Sales of Juul e-cigarettes were blocked by the US Food and Drug Administration on Thursday (Jun 23), in a major blow to the once high-flying firm whose products have been tied to a surge in teenage vaping.
The agency said the applications "lacked sufficient evidence" to show that the sale of the products would be appropriate for public health, following a nearly two-year-long review of data provided by the company.
Some of the findings raised concerns due to insufficient and conflicting data, including whether potentially harmful chemicals could leach out of the Juul pods, the FDA said.
"We respectfully disagree with the FDA's findings ... intend to seek a stay and are exploring all of our options under the FDA's regulations and the law, including appealing the decision and engaging with our regulator," said Joe Murillo, a chief regulatory officer at Juul.
The company said it had appropriately characterized the toxicological profile of its products and that the data met the statutory standard of being "appropriate for the protection of the public health".
Juul and other e-cigarette brands, including British American Tobacco's Vuse and Imperial Brands' Blu, had to meet a September 2020 deadline to file applications to the FDA showing the products provided a net benefit to public health.
The health regulator had to judge whether each product was effective in getting smokers to quit and, if so, whether the benefits to smokers outweighed the potential health damage to new e-cigarette users, including teenagers, who never smoked.
BAT's Vuse Solo was the first e-cigarette to get the agency's clearance in October.
"The agency has dedicated significant resources to review products from the companies that account for most of the US market. We recognise ... many have played a disproportionate role in the rise in youth vaping," FDA Commissioner Robert Califf said in a statement.
Teenage use of e-cigarettes surged with the rise in popularity of Juul in 2017 and 2018. Its use among high school students grew to 27.5 per cent in 2019 from 11.7 per cent in 2017, but fell to 11.3 per cent in 2021, a federal survey showed.
Juul did not provide evidence to show the products were up to its standards and that raised "significant questions", the FDA said but added it has so far not received clinical information to suggest an immediate hazard tied to the device or pods.
"Without the data needed to determine relevant health risks, the FDA is issuing these marketing denial orders," Michele Mital, acting director of the FDA's Center for Tobacco Products, said.
Shares of tobacco giant Altria Group Inc, which partly owns Juul, have lost about 7 per cent, or nearly US$6 billion in market value, since Wednesday when the Wall Street Journal first reported the FDA was preparing to order Juul's e-cigarettes off the market.
Juul had sought approval for its vaping device and tobacco and menthol-flavoured pods that had nicotine content of 5 per cent and 3 per cent.
E-cigarette makers have been selling products in the United States for years without being officially authorised by the FDA, as regulators repeatedly delayed deadlines for the companies to comply with federal guidelines.
Thursday's decision was cheered by public health groups, who had long warned that e-cigarettes were getting a new generation of teenagers hooked on nicotine after major strides in reducing youth cigarette use.
In 2020, the FDA banned all flavours except tobacco and menthol for cartridge-based e-cigarettes such as Juul. The company pulled all other flavours including mint and mango in late 2019.
The Biden administration has been looking at other ways to help people quit smoking in an effort to cut down on preventable cancer deaths. It said this week it plans to propose a rule establishing a maximum nicotine level in cigarettes and other finished tobacco products to make them less addictive.
The surprise decision was an indication of a more hawkish FDA, some analysts said, as it was expected that some Juul products would be approved, following the agency's clearance of several other e-cigarette products.
BAT overtook Juul as the leader of the US vaping market in April, according to data Nielsen provided to brokerage J P Morgan. Juul led the market in 2021, with a 38 per cent share of the US$11 billion retail sales market.
"The only opportunity for Juul to create value may be in international markets, but we expect other regulators to take a similar stance to the FDA in limiting the marketing of e-cigarettes to minors," Morningstar analyst Philip Gorham said.