ignarro's financial arrangement with Herbalife in its news release. "It seems an elementary conflict of interest,'' she said.

Roxanne Moster, director of media relations for UCLA Health Sciences, said the university doesn't research potential conflicts. "We rely on our faculty members to let us know if there is a conflict,'' she said.

Former New England Journal editor Angell said Ignarro needs more than mouse studies to support his claims. "There's a way to find out if it works in humans,'' by conducting clinical trials on people, she said. "Until you do the trial, you don't know. There's a lot more work to do. You can't assume it will work for people.''

Herbalife markets Niteworks as a food supplement, so the Food and Drug Administration doesn't require it to be tested for safety or efficacy. Herbalife hasn't disclosed the results of any human testing of Niteworks.

"I think with the sort of money they're raking in, they could have done some human studies,'' said Ignarro's co-Nobel Prize winner Furchgott.

Clinical Studies Needed

U.S. Senator Richard Durbin, an Illinois Democrat, said dietary supplement companies will twist facts to sell products. "The actions attributed to Herbalife are yet another example of how the dietary supplement industry is the Wild West of the American health sector - complete with medicine shows,'' he said.

Ignarro's consulting company partner Brubaker, a trustee of the University of Southern California in Los Angeles, sells Herbalife products from his house in Hermosa Beach. He said their consulting company is spending more than $150,000 to fund a clinical trial on the effectiveness of Niteworks. "Mice are a good indication of the benefit of nitric oxide,'' Brubaker said." But it goes without saying that human studies are closer to the real world.'' Brubaker said he was aware of Ignarro's article in the medical journal. "I don't know why it wouldn't have been disclosed,'' Brubaker said. "Maybe it would have been an oversight on his part.''

"No More Heart Disease"

Ignarro's video was taped during a training session for hundreds of company distributors at Herbalife's Las Vegas Extravaganza in June 2003 at the Mandalay Bay Resort. The video is streamed on Brubaker's Herbalife distributor Web site.

"Guess what - no more heart disease,'' Ignarro said on the tape. "This is the nitric oxide story. The nitric oxide that is generated by this product is a vasodilator. It lowers the blood pressure. That's a good thing.'' Ignarro also said: "I really think that soon there will be no heart disease. I really believe that.''

His Nobel Prize co-winner Furchgott said unproven claims like these shouldn't be used to sell the product to the public. "I'm worried that Lou has gone into making a big thing of it before it's been thoroughly shown by controlled studies,'' Furchgott said. Furchgott said he regrets Ignarro has become a pitchman for an unproven product, linked to their shared prize. "That's sad,'' he said. "Sometimes I get angry. Right now, I'm just sorry.''