Tobacco Stocks Drop as FDA Issues Plan to Curb Tobacco-Related Deaths
Jul 29 2017
Wade pointed to a study published this month in the British Medical Journal, using data from the FDA's Tobacco Use Supplement to the Current Population Survey, which shows e-cigarettes contribute to significant increases in successful quit attempts across the country.
"It's hard to overstate what this could mean for the companies affected: non-addictive levels of nicotine would likely mean a lot fewer smokers and of those people who do still light up, smoking a lot less", said Neil Wilson, a senior market analyst at ETX Capital.
According to CNBC, shares of Altria Group, maker of Marlboro and Parliament brands plummeted more than 10 percent after the FDA's announcement on Friday morning. This is the first time the administration will attempt to regulate nicotine levels. It's naturally found in tobacco leaves, though cigarette companies add chemicals that force tobacco to deliver more nicotine when burned.
Cigarettes kill 480,000 people in the USA each year, according to the Centers for Disease Control and Prevention.
The agency said it also would issue a new enforcement policy for newly-regulated products such as e-cigarettes.
British American Tobacco suffered a sharp sell-off in its shares in late trading after the US Food and Drug Aministration announced plans to cut the amount of nicotine in cigarettes.
The FDA's shift comes as the agency considers whether to approve new marketing claims for new heat-not-burn devices, smokeless tobacco and other products. The FDA has not said what level of nicotine it is aiming for.
The smoking rate in the U.S.is falling.
Campaign for Tobacco-Free Kids president Matthew Myers praised the overall approach as "a bold and comprehensive vision" but called the e-cigarettes delay "a serious error". Marketing applications for non-combustible products, like e-cigs, must be filed by August 8, 2022.
Altria, the parent of Philip Morris USA, responded to the talk of targeting nicotine by saying in a statement that new rules must be "based on science and evidence, must not lead to unintended consequences and must be technically achievable".