The Food and Drug Administration announced Thursday that it would ban the sale of Juul e-cigarettes in the United States
Juul intends to stay the decision and is reviewing options, including appealing the decision or cooperating with the FDA, Chief Regulatory Officer Joe Murillo said in a statement.
The ban is part of the FDA’s broader scrutiny of the vape industry after years of pressure from politicians and public health groups to regulate the segment as tightly as other tobacco products after vaping became more common among high school students.
Juul had applied to the agency for approval for its vaping device and tobacco and menthol flavored capsules, which are available in 5% and 3% nicotine strengths. The flavors were not subject to a 2020 government ban on mint- and fruit-flavored vaping products that were popular with teens.
Banning Juul from selling these remaining products would deal a serious blow to the company. Juul’s international expansion efforts have been hampered by regulations and a lack of consumer interest. The US remains the largest market.
The FDA said Juul’s applications contained insufficient or conflicting data about the potential risks of using the company’s products, including whether potentially harmful chemicals could leak from the Juul capsules.
“Without the data needed to determine relevant health risks, the FDA is issuing these marketing denial orders,” Michele Mital, acting director of the FDA’s Center for Tobacco Products, said in a statement.
The FDA said it hasn’t seen any clinical information that suggests there’s any immediate risk from using Juul products. Still, due to Thursday’s decision, Juul must stop selling and distributing its products in the United States effective immediately. The FDA cannot enforce the possession or use of the company’s e-cigarettes by individual consumers.
“We respectfully disagree with the FDA’s findings and decision and continue to believe that we have provided sufficient information and data based on high-quality research to address any issues raised by the agency,” Juul’s Murillo said in his statement.
In FDA decisions last year, rival vape makers British American Tobacco and NJOY received approvals for their vape products, although the FDA rejected some of the flavored products submitted by the companies. The agency said it approved both companies’ tobacco-flavored products because they had proven they could benefit adult smokers and outweigh the risk to minors.
The FDA has also made strides to reduce nicotine use in traditional tobacco products. On Tuesday, the agency said it plans to require tobacco companies to reduce the nicotine content in cigarettes to minimum addictive or non-addictive levels.
In 2019, federal data found that more than one in four high school students had used an e-cigarette in the past 30 days, up from 11.7% just two years earlier. An outbreak of vaping-related lung disease in 2020 heightened concerns about e-cigarettes.
Last year, usage among high school students dropped to 11.3% due to tighter government controls and the coronavirus pandemic.
Juul has been the market leader in e-cigarettes since 2018, according to Euromonitor International. As of 2020, the company held a 54.7% share of the US$9.38 billion e-vape market.
E-cigarettes deliver nicotine to users by vaporizing liquid in cartridges or capsules. 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 addicted adult smokers without the health risks associated with burning tobacco.
Marlboro-owner Altria bought a 35% stake in Juul for $12.8 billion in late 2018. However, Altria lowered the value of the investment as controversy embroiled Juul and the broader vape industry. In March, Altria valued its stake at $1.6 billion, an eighth of its original investment, and Juul itself at under $5 billion.
The FDA decision is also likely to 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 e-cigarette epidemic. It has already settled $40 million with North Carolina and $22.5 million with Washington State.
The FDA gained authority to regulate new tobacco products in 2009. Over the past decade, thousands of e-cigarettes have appeared on store shelves without regulatory approval, allowing these products to be sold as it gradually rolled out standards for the burgeoning industry.
A court decision established a timeline for the FDA’s approval process for e-cigarette company applications to launch tobacco products. The agency reviews around 6.5 million applications from around 500 companies and has already rejected around 1 million applications from smaller players such as JD Nova Group and Great American Vapes for their flavored vape products.