The Food and Drug Administration will restrict sales of most flavored e-cigarettes to age-restricted stores and pursue bans on menthol cigarettes and flavored cigars as it tries to control what Commissioner Scott Gottlieb describes as an "astonishing" surge in teen e-cigarette use that is reversing years of progress in fighting youth tobacco addiction.
Gottlieb in a statement Thursday outlined a slew of policies and essentially threatened to pull products from the market if manufacturers do not follow them. He cited data from the Centers of Disease Control and Prevention's National Youth Tobacco Survey, expected to be released in its entirety later Thursday, showing that 3.6 million middle and high school students currently use e-cigarettes.
"These increases must stop," Gottlieb said in a statement. "And the bottom line is this: I will not allow a generation of children to become addicted to nicotine through e-cigarettes."
It could take weeks, if not months, for retailers to fully adjust to the flavored e-cigarette changes, Gottlieb told reporters Thursday. The FDA plans to advance rules on menthol cigarettes and flavored cigars next year, he added. He declined to give a time frame for when it could finalize a menthol ban but said the agency "should be able to move with some added efficiency."
In proposing new restrictions and regulations, Gottlieb breaks with President Donald Trump, who has repeatedly said his administration would work to rollback government oversight. Health and Human Services Secretary Alex Azar, in a statement, supported Gottlieb's efforts.
The announcement comes just over two months since Gottlieb ordered manufacturers to fix what he called "epidemic" levels of teens using e-cigarettes and specifically instructed five brands — Juul, British American Tobacco's Vuse, Altria's MarkTen, Imperial Brands' Blu E-cigs and Japan Tobacco's Logic — to submit plans detailing how they will prevent teens from using their products. He gave them 60 days, with the deadline passing on Sunday.
The FDA will require all types of flavored e-cigarettes, excluding menthol, to be sold by retailers that altogether prohibit people under the age of 18, the federal minimum age to buy tobacco products, or have a section of the store that bars minors. This policy effectively bans most flavored products from convenience stores and gas stations while permitting them in the roughly 10,000 tobacco and vape shops.
The agency will allow mint- and menthol-flavored e-cigarettes to continue to be sold at all retailers until it removes menthol cigarettes from the market. Officials worry that in removing menthol e-cigarettes from places where menthol cigarettes are sold, consumers might opt for conventional cigarettes. However, Gottlieb said the agency will reconsider the exemption if data show kids are using these products.
Anti-tobacco groups applauded the FDA taking some action but said it didn't go far enough. Truth Initiative CEO Robin Koval told CNBC she urges the agency to ban flavored e-cigarettes outright and, in the meantime, include mint in the retail restrictions.
E-cigarette manufacturers that wish to sell flavored products more broadly in the future must first submit the products to the FDA to review and authorize. The FDA will require products that are found illegally being sold in stores to undergo review and would be pulled from the market until the agency completes the application process and clears it, which it may not. In the process, known as a premarket tobacco application, products must prove they deliver a net public health benefit.
All e-cigarettes currently on the market will eventually go through this process. Products that were on the market before Aug. 8, 2016, were supposed to start undergoing review this year until Gottlieb extended the deadline until Aug. 8, 2022, so manufacturers would have more time to file complete applications.
Companies who do not comply with new FDA-mandated age verification guidelines for online sales or are marketed to children, including by using popular children's cartoons or names of kid-favorite products like brands of candy or soda, would lose this extension and be required to undergo review.
Gottlieb said the FDA will explore how to accelerate the process for new technologies that prove they can keep kids from using them. Fontem Ventures, a unit of Imperial Brands and maker of blu e-cigarettes, and Juul have both said they plan to test new connected devices outside of the U.S.
Some manufacturers have already started taking action on flavors. Altria said it will voluntarily remove its MarkTen pod-based products from the market and will stop selling all flavors except for menthol or tobacco in its "cig-a-like" products until the FDA reviews and clears them.
Juul, the clear e-cigarette market leader, on Tuesday stopped accepting retail orders for its mango, fruit, creme and cucumber pods from the more than 90,000 convenience stores, vape shops and other retailers that sell them, CEO Kevin Burns said Tuesday in a blog post on the company's website. Juul plans to resume sales to retailers that are legally allowed to sell flavored e-cigarettes and adopt the company's new age restrictions and verification system, though it's unclear when sales could resume.
In a statement Thursday, Juul said it is "committed" to working with the FDA and others to prevent minors from using e-cigarettes. Japan Tobacco International said it looks forward to ongoing discussions with the FDA "to further understand and support the development of these proposals."
The FDA will also advance rules to ban menthol cigarettes and flavored cigars, Gottlieb said Thursday.
In 2009, the FDA banned certain flavors in cigarettes, but menthol was excluded, as were other tobacco products. Critics have begged the agency to reverse these exemptions in the years since.
This spring, the FDA took the first step toward implementing a new rule on flavors in tobacco products. The comment period closed in July. On menthol specifically, the FDA started the process of issuing a rule in 2013, which may allow the agency to speed up a process that can take years to finalize and implement.
Gottlieb told reporters the FDA will likely take formal next steps sometime in 2019. He said he does not want to "pre-judge" the rule-making process or put a timeline on finalizing and implementing a rule on menthol cigarettes "other than to say that this isn't something we don't understand."
"All the past work we've done, all the information we have on it is going to inform our rule-making process," he said.
Anti-tobacco groups cheered the move, with Campaign for Tobacco-Free Kids President Matthew Myers in a statement saying, "if adopted, these two proposals will have a greater impact in reducing tobacco use by youth and the African-American community than any regulatory measure ever undertaken by the federal government."
More than half of youth smokers between the ages of 12 and 17 use menthol cigarettes, compared with less than one-third of adult smokers 35 and older, Gottlieb said. Among African-American youth, data show 7 out of 10 smoke menthol cigarettes, he said.
Menthol cigarettes represent 35 percent of total industry volume, Wells Fargo analyst Bonnie Herzog wrote Monday in a note to clients. A ban on menthol cigarettes could slice into British American Tobacco, Imperial Brands and Altria sales.
Shares of BAT and Imperial Brands fell about 2 percent Thursday following news of the FDA's plan, while Altria's stock dipped more than 1 percent. Tobacco companies are likely to fight a ban, with Altria in a statement Thursday saying such a move would be "an extreme measure not supported by the science and evidence."
Imperial Brands in a statement said it will be "fully engaged" in the process, while also noting any rule would need to be backed by "relevant science and other evidence." British American Tobacco said it shares the FDA's concerns around youth access to e-cigarettes but "the science does not support treating" menthol cigarettes "differently from other cigarettes."
More than 3.6 million middle and high school students reported being current e-cigarette users in 2018, according the CDC's National Youth Tobacco Survey.
The number of high school students who reported being current e-cigarette users, meaning they used the product within the past 30 days, increased 78 percent between 2017 and 2018. That equates to 3.05 million high school students, or 20.8 percent of this group. Among middle school students, current e-cigarette use increased 48 percent between 2017 and 2018, equaling 570,000, or 4.9 percent of middle school students.
"These data shock my conscience," Gottlieb said.
Of current high school e-cigarette users, 27.7 percent regularly used the product on 20 or more days in the past month, and 67.8 percent used flavored e-cigarettes, Gottlieb said, citing the survey data.
Researchers suggest the popularity of "certain types of e-cigarettes, such as JUUL" likely caused the surge in e-cigarette use.
"The markedly accelerating rate of e-cigarette use among U.S. youth within the past year is a cause for grave concern," CDC Director Robert Redfield said in a statement.
The spikes in e-cigarette use also cause overall tobacco product use to increase. Among high school students, 27.1 percent said they used any tobacco product, a 38 percent rise from the previous year. Among middle school students, 7.2 percent said they used one, a 29 percent year-over-year increase.