Tobacco Stocks Jump Following FDA Warning to E-Cig Companies

Tobacco Stocks Jump Following FDA Warning to E-Cig Companies

Despite this extensive plan, some of the unelected bureaucrats at the FDA would still like to ban flavored e-cigarette products. And it highlighted e-cigarettes' role as a way for adult smokers to transition off cigarettes.

"The action FDA threatened to "consider" using against the manufacturers of five e-cigarette brands - removing certain products that are clearly aimed at youth from the market - is the very authority the American Lung Association has urged the FDA to actively use, broadly". The agency also has issued more than 135 No-Tobacco-Sale Order Complaints, which can result in retailers being prohibited from selling tobacco products for specified time periods.

In raw numbers, that is 3.6 million students using tobacco previous year compared with 4.5 million in 2011.

In what the FDA is calling its "largest coordinated enforcement effort", the agency investigated stores and online businesses this summer after finding evidence that "e-cigarette use among young people has hit epidemic proportions".

The burgeoning popularity of e-cigarettes among young smokers has caused traditional cigarette industry players a great deal of trouble by eating into their market share.

FDA Commissioner Scott Gottlieb announced aggressive measures against any retailers who are selling e-cigarettes to minors and warned manufacturers of a potential ban on flavored e-cigarette liquids.

Shares of British American Tobacco, which owns the Vuse brand, closed up almost 6%, while shares of cigarette-maker Imperial Brands PLC, which owns Blu, rose more than 3%. And so the fear is that these things have become so popular that we might be addicting a whole new generation of kids to nicotine. If producers are no longer keen to function the overview, he said, the FDA will function it for them, with acceptable consequences.

However, there is little consensus about how to regulate the industry.

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"We need to go further", said Michael Bloomberg, the billionaire philanthropist who has worked for years to reduce tobacco use.

The agency will also be increasing federal enforcement actions on e-cig sales to minors in convenience stores and other retail sites, Gottlieb said, and would look closely at a practice called "straw purchases", in which adults visit web-based stores and buy in bulk to resell to minors. Gottlieb would be on much firmer ethical ground if he took the opposite position: In trying to stop teenagers from vaping, we won't deny adult smokers access to products that could save their lives. That's why combating youth use of nicotine-containing products is a core priority and the guiding principle behind the FDA's Youth Tobacco Prevention Plan.

If the FDA isn't happy with the responses, it will reconsider whether it will continue to allow those e-cigarette products on the market before the companies file applications with the FDA.

The steps announced Wednesday are just the initial elements of these new efforts, Gottlieb said.

Under Wednesday's announcement, the five largest e-cigarette manufacturers will have 60 days to produce plans to reverse underage use of their products.

The FDA also requested Juul and four other manufacturers provide plans to mitigate youth sales within 60 days or face potential criminal or civil action.

Gottlieb said the FDA is rethinking the extension given the explosive growth of e-cigarette use among adolescents. Other big players are owned by big tobacco conglomerates; Camel parent British American Tobacco makes Vuse e-cigarettes, and Marlboro parent Altria makes MarkTen e-cigarettes. A primary concern for health experts is that kids will become addicted to nicotine and graduate to traditional cigarettes, putting them at risk for lung cancer.

These levels of nicotine are highly addictive, particularly to the developing brains of children and teenagers.

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