Company News

September 29, 2022

Today, Juul Labs Chief Regulatory Officer, Joe Murillo, delivered the keynote address at the 2022 Global Tobacco & Nicotine Forum (GTNF), where he discussed our fight for the future of tobacco harm reduction in the United States and the regulatory uncertainty that has created barriers to innovation for our category. He also walked through the real world evidence we’ve seen that make it clear that our mission is worth fighting for.

Read the full remarks below as prepared for delivery:

Good morning, everyone. I’m grateful to be here with you today. Thanks to Elise for organizing another excellent forum. And to her team for pulling it all together. I’m glad to be here to speak on the theme of innovation.

Two years ago, our company addressed this conference to share our perspective on the road ahead for tobacco harm reduction. A lot has happened in the last two years. And to be honest, despite signs of promise in some parts of the world, we have reason for great concern given what we are seeing here in the U.S.

As you may have heard, we had quite the summer. The FDA issued a Marketing Denial Order, or MDO, which rejected our applications to sell JUUL products in the United States. The MDO was not based on a fair and complete review of the science in our PMTAs. Our PMTAs included over 125-thousand pages of data. They included information and analyses from over 110 scientific studies. These studies cut across nonclinical, clinical and behavioral research programs. We assessed our products relative to combustible cigarettes, relative to IQOS, and relative to other marketed ENDS products. It seems as though FDA overlooked at least 6-thousand pages of these data. All of the evidence we provided, taken together, demonstrates that the marketing of the JUUL System is appropriate for the protection of public health.

Now, we are in a fight for our company’s future. We fight for the over 2-million adults who have switched from combustible cigarettes using our products. And we fight for the 31-million adults who smoke in this country, and who have yet to find an alternative that suits them.

So where are we now? On July 5th, after we filed our brief in court, FDA unilaterally stayed its own denial order. The Agency announced it would review its decision after determining that, quote “there are scientific issues unique to this application that warrant additional review” unquote.

And meanwhile we continue to fight. Alongside the Agency’s internal review, we submitted our own administrative appeal to FDA. In this appeal, we demonstrate how the Agency’s denial of our applications was substantively and procedurally flawed. We requested, among other relief, that FDA rescind its denial and put our applications back into substantive review.

Throughout this process, JUUL products will remain on the U.S. market. We are confident we can address any further questions the Agency may have. We will continue to fight for the millions of adults who use our products. They deserve a complete review of the science and evidence we presented, as is required by law, without political interference.

The FDA prides itself on having the highest scientific integrity and public health focus – shielded from political interference. And yet the PMTA review process has seen no defense from troubling political interference. The FDA has been under immense — and unprecedented — political pressure to deny our applications and remove JUUL products from the U.S. market.

This political pressure cannot continue. FDA cannot allow the hostile conversation around tobacco harm reduction to seep into what should be a science- and evidence-based process. The very integrity of FDA’s review process has now been called into question. The FDA must guard against politics and improper attempts to influence their scientific decision-making. We need to find common ground — turn down the temperature of the rhetoric — and put people who smoke at the center.

One area of common ground – that I know everyone in this room shares – is concern around continued underage use. As we’ve made clear before – progress in tobacco harm reduction cannot come at the cost of high levels of underage use. Here, we have seen progress. As you can see, last year’s National Youth Tobacco Survey shows significant decline in underage use compared with just two years ago. And youth use of cigarettes continues to decline to historic lows, now below 2%. This decline in underage use can be attributed to many factors – including raising the minimum-purchasing age to 21, and measures to better restrict access and limit appeal.

But not all trends related to underage use are positive. Many of us are worried about the rise of disposable use among youth. In the United States, fly-by-night companies have flooded the market with illegally-marketed products. These products flout laws and regulations, and present a public health danger. While we’ve seen progress, regulators need to improve and prioritize effective enforcement. Working together, we can better combat underage use through restricting access and limiting appeal. Proactive steps work. TruAge, NACS, and other stakeholders are firmly committed to reducing and preventing underage access to tobacco products at retail. Scientists and policy experts have put forward thoughtful solutions to preserve the harm reduction opportunity for adults, while also protecting youth.

The Institute of Medicine laid the groundwork for regulating potentially reduced risk products in its landmark Clearing the Smoke report in 2001. The pathway for innovative tobacco products was created by Congress in the Tobacco Control Act of 2009. And having accessible, appealing noncombustible products for adults who smoke was at the core of FDA’s Comprehensive Plan in 2017. Innovation and strategic, science-based regulation can and should go hand in hand.

But we are not seeing that. Regulatory uncertainty creates immense barriers to innovation for reduced risk products. This uncertainty diminishes confidence in the products themselves and the category as a whole. And it has a chilling effect on investment in further innovation.

So how are noncombustible products faring? We’ve seen very limited progress in bringing alternatives to the U.S. market through premarket review. We need better efficiency and predictability around what’s required to support product applications. And we need transparency in how applications are being reviewed and decided. To be crystal clear. This uncertainty prolongs cigarette use. Despite challenges for alternatives like JUUL with the PMTA process, new combustible cigarettes continue to receive authorization via substantial equivalence — and even MRTPA — pathways.

This is a problem. 13 years after passage of the Tobacco Control Act, cigarettes remain far and away the most-used tobacco product in the U.S. – making up over 75% of the market.

Let’s take a closer look specifically at the ENDS market in the United States. Less than 3% of the total, tracked ENDS market is authorized under FDA’s PMTA process. This is essentially a rounding error. These data show us that the 23 ENDS products authorized by FDA have been tried — and largely rejected — by adult smokers. And the rest of the market? The vast majority of ENDS products fall into one of three precarious buckets: One, those being sold illegally. This includes companies that have not submitted PMTAs. Two, those awaiting a marketing decision from FDA after years of review. Or three, those stuck in a highly opaque administrative process. One that’s subject to shifting requirements and unpredictable timelines.

Innovative products that are specifically designed to advance public health have a steep road ahead in the U.S. This is alarming. We have the technology to accelerate the displacement of combustible use. But a slow and uncertain path to market is a significant obstacle.

The environment in the U.S. is in stark contrast to what we see in other markets, such as the U.K. Last autumn in the U.K., Juul Labs introduced JUUL2, a redesigned new product platform. JUUL2 is now available in limited markets, and the early results are really quite promising. The JUUL2 platform includes cutting edge technology. It is designed to deliver a more consistent vapor experience with improved nicotine delivery to satisfy adult smokers. JUUL2’s precise temperature control minimizes the production of toxicants. And the platform can help address underage use through our PodID technology. We’ve also developed a mobile app that can be used for age verification and locking the device when it’s out of range of a user’s phone. The app has other features that enhance the experience for JUUL2 users as they switch away from cigarettes.

We’re confident that JUUL2 delivers a better experience for adult smokers than products currently available. Which should result in increased switching from combustible cigarettes. The opportunity to realize harm reduction is only increasing as product innovation continues. But innovative products face a steep and opaque path.

Nevertheless, there is reason to be cautiously optimistic. Data continue to confirm that adult smokers who switch to ENDS products substantially reduce their exposure to harmful chemicals. As importantly, adult smokers are actually using and completely switching to these products.

Several lines of evidence are converging and show the broader real-world impact of ENDS products for adult smokers: First, US market data show accelerated declines in cigarette sales following the growth of ENDS. Second, population-level data show adult smokers transitioning and completely switching from cigarettes to ENDS. Third, behavioral and economic data show ENDS as substitutes for cigarettes. And fourth, population models show ENDS accelerating the decline of cigarette smoking — resulting in a net-population benefit.

Now, let’s take a look at some JUUL-specific data. Our initial behavioral, longitudinal research showed that nearly all — over 90% — of JUUL users were current or former smokers. About half of JUUL purchasers completely switched from combustible cigarettes within twelve months. The other half did not switch completely. But more than three-quarters of them cut their cigarette consumption in half. We now have data over a twenty-four month period, which show sustained switching. Fifty-eight percent of JUUL purchasers completely switched away from combustible cigarettes over this two-year period. This represents meaningful progress.

The public-health benefit of displacing cigarettes with noncombustible alternatives is not just a hypothesis. It is being realized in real-time and can be accelerated under the right policy conditions and regulatory frameworks. Let me walk you through this slide – an analysis of IRI data by Dr. Selya and colleagues. They looked at predictions for cigarette sales made before the growth of ENDS in the U.S. market. Now take a look at that vertical line in 2017. Where market predictions pre-ENDS adoption — and the market reality over the early years of actual ENDS adoption in the U.S. — diverge. This analysis found that cigarette sales were 16% lower than what was otherwise expected in that pre-ENDS environment. The data suggest that ENDS sales are displacing cigarette sales.

So, we can see a path emerging. A path to end the combustible cigarette once and for all. Unfortunately, that path remains blocked by a political and regulatory environment that inhibits meaningful progress.

To my colleagues here from other manufacturers — I know the uncertain future of this category makes planning and investing challenging. Your businesses, employees, customers, investors, and boards seek more clarity about the future. Trust me, I get it. As an industry, we have often grappled with longer-term planning amid near-term pressure. But I think most of us in this room appreciate that combustible cigarettes will one day be obsolete. Undoubtedly, that is our company’s goal. It’s not a question of whether, but of when.

Limiting the appeal of cigarettes, reducing initiation, and increasing cessation have been a focus for years. And for good reason. As an industry, we can accelerate this public health goal through product innovation and evidence-based policy development. But the viability of the marketplace for noncombustible products is at stake — especially for those companies that don’t sell cigarettes.

We at Juul Labs will continue to develop products that meet the needs and preferences of adult smokers. We will put science at the forefront and be responsible stewards throughout the product life cycle. We will continue to tailor our marketing to focus on switching adult tobacco consumers, and avoid advertising to any other audiences. And we will advocate for responsible policies that favor noncombustible alternatives over combustible products.

But what else can we do as an industry? How can we advance risk-proportionate regulatory frameworks? How can we find common ground to advance harm-reduction across stakeholders? These are existential questions that require deep reflection, and the courage to make near-term sacrifices in pursuit of longer-term predictability. And, most importantly, a future without combustible cigarettes.

In closing, although I am disappointed with where we are, I genuinely believe we can realize an endgame for combustible cigarettes. Society cannot allow the death and disease associated with smoking to continue indefinitely. But the barriers I’ve spoken about threaten the incremental progress we’ve made. Absent a renewed and fundamental commitment to the very concept of harm reduction, we will lose this opportunity.

Thank you.