$439 million settlement shows Big Tobacco sees riches still in vaping

juullogo1-300x142Parents, educators, politicians, federal regulators, and advocates for Americans’ better health all should pause and consider the prime takeaways from a company’s willingness to strike a $439 million settlement with three dozen states figuratively shutting a barn door long after the nag has bolted.

Hint: Big Tobacco is relentless in its efforts to addict regular folks to products proven to destroy their health — and the financial payoff for doing so continues to be so potentially lucrative that most of us can hardly imagine.

Let’s back up just a bit for the basic facts: Juul, a San Francisco-based firm that federal officials have blamed for almost single-handedly creating the e-cigarette and vaping fad in recent years, reached a deal with 33 states and a U.S. territory to pay almost half a billion dollars over the way it marketed its products to teenagers and young adults.

The federal Food and Drug Administration, in the previous presidential administration, opened the door to the firm by pausing an Obama-era plan to crack down on then-nascent electronic or smokeless cigarettes, arguing that experts needed time, instead, to consider yet again the role that addictive nicotine plays in the nasty, unhealthy habit of tobacco use.

During this regulatory pause, Juul struck, selling a sleek, small e-cigarette that looked like a snappy computer accessory. The company also pushed all bounds by marketing the practice of vaping and e-cigarettes to young consumers (even early teens), tapping social media and the profound power of imagery. Juul captured the youth market by showing youthful consumers snazzy images of hot, trendy young vapers in fashionable settings.

To the consternation of grownups from coast to coast, vaping became the hip thing to do, and Juul rode the wave to big growth and huge profits — all while denying that it was targeting the young and while pursued by increasingly furious and concerned regulators, parents, and health experts.

That’s because a growing body of rigorous research started to show that vaping — promoted at first as an alternative to cancer-causing cigarette smoking and a way to break tobacco smokers’ habits — had its own negatives. Makers like Juul, experts found, increased the likelihood of young people getting hooked on unhealthful habits by spiking the delivery of addictive nicotine in e-cigarette pods. Further, consumers at increasingly younger age were starting to vape, as makers pushed sweet and candy flavorings.

The federal Food and Drug Administration, in a series of fast escalating steps, sought to crack down on a fad that the agency could not keep pace with, as makers, especially with their advertising and marketing, always seemed several steps ahead. The FDA banned sales of vaping flavors and ordered vendors to better oversee sales of vaping products, especially e-cigarettes. The situation worsened when dozens of young people were hospitalized with lung injuries tied to vaping and e-cigarettes, and eventually linked to illicit products used to vape.

Federal regulators also told makers of e-cigarettes and vaping products that they had a limited time to submit scientific evidence of the health benefits of their products — or see them banned eventually. The FDA recently has started to enforce this aspect of its vaping crackdown, at one point banning Juul — a onetime market leader — from continuing to sell its wares. Juul appealed the ban through the courts and has won a stay.

The company says that voluminous materials it has submitted show the usefulness of its products, and it has tried to clear away at huge cost various lawsuits filed against it, notably for its marketing and advertising to minors. The latest settlement is part of the company’s campaign to prove to the FDA that Juul should be allowed to keep operating, the Washington Post reported:

“The settlement requires Juul to refrain from marketing to youths in a number of ways, including advertising in public transit or on billboards, paying influencers, or depicting anyone under 35 in advertisements. Connecticut and Texas, which led the investigation, will receive $16.2 million and $42.8 million, respectively. The settlement leaves many questions unanswered, said Carl Tobias, professor of law at the University of Richmond School of Law. ‘Is it the right amount of money? Is this enough to get help to the people who were hurt?’ he said, adding that it’s unclear whether the settlement will be enough to deter bad behavior. Tobias said Juul isn’t the same company it was years ago, thanks to increased scrutiny on the vape industry as more has become known about vaping’s effects on the body. ‘I don’t think [Juul] is as troubling now,’ he said, referring to the company’s marketing that appeared to be targeting young demographics. ‘But the company made a lot of money off those products. … More could’ve been done to prevent injuries that didn’t need to arise.’”

Juul, since its launch, entered into a money-sucking deal with a major partner in Altria, one of the world’s leading tobacco cigarette makers and a company that hoped to diversify its product line. With federal regulators targeting Juul, the company struggled and fell in its once top standing in its industry, even as young folks’ vaping practices shifted, too, the New York Times reported:

“E-cigarette use among teenagers appears to have fallen in recent years, though the coronavirus pandemic had thrown new dynamics at the leading monitor of youth tobacco use, a survey conducted in schools by the Centers for Disease Control and Prevention. In March, that survey showed that nearly 8%, or about two million students, reported using e-cigarettes within the past 30 days. While Juul was once the youth favorite, the survey showed that the candy- and fruit-flavored Puff Bar vapes were most liked by youth, with Juul coming in fourth among students. Data from IRI, a marketing research company, suggested that the brand attracted more adult customers by competing closely with another brand, Vuse vapes, for the market leader position, with about 30% of recent sales.”

While anti-smoking advocates look optimistically on the Juul settlement, arguing it will send hundreds of millions to communities to battle nicotine addiction, tobacco use, and to better inform consumers about the risks of vaping, two other things also are clear:

  • there’s still big money in this industry — and not as a more healthful alternative to burning tobacco cigarettes but as its own enriching market
  • and regulators are far from figuring how to exercise appropriate oversight over a risky health challenge for the young

Stat, the science and medical news site, recently reported this about the financial allure of vaping and e-cigarettes:

“Overall, e-cigarette sales increased six-fold, from $304.2 million in 2015 to $2.06 billion in 2018, according to a recent government study.”

As for oversight of an industry that the FDA has targeted for several years now, Stat found this:

“[Our] investigation examined the main way the FDA has tried to crack down on vape companies selling illegal products. It’s ordered more than 100 vape manufacturers to stop making more than 250 specific flavors and vapes — but we found scores of companies, across the country, that are defying the FDA’s demands. The reporting reveals, too, just how reluctant the FDA is to use its power to rein in bad actors. The agency has sweeping legal authorities to crack down on vape companies that ignore its bans, ranging from levying seven-figure fines to physically pulling products off shelves. But the FDA has never used those powers, according to its own data. In several cases, it’s even dropped cases against companies that it knows are still selling illegal products. The agency’s approach has been so conservative in certain cases that one legal expert compared it to a cop pulling someone over for running a red light while drunk — and then writing them a ticket for the traffic violation and sending them on their way.”

Stat also has published an investigation behind its paywall, showing further not only the enormous money that still bankrolls Big Tobacco but also how the industry, in particular the giant conglomerate Philip Morris, is investing and diversifying billions of dollars — buying up, for example, a firm that is a leader in  “cutting-edge inhalation technology and oral delivery expertise to treat everything from neurology to cardiovascular emergencies.”

The Big Tobacco incursion into health care — “peddling cures for its own poison,” as Stat headlines its investigation — has infuriated medical and patient advocacy groups. While the Stat investigation resides in a revenue-generating and closed area, the reporting on the controversy is easily accessible, for example, through Thorax, a specialty medical journal that is part of BMJ, the publication of the British Medical Association. The journal reported earlier this year:

“The uniquely lethal nature of the tobacco industry’s products, the industry’s environmental impact and its incompatibility with human rights make the takeover of Vectura, a pharmaceutical company focused on inhaler technology, by tobacco giant Philip Morris International (PMI), extremely unwelcome. The idea that a company which, based on its market share and the global death toll, kills more than a million people every year should be allowed to expand into the delivery of health care has been widely condemned, including by the British Thoracic Society, the European Respiratory Society, and the U.S. COPD Foundation, as well as the American Lung Association and American Thoracic Society who referred to the move as ‘reprehensible.’”

In my practice, I not only see the harms that patients suffer while seeking medical services, but also the clear benefits they may enjoy by staying healthy and far away from the U.S. health care system. It is, according to research conducted in pre-coronavirus pandemic times, fraught with medical errorpreventable hospital acquired illnesses and deaths, and misdiagnoses.

If you don’t smoke, please don’t start. If you smoke, talk to your doctor, and make the challenging effort to stop. There are other ways to do so without taking up vaping. No one argues it is good for you — just that it is less harmful and another possible way to quit smoking. That’s a dubious health argument, akin to asking whether it’s “better” to die in a car or plane crash. Neither, thank you. After many months of battling a killer pandemic, does the nation need anything that can worsen people’s respiratory health, especially as smoking has been shown to inflict major damage on the lungs, heart, and other parts of the body with cancer and other terrible diseases?

Patrick Malone & Associates, P.C. listed in Best Lawyers Rated by Super Lawyers Patrick A. Malone
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