The multi-billion-dollar company Juul may be looking at a beautiful future after its $12.8 billion deal with big tobacco giant Altria. However, the U.S. Food and Drug Administration (FDA) sees this as a huge setback.
Following the accusation against unnamed e-cigarette makers last month in regards to, “backing away from commitments made to the FDA and the public” in order to decrease the use among teens, FDA Commissioner Scott Gottlieb is planning a cutthroat case to bring down the companies Juul and Altria, and more importantly the maker of Marlboro.
According to a report published Friday by The New York Times says Gottlieb will be preparing a meeting with both companies and a case, “that will criticize them for publicly pledging to remove nicotine flavor pods from store shelves, while secretly negotiating a financial partnership that seems to do the opposite.” Per the Times:
In the initial meeting held back in October with Dr. Gottlieb and Altria who had agreed to stop selling the pod devices until they received F.D.A. permission or address the growing youth problem. The meeting led to Howard A. Willard III, Altria’s chief executive, writing a letter to the F.D.A agreeing that the pod-based products are significantly adding to the increase in youth vaping.
Be that as it may, the new deal commits the giant tobacco to dramatically expand the reach of those types of products, by allowing Juul to have access to shelf space in 230,000 retail outlets where Marlboro products and other Altria Tobacco Products are sold.
Juul can still be found in 90,000 stores.
The report states that Gottlieb said in December how he plans on meeting with the company leaders of the e-cigarette manufacturers over teen vaping concerns. The meeting is still being prepared and will take place within the next few months. As stated by Times, Gottlieb told them that he is “reaching out to both companies to ask them to come in and explain to me why they seem to be deviating from the representation that they already made to the agency about steps they are taking to restrict their products in a way that will decrease access to kids.”
Initially, the deal gave Altria a 35 percent minority stake in Juul last month and pushed the value to around $38 billion, although the rise caused conflict within Juul’s employees. Many argue that it contradicted Juul’s mission statement.
CEO Kevin Burns released a statement in December backing up the companies script, saying that “made it very clear that any investment would need to meet demanding and specific criteria to ensure that they are committed to our mission.” They argue that this partnership will help it further the company’s alleged mission of getting adult smokers off of cigarettes.
Despite Burns efforts, Juul has come under intense blame for its part in contributing to what the FDA claim is a teen vaping epidemic. Juul has taken steps to counteract those allegations by pulling its flavored pods from stores and shutting down its popular social media accounts.
A few weeks before the new deal with Altria was made public, CEO Burns released a statement saying that his pod-based e-cigarette company“won’t be successful in our mission to serve adult smokers if we don’t narrow the on-ramp” of kids to nicotine.
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