The Wall Street Journal published a news item revealing that combustible cigarette maker Altria is having discussions with Juul Labs in order to acquire a significant minority stake in the electronic cigarette giant. It is widely expected that the outcome of those talks will be announced in a few weeks. But why would Juul be reversing its earlier distance from “Big Tobacco” firms in its marketing efforts? Juul has the lion’s share of the e-cig market (75 percent) and it has come under intense pressure from regulators regarding the popularity of its products among teens. Teaming up with Altria could be a mutually beneficial arrangement in which Juul Labs benefits from the decades Altria has in dealing with tough regulatory scrutiny and pressure, while Altria stands to line its coffers with earnings from the sale of Juul products. Interestingly, both companies announced separately in recent weeks that they were halting the sale of some of their flavored e-cigarette products in light of concerns over teen vaping. How will this new deal affect the future of both companies?
Juul Labs has initiated lawsuits against several companies that it claims are infringing on its copyright. Some suits were filed with the International Trade Commission while others were filed in district courts. In total, more than 30 companies are affected by the suits. Most of the said companies are based abroad, with China and Uruguay taking the largest share of the companies listed in those complaints. The ITC (International Trade Commission) cannot award monetary damages in case Juul Labs wins the cases. However, the suits in the district courts can result in monetary awards, so that could explain why mirror suits were filed in these courts too. Juul claims that those look-alike products aren’t subjected to any controls and can endanger public health since minors can access them. In response, some of the companies cited are saying that Juul is using underhand tactics to lock out any competition in order to raise the price of its products. All that is left is for the competent entities to listen to both sides and decide appropriately.
The FDA has announced that it plans to hold a public hearing on December 5. This public hearing is intended to share the how FDA intends to curb the wave in teen vaping and smoking, and what measures have been put in place to stop teen initiation into nicotine use as well as help those who are already addicted and want to break the habit. The FDA also wants to use the public hearing as an opportunity to receive input from different sections of the public, such as the medical community and other stakeholders, regarding the best ways to deal with the threat to public health as a result of the use of nicotine-containing products by minors. This announcement comes at a time when the available data shows that gains aren’t being made to keep teens off tobacco and ENDS (electronic nicotine delivery system) products. It is every parent’s wish that his or her child is protected from nicotine addiction, and the kids already addicted get all the help they need. The public hearing will show how far this can be attained realistically.
The US FDA has written a warning letter to Electric Lotus LLC warning it about how it been packaging its e-liquids in a way that can mislead kids into thinking that those e-liquids are common consumer products. One product is labelled as “Cereal Treats Crunch” and it resembles the cereal products made by Cinnamon Toast Crunch. The e-liquids were also faulted for having cartoon characters on their packages, a move that can be regarded as targeting kids. The FDA also noted that Electric Lotus brought its products to the market after August 8, 2016. This means that those products should have been subjected to premarket approval by the FDA, but the company didn’t seek that approval. The FDA has therefore given Electric Lotus LLC 15 days (starting on November 29 when the warning letter was written) within which to file its response to the concerns raised. Otherwise additional measures, such as an injunction and/or seizures of the products in question would be undertaken. It remains to be seen whether Electric Lotus will wiggle out of the tight spot into which it has found itself.
Juul Labs is slated to announce its plans to stop retailing the majority of its flavored “Juul pods” in most brick and mortar stores as a response to the FDA’s call that electronic cigarette manufacturers reveal their plans on curbing teen vaping. Juul’s plan comes hot on the heels of an announcement by Altria a few weeks ago that the company would no longer sell flavored vapes until the teen vaping issue is resolved or the FDA designs clear rules on flavored e-cig products. Juul will continue to sell those fruity flavors on its online stores since, it says, sufficient age-verification technology can prevent access by minors. The big question on the mind of people hearing this yet-to-be announced plan by Juul Labs is, “Are they pulling the trigger just because they have got wind of the restrictions due to be announced by the FDA or they are doing it from the goodness of their hearts?” We can only hope that the remedial measures aren’t coming too late to save teens before they are addicted to nicotine.
In a move that is expected to be announced soon, the FDA plans to restrict the sale of flavored electronic cigarette products in all gas stations and convenience stores across the US. This decision comes at a time when government data paints a gloomy picture showing that teen vaping has increased by 77 percent since last year. The FDA will only allow tobacco shops and vape shops to sell flavored e-cigs. However, menthol and mint-flavored e-cigs will continue to be sold in convenience stores as well as gas stations. This exception is intended to avoid giving combustible cigarettes an advantage since menthol and mint-flavored tobacco cigarettes can be sold at gas stations and convenience stores. Refillable e-cigs will not be affected by the ban. Only prepackaged e-liquid pods will be restricted. The regulator also wants online stores to implement strict age-verification systems in order to prevent minors from purchasing e-cigs.
This decision is likely to be criticized by both sides of the aisle. Pro-vaping groups may protest that it will get harder for adults who want to switch to e-cigs to access those products. In contrast, those opposed to vaping are likely to say that the FDA should have imposed a total ban on the manufacture and sale of flavored e-cigs. The coming weeks will show how this matter pans out once the official FDA restrictions are announced.
The U.S. Food and Drug Administration has written letters to 21 e-cig manufacturers asking for information that would help the regulator to determine whether some of the products marketed by the companies in question are on the market illegally. The FDA ruled that any electronic cigarette product which was to be introduced on the market after August 8, 2016 needed to get clearance (premarket approval) from the FDA while those already on the market could continue as the makers prepared to undergo the premarket approval process come 2022. However, the media had reports of new products on sale yet such products aren’t approved by the FDA as required by law. The call for information is therefore designed to identify those products which could have been rebranded (due to the sale of their parent companies and other factors) and those which are new (and therefore non-compliant). We await the outcome of that investigation.
In a first of its kind, Phillip Morris, the largest cigarette maker in the world, has rolled out a campaign to urge smokers in the UK to abandon tobacco cigarettes and switch to vaping. The campaign dubbed “Hold My Light” is urging family members to support smokers to quit and switch to safer alternatives like e-cigs. For example, family members and friends can pledge to perform certain chores for the person who wants to quit smoking. This social support can provide the impetus needed for smokers to follow through on their desire to quit. The company cites research conducted by Public Health England as proof that vaping poses fewer risks to the individual and the public.
The £2 million campaign also hopes to strengthen the foothold of the e-cigarettes made by Philip Morris. The company plans to stop making tobacco cigarettes and focus on e-cigs and heated tobacco. The Hold My Light campaign has been received positively by a cross-section of the UK community, including a former health minister. The UK is one of the few jurisdictions around the world that has embraced vaping as a way to stop smoking harm. Doctors are even encouraged to suggest vaping as an alternative to their patients who smoke. I wonder whether policymakers and regulators in the U.S. can borrow a leaf from the approach taken by the UK?
Juul Labs, the manufacturer of Juul electronic cigarettes, have been under scrutiny by the FDA and Congress regarding why Juul products are so popular among teens and the youth. The FDA went on to describe teen vaping as an “epidemic” and the agency threatened to ban the sale of any flavored e-cigarette juice or product which is seen as appealing to teens and the youth. Juul Labs has responded by cooperating with the regulator as well as increasing its expenditure on lobbying by 167 percent in the third quarter of this year when that spending is compared to what was spent in the second quarter of this year. According to Juul’s declaration, it spent $560,000 on lobbying while the second quarter cost for lobbying was just $210,000. The e-cig maker appears to be in a fight for its very life. It will be interesting to look back and judge whether the lobbying had any effect in softening the rate at which regulators clamped down on different e-cig manufacturers.
Amid intense pressure from the FDA and legislators, some electronic cigarette makers are turning to self-regulation. They probably fear that they could lose their businesses if the FDA clamps down on them. Altria, one of the leading e-cig makers, has announced that it will stop making some of its flavored products until the FDA brings clearer rules on flavored e-cigs or the issue of teen e-cig use is conclusively addressed. The flavored products to be affected by this announcement are pod-based (similar to Juul pods). They constitute 20 percent of the products made by Altria. Other electronic cigarette makers are yet to make any decisions about their flavored products as they await the outcome of the investigations being conducted by the FDA on the matter. One can only hope that the attempts to stop minors from using electronic cigarettes don’t turn into a widespread witch-hunt targeting the vaping industry as a whole.