While regular folks will count their pennies and fret about affording gifts for loved ones during an inflation-plagued holiday season, plutocrats have given the hoi polloi a rare glimpse of the major loot they see in the business of peddling health-wrecking e-cigarettes and vaping.
The concerning disclosures are emerging as part of the financial struggles for the industry pioneer Juul to stave off fierce federal regulation, angry customers, and plummeting business to survive.
In its latest step, Juul — the high-tech company that helped to create the e-cigarette and vaping fad and then saw its fortunes plunge with increasingly stern federal oversight of its products —has settled more than 5,000 lawsuits with 10,000-plus individual plaintiffs.
They had claimed the company misled consumers with flashy, youth-oriented advertising leading users to suffer health and other harms from vaping and use of Juul’s trendy, snazzy products. Juul created such a youth sensation with its devices, which packed an especially high-powered dose of highly addictive nicotine, that regulators were caught flat-footed and then raced to impose ever more restrictive regulations on e-cigarettes and vaping.
While initial news articles simply reported Juul’s latest settlement plans — which came atop other costly legal moves by the company to resolve other, gnarly legal claims against it — the Wall Street Journal, to its credit, has dug further. The newspaper reported that Juul’s latest settlement wave, which will help avert a prospective bankruptcy filing, will cost the company $1.7 billion.
That money did not materialize magically, nor, analysts say, is it coming from the company’s current revenue streams.
Nope. The newspaper said that Juul executives had persuaded some of their earliest bettors, um, investors, to provide a money infusion to keep the company going, in exchange for staff and other cost reductions.
Details of the deal are not plentiful. Still, that would be an interesting move by big money, particularly if it were traditional lenders like banks or other publicly traded enterprises — putting up money for a company in shaky financial straits to settle major claims asserting its products were marketed in deceptive fashion and harm users. Really? Who wants to sink lots of dough into a business that the federal Food and Drug Administration is demanding proof from that its wares not only have any benefit but that they don’t damage the public’s health?
The Wall Street Journal reported that Hyatt Hotels heir Nick Pritzker and California investor Riaz Valani, two longtime Juul board members, are funding the corporate bailout. Dig deeper into the newspaper’s reporting on Juul and the investors reasons may be clearer, especially with a bit of background of how the company once was a highly profitable high-flyer that attracted big sums from the likes of Big Tobacco, aka Marlboro-maker Altria Group Inc:
“Mr. Valani and Mr. Pritzker were Juul’s largest shareholders before Altria bought its Juul stake for $12.8 billion, according to people familiar with the matter. Almost all of that cash was paid out in employee bonuses and shareholder dividends, including more than $2 billion to Mr. Valani and more than $1 billion to Mr. Pritzker, the people said.”
So, having seen billions of dollars in profits already, are investors experiencing what economists call “sunk costs,” or, does the smart money see yet more lucre in Juul, e-cigarettes, and vaping?
With its social media savvy and popular advertising and marketing campaigns, Juul for a time seemed to stay at least a step or two ahead of medical and scientific researchers and regulators, notably at the FDA. In turn, though, the FDA steadily cracked down on Juul, its advertising, and its vaping device sales. The agency barred sales of vaping goods, notably flavored cartridges and liquids, by dealers, retailers, and other vendors to minors.
Still, e-cigarettes and vaping continued to be increasingly popular with younger consumers, raising real concerns that federal regulators fell down on the job in preventing a whole, new, and younger generation from not only getting hooked on vaping and nicotine but also transitioning slowly to the even-more destructive, noxious habits of smoking tobacco cigarettes, flavored cigarettes, cigars, and pipes.
The FDA has pledged to crack down on vaping, especially by younger people, while still holding the door open a bit to the idea that e-cigarettes and vaping devices can provide an option to unhook older users from smoking burning tobacco cigarettes. So far, critics say, the agency is lagging still in stopping a noxious health harm.
In my practice, I not only see the harms that patients suffer while seeking medical services, but also the clear benefits they may enjoy by staying healthy and far away from the U.S. health care system. It is, according to research conducted in pre-coronavirus pandemic times, fraught with medical error, preventable hospital acquired illnesses and deaths, and misdiagnoses.
If you don’t smoke, please don’t start. If you smoke, talk to your doctor, and make the challenging effort to stop. There are other ways to do so without taking up vaping. No one argues it is good for you — just that it is less harmful and another possible way to quit smoking. That’s a dubious health argument, akin to asking whether it’s “better” to die in a car or plane crash. Neither, thank you. After many months of battling a killer pandemic and with seasonal flu and the respiratory illness RSV raging, does the nation need anything that can worsen people’s lung and heart health, especially as smoking has been shown to inflict major damage on the body with cancer and other terrible diseases?
