UPDATE: FDA Panel: Menthol, Regular Cigarettes Marketed Same Way
March 17 2011 - 1:35PM
Dow Jones News
Menthol cigarettes are marketed in a similar manner as regular
cigarettes, although menthol products are "disproportionately"
marketed to African-Americans, a Food and Drug Administration
advisory panel said in a partial draft report released
Thursday.
The Tobacco Products Scientific Advisory Committee is scheduled
to meet later Thursday and on Friday to discuss menthol
cigarettes.
The panel is charged with writing a report to the FDA about the
public health impact of menthol and could make a recommendation
about whether menthol flavoring should be banned. The panel is
scheduled to discuss its recommendations Friday but isn't expected
to take a formal vote on specific recommendations so the outcome of
the meeting could be unclear. The menthol report is required to be
submitted to the FDA next week.
Menthol cigarettes account for about 30% of total cigarette
sales in the U.S. The issue is of major importance to Lorillard
Inc. (LO) the maker of the leading menthol brand, Newport. The
product accounts for roughly 90% of the company's sales. Altria
Group Inc. (MO) and Reynolds American Inc. (RIA) also market
menthol cigarettes but aren't as reliant on them for overall
sales.
The tobacco companies, in a draft summary of a separate industry
report posted on FDA's website Thursday, said the scientific data
demonstrate that there is no difference in disease, initiation,
cessation or dependence between menthol and non-menthol
cigarettes.
"As a result, there is no scientific basis to support the
regulation of menthol cigarettes any differently than non-menthol
cigarettes," the industry report said.
Lorillard's shares were recently trading up 1.2% to $79.27. The
stock jumped as high as $83.25 right after FDA's draft report was
released. Altria is up 1.3% to $24.60, while Reynolds American
gained 1.9% to $33.12.
In the most recent chapter of the FDA panel's draft report,
which was also posted to the FDA's website Thursday, the draft
said, "the evidence is sufficient to conclude that menthol
cigarettes are disproportionately marketed per capita to
African-Americans" and that "consistent with these targeted
marketing efforts, menthol cigarettes are disproportionately smoked
by African-American smokers."
The FDA has released several draft chapters of the report, but
what has been released so far hasn't contained any recommendations
about menthol.
The report could call for an outright ban on menthol cigarettes
or tighter restrictions of some kind.
The panel's chairman Jonathan Samet, a professor at the
University of Southern California who has studied smoking-related
health issues, said, "we intend to provide some sort of overall
conclusions and recommendations," suggesting the panel won't simply
call for more study of the issue.
The FDA was given the authority to regulate tobacco products in
2009. As part of the tobacco law, all tobacco flavorings except for
menthol were banned on concerns the flavors entice children and
adolescents to start smoking. The law called for an FDA advisory
panel to report on the public health effects of menthol in
cigarettes. The FDA doesn't have a required deadline or timeline to
act on the panel's recommendations. Even if the FDA were to move to
ban menthol the agency would then have to follow the federal
rule-making process which usually takes years.
The tobacco industry has said there is no evidence that menthol
in cigarettes makes it more likely people will start smoking,
compared to regular cigarettes, and that menthol cigarettes carry
the same risks as regular cigarettes.
-By Jennifer Corbett Dooren, Dow Jones Newswires; 202-862-9294;
jennifer.corbett@dowjones.com
--Melissa Korn contributed to this article.
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