FDA crackdown on flavored e-cigs warns Juul

WASHINGTON / LOS ANGELES (Reuters) – The US Food and Drug Administration plans to ban flavored electronic cigarettes from Juul Labs and other companies fighting an "epidemic" of electronic cigarette consumption by young people who risk creating a new generation of nicotine addicts, said the agency's manager on Wednesday.

In a speech at FDA headquarters, Commissioner Scott Gottlieb said the agency would also review a policy that extended the FDA's approval dates for certain flavored electronic cigarette manufacturers before selling their products. This could result in the removal of some major brands of flavored electronic cigarettes, including popular products manufactured by Juul Labs Inc., if they do not address the problem to the satisfaction of the agency.

"We are seeing clear signs that the use of e-cigarettes by young people has reached an epidemic proportion," Gottlieb said.

Manufacturers offer and market electronic cigarette flavors that clearly appeal to minors, including the flavors of candy and chewing gum. The FDA said more than 2 million high school and high school students had used electronic cigarettes in 2017.

The FDA gives the top five brands of electronic cigarettes – Juul, Vuse, MarkTen XL, Blu and Logic – 60 days to provide plans on how they will mitigate sales to minors.

According to Wells Fargo, Juul holds approximately 72% of the US market for electronic cigarette sales. "Juing", with "vaping," has become a common term for teenagers to use electronic cigarettes on social media and in American high schools.

Investors in Juul's competitors seemed to welcome the FDA announcement.

Shares of British American Tobacco, owner of the Vuse brand, closed up nearly 6%, while shares of the cigarette manufacturer Imperial Brands PLC, owner of Blu, increased by more than 3%. The shares of the traditional cigarette maker Altria Group, which also owns the MarkTen brand, closed up 6.6%, while the shares of Philip Morris International rose by 3.4%.

In a research note, Wells Fargo analyst Bonnie Herzog said Juul seemed "most at risk" of the crackdown because of his "strong appeal for youth and FDA comments on flavors" .

She said that Altria could be well positioned as it has a long history with young people in terms of access to its products and has 'limited / mature' flavor profiles compared to Juul.

MENTHOL VERSUS FRUIT MEDLEY AND BURNED CREAM

The flavors of MarkTen, for example, include "menthol", "classic" and "summer mix", while Juul's flavors include "fruit medley" and "crème brûlée", recently shortened to "fruit" and "cream" ".

Gottlieb has announced a number of steps that the agency plans to take in the context of a broader crackdown on the sale and marketing of electronic cigarettes to minors. The agency has sent 12 warning letters to companies that it says have misleading marketing labels on electronic liquids.

"We can not allow a new generation to become addicted to nicotine," he said.

Juul Labs said she would work with the FDA and pledge to prevent the use of her product by minors. But spokeswoman Victoria Davis said that "the right flavors play an important role in helping adult smokers to change."

The FDA move comes as it seeks to balance its approach on electronic cigarettes, which can be used to wean lifetime smokers on less harmful nicotine products, but also risk attracting a new generation to addiction to nicotine.

"While we remain committed to developing policies to promote the potential of e-cigarettes to help adult smokers move away from combustible cigarettes, this work can not be done to the detriment of children," Gottlieb said.

The other companies also said they would work with the FDA on youth prevention efforts.

"We welcome the action of the FDA today and we look forward to sharing our thoughts on how to prevent and reduce the use of young people, an issue we've been focusing on for decades," said George Parman, spokesman for Altria.

The Imperial Brands unit, Fontem Ventures, said it would work to strengthen policies and procedures for preventing youth access.

British American's R. J. Reynolds Vapor Company, said he would comply with the FDA's request, adding that "prevention of youth smoking is a priority for our businesses."

Logic Technology Development, owned by Japan Tobacco Inc., said it would demonstrate to the FDA that "Logic only markets its products to adults".

As part of its broader enforcement efforts, the FDA said it issued more than 1,300 warning letters and fines to retailers who illegally sold electronic cigarette products to minors.