US health officials say teenage use of e-cigarette has reached "epidemic" levels and are calling on the industry to address the problem or risk having their flavored products pulled off the market. Since past year, FDA commissioner Scott Gottlieb and other federal officials have discussed e-cigarettes as a potential tool to ween adult smokers off cigarettes, although that benefit hasn't been proven.
"Today, we asked five e-cigarette manufacturers to put forward plans to immediately and substantially reverse these trends, or face a potential decision by the FDA to reconsider extending the compliance dates for submission of premarket applications", Gottlieb said. The number of regular users is much smaller, and nearly all of them are current or former smokers. But health officials have warned nicotine in e-cigarettes is harmful to developing brains.
Shares of British American Tobacco, which owns the Vuse brand, closed up almost 6 percent, while shares of cigarette-maker Imperial Brands PLC, which owns Blu, rose more than 3 percent. "If they fail to do so, or if the plans do not appropriately address this issue, the FDA will consider whether it would be appropriate to revisit the current policy that results in these products remaining on the market without a marketing order from the agency".
The agency is now demanding plans to reign in youth-targeted marketing campaigns and control illegal sales of their products to minors from Juul and four other e-cigarette makers within 60 days.
Tobacco investors have grown increasingly concerned that the widespread popularity of e-cigarettes is having a negative impact on the old-school industry, a headwind expected to grow as its products from companies like Juul continue gaining traction with consumers.
Juul e-cigarette starter pack is seen in this picture illustration taken July 16, 2018. The FDA's delay on that requirement has allowed the industry to flourish with little oversight.
"I certainly am in possession of evidence that warrants that", Gottlieb said, without disclosing the evidence. Youth tobacco prevention is a priority for our companies.
Juul Labs said it would work with the FDA and is committed to preventing underage use of its product.
The FDA also announced 1,300 warning letters and fines to online and traditional stores that have illegally sold Juul and other e-cigarettes to minors.
E-cigarette makers argue the devices help adult smokers give up cigarettes - potentially saving them from related illnesses - by giving a nicotine fix without the smoke and smell of combustible cigarettes. "This belief is based on not just the results of the agency's enforcement actions, but also recent sales trends, news coverage, increased concerns among kids, parents and educators, as well as preliminary data that will be finalized and released in the coming months".
She said Altria could be well positioned because it has a long history of dealing with youth access to its products and has "limited/mature flavor profiles relative to Juul".
"In my view, they treated these issues like a public relations challenge rather than seriously considering their legal obligations, the public health mandate, and the existential threat to these products".
"I'm here to tell them today that this prior approach is over", he said.