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Juul agrees to pay North Carolina $40 million to settle vaping accusations

E-cigarette company was accused of marketing its product to youth and fueling a vaping epidemic

An agreement between e-cigarette maker Juul and North Carolina imposes several marketing restrictions on the company, most of which it has been following voluntarily. (Samantha Maldonado/AP)
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E-cigarette company Juul agreed to pay North Carolina $40 million to settle allegations that the company aggressively marketed its products to young people, leading to addiction to high-nicotine vapes, Attorney General Josh Stein announced Monday.

North Carolina is the first state to reach a settlement with Juul for allegedly targeting youth through social media advertisements and other outlets, and fueling a sharp rise in youth vaping. Another 13 states and D.C. also have sued the e-cigarette company.

“For years, JUUL targeted young people, including teens, with its highly addictive e-cigarette,” Stein said in a statement. “It lit the spark and fanned the flames of a vaping epidemic among our children — one that you can see in any high school in North Carolina.”

The consent order also imposes several marketing restrictions, including barring the company from engaging in most social media advertising, having outdoor advertising near schools, and sponsoring sporting events and concerts. Juul has been voluntarily adhering to many of those restrictions, but the consent order gives them the force of law in North Carolina.

The agreement took on a national perspective when Stein urged the FDA to prohibit all non-tobacco flavors, including menthol, in e-cigarettes and to limit the level of nicotine in e-cigarette products, and to impose marketing restrictions to prevent youth appeal.

Juul has been at the center of the e-cigarette controversy since youth vaping began to increase sharply beginning in 2017, drawing the ire of the Food and Drug Administration and anti-tobacco advocates. In fall 2019, the company stopped selling flavored vaping pods except tobacco and menthol.

Under the settlement with North Carolina, Juul agreed not to sell sweet and fruity flavored e-cigarettes unless it was authorized to do so by the FDA.

Juul also denied wrongdoing and liability in Monday’s consent order.

In a statement, Juul spokesman Josh Raffel said the agreement “is consistent with our ongoing effort to reset our company and its relationship with our stakeholders, as we continue to combat underage usage and advance the opportunity for harm reduction for adult smokers.” He said the company looks forward to working with Stein and with other manufacturers on the development of possible “industry-wide marketing practices based on science and evidence.”

Stein said Juul will pay the $40 million over the next six years to the state, which will use the money to fund programs to help young people quit e-cigarettes and to underwrite research on e-cigarettes.

Stein’s investigation began in 2018. He sued the company in 2019 for allegedly targeting young people in designing, marketing and selling its e-cigarettes and for misrepresenting the potency and danger of nicotine in its products.

His office said most documents from the case will be made public by July of next year and maintained by a North Carolina public university to help with research efforts.

Youth vaping rates declined last year following a new federal ban on fruit-flavored and minty vapes and an increase to 21 in the legal age to buy tobacco products. But advocates say the rates are still far too high.

Now, Juul and other e-cigarette companies are awaiting word from the Food and Drug Administration about whether their products can remain on the market. The FDA is supposed to decide by early September, but it isn’t clear whether it will make that deadline.

Matthew L. Myers, president and chief executive of Campaign for Tobacco-Free Kids, praised the North Carolina settlement as a positive step but said it is “time for FDA to act.” Only the FDA, he said, “has the authority to prohibit the sale of the flavored and high-nicotine e-cigarettes that are fueling the youth e-cigarette epidemic.”

He said in a statement that allowing Juul to continue to sell flavored e-cigarettes would be an “abdication of the FDA’s responsibility.”

Myers was echoing what Stein said at a news conference, and what several Democrats told acting FDA commissioner Janet Woodcock at a House subcommittee hearing last week.

Woodcock declined at the hearing to commit the agency to a flavor ban, saying she could not “prejudge” the issue. The FDA is in the midst of an extensive review of 6.5 million applications from manufacturers of e-cigarettes, cigars and other tobacco products seeking to keep their wares on the market. Each formulation, flavor and strength of e-cigarette requires a separate application, including those made by thousands of vape shops across the United States.

The FDA, in evaluating a product, must use a public health standard. That means it will weigh, for example, the potential benefit of an item helping an adult stop smoking cigarettes vs. the risk that a young person will start using it.

The FDA has said it will prioritize applications from companies with the biggest market shares, suggesting that Juul is at the top of the list.

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