Friday, 21 Jun 2024

What's next for Juul after e-cigarette maker's latest settlements

Packages of Juul e-cigarettes displayed at a store. Photo: Mario Tama/Getty Images

Minnesota settled its lawsuit against Juul labs and the e-cigarette manufacturer's previously largest investor Altria as their trial was wrapping up in on Monday, the two parties announced.

The big picture: Juul has settled thousands of lawsuits — its biggest coming last week when it agreed to pay six states and the District of Columbia $462 million related to allegations that the vaping company targeted youth in its marketing. The Minnesota case was first to reach trial.

  • Juul noted in an emailed statement Friday that the company "suspended all mass marketing of our product in 2019" and that its appeal against the Food and Drug Administration's plan to take its e-cigarettes off the shelves in the U.S. market remains ongoing.

By the numbers: Juul has now settled cases with 48 states and territories, "providing over $1 billion to participating states to further combat underage use and develop cessation programs," per a statement from the e-cigarette maker announcing it's working with Minnesota to finalize the details of their agreement over the coming weeks.

  • "This is in addition to our global resolution of the U.S. private litigation that covers more than 5,000 cases brought by approximately 10,000 plaintiffs," the statement added.

Of note: Juul has "never admitted any wrongdoing," said Robert Jackler, a surgeon and Stanford professor whose research into the e-cigarette maker's marketing was used as a primary source in most of the U.S. litigation, in a phone interview Friday.

State of play: The maker of vaping devices and nicotine flavor pods exploded onto the market after launching in 2015 with sleek marketing campaigns and by 2018 it was raking in revenue of nearly $1 billion.

  • It's since lost market share to the British American Tobacco-owned Vuse as its legal woes mounted, the New York Times notes.
  • Juul announced last November it has secured enough new financing to avoid bankruptcy, but that it would have to lay off workers — reportedly some 400 employees, or roughly one-third of its global staff.
  • Then last month Marlboro cigarettes maker Altria, which had invested heavily in Juul, announced it had exchanged its remaining minority stake "for a non-exclusive, irrevocable global license to certain of Juul's heated tobacco intellectual property."

What they're saying: Juul said in its statement Monday that it's "focused on our path forward to maximize the value and impact of our product technology and scientific foundation," which "has transitioned" over 2 million adult smokers from "combustible cigarettes."

  • A spokesperson for the company said in an emailed statement Friday that the "marketing restrictions in the settlements are legal requirements with which we'll comply."
  • Juul proposed in its Premarket Tobacco Product Applications "a marketing plan narrowly tailored to adult smokers to reach our intended audience and limit underage exposure," which it "specifically stated" that it would "avoid broad marketing channels, like social media, unlike competitors in the marketplace."

Yes, but: Jackler and Michelle Jongenelis, an associate professor at the University of Melbourne whose study published in February examined the impacts of e-cigarettes on youth in Australia, expressed skepticism at Juul's pledge.

  • Jongenelis said in an emailed comment on Monday that the tobacco and vaping industries "have always found loopholes" in marketing restrictions and other regulations.
  • "If we really want to reduce the uptake and harms associated with e-cigarettes, we should be reducing the availability and accessibility of these products globally," she said.
  • Jackler said Juul "set out claiming they were trying to improve the lives of a billion smokers around the world and instead, they addicted a whole generation of non-smoking to nicotine."

Meanwhile, Juul's pledge not to market to youth doesn't really matter as the company already went viral on social media in its earlier campaigns and became a "fad amongst teenagers," according to Jackler.

  • "They had recruited an army of teenagers that basically became members of their marketing department," he said.
  • "Then you get peer-to-peer so-called 'electronic word of mouth' and you know, what's the most influential thing to a teenager? Recommended by another teenager."

What we're watching: "The fact that in late 2022 JUUL's lead investors, who also serve as corporate directors, were willing to make a sizable cash infusion to help pay for JUUL’s litigation payments indicates that this savvy group of wealthy individuals foresee a promising path forward for JUUL in the nicotine delivery marketplace," said Jackler in an email on Monday night.

  • "There can be little doubt that JUUL has been working on a business plan based on introducing novel nicotine delivery technologies, almost certainly ones which the company anticipates will circumvent its present regulatory limitations."

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