It faces declining sales and thousands of lawsuits alleging it knowingly sold its trendy vaping products to minors. The FDA will soon decide whether it can continue to sell them.
The company’s sales have plummeted by $500 million. There has been a reduction of three-quarters in the number of employees. 14 countries have abandoned operations. There have been many shutdowns of lobbying campaigns at the state and local levels.
Juul Labs, the once high-flying e-cigarette company that became a public health villain due to its role in the teenage vaping boom, has been operating as a shadow of its former self, largely operating out of public sight in what it calls “reset” mode. As it mounts an all-out campaign to convince the FDA to let it continue to sell its products in the United States, its very survival is on the line.
The agency is trying to meet a Sept. 9 deadline to decide if Juul’s devices and nicotine pods have enough public health benefit as a safer alternative for smokers to stay on the market, despite their popularity with young people who never smoked but became addicted to nicotine after using Juul products.
Juul’s application has been rejected by major health organizations, including the American Heart Association, American Lung Association, American Academy of Pediatrics and American Cancer Society’s Cancer Action Network.
According to Eric Lindblom, a senior scholar at Georgetown University’s O’Neill Institute for National and Global Health Law and a former FDA adviser on tobacco, “the stakes are high.” “The FDA could face public health lawsuits if it blows this one.”
Juul doesn’t spare any expense when it comes to fighting back. Last week, the company settled just one lawsuit (with North Carolina) out of thousands lodged against it, avoiding a jury trial. As the F.D.A. reviews its vaping products, the company sought the deal urgently to avoid courtroom testimony from parents and teenagers.
A 125,000-page application Juul submitted to the agency has not been made public. Juul, however, paid $51,000 to have the entire May/June issue of the American Journal of Health Behavior devoted to 11 studies offering evidence that Juul products help smokers quit. One of Juul’s submissions was rejected by the editors. This fee included $6,500 for open access to the subscription journal.
The arrangement led to the resignation of three members of the journal’s editorial board.
Juul’s federal lobbying has remained strong. According to the Center for Responsive Politics, which tracks political spending, it spent $3.9 million on federal lobbying in 2020. Nearly $11 million was spent by Altria, which owns a chunk of Juul.
From a high of 75 percent in 2018, Juul’s share of the vaping market has shrunk to 42 percent last year, according to analysts. Public health experts are concerned that FDA approval will pave the way for the company to rise again and expand its reach.
Juul has long denied selling its products to teenagers, and has pledged publicly to keep them away from minors. The company did not admit to targeting youths in its settlement with North Carolina.
According to Joe Murillo, Juul’s chief regulatory officer, “We have a bigger chance than ever to convert smokers, but we can only achieve that if we continue to fight underage usage and behave as the highly regulated company that we are.”.”
In addition to its iconic vaping device, once dubbed the iPhone of e-cigarettes, the company is seeking approval for tobacco- and menthol-flavored pods in two nicotine strengths: 5 percent, which is equivalent to the nicotine in an average pack of cigarettes, and 3 percent.
As a result of the lack of a permanent commissioner, the FDA has had to deal with a number of critical issues — including the recent approval of a controversial Alzheimer’s drug and decisions on thousands of vaping products made by companies other than Juul. A nominee has not yet been announced by President Biden.
Doctor, the acting commissioner, was recently questioned about the agency’s plans for Juul by a House panel. The agency will base its decision on sound science, and she couldn’t prejudge the application, which is still undergoing review.
Will smokers use Juul products more as an off-ramp from traditional cigarettes than non-smokers will use Juul products as an on-ramp to nicotine? Is Juul really able to keep its products away from children?
Journal edition it bought, Juul’s research mainly covers the 12-month experiences of 55,000 adults who bought the Juul starter kit. Researchers paid by Juul concluded that 58 percent of the 17,000 smokers who stayed in the study had stopped smoking after 12 months. Two percent smoked both traditional and e-cigarettes but cut their smoking by at least half.
Elbert D. Glover, who was editor and publisher of the journal until he retired soon after publication, said the journal followed its standard protocol for vetting studies.
There has been a steady decline in the number of Americans who smoke over the past few decades. In 1965, 42 percent of the population was living in poverty. In 2019, 14 percent lived in poverty. According to the Centers for Disease Control and Prevention, some 480,000 people die each year from smoking-related diseases, making it the leading preventable cause of death.
Developed in the early 2000s, e-cigarettes provide smokers with the nicotine fix they crave without the carcinogens that come from burning tobacco. However, until Juul’s launch in 2015, no e-cigarette had captured the public’s attention.
Juul’s sleek design and use of nicotine salts in its pods created a high-nicotine, low-irritant experience, which quickly became a fad, especially among high school and middle school students. Instead of helping adults quit smoking, Juul is hooking a new generation on nicotine, posing potentially harmful health effects on their developing brains.
It wasn’t until 2018 that the Food and Drug Administration declared a youth vaping epidemic that Juul’s rapid growth came to light.
Juul and others exploited the open, Wild West marketplace left by the FDA around vaping products, said Clifford E. Douglas, director of the University of Michigan Tobacco Research Network. The events of that time ruined a genuine opportunity for harm reduction in the public health sector. To serve the public health, we must return to that.”
According to Mr. Douglas, Juul is now marketing its vaping products responsibly, which could reduce the harm caused by cigarettes.
Despite being highly critical of Juul, former F.D.A. tobacco adviser Lindblom believes the FDA cannot take past bad behavior into consideration.
“FDA has to look at this in a forward-looking manner and can’t really punish Juul, but it can certainly take into account Juul’s popularity among youth,” he said.
Juul’s critics believe the company should not be given another chance. Juul’s “reset,” announced in September 2019, is unpopular with the company’s customers. Juul’s CEO is Crosthwaite, a top executive at Altria, the maker of Marlboro cigarettes.
Some of Juul’s controversial state and city lobbying campaigns were halted by Mr. Crosthwaite. He closed Juul’s foreign markets except for Britain and Canada, although Juul continues to be sold through distributors in Ukraine, Russia, Italy, and the Philippines. As a result of public pressure, he took off the market mint-flavored pods, which accounted for 70 percent of sales. All U.S. advertising was also suspended.
“Earning trust must be at the heart of everything we do,” he wrote last summer in an email to company employees.
Most of these changes were made at gunpoint after the FDA threatened to shut down the business if teenagers continued to use Juul.
Altria’s purchase of a $12.8 billion stake in Juul in December 2018 makes them even more distrustful.
“ Marlboro man rides into Juul and now wants us to trust them,” said Matthew L. Myers, president of the Campaign for Tobacco-Free Kids.
The Federal Trade Commission is now investigating the Altria-Juul deal, alleging that the two companies entered into antitrust violations by eliminating competition.
As Juul became more popular, Altria dealt with its competitive threat by discontinuing its Mark Ten e-cigarette in exchange for a share of Juul’s profits, according to the commission. The charges against both companies have been denied.
Juul would face considerable business challenges even if the FDA approved its products.
New competitors, sometimes called Juulalikes, flooded the market with cheap, disposable e-cigarettes in flavors such as Cherry Frost and Dinner Lady Lemon Tart when Juul discontinued its fruity flavor pods. With the 2018 deal, Altria bought 35 percent of Juul for $38 billion. Juul now has a value of under $5 billion, a fraction of its previous $38 billion valuation.
Most likely, Juul will spend the next few years settling thousands of lawsuits if it survives.
In an effort to combat the youth vaping crisis, 14 states and the District of Columbia have sued Juul for money. The Justice Department is still investigating the company criminally.
Similar to the treatment of opioid cases, there is also multi-district litigation in a federal court in California, which has combined nearly 2,000 cases under one judge’s jurisdiction.
It is up to the FDA to determine whether there will be companies left to collect from if plaintiffs prevail.