UPDATE: FDA Panel: Menthol, Regular Cigarettes Marketed Same Way

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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