Signage from Juul Labs is seen in the window of a store in San Francisco on June 25, 2019.
David Paul Morris | Bloomberg | Getty Images
The Food and Drug Administration announced Thursday that it will ban the sale of Juul e-cigarettes in the US
The decision is part of a broader review of the agency, which has become more common among high school students as other tobacco products after years of pressure from politicians and public health groups to regulate the clause.
Juul sought FDA approval for its vaping device and tobacco- and menthol-flavored pods, which are available at 5% and 3% nicotine strengths. Already, the agency banned peppermint- and fruit-flavored vaping products in 2020 to cut down on teen vaping, leaving only tobacco and menthol-flavored products on the market.
Juul’s decision to ban sales of those remaining products has dealt a heavy blow to the company. Juul’s international expansion efforts have been hindered by regulations and a lack of consumer interest. America remains its largest market.
The FDA said Juul’s applications provided insufficient or conflicting data about the potential risks of using the company’s products.
“Without the data necessary to determine the relevant health risks, the FDA is issuing these in-marketing denial orders,” Michelle Mittal, executive director of the FDA’s Center for Tobacco Products, said in a statement.
Juul must stop selling and distributing its products in the US, but the FDA cannot enforce personal consumer possession or the company’s use of e-cigarettes.
A representative for Juul did not immediately respond to CNBC’s request for comment.
In last year’s FDA rulings, rival e-cigarette makers British American Tobacco and NJOY received approval for its e-cigarettes, although the FDA rejected some of the flavored products offered by the companies. The agency said it approved both companies’ tobacco-flavored products because they proved they could benefit adult smokers and reduce risk for younger users.
The FDA is also striving to reduce the use of nicotine in traditional tobacco products. On Tuesday, the agency said its plan requires tobacco companies to reduce nicotine content At least to the level of addictive or non-addictive exposure to cigarettes.
In 2019, federal data found that more than 1-in-4 high school students had used e-cigarettes in the past 30 days, up from 11.7% two years earlier. The outbreak of vaping-related lung disease in 2020 only raised concerns about e-cigarettes.
Last year, Usage among high school students fell to 11.3% Amid more regulatory scrutiny and the coronavirus pandemic.
According to Euromonitor International, Juul was the market leader in e-cigarettes since 2018. As of 2020, the company had a 54.7% share of the 9.38 billion US e-vapor market.
E-cigarettes deliver nicotine to users by vaporizing the liquid in cartridges or pods. Nicotine is the ingredient that makes tobacco addictive, and it can have other negative health effects. However, e-cigarette manufacturers have argued that their products can deliver nicotine to addictive adult smokers without the health risks that come with burning tobacco.
marlboro owner Altria At the end of 2018 bought a 35% stake in Juul for $12.8 billion. However, Altria in the form of Juul has eroded the value of the investment and the wider e-cigarette industry has been embroiled in controversy. As of March of this year, Altria valued its stake at $1.6 billion, one-eighth of its original investment, and Juul itself at just under $5 billion.
The FDA’s decision will also hurt Juul’s defense in US courts as it faces lawsuits from a dozen states and Washington over allegations that it marketed its products to minors and played a major role in the vaping epidemic. It has already entered into agreements with North Carolina for $40 million and with Washington state for $22.5 million.
The FDA gained the power to regulate new tobacco products in 2009. Over the past decade, thousands of e-cigarettes have appeared on store shelves without approval from the agency, which allowed the sale of those products as it phased in rising industry standards. ,
A court ruling created a timeline for the FDA’s approval process of the e-cigarette company’s premarket tobacco product applications. The agency is reviewing approximately 6.5 million applications from nearly 500 companies and has already denied nearly one million applications from smaller players such as JD Nova Group and Great American Vapes for their flavored vape products.
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