Tobacco stocks are not looking so hot as a result.
Image via TBEC Review/Wikimedia Commons.
Between California’s $2 tax hike on cigarette packs and culturally adopted bans on smoking indoors, it probably won’t come as a surprise that the U.S. Food and Drug Administration is now moving to make its own adjustments to the health-hazardous tobacco industry. Instead of going after cigarettes directly, the FDA has proposed regulating the amount of nicotine in tobacco products by enforcing non-addictive levels. According to NPR, this would be the first time the agency has attempted to control sales of nicotine since it was established in 1906.
FDA Commissioner Scott Gottlieb told the news outlet on Friday, “The overwhelming amount of death and disease attributable to tobacco is caused by addiction to cigarettes — the only legal consumer product that, when used as intended, will kill half of all long-term users. Unless we change course, 5.6 million young people alive today will die prematurely later in life from tobacco use.”
He isn’t wrong. Overwhelming evidence exists positioning cigarettes and nicotine-containing products as detrimental to one’s health, if not lethal. The FDA echoed those sentiments in a statement defending its proposal, writing,
“Tobacco use remains the leading cause of preventable disease and death in the United States, causing more than 480,000 deaths every single year. In addition to the devastating human toll caused mainly by cigarette smoking, tobacco also causes substantial financial costs to society, with direct health care and lost productivity costs totaling nearly $300 billion a year. A key piece of the FDA’s approach is demonstrating a greater awareness that nicotine – while highly addictive – is delivered through products that represent a continuum of risk and is most harmful when delivered through smoke particles in combustible cigarettes.”
In response to the announcement, stock values of major tobacco-oriented companies plummeted on Friday, although it would be some time before the proposed regulations take effect. According to the FDA, manufacturers of combustible products (i.e. cigars and pipe and hookah tobacco) would have until August 2021 to submit applications for revised products while makers of non-combustible products like e-cigarettes would have until August 2022.