WASHINGTON -- Juul Labs Inc. will stop advertising its electronic cigarettes in the U.S. and replace its chief executive as mysterious breathing illnesses and an explosion in teen vaping have triggered efforts to crack down on the largely unregulated industry.
In another sign of the vaping fallout, Altria and Philip Morris International said Wednesday that they had ended merger talks.
The sudden developments underscore the concerns prompted by continued increases in underage e-cigarette use and growing alarm over a mysterious lung ailment believed to be linked to vaping that has stricken at least 530 people, nine of whom have died. Officials said Tuesday that they still don't know the cause.
No major e-cigarette company has been tied to the ailments, including Juul, which said it won't fight a proposal from President Donald Trump administration for a sweeping ban on e-cigarette flavors that can appeal to teens.
E-cigarettes have been largely unregulated since arriving in the U.S. in 2007. The Food and Drug Administration has set May as a deadline for manufacturers to submit their products for review.
Michigan, New York and Rhode Island banned vaping flavors this month, while Massachusetts said it will stop sales of all vaping products for four months, the first such step in the country.
"I think this rush to judgment is extraordinary, and we might be looking at the demise of vaping," said Kenneth Warner, professor emeritus at University of Michigan's school of public health.
Warner and some other experts believe vaping has the potential to dramatically reduce the deadly toll of traditional cigarettes among adult smokers. But he said Juul made "enormous mistakes" in its early advertising campaigns, which featured young models, bright colors and youth-oriented catchphrases.
Exempt from restrictions on traditional tobacco marketing, Juul until now has advertised its e-cigarettes in print, TV, radio and online.
But the Food and Drug Administration had criticized its "Make the Switch," campaign as an illegal effort to portray its e-cigarettes as safer than traditional cigarettes.
Juul said Wednesday that it would suspend all broadcast, print and digital advertising in the U.S., and refrain from lobbying the Trump administration on its guidance regarding proposed curbs on vaping products.
It's also replacing Chief Executive Officer Kevin Burns with a senior executive from Altria, the maker of Marlboro cigarettes that paid $13 billion for a 35% stake in Juul in December.
"I have long believed in a future where adult smokers overwhelmingly choose alternative products like Juul," new chief K.C. Crosthwaite said in a statement. "Unfortunately, today that future is at risk due to unacceptable levels of youth usage and eroding public confidence in our industry."
Altria and Philip Morris International split up in 2007 but announced in August that they might combine to form a behemoth to focus on e-cigarettes. On Wednesday, Altria's chief executive Howard Willard said in a statement that the companies could not reach agreement but would continue to work together to commercialize IQOS, a system that heats but doesn't burn tobacco, in the United States.
The growing controversy over Juul proved too intense for Philip Morris, leading the company to abandon the talks, which had begun in August, on concern about regulatory changes that are expected from the FDA, according to people familiar with the deal negotiations.
Health experts generally consider e-cigarettes less harmful than traditional cigarettes because they don't contain all the cancer-causing byproducts of burning tobacco. But there's virtually no long-term research on the health effects of the vapor produced when e-cigarettes heat a liquid with nicotine.
Health officials are investigating hundreds of recent cases of the lung illnesses. Many patients said they vaped tetrahydrocannabinol, marijuana's intoxicating chemical, with bootleg devices, but officials have not yet implicated any common product or ingredient.
Meanwhile, underage vaping has reached epidemic levels, health officials say. In a government survey, more than 1 in 4 high school students reported using e-cigarettes in the previous month despite federal law banning sales to those under 18.
At a hearing Wednesday held by a subcommittee of the House Energy and Commerce Committee, lawmakers demanded to know why the FDA had not taken action against vaping sooner. Rep. Joe Kennedy, D-Mass., called it a "massive regulatory failure."
"In retrospect, the agency should have acted sooner," conceded Acting FDA Commissioner Norman Sharpless, who replaced Commissioner Scott Gottlieb earlier this year. Sharpless said earlier data had suggested youth vaping was declining and noted the agency has issued thousands of warning letters and penalties involving underage sales in the past year and a half.
Vaping opponents met Juul's changes with skepticism.
"Juul's announcement today is aimed at repairing its image and protecting its profits, not at solving this crisis," said Matthew Myers, president of the Campaign for Tobacco-Free Kids. "Policymakers must stand up to Juul and protect our kids by banning flavored e-cigarettes."
Juul devices went on sale in 2015, and the company quickly propelled itself to the top of the market with a combination of high-nicotine pods, dessert and fruit flavors, and viral marketing. The San Francisco company now controls roughly 70% of the U.S. e-cigarette market.
In the last year, Juul tried to reposition itself as a brand for middle-age smokers looking to wean themselves off cigarettes. But the FDA warned the company this month that its product hasn't yet been approved to help smokers quit.
The company faces investigations from Congress, several federal agencies and state attorneys general.
Tim Hubbard of University of Notre Dame said Juul has "failed spectacularly" in managing the public perception of its e-cigarettes.
"Bringing in a traditional tobacco executive who knows how to market and manage government relationships with deadly products matches the firm's needs," Hubbard said in an email.
Information for this article was contributed by Matthew Perrone and Michelle Chapman of The Associated Press; by Laurie McGinley of The Washington Post; by Tiffany Kary, Ed Hammond and Timothy Annett of Bloomberg News; and by Sheila Kaplan, Michael J. de la Merced and Julie Creswell of The New York Times.
A Section on 09/26/2019