Earlier this week the U.S. Court of Appeals for the D.C. Circuit upheld a lower court ruling that the FDA has the authority to regulate e-cigarettes as “tobacco products”. Stating that e-cigarettes are “indisputably highly addictive and pose health risks, especially to youth, that are not well understood”, the Court also upheld a ban on the free distribution of e-cigarette products.
Amid ongoing scrutiny from regulators and a growing number of lawsuits against JUUL, Massachusetts Governor Charlie Baker has signed into law legislation that bans the sale of flavored vaping and tobacco products and places a 75% excise tax on e-cigarettes, effective next June.
A recent study by researchers at Penn State University School of Medicine found blood nicotine levels for JUUL users were almost three times as high as most of the e-cigarette users previously studied. That, along with responses to questions about nicotine craving and anxiety before and after using JUUL, indicate a high addiction potential, according to the researchers. Based on information from a former JUUL sales and distribution executive, a Reuters article titled “JUUL disregarded early evidence it was hooking teens”, says that JUUL’s sales force emphasized JUUL’s addictive power to convince retailers to give shelf space to the product. A lengthy article in The New York Times entitled “How JUUL Hooked a Generation on Nicotine” was published late last month with new information about the company and its marketing approach.
The ongoing troubles at JUUL are having a financial impact, as holders of its stock adjust their valuations of the closely-held company. Bloomberg reports that Fidelity Investments has cut its valuation of the company to $16.4 billion, while Tiger Global Management is said to have cut its valuation to $19 billion in September. This is down from a valuation of $38 billion at the time Altria made its investment last December. Altria declined to comment other than to note that the company took a $4.5 billion charge in the third quarter as U.S. vaping volume came in lower than expected.
V.P. of Mass Torts Services, General Counsel
Deb is a lawyer with over 25 years of legal and business experience. As the leader of mass tort services at Verus, she oversees the support services provided to law firms involved in mass tort litigation, specifically in the areas of case management, claimant contact and medical record review. More