It’s almost Shakespeare.
Juul, the vape company that took the US by storm five years ago — and was valued at $38 billion at its peak — is on the verge of being thrown out of the country, according to the WSJ. According to the outlet’s report today, the Food & Drug Administration could announce today that the San Francisco-based company can no longer sell its products in the United States
The “marketing denial order,” the WSJ writes, would follow a nearly two-year review of data provided by Juul, which in 2019 said it was suspending all print, broadcast, and digital advertising in the United States after parents across the country Her children were exposed to – and addicted to – Juul products.
The company also agreed to stop selling its sweet-flavored e-liquid pods, including fruit, cream, mango and cucumber flavors.
Since then, Juul — which sold a 35% stake in its business to tobacco giant Altria for $12.8 billion in 2018 — has spent millions of dollars lobbying the federal government in hopes of making its products with tobacco and menthol flavor on the US market.
According to a New York Times report last summer, Juul also submitted a 125,000-page application to the agency; Spent $40 million to settle just one lawsuit; and paid $51,000 to dedicate the entire May/June 2021 issue of the American Journal of Health Behavior to 11 company-funded studies designed to show that Juul products help smokers quit traditional cigarettes.
Juul, which has faced thousands of lawsuits until they were consolidated into a multi-district litigation overseen by a single federal judge, agreed in April to pay $22.5 million to settle a lawsuit brought by Washington state alleging that the company intentionally targeted teenagers with its products and misled users about the addictiveness of its products.
As reported at the time, under the terms of the settlement, Juul admitted no wrongdoing or liability and said it settled “for the sake of compromise” and to avoid further litigation (litigation that could impede hoped-for progress with the FDA). )
Apparently, all of that effort was underestimated and too late, even though the FDA appears to be allowing Juul’s biggest rivals, Reynolds American and NJOY Holdings, to continue selling their own tobacco-flavored e-cigarettes in the market.
Assuming its US days are over, the chapter is an incredible journey for the now seven-year-old company, which in its third year of existence had easily captured over 75% of the US vape market, thanks to the big one Part on the sleek design of its nicotine vaporizer.
In fact, in 2018 the company was reportedly on track to generate at least $1 billion in revenue and had the backing of well-funded investors including Tiger Global and Fidelity Investments, money it wanted to spend internationally, to attract the roughly billion smokers living outside of the US
The FDA, then headed by then-Commissioner Scott Gottlieb — who is also a doctor and VC — would scuttle those plans. Under Gottlieb’s watch, the FDA spoke religiously of the year-over-year use of vaping pens by high school students, as well as a smaller but alarming percentage of middle school-aged kids who had taken up vaping.
Juul initially pushed back the data. At an event hosted by that publisher in the fall of 2018 — the only public event that Juul co-founders and former Stanford design students Adam Bowen and James Monsees have performed together — the two were still bickering over the benefits of flavored Juuls Vaping Pods. They said they made it easier for smokers to switch to their product and “reduced harm.”
At the time, flavor removal “was certainly on the table,” Monsees said. But he continued, “We have seen no evidence that there is necessarily causality for flavors to be a lead-in for underage consumers.” Cigarettes have been a major problem for minors for some time. What we’re seeing internally is a much stronger correlation for adult consumers staying away from cigarettes, as they move further away from anything that reminds them of cigarettes in the first place, which includes the taste of cigarettes.”
It was another 13 months before Juul suspended sales of these flavored products.
Monsees and Bowen first presented their product design thesis The Future of Smoking at Stanford in 2004. Three years later, in 2007, the graduates founded Ploom, which made a cannabis vaporizer. The company later became Pax Labs, sold the rights to this Ploom product to an investor in the company (Japan Tobacco International) and began focusing on the Juul e-cigarette. In 2017, Juul Labs was spun off as a separate company.
Juul has been public about the health benefits of switching from combustible cigarettes to e-cigarettes from the start, but according to doctors and researchers, while vaping is less harmful than smoking, it is equally addictive and there are many unknowns.
For example, the data suggest links to chronic lung disease and asthma, as well as associations between dual use of e-cigarettes and smoking with cardiovascular disease, says Michael Blaha, MD, MPH, director of clinical research at Johns Hopkins Ciccarone Center for the Prevention of Heart Disease in an online explainer hosted by the medical center.
Should the FDA order Juul to withdraw its products from the U.S. market as expected, the company still has some options, the WSJ notes. It could “appeal to the FDA, challenge the decision in court, or file a revised application for its products.”
Meanwhile, it’s not clear how much success Juul has had overseas. Sales of Juul in China stopped just days after its launch in the country in 2019.
During the pandemic, Juul was also reportedly planning to significantly reduce its European presence, ceasing sales in Austria, Belgium, Portugal, France, and Spain, according to BuzzFeed News. As BuzzFeed noted at the time, Europe has stricter vape regulations than the US, including stricter nicotine limits.