FDA says it won’t full the assessment of e-cigarette merchandise by Thursday due date
A sign advertising Juul branded vape products is seen outside a store in New York City on February 6, 2019.
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The Food and Drug Administration said it would take more time to complete its review of e-cigarette products sold in the United States.
The agency made decisions on more than 90% of the new tobacco products submitted. It had a year to assess whether these products were in the public health interest and analyze whether they were effective in helping smokers quit and whether this was predominant in introducing new users, including teenagers, to e-cigarettes.
Earlier Thursday, the Wall Street Journal reported that the FDA will take more time before deciding whether Juul can resell its e-cigarettes in the US
After years of pressure from politicians and public health groups to regulate the segment as strictly as other tobacco products, a court mandate created a schedule for the agency to review vapor products. The deadline for reviewing the agency was Thursday. If an application has not been approved or denied by then, the products must be withdrawn from the US market until the FDA makes a decision. The FDA announced Thursday afternoon that it had made “significant progress” in reviewing around 6.5 million product applications from approximately 500 companies.
“The FDA’s opaque review process was purposely designed to eliminate all but the largest players from the market,” said Gregory Conley, president of the American Vaping Association, in a statement. “We look forward to supporting future legal challenges with our support.”
Prior to Thursday, the FDA announced it would accelerate decisions for market leaders like Juul, but didn’t expect to make decisions on all of the millions of product applications by the deadline.
In late August, it turned down 55,000 requests from smaller companies like JD Nova Group and Great American Vapes for their flavored vape products. Flavored e-cigarettes have been the focus of anger for many health groups due to concerns about underage consumption. According to vaping trade groups, the agency issued further denials on Wednesday.
“Many very good people, whom I deeply respect and who have helped thousands of smokers quit, have been told by our government that their products are illegal,” tweeted Amanda Wheeler, president of the American Vapor Manufacturers Association.
The FDA was given authority to regulate new tobacco products in 2009. Over the past decade, thousands of e-cigarettes have appeared on store shelves without agency approval, allowing these products to be sold as standards for the emerging industry gradually rolled out.
According to Euromonitor International, Juul has been the market leader in e-cigarettes since 2018. In 2020, the company held 54.7% of the US e-cigarette market of $ 9.38 billion. Juul filed with the FDA for approval for its vaping device and tobacco- and menthol-flavored pods, which are available with a nicotine strength of 5% and 3%.
If the FDA rejects Juul’s applications, it would be a severe blow to the company. Its international expansion efforts have been hampered by regulators and a lack of consumer interest, and the US remains its largest market. It is also likely to harm Juul’s defense in U.S. courts as it faces lawsuits from 13 states and the District of Columbia over allegations that it marketed its products to minors and played a major role in the steam epidemic. It has already reached an agreement with North Carolina for $ 40 million.
In 2019, Juul pulled most of its flavored nicotine pods off the shelves, discontinuing the fruit, cream, mango and cucumber flavors. Shortly thereafter, the FDA banned the sale of most fruit and mint flavored nicotine e-cigarettes. Juul says his target customers are adult smokers who use his e-cigarettes to stop smoking traditional tobacco cigarettes.
Marlboro owner Altria bought a 35 percent stake in the company for $ 12.8 billion in late 2018. However, Altria reduced the value of the investment when Juul and the wider e-cigarette industry became embroiled in controversy. In September 2020, Altria estimated its stake at $ 1.6 billion, an eighth of its original investment, and Juul at under $ 5 billion.
Altria shares were down less than 1% in morning trading, while shares of British American Tobacco, which makes Juul rival Vuse, fell 1.7%. The FDA has not yet publicly condemned Vuse either.
A representative from Juul declined to comment. Reynolds American, a subsidiary of British American Tobacco, did not immediately respond to CNBC’s request for comment.