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Ex-FDA Chief: Juul Created Teen Vaping Epidemic

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Ex-FDA Chief: Juul Created Teen Vaping Epidemic

Just minutes after vaping company Juul announced Wednesday that its CEO Kevin Burns will step down, former FDA Commissioner Dr. Scott Gottlieb told CNBC the company was responsible for "creating this teen epidemic" of widespread vape usage.

What Happened

Juul will replace Burns with former Altria Group Inc (NYSE: MO) executive K.C. Crosthwaite, according to CNBC.

The new executive will undertake a "broad review" of Juul's practices and policies to "ensure alignment with its aim of responsible leadership within the industry."

Juul also said it will no longer oversee broadcast, print and digital advertising in the U.S. and will not lobby the U.S. government on its policy move to ban flavored e-cigarettes from the market.

Why It's Important

The FDA explored in a survey what percentage of teens not only vape but use a Juul product, Gottlieb said on CNBC's "Squawk Box." The FDA likely already has the survey results and "[knows] how many kids are using Juul."

Juul does have a place in the broader smoking segment as an alternative to smoking among adults, Gottlieb said.

While Juul's products likely cause some form of chronic lung injury, the industry standard is to compare its impact on health versus tobacco, he said. 

"If they can legitimately help a currently addicted adult smoker fully quit combustible tobacco, even if they do cause some long-term lung injury, it's probably going to be less lung injury than from smoking." 

What's Next

The problem for Juul is that demonstrating its superiority versus tobacco would be an expensive study to undertake, Gottlieb said.

Any company that decides to take this path could end up with a monopoly while other vaping products are pulled off the market, he said. 

Separately, The New York Post reported that several Juul investors are looking to sell their stakes at prices that value Juul at $25 billion, or $175 a share.

That’s a 35% fall from a December deal in which Altria valued Juul at $38 billion, or $270 a share, the Post said. 

Benzinga has contacted Juul for a response.

Earlier today it was announced that Altria and Philip Morris International Inc. (NYSE: PM) ended merger discussions.

Altria shares were down 1.6% at the time of publication Wednesday, while Philip Morris shares were up 6.37%. 

Related Links:

FDA Warns Juul On Marketing To Youth

Tobacco Stocks React As FDA Investigates Reports Of Seizures After Vaping

Tanzeel Akhtar contributed to this report. 

Photo courtesy of Juul. 

Posted-In: CNBC JUUL Scott Gottlieb Squawk Box The New York PostNews FDA Media Best of Benzinga

 

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