Hatch’s legacy: a tough pill to swallow

My fellow Baldwin High graduate has a lot to answer for in protecting the supplement industry despite its questionable claims, writes Pittsburgh financial adviser KEN KASZAK

Sen. Orrin Hatch (R-Utah) announced his retirement from office effective at the end of 2018.

Mr. Hatch and I have two things in common. One: we both graduated from Baldwin High School. Mr. Hatch’s Mormon family lived in a house on Cathell Road, a half-mile from where I grew up. He was class president and sharp enough on the basketball court to be voted into the school’s sports hall of fame. Although I played sports, I am not in the Baldwin High School Hall of Fame—so no connection there.

The second thing we have in common is the supplement industry. Mr. Hatch was the leading proponent of 1994’s Dietary Supplement Health and Education Act. This legislation created a “hands off” approach by the Food and Drug Administration to the industry. Manufacturers can sell their products as long as no medicinal claim is made on the label or in advertising. No agency is reviewing the safety or efficacy of any product. Since the legislation, the industry grew from $4 billion in sales in 1994 toan estimated $37 billion in 2017.

The legislation is directly responsible for making the supplement industry the largest business in the state of Utah (in excess of $7 billion in annual revenue), with many “pyramid” companies selling nutritional supplements based in Salt Lake City (also known as the Silicon Valley of the supplement industry), and employment for members of Mr. Hatch’s family. His son, Scott, is a lobbyist for a law firm with solid connections to the industry, and his grandson and son-in-law sell pricey supplements out of their chiropractic clinic. In spite of deaths from ephedra-based products and thousands of emergency room visits caused by supplements, Mr. Hatch has played good defense for the industry and blocked any attempts to curb the industry—and in return maintain contributions from supplement manufactures and employment for his family members.

My connection to the supplement industry? After the DSHEA Act was passed (and I still don’t know how the word “Health” got in there), I sat in the basement of an old shoe store in Cheswick and sold bodybuilding supplements to gym owners in the Midwest. The gym owners marked up the products and sold them to their members. I was great at this job. It was scam over substance but I knew how to “sell the scam.” I moved pallets full of creatine, whey protein, pre-workout mixes, caffeine pills, etc. to gyms in Michigan, Ohio, Indiana, Missouri and Illinois (a big customer was Guns Gym in Chicago; often wondered if

they ever changed that name).

I have been in and around the real estate and investment industries for a long time. Without a doubt, the supplement industry is the most “whorish” industry I’ve been associated with. While my expertise is finding value in information and potential investments, there is no, or limited, or questionable value found in supplements—but nothing or nobody to stop them from being sold. Because most of what is sold doesn’t do what it purports to do, the industry has to reinvent itself with a new “hot” product every six months or so.

However, the tide may be turning. Even if Mr. Hatch’s replacement (front runner is speculated to be Mitt Romney) keeps status quo with the industry, the recent death of a prominent local supplement seller (and supporter of various AM radio stations) has left only one “weight loss” expert to sell supplements to unsuspecting buyers (and keep AM stations on the air). In addition, General Nutrition Corporation (GNC) is having major issues with online competition and (maybe) a dose of common sense among consumers. The stock price ended 2017 at $3.69. It’s closing price at the end of 2016 was $11.04 and was $31.02 at the end of 2015. Whatever GNC is selling, people aren’t buying — or they’re buying elsewhere.

What should the longterm corporate fixture in Pittsburgh, numerous shopping malls, and your local Rite Aid do? If I were them, I’d close the downtown office (located next to a Domino’s Pizza) and move to Utah where Pittsburgh native Orrin Hatch made their industry extremely welcome. They may be able to survive there—long enough until the pill that cuts body fat, increases energy, doubles libido and provides perfect abs comes along. And, thanks to my fellow Baldwin alum, it is coming … six months from now — or six months from six months from now or …