Juul and Altria Clash With FDA
The New York Times reported that the FDA is furious over Marlboro maker Altria’s purchase of a 35 percent stake in vape pod giant Juul. “Juul and Altria made very specific assertions in their letters and statements to the F.D.A. about the drivers of the youth epidemic,” FDA commissioner Scott Gottlieb said in an interview last week. “Their recent actions and statements appear to be inconsistent with those commitments.”
We examined the primary issue earlier this year: the teen vaping epidemic. The FDA is also concerned about e-cig use by current smokers and the proposed inclusion of inserts for Juul products within packs of Altria owned Marlboro cigarettes. Word of these inserts was first leaked to the public during the negotiation stage when rumors of Altria’s purchase of Juul were rampant.
At the time, these inserts were presented as a wonderful feature of the Altria purchase. Some public health officials have taken a different view and see the inserts as little more than Juul marketing materials. They argue that these inserts encourage smokers to use both products rather than to entirely transition to smoke and ash free alternatives.
The FDA is also frustrated by what they perceive as double dealing by Altria. In October, the Marlboro-maker claimed they would not sell pod based e-cigs, but at the same time were in negotiations with the dominant player in the pod industry. The FDA will probably keep the pressure on Altria and attempt to persuade them to not share shelf space with their new ally Juul. After investing $12.8 billion, it seems unlikely that Altria will comply.
For Altria Shelf Space Is King
The FDA is concerned about the use of shelf-space at certain types of brick and mortar establishments. Their new regulations on e-cigs, announced in November, specifically targeted gas stations and convenience stores. Sweet flavors, which are preferred by minors, are now only permitted for sale online and at vape shops.
Gas stations and convenience stores are the traditional sales channel of Altria’s Marlboro products. An expanded Juul presence at such establishments effectively undermines the FDA’s game plan to reduce teen vaping. Conventional wisdom is that Altria would not invest billions in Juul unless they plan on using their existing shelf-space and logistical infrastructure to increase the availability of the popular Juul vape pod system. Altria dumped their existing e-cig brands MarkTen and Green Smoke. This indicates that they plan on giving Juul their undivided support.
The FDA’s Approach to E-Cigs
The FDA regulations on e-cigs are built upon two pillars and both are flawed. The first is that sweetly flavored e-juices exist to get children hooked. Minors may prefer these flavors but surveys have made it clear that so do the majority of adults.
The second is that brick and mortar stores are incapable of adhering to age verification rules. This is also a questionable conclusion. In the summer of 2018, FDA sponsored compliance checks found that 96 percent of convenience stores and gas stations adhered to age verification rules.
Is Juul Done Retreating?
The FDA expected Juul to back down after November’s wave of new regulations. Juul preemptively removed what the New York Times vaguely described as “teen friendly” nic salt pods just before the FDA announced flavor restrictions. Yet only a few short weeks later, perhaps emboldened by their alliance with the tobacco giant, Juul seems much less willing to roll over and play dead.
Not only do they have access to Altria’s years of expertise and relationships with regulators, but Juul has begun to build a lobbying structure of their own. Juul employees donated more heavily to political candidates last year and the New York Times reported that they have spent $900,000 in 2018 on lobbyists, public relations experts and advisers. This is a fraction of Altria’s $7 million investment in lobbyists but Juul’s ramped up effort illustrates their readiness to play the game in Washington.
Altria’s Public Perception
By joining forces with Altria, Juul can no longer present themselves as the scrappy upstart eager to take down Big Tobacco with their smoke free alternatives. But capitulation to the FDA got them nowhere and they have plenty of foes crying for their total destruction. Perhaps it was inevitable that they would team with an embattled, controversial company that has been under fire for decades. Unfortunately, the standing of vaping and Juul are likely to fall even further now that they can be tied to “Marlboro” and the “Marlboro Man”. On the plus side, Altria did advocate for FDA control over tobacco products at the turn of the 21st century and has shown tremendous skill in their dealings with regulators.
Based on the beating Juul took this year in the media and from politicians, they may benefit from Altria’s tutelage. How far out of control did the public discourse on vape pods and sweetly flavored e-juices get in 2018? Juul was compelled to change the name of their crème brulée pods to crème. The dessert themed name “crème brulèe” was presented as an affront to decency. At what point did a decadent, upscale French dessert (which was trendy 1990s) start to resonate with high school students born in the last 18 years? Are high school students the same demographic that the high-end cosmetic company Laura Mercier (available at Neiman Marcus and Bloomingdales) is targeting with their assorted crème brulée themed products?
What About the Children?
Juul’s already negative portrayal in the media may get worse after Altria’s high stakes buy in. “What about the children?” arguments are specious but they work. Until the uptick in teen vaping is dealt with, the vaping industry will face regulatory headwinds and public backlash. High risk teen behaviors have been plummeting for over 20 years and this gives the FDA and CDC more time to focus on vaping. Of course, there are plenty of other concerns that probably should take priority over vaping.
Old Wine, New Bottle
New life has been breathed into the “vaping is a gateway drug myth” but the health of adult smokers who now vape is generally overlooked by many vaping critics. The myth these adult vapers still smoke heavily had been on life support but expect it to rejoin the legion of zombie vaping myths in coming months. The Altria-Juul purchase has made such errors in logic extremely easy to make.
Altria’s expertise may come in handy when dealing with the FDA but teaming with a company viewed as a villain by most American’s could come back to haunt Juul. The rest of the vaping industry is being held hostage by this high stakes battle and we can only hope that Juul, Altria and the FDA are able to resolve their differences amicably.
Vapor4Life Stands for Responsible Business Practices
At Vapor4Life, we have no interest in selling to minors. We go above and beyond the industry standard for age verification. Vaping by minors is an issue that we and the vast majority of vaping companies take very seriously. Here is why we view this issue as important: Our business does not sell to minors but any future punitive regulations will probably be the result of electronic nicotine delivery systems falling into the hands of children.
Our products are designed as alternatives to combustible cigarettes and not as a supplemental source of nicotine. Juul has also described their product in this manner and there is no reason to believe that this is not the case.
Ideally, their alliance with Altria will help them effectively make the case for electronic nicotine delivery systems and demonstrate the merits of e-cigs to regulators and politicians. Perhaps they will be able to protect the interests of brick and mortar establishments and convince the FDA not to target specific sales channels.
Including Juul inserts into Marlboro packs may give Juul a huge advantage, but educating current smokers about the potential benefits of non-combustible alternatives is important. Public Health England (PHE), an executive agency in the United Kingdom’s Department of Health and Social Care, promotes e-cigs. They have found, “vaping poses only a small fraction of the risks of smoking and switching completely from smoking to vaping conveys substantial health benefits.” Our products have much to recommend when compared to the Juul but we also feel that society benefits from fewer smokers and more vapers.
Vaping Prohibitionists and Marginalized Groups
The vaping industry has no shortage of powerful and vocal opponents. Late last year, state senators proposed a law that would result in e-cig prohibition in California. The FDA at least makes some effort to weigh empirical data and scientific evidence. FDA commissioner Scott Gottlieb acknowledged the importance of adult access to e-cigarettes in his November press release. Politicians are much more likely to make rash and ill-informed decisions that harm marginalized populations.
Fountains of misinformation like Parents Against Vaping e-cigarettes (PAVe) have leveraged their personal wealth into national news media coverage. Despite having fewer Instagram followers than my cat, they have been provided a New York Times op-ed slot and host school sanctioned disinformation seminars. They seek a total ban on flavors and online sales. These are the demands of vaping opponents. The stakes are high.
The well-being of marginalized populations apparently of no concern to the politicians promoting e-cig prohibition and extremists like PAVe. The wealthy have given up smoking, but it remains prevalent among the less affluent, minorities and the LGBT community. The CDC found 20.3 percent of adults that identify as lesbian, gay or bisexual smoke cigarettes. The overall rate is 14 percent. They are also three times more likely to use e-cigs: 7.5 percent versus 2.6 percent. This is the highest rate for any group surveyed.
The CDC’s study, “Cigarette Smoking and Tobacco Use Among People of Low Socioeconomic Status”, found that adults with less than a high school education succeed in quitting cigarettes only 43.5 percent of the time versus 73.9 percent for college graduates. Adults earning more than twice the poverty line are only half as likely to smoke as adults living below the poverty line.
The system is failing less affluent smokers. Lung cancer rates are far higher in rural, and poor areas. A lack of access to health care is blamed, but there is no reason to compound the issue by denying them ash and smoke free cigarette alternatives.