A stinging rebuke to the Silicon Valley startup, which vowed to transform smoking but instead helped spark a new generation of teenage nicotine addicts, was delivered by the US Food and Drug Administration.
It was clear that the company was in for a lot of trouble when they put up billboards in New York and young models flaunting the sleek nicotine device. Big Tobacco was accused of selling cigarettes to young people and lying to the American public about the dangers of its product.
The creators of Juul pushed the classic Silicon Valley growth strategy. They followed a postmodern version of Big Tobacco's approach by packaging a highly addictive nicotine Potion in a chrome shell and marketing it to a new generation of young people who had become addicted to nicotine. Just as youth smoking rates had fallen to record lows, teens became addicted to nicotine. The FDA and parents were incensed. Nicotine is addictive and can affect the development of the adolescent brain.
The decision by the FDA, after a two-year scientific review, was a potential death blow to an American company that just a few years ago had attained a $38 billion valuation and had dominated more than 70%.
The decision was applauded by anti-vaping advocates. "Ask a high school student in America if you don't know the story behind e-cigarettes and vaping, if you don't know anything at all."
Almost 30% of high school students used e-cigs in 2019. Scott Gottlieb, the former FDA Commissioner, warned of the dangers of e-cig use. The portion of high school students who use Vaping has dropped since then, and the most popular product is not Juul.
The agency pulled Juul off the market because it didn't appeal to young people. The FDA has the authority to deny or grant marketing orders to e-cigarettes and other alternative tobacco products if they are found to be inappropriate for the protection of the public health. Even though Juul spent more than $150 million and hired an army of scientists to make its case, the agency found that the company didn't meet that standard.
Even though the FDA stressed that it didn't believe Juul posed an "immediate hazard" to human health, it's difficult to know what concerns the agency harbored. Some of the company's study findings raised concerns due to insufficient and conflicting data, which indicates that the agency wasn't satisfied the science Juul provided was enough to rule out the possibility that its product might cause cellular damage.
The FDA was unable to complete a full toxicological risk assessment due to insufficient data on the potentially harmful chemicals that could be found in thepods. Juul users might be inhaling heavy metals since there is a tiny heating element made of chromium, nickel, and iron submerged in thepods that transforms the liquid nicotine into Vapor.
On Friday, a federal judge granted Juul an emergency order that would allow its products to remain on store shelves while it appeals the FDA's decision. "We remain committed to doing all in our power to continue serving the millions of American adult smokers who have successfully used our products to transition away from cigarettes," said Joe Murillo, chief regulatory officer.
The company brought in over a billion dollars in sales last year, but it was down from its peak in 2019. The majority of the company's business is in the US, with the rest in Canada and the UK. The company is a small one without the US market.
The company's valuation plunged amid new regulations on e-cigarettes, a series of public-health controversies, and an increasingly competitive market, as the investment firms that invested in it saw their bets sour over the years. The parent company of Marlboro cigarettes paid over $12 billion for a stake in the company. The investment is now valued at about $1.6 billion. According to Goldman Sachs Group Inc. tobacco research analyst Bonnie Herzog, there is a chance that more people will switch to smoking Marlboros if there is no Juul.
The competition is one of the main winners. The FDA gave R.J. Reynolds Vapor Co. permission to keep their products on the market.
The tobacco industry is morphing into Big Nicotine as the FDA prepares to take action. The market for potentially less harmful products is growing despite the decline in cigarette sales. The global nicotine market was worth $935 billion in 2021, up 25% from the previous year. Philip Morris International wants to become a majority smoke-free business by 25th century. It snapped up companies with expertise in pulmonary drug delivery and indicated it could develop new products that could deliver a range of "sensorial experiences."
Smoking is one of America's most intractable health problems, and the FDA has been trying to figure out a way to stop it. Smoking is the leading cause of preventable disease and death. Over the past two decades, the public-health movement has argued that the government should do everything it can to speed up the end game for the deadly products. Nicotine in cigarettes can be reduced to nonaddictive levels. It would help current smokers kick the habit and prevent a new generation from becoming addicted. Most adult smokers start smoking before the age of 18. The plan to reduce nicotine in cigarettes was laid out two days before the FDA made its decision.
Nicotine-replacement therapies such as the patch, gum, and pharmaceutical quitting drugs like varenicline have always been presented to smokers as less harmful alternatives to tobacco use. There are also e-cigs.
The smoking problem has been solved by the use of e-cigarettes. Critics of the agency's decision say smokers are abandoning the cigarette in favor of e-cigarettes. Anti-vaping advocates say that smokers have lots of options, including quitting cold turkey, and that e-cigarettes are too great of an addiction risk to young people.
Smoking, tobacco, and nicotine have been regulated by the federal government. The FDA has found itself in the middle of a number of battles dating to the Tobacco Wars of the 1990s. Faced with a company that treated nicotine as a fashion accessory, and barreled into the market with classic Silicon Valley move-fast-and-break- things abandon, it has struck one of its most consequential decisions yet.
The Army of Really Rich Parents was found by Juul.
All Rights Reserved © 2024
