Tobacco Stocks Fall after FDA Announces New Nicotine Regulation Plan

Mark Lennihan  AP

Gottlieb said he has asked the FDA's Center for Tobacco Products to explore whether lowering nicotine could create a black market for higher nicotine products and what role e-cigarettes and others forms of nicotine delivery may play in reducing harm from smoking. "But the nicotine in cigarettes is not directly responsible for the cancer, lung disease, and heart disease that kill hundreds of thousands of Americans each year".

It would be the first time in the agency's history that it has sought to regulate the amount of nicotine in cigarettes.

He also stressed the need to properly regulate products like electronic cigarettes, which can deliver nicotine without the harmful compounds found in tobacco smoke.

"Tobacco use remains the leading cause of preventable disease and death in the United States, causing more than 480,000 deaths every single year", the FDA said in announcing the plan. The agency needs to concentrate on nicotine regulation and not be distracted by the debate on whether e-cigarettes help smokers quit, he said.

The FDA will also ask for public input on regulating kid-appealing flavors in e-cigarettes and cigars. Health care and lost productivity costs come in at almost $300 billion annually, according to the FDA.

Tobacco companies, such as British American Tobacco (BAT), said the announcement will lead to innovation in the industry.

The policy announced on Friday has a goal of cutting back on nicotine levels in order to discourage addiction and lower the number of U.S. smokers.

Until now, USA health officials have stuck with an abstinence-only message to the public. Marketing applications for non-combustible products, like e-cigs, must be filed by August 8, 2022.

"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 with ETX Capital in London.

As part of a series of new regulatory efforts to try to limit the harmful effects of tobacco, the agency plans to try to cut nicotine levels in cigarettes significantly.

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