It’s almost Shakespearean.
Juul, the e-cigarette company that took the US by storm five years ago, and was valued at its peak at $38 billion, is about to be kicked out of the country, according to the WSJ. According to today’s media report, the Food and Drug Administration could announce today that the San Francisco-based team can no longer sell its products in the US.
The “marketing denial order,” writes the WSJ, would follow a nearly two-year review of data submitted by Juul, which in 2019 said it would suspend all print, television and digital advertising in the United States after parents across the country were complaining that their children were becoming exposed and addicted to Juul products.
The company has also agreed to stop selling its sweet-flavored e-liquid pods, including fruit, cream, mango and cucumber flavors.
Since then, Juul, which sold a 35% stake in its business to tobacco giant Altria in 2018 for $12.8 billion, has spent millions of dollars lobbying the federal government in hopes of continuing to sell its tobacco- and menthol-flavored products. . in the US market.
According to a New York Times report last summer, Juul also submitted a 125,000-page application to the agency; he shelled out $40 million to settle just one lawsuit; and paid $51,000 for the entire May/June 2021 issue of the American Journal of Health Behavior to be devoted to 11 studies that were funded by the company and aimed to show that Juul products help smokers quit traditional cigarettes.
Juul, facing thousands of lawsuits until they were combined into multidistrict litigation overseen by a single federal judge, also agreed to pay $22.5 million in April to settle a lawsuit brought by the state of Washington that alleged the company intentionally targeted teens with their products and misled users about the addictiveness of their products.
As reported at the time, under the terms of the settlement, Juul did not admit any wrongdoing or liability, saying it settled “for the purpose of compromising” and avoiding further litigation (litigation that could hinder the progress it hoped to make with the FDA). )
Clearly, all that effort was too little too late, even as the FDA appears to allow Juul’s biggest rivals, Reynolds American and NJOY Holdings, to continue selling their own tobacco-flavored e-cigarettes on the market.
Assuming its days in the US are over, the chapter heralds an incredible journey for the now seven-year-old company, which easily won over 75% of the US e-cigarette market in its third year in business, thanks in no small part to the sleek design of its nicotine vaporizer.
In fact, in 2018, it was reportedly on track to see at least $1 billion in revenue and had the backing of wealthy investors, including Tiger Global and Fidelity Investments, money it planned to spend internationally to woo the roughly 1,000 million smokers who live abroad. from United States
The FDA, led at the time by then-commissioner Scott Gottlieb, who is also a physician and VC, would derail those plans. Under Gottlieb’s watch, the FDA spoke religiously about the year-after-year use of vaping pens by high school students, as well as a smaller but alarming percentage of middle school-age kids who had started vaping.
Juul initially rejected the data. At an event hosted by this publisher in the fall of 2018, the only public speaking event where Juul co-founders and former Stanford design students Adam Bowen and James Monsees appeared together, the two were still discussing the benefits of the pods. Juul’s flavored vape products, saying they made it easier for smokers to switch to their product and “reduced the harm.”
At the time, flavor removal was “certainly on the table,” Monsees offered. But he went on to say that “we have not seen evidence that there is a necessary causality for the flavors to be an introduction to underage consumers. Cigarettes have been a major problem for underage users for some time. What we do see strong internal evidence for is a much stronger correlation for adult consumers staying away from cigarettes as they move further away from everything that reminds them of cigarettes in the first place, including the taste of the cigarettes”.
It took another 13 months for Juul to suspend sales of those flavored products.
Monsees and Bowen first submitted their “future of smoking” product design thesis at Stanford in 2004. Three years later, in 2007, the graduates founded Ploom, which produced a cannabis vaporizer. The company later came to Pax Labs, sold the rights to that Ploom product to an investor in the company (Japan Tobacco International), and began to focus on the Juul e-cigarette. In 2017, he created Juul Labs as his own company.
Juul spoke publicly early on about the health benefits of switching from combustible cigarettes to e-cigarettes, but according to doctors and researchers, while vaping is less harmful than smoking, it’s just as addictive and unknowns abound.
For example, the data suggest links to chronic lung disease and asthma, as well as associations between e-cigarette dual use and smoking with cardiovascular disease, says Michael Blaha, MD, MPH, director of clinical research at the Johns Hopkins Ciccarone Center. for the Heart Disease Prevention in an online explainer hosted by the medical center.
If the FDA orders Juul to withdraw its products from the US market as expected, the company still has a few options, notes the WSJ. You could “file an appeal through the FDA, challenge the decision in court, or file a revised application for your products.”
Meanwhile, it’s unclear how successful Juul has been abroad. Juul sales in China stopped just days after its launch within the country in 2019.
During the pandemic, Juul also reportedly planned to significantly reduce its presence in Europe and stop selling in Austria, Belgium, Portugal, France and Spain, according to BuzzFeed News. Europe, as BuzzFeed noted at the time, has stricter e-cigarette regulations than the US, including more aggressive nicotine limits.