A salesman reaches for a Juul Labs device kit for a customer at Discount Cigarettes and Cigars store in San Francisco, California, on Wednesday, June 26, 2019. The city voted to ban sales of e-cigarettes, making it illegal to sell nicotine vaporizer products in stores or for online retailers to ship the goods to San Francisco addresses. (Photo: David Paul Morris/Bloomberg)
The future of one of the U.S.'s most lucrative businesses is up in the air as e-cigarette makers face an FDA review that could make or break the industry that has faced immense scrutiny over a teen vaping epidemic and vaping-related lung injuries.
By May 12, e-cigarette maker Juul and its peers must submit applications to the FDA in order to continue selling their products, Bloomberg reported.
According to Bloomberg, the FDA expects vaping companies to provide studies showing their products' health effects, the potential for products to help smokers quit, and evidence on how they appeal to children and nonsmokers.
'Re-earn trust'
At a U.S. House Energy & Commerce subcommittee hearing on Feb. 5, 2020, Juul CEO K.C. Crosthwaite testified that his company plans to submit findings from more than 100 toxicological, clinical and behavioral studies.
Before lawmakers, Crosthwaite also said his company is committed to "taking concrete action to re-earn trust" after "past actions have contributed" to the erosion of trust in Juul and the industry.
The upcoming FDA review is not out of the blue for Juul, Bloomberg says, as the company recently hired former FDA employees and researchers as it prepares to deliver its findings to the federal agency.
The review also comes despite the company's efforts to curb its appeal to younger generations, including the elimination of popular flavors and ceasing all social media. An FDA study in 2019 showed that it remained the most popular e-cigarette brand for U.S. middle-school and high-school students.
Just in December, Illinois Attorney General Kwame Raoul filed a lawsuit against Juul, alleging the company intentionally marketed products to minors, among other grievances.
"This lawsuit is part of a comprehensive approach to addressing a public health epidemic, particularly one impacting young people," Raoul said in a statement. "Juul has intentionally targeted minors and, after being criticized for its intentionally youthful marketing, marketed its product as a smoking cessation device — without having FDA approval to do so. This lawsuit is a step toward holding companies accountable, and I am committed to continuing to partner with advocates, lawmakers, and state and federal regulators to enact policies that protect minors from e-cigarettes and other addictive tobacco products."
If Juul fails to meet the FDA's standards during the review, it could be out of the business it once dominated. Ken Shea, Bloomberg Intelligence analyst, said in a research note that Juul's market share was down 70% in January 2020 over the year prior. He also emphasized the importance of the review. "This application is everything for [Juul]," he said, as companies that gain FDA authorization first will gain an advantage in a market that generated more than $6 billion in sales last year.
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