Altria Group and Juul Labs will likely face a proposed antitrust action seeking to unwind a $12.8 billion deal that gave the tobacco giant a 35 percent stake in the vapor company, reports Bloomberg Law, citing a “tentative” ruling by a federal judge in San Francisco.
Judge William H. Orrick indicated Wednesday that he’s inclined to let most of the lawsuit move forward in the U.S. District Court for the Northern District of California, where it was consolidated after dozens of antitrust plaintiffs sued over deal clauses calling for Altria’s exit from the vaping market.
The Federal Trade Commission has also sued over the Altria-Juul transaction.
The budget deal awaiting a final vote in Indiana today includes the state’s first-ever tax on e-cigarettes. Both the House and Senate had floated an extra 10 percent sales tax on e-liquids, but the final bill jacks that up to 15 percent. Prepackaged closed-pod cartridges like Juul will be taxed at 25 percent at the wholesale level.
Credit: Ken Shelton
Health advocates say the plan meets their goal of a tax rate comparable to the rate on traditional cigarettes, according to WIBC.com. Indiana State Medical Association president Roberto Darroca says doctors are particularly concerned about discouraging teenagers from taking up vaping so they don’t get a taste for nicotine and move on to traditional cigarettes.
The Senate had flirted with the idea of taxing closed-pod cartridges based on the amount of liquid they contained. Darroca says that would have been a mistake, and says negotiators did the right thing in basing the taxes on price. Because pod cartridges contain a fraction of the liquid sold for open systems, Darroca says a volume tax would have blown up the goal of making the vaping tax comparable to taxes on traditional tobacco products.
The Indiana Chamber had gone farther, blasting the volume-based tax as worse than doing nothing. President Kevin Brinegar says the Chamber supports the final version as a “big step” for public health, though he and Darroca both say they’re disappointed the Senate blocked a proposed cigarette tax hike.
Juul Labs is leaving Canada’s Vaping Industry Trade Association (VITA), citing nonalignment on critical policy issues.
“While we have appreciated the opportunity to collaborate with VITA , we will not be renewing our membership as we are not aligned on too many critical policy issues,” Juul Labs wrote in a statement. “For example, we support Tobacco 21 legislation—raising the minimum purchase age of tobacco and vaping products to 21—enhanced access controls at retail and limiting flavor options.”
Juul Labs Canada said it will continue to focus on combating underage usage of vaping products, while preserving the historic opportunity to switch adult smokers off of combustible cigarettes.
U.S. Customs and Border Protections (CBP) officers in Indianapolis seized six shipments containing over 10,000 unapproved Juul Pods. All the shipments originated from an individual in Ontario, Canada and were headed to various locations in New York and New Jersey.
The FDA determined the shipments violated the Federal Food, Drug, and Cosmetic Act (FD&C Act) as misbranded consumer goods being imported by an unauthorized agent, according to a CBP press release. Tobacco products imported or offered for import into the United States must comply with all applicable U.S. laws. Read more about the FDA’s regulations governing e-cigarettes and other tobacco products.
The shipments arrived separately and were all seized on April 8. The packages were mis-manifested as electrical apparatus, a common practice used by smugglers. CBP believed the shipment was intentionally improperly labeled to avoid detection. A total of 10,464 pods were seized. The pods had an MSRP over $156,000.
“Our officers are dedicated to identifying and intercepting these types of shipments that could potentially harm communities,” said Kerry Carter, Acting Port Director-Indianapolis. “Our officers and specialists enforce hundreds of laws for many partner agencies, and are committed to ensuring the health and safety of American citizens.”
Last year the FDA announced an increased enforcement priority of electronic nicotine delivery systems, and issued detailed guidance to the industry of these new enforcement priorities that regulate the unauthorized importation of tobacco products.
CBP provides basic import information about admissibility requirements and the clearance process for e-commerce goods and encourages buyers to confirm that their purchases and the importation of those purchases comply with any state and federal import regulations.
CBP conducts operations at ports of entry throughout the United States, and regularly screens arriving international passengers and cargo for narcotics, weapons, and other restricted or prohibited products. CBP strives to serve as the premier law enforcement agency enhancing the Nation’s safety, security, and prosperity through collaboration, innovation, and integration.
A California magistrate judge said vaping would be off-limits during upcoming depositions in multidistrict litigation against Juul labs. The suits allege that the e-cigarette manufacturer intentionally marketed product to teens, according to law360.com. Judge Jacqueline Scott Corley wrote that the court “confirms that no party shall vape during deposition questioning.” She added that individuals who vape can take however many breaks as they need. “These breaks shall not count against the presumptive seven-hour deposition limit.”
Credit: Insurance Journal
The actions include putative class actions, actions on behalf of school districts and other governmental entities, and individual personal injury cases. The lawsuits allege that Juul Labs “marketed its JUUL nicotine delivery products in a manner designed to attract minors, that [Juul Labs] marketing misrepresents or omits that JUUL products are more potent and addictive than cigarettes, that JUUL products are defective and unreasonably dangerous due to their attractiveness to minors, and that [Juul Labs] promotes nicotine addiction.”
North Carolina was the first state to sue Juul over accusations that it targets underage youths with its products. Most specifically, the NC Attorney General’s office accuses Juul of violating the state’s Unfair and Deceptive Trade Practices Act.
A new study from Italy has found that 40 percent of participating adults with schizophrenia spectrum disorders stopped smoking traditional cigarettes after 12 weeks of using Juul products. These findings are significant because smoking prevalence among people with schizophrenia is at 60 to 90 percent.
“Smoking is the primary cause of the 15-25 years mortality gap between users of mental health services and the general population,” said Riccardo Polosa, one of the lead researchers. “This study demonstrates that switching to high-strength nicotine e-cigarettes is a feasible, highly effective smoking cessation method for smokers who have schizophrenia. And it improves their quality of life too!”
The study—conducted in collaboration with the University of Stirling, City University of New York and Weill Medical College of Cornell University, and published in the journal Nicotine & Tobacco Research—enrolled 40 adult smokers with schizophrenia spectrum disorders, as reported on filtermag.org.
Aged between 22 and 65, the participants all said at the outset that they did not intend to quit or reduce their smoking. They were each given a free starter kit—containing one Juul device with a 5 percent nicotine tobacco flavored pod and a charger. In addition, participants were asked to maintain a daily diary to record product use, number of tobacco cigarettes smoked and any adverse side effects.
Among the study’s key findings:
Researchers observed [either] an overall, sustained 50 percent reduction in smoking or complete smoking abstinence in 92.5 percent of participants at the end of 12 weeks.
Researchers observed an overall 75 percent reduction in median daily cigarette consumption, from 25 to six, by the end of the 12 weeks.
After six months, 35 percent of participants had completely stopped smoking conventional tobacco cigarettes, while continuing to use e-cigarettes.
After six months, 57.5 percent of participants reduced their cigarette usage by over 50 percent.
Participants’ mean blood pressure, heart rate and weight measurably decreased between the start of the study and the 12-week follow up.
Positive and negative symptoms of schizophrenia were not significantly different after using e-cigarettes throughout the duration of the study.
At the end of the study 61.9 percent of participants reported feeling more awake, less irritable, and experiencing greater concentration and reduced hunger.
These findings are remarkable and should give hope to the international mental health community that has essentially given up on helping smokers with schizophrenia.
The power of vaping is that the enjoyable and comforting rituals remain, while the dangers of combustion are eliminated.
Joel Klein, a top executive at health insurer Oscar Health, has joined the board of directors of Juul Labs, one of the largest e-cigarette companies in the world.
Joel Klein, Credit: NYT
Klein is the chief policy and strategy officer at Oscar, which went public earlier this month in an IPO that valued the company at $8.6 billion, according to Business Insider. He previously spent eight years as the chancellor of New York City public schools under former Mayor Michael Bloomberg. Politico first reported Klein’s appointment.
“I believe the company must continue to play a critical role in reducing the devastating harm caused by smoking,” Klein said in a statement emailed to Insider. “To accomplish that paramount goal, Juul Labs must, first and foremost, continue preventing underage use of its products.
The Altria Group Inc. asked the U.S. Food and Drug Administration (FDA) for its help in convincing Americans that nicotine isn’t linked to cancer. In a letter to the regulatory agency, the maker of IQOS and Juul products asked for the FDA to assist in combatting misperceptions about nicotine as part of a proposed $100 million advertising campaign to reduce the harm caused by tobacco.
According to a letter seen by Bloomberg, Altria states that nearly three-fourths of U.S. adults incorrectly believe nicotine causes cancer, citing government research. Clearing up the drug’s health risks will be key to the agency reducing smoking combustible cigarettes because it will help convince cigarette users to switch to noncombustible options for nicotine, the company said.
While there are at least 60 well-established carcinogens in cigarette smoke, it’s been known for years that nicotine isn’t the direct cause of many of smoking’s ills. The drug has even been touted as a way to ease tension and sharpen the mind. But nicotine is the ingredient that addicts people to tobacco products, and it has risks, according to the National Institute on Drug Abuse, a government agency.
The FDA “should commit resources and expertise to correct the deeply entrenched public misperceptions regarding the health risks of nicotine,” Paige Magness, Altria’s senior vice president of regulatory affairs, said in the letter dated Feb. 25. Such a campaign would help the agency by getting more smokers to use noncombustible offerings that “may present lower health risk,” according to the letter.
The FDA declined to comment, according to Bloomberg.
Juul Labs announced findings from its science and research program at the 2021 Annual Meeting of the Society for Research on Nicotine & Tobacco (SRNT), which was held virtually. The studies presented covered a wide range of topics that contribute to the growing body of scientific evidence on ENDS products, including information about their harm reduction potential as well as rates of complete switching to ENDS among adult smokers.
To better understand patterns of tobacco product use among adult smokers, Juul Labs has developed an extensive behavioral research program that includes measurements of complete switching from combustible cigarettes to the Juul System among adult smokers. Among the data presented at SRNT are the results of a longitudinal study which found that more than 50 percent of adult smokers who purchased the Juul System reported complete switching at a 12-month follow-up assessment. Complete switching was defined as no cigarette smoking in the past 30 days.
Another new study presented this week examined trends in dual use of the Juul System and cigarettes among adult smokers who recently purchased Juul products, as well as any changes in cigarette consumption among these dual-users. While dual use of Juul products and cigarettes was initially high, it declined over time, and most adult smokers who began by dual-using ultimately switched completely away from cigarettes 12 months after initial purchase. Additionally, over 60 percent of dual-users at 12 months substantially reduced their average daily cigarette consumption. Researchers concluded that dual use is often a transitional stage characterized by reductions in cigarette consumption followed by complete switching away from cigarettes.
Juul Labs is seeking out retailers selling illegal counterfeit and compatible Juul pods and devices.
Juul Labs announced today that it recently initiated an enforcement campaign in South Florida to identify retailers trafficking counterfeit and other illicit vapor products. A press release states that the company obtained intelligence on upstream suppliers and took expansive enforcement action to address a growing black market.
“We need to be a responsible and trusted steward of vapor products,” said Adrian Punderson, vice president of Brand Protection at Juul Labs. “As such, it is our obligation to support enforcement against illicit and illegal products as we strive to reset the vapor category and earn a license to operate in society.”
Juul Labs’ Brand Protection Team conducted an investigation of 917 retailers in Miami-Dade County and Broward County [Florida], representing a major urban area that comprises various classes of retailers, including convenience stores and specialty vape shops, the release states. “These South Florida counties also are in close proximity to a U.S. port-of-entry and international-mailing facility — known entry points for the importation of illicit products.”
With the support of a third-party compliance auditor, Juul Labs conducted product surveillance and obtained samples from the retailers. The surveillance identified 30 retail outlets (3.3 percent of all surveilled outlets), as selling illicit counterfeit, diverted or unauthorized Juul-compatible products.
“Unauthorized Juul-compatible products are designed and marketed to be used with authentic Juul products without the company’s authorization. Counterfeit and compatible products violate intellectual-property rights and may raise additional health and safety risks given their untested ingredients and lack of manufacturing and quality controls and unsanitary conditions in which they are produced,” the release states. “Illicit vapor products actively undermine underage-prevention measures given their ease of access.”
Of the 30 outlets in South Florida selling illicit products, 6 outlets sold counterfeit Juul Pods, primarily offered in illegally marketed flavors, while 1 sold counterfeit Juul devices, 10 outlets sold diverted Juul Pods, primarily diverted from Canadian and Russian markets, and 13 outlets sold illegal and unauthorized compatible pods, with the majority of these compatible brands subject to International Trade Commission exclusion orders.
“Insights into these illicit activities will inform broad enforcement actions against these violating retailers, including cease-and-desist letters, training and education, and litigation as needed. But these actions are just a starting point: The Brand Protection Team will collect additional records and information from the violating retailers to identify upstream suppliers and sources of the illicit products,” the release states. “This will result in further enforcement action to disrupt the illicit trade of black market vapor products that are impacting local communities. Juul Labs will deliver these findings to law enforcement authorities and support their efforts to bring legal action.”
