The Food and Drug Administration is set to ban Juul e-cigarettes from being sold in the United States, according to a report.
The FDA was expected to announce the stunning decision as soon as Wednesday, according to The Wall Street Journal.
A ban on the e-cig maker would have no impact on rivals Reynolds American, which produces Vuse, and NJOY, according to the Journal.
The agency had been investigating Juul for the past two years while the company sought approval to continue selling its nicotine pods.
Shares of Altria Group, the cigarette maker which owns a 35% stake in Juul, closed down by more than 9% Wednesday.
Juul landed in hot water some four years ago when its flavored e-cigarettes, which were touted at the time as a carcinogen-free and healthier alternative to traditional cigarettes, were being blamed for a surge in youth vaping.
The company tried to appease federal regulators by banning their sweet and fruit-flavored products.
Thousands of lawsuits have been filed in the US against the company, which was accused of targeting underage smokers with their flavored products.
Since its e-cigs and other similar vaping products came to market, scores of people have died and thousands have been hospitalized nationwide for various lung ailments that medical and health officials blame on vaping.
Health advocacy groups like the American Heart Association, the American Lung Association and the American Academy of Pediatrics have lobbied the FDA to bar Juul from selling its products.
Juul burst onto the scene shortly after its founding in 2015. The next year, it sold 2.2 million devices. In 2017, it sold 16.2 million devices.
By 2018, the company was valued at $15 billion. That same year, it had a market share of 75%.
In December 2018, Altria, one of the world’s largest cigarette manufacturers and the maker of popular brands including Marlboro, paid $12.8 billion for a 35% stake in Juul, which was generating an annual revenue of around $2 billion.
Since then, Juul has lost considerable market share as lawsuits have piled up and more Americans have been made aware of the dangers of vaping.
Last year, Juul agreed to pay $40 million to the state of North Carolina after its attorney general sued the e-cigarette maker over the exploding rates of teen vaping.
Several states have filed their own lawsuits against Juul. A group of 39 state attorneys general have been cooperatively investigating the company’s marketing and products since February 2020.
In October 2019, Altria wrote down $4.5 billion of the investment it made in Juul. The next year, Altria slashed Juul’s valuation to $10 billion.
By March of last year, the valuation was slashed to $4.3 billion. Earlier this year, it was cut again to $1.6 billion.
Last year, Juul reported a net loss of $259 million as well as an 11% decline in sales to $1.3 billion, according to the Journal.
Juul products are mostly sold in the US, though they are also available in Canada, the United Kingdom, Italy, France, and the Philippines.
The company’s removal from the US clears the way for Reynolds’s Vuse brand to dominate the marketplace.
It is unclear if the FDA plans to move against other e-cigarette brands.
The FDA is also expected to move aggressively against traditional cigarette makers.
The Biden administration on Tuesday said it wants to cap the amount of nicotine allowed in cigarettes as part of an effort to stem addiction and reduce smoking-related deaths.
The FDA plans to officially publish the proposed rule in May 2023, according to the Wall Street Journal, which first reported on the plans.
But the restriction likely would take years to go into effect.
The FDA would have to take public comment after issuing the proposed rule — and withstand expected backlash and potential lawsuits from cigarette makers, according to the Journal.
The FDA has backed slashing nicotine content for several years, with former Commissioner Scott Gottlieb taking the first steps toward a new rule during the Trump administration. But that effort stalled when Gottlieb left in 2019.
With Post wires