(Bloomberg) -- Juul Labs Inc. was warned by U.S. health officials that it may have violated the law by making claims its e-cigarette devices are safe. The letter increases pressure on the richly valued company at the same time a mysterious lung ailment is raising new questions about the health effects of vaping.
The Food and Drug Administration sent Juul a warning letter on Monday that said the agency had determined that the company has marketed its products as less risky than cigarettes without gaining the agency’s approval. Juul has pitched its sleek, USB-like vaping device as a way for adults to quit smoking -- though the FDA said that the company also targeted students.
The reprimand could foreshadow a tough road for Juul’s efforts to gain FDA clearance to continue selling its products, which all e-cigarette makers must do starting next year. The industry is under mounting scrutiny due to a surge in teenage vaping and recent deaths that public-health officials have connected to inhaling vapor from e-cigarettes.
The FDA also sent Juul a letter requesting documents related to the company’s advertising and promotional efforts, given that its vape devices “continue to represent a significant proportion of the overall use” of e-cigarettes by children. Juul halted much of its social-media marketing last year after criticism that its stylish ads on Instagram and other apps targeted younger users.
“Juul has ignored the law, and, very concerningly, has made some of these statements in school to our nation’s youth,” said Acting FDA Commissioner Ned Sharpless.
“We are reviewing the letters and will fully cooperate,” Ted Kwong, a Juul spokesman, said.
Federal and state health officials are investigating a number of mysterious deaths from illnesses that have been connected to use of vaping devices. The Centers for Disease Control and Prevention said on Friday it was investigating 450 cases of the ailment nationwide. Five people have died from the illness, the CDC says.
In addition, the FDA has been looking into whether e-cigarettes are linked to seizures after receiving initial reports from Juul users. The investigation has widened into 127 reports of seizures linked to various types of e-cigarettes.
Representative Raja Krishnamoorthi, an Illinois Democrat, wrote Sharpless last week urging the agency to look into the claims Juul has made, including some before his House Oversight and Reform subcommittee. During a subcommittee hearing in July, Krishnamoorthi’s staff revealed that a Juul representative had told students that the company’s device “was much safer than cigarettes” and called the products “totally safe.” The FDA highlighted those statements Monday.
The FDA told Juul that parts of its “Make the Switch” marketing campaign that encourages smokers to use its device convey that they’re safer than cigarettes. The agency asked Juul for any consumer-perception studies related to whether Juul’s representation implies the products are smoking-cessation devices. The FDA hasn’t approved any of the company’s products as smoking-cessation tools.
Last week, Juul spokesman Ted Kwong disputed that the marketing was violating FDA rules.
“Switching is not another word for cessation,” Kwong said. “They mean two very different things. Switching involves continuing to consume nicotine but from a different device, while cessation is about getting users to eliminate their nicotine consumption altogether. We are a switching product.”
Juul is one of the most highly valued private companies in the U.S. Last year, the maker of Marlboro cigarettes, Altria Group Inc., invested nearly $13 billion in Juul, giving it a valuation at the time of roughly $35 billion. Altria shares were little-changed in New York trading Monday, trading at $43.89 at 11:36 a.m.
(Updates with Juul comment in sixth paragraph.)
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