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Juul Settles $438.5 Million Multistate Youth Vaping Investigation

Juul Labs, fighting for its survival in the United States, tentatively agreed Tuesday to pay $438.5 million to settle an investigation by nearly three dozen states into sales and marketing practices they say sparked the vaping crisis among Americans. the country’s teenagers.

The company said it did not acknowledge any wrongdoing in the deal but was trying to “work out past problems” while awaiting a decision from the Food and Drug Administration on whether it would be allowed to continue selling its products. Juul has been trying to reposition itself as a seller of vaping products that could help adults quit traditional cigarettes, in an effort to rehabilitate its tarnished reputation and improve its diminished market value.

The tentative agreement prohibits the company from marketing to youth, funding education in schools, and misrepresenting the level of nicotine in its products. But Juul had already discontinued various marketing practices and pulled many of its flavored pods that appealed to teens, under public pressure from lawmakers, parents and health experts a few years ago, when the vaping crisis was raging.

“We think this will go a long way toward stemming the flow of youth vaping,” Connecticut Attorney General William Tong said at a news conference Tuesday. “We are under no illusions and cannot claim that it will stop youth vaping. It is still an epidemic. It’s still a big problem. But essentially we’ve taken a big chunk of what was once a market leader.”

The multistate investigation found that the company lured young people by hiring young models, using social media to court teens and giving out free samples, he said. He added that the investigation revealed that the company had a “porous” age verification system for its products and that 45 percent of its Twitter followers were between the ages of 13 and 17.

Jason Miyares, the Virginia attorney general, noted in a statements that the company’s previous strategy of selling flavors like mango and crème brûlée appealed to young people as did its device’s sleek design that was easy to hide. One of the terms of the agreement prohibited the company from depicting anyone under the age of 35 in its marketing images, according to Miyares’ statement.

Juul said Tuesday that the settlement agreement was “aligned with our current business practices that we began to implement after our company-wide restart in the fall of 2019.”

“We remain focused on the future as we work to fulfill our mission to stop adult smokers from smoking cigarettes – the number one product. 1 preventable cause of death, while combating underage use,” the company statement said.

The settlement does not resolve all of the company’s legal battles. While Juul had previously settled lawsuits brought by the attorneys general of North Carolina, Washington, Louisiana and Arizona, nine similar cases remain. Major lawsuits filed by New York and California are among those still pending. And some 3,600 lawsuits from individuals, school districts and local governments have been consolidated into one action that is still making its way through a California court.

Juul continues to sell tobacco- and menthol-flavored pods and vaping products while the FDA reviews its application for permanent sales. The agency originally rejected the company’s request in June, saying Juul had not provided sufficient evidence that its products would benefit public health and citing “insufficient and conflicting” data from the company.

Juul received a temporary reprieve in court. He has since argued that he helped two million adult smokers quit traditional cigarettes, and has objected to the agency’s findings about the chemicals in its products. The FDA then relented on his denial and announced that it would conduct a further review of the “scientific problems” in the application.

States will vary in how they use the settlement funds, which will be paid out over six to 10 years. A spokeswoman for the Connecticut attorney general’s office said that part of it (more than $16 million) would go towards vaping and treatment for smoking cessation and nicotine addictions. Texas estimated it would receive nearly $43 million, and Virginia listed its share at $16.6 million.

Meredith Berkman, co-founder of Parents Against Vaping E-Cigarettes, said she was pleased to learn of the deal. She became involved in the group after Juul sent a representative to her ninth-grade son’s high school to speak at an assembly in 2018. Her son relayed that the representative had described the product as “totally safe.” “, a conversation Mrs. Berkman told during a congressional hearing in 2019.

Since then, he said the group had heard from hundreds of families who claimed their teenage children had become addicted to Juul vaping and other nicotine and marijuana devices. Some young people became seriously ill from vaping and others had to go to drug rehab to kick the nicotine habit.

“It was Juul that came on the scene and opened this terrible Pandora’s box,” Berkman said. “No amount of money can erase the harm caused by Juul’s targeting and marketing of teenagers whose use of the company’s hidden designer flavored products led many children to severe nicotine addiction and physical harm.” .

E-cigarette use among teens appears to have declined in recent years, though the coronavirus pandemic has sparked a new dynamic in the leading monitor of youth tobacco use, a survey conducted in schools by the Centers for Disease Control and Prevention. and Disease Prevention. In March, that survey showed that nearly 8 percent, or about two million students, reported using e-cigarettes in the past 30 days.

While Juul was once a youth favorite, the survey showed that candy and fruit-flavored Puff Bar vaporizers were most loved by youth, with Juul ranking fourth among students. Data from IRI, a market research firm, suggested the brand attracted more adult customers by closely competing with another brand, Vuse vapes, for the market-leader position, with around 30 percent of recent sales. .

Altria, which in December 2018 bought a 35 percent stake in Juul for $12.8 billion, said in a recent presentation to investors that the company’s stake was now valued at about $450 million, about the same amount Juul just agreed to pay to settle investigations from nearly three dozen states and Puerto Rico.

After receiving significant scrutiny for its prestige among teenagers, Juul lost considerable market share and value when it bowed to public pressure and stopped selling the flavors most appealing to young people.

Although the vaping market remains a small part of total sales of cigarettes and other inhaled products, the FDA has repeatedly fallen short in its efforts to control youth-friendly e-cigarettes that continue to appear in new colors and sweet flavors. After the agency tried to crack down on existing brands, companies and the market turned to synthetic nicotine in an attempt to evade regulation.

In March, Congress gave the FDA the authority to remove synthetic nicotine from the market. But the agency is moving methodically, examining about a million applications it received from makers of non-tobacco nicotine products in the spring. To some extent, he has to proceed carefully to ensure that his sentences are lifted In the court.

The agency also continue checking and approving some marketing authorization applications filed years ago for leading vapers that tend to be sold at gas stations and convenience stores. But he recently said that he did not expect to finish reviewing applications already submitted before next year.

Those participating in the agreement are: Alabama, Arkansas, Connecticut, Delaware, Georgia, Hawaii, Idaho, Indiana, Kansas, Kentucky, Maryland, Maine, Mississippi, Montana, North Dakota, Nebraska, New Hampshire, New Jersey, Nevada, Ohio , Oklahoma, Oregon, Puerto Rico, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Virginia, Vermont, Wisconsin, and Wyoming.


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