After U.S. scandal, JUUL develops new market in the Philippines
Part 2: Amid a crackdown in its home market, leading e-cigarette company JUUL treads carefully with ‘transparency’ efforts as it sets up shop in the Philippines
BY Michelle Abad | February 27, 2020
After U.S. scandal, JUUL develops new market in the Philippines
READ: Part 1 | Will e-cigarettes help you quit smoking?
AT A GLANCE
- After suffering a backlash in the US for allegedly being responsible for a "vaping epidemic," e-cigarette giant JUUL Labs expands its market internationally. They have met privately with Philippine policy makers and the medical community.
- With a no-marketing, no-lobbying approach under a new leadership, JUUL resorts to "educational" practices. JUUL's transparency in congressional hearings is limited, with more focus on reduced harm compared to cigarettes and little mention of inherent harmful effects.
- Lawmakers are divided on regulation issues, as some are skeptical about the company, while others are convinced about JUUL's "reduced harm" approach despite the absence of long-term studies on e-cigarettes.
This story was done with inputs from The Bureau of Investigative Journalism. (READ: JUUL spreads over the world as home market collapses in scandal)
MANILA, Philippines – The House health committee vice chair stood his ground as e-cigarette giant JUUL Labs tried to convince lawmakers that their products were viable alternatives for smokers, and that they were aboard the mission to prevent non-smoker and youth usage.
“I’m having a hard time understanding the sincerity of our manufacturers now,” said vice chair Representative Joet Garcia, recalling the worldwide tobacco industry lobby known to mislead the public. “If you watch all the hearings of the cigarette companies before, it’s the same thing.”
JUUL was prepared for the January 28 hearing – present were Asia Pacific South president Ken Bishop, medical representative Amar Kureishi, and government affairs head Mario Zinampan. They presented scientific evidence of the less harm caused by vapor compared to the smoke of combustible cigarettes.
They are careful never to utter the word “harmless.” But they beat around the bush on the actual harm a JUUL product inherently brings to the body.
Expansion amid crackdown
One might know JUUL as the face of the e-cigarette industry. The flash drive look-alikes might be distinguishable by teens but not by all parents.
In the United States, JUUL faced a backlash that reverberated internationally in its early years following alleged youth-appealing advertisements and public claims that its product was “totally safe.” It has come under intense pressure and faces hundreds of lawsuits and state investigations in its home market.
The product became popular with minors and young people, and the US Surgeon General declared a “vaping epidemic." The US Food and Drug Administration (FDA) said JUUL was responsible, although the latter claims to never have marketed to the youth.
The Bureau of Investigative Journalism found that JUUL requests private meetings with government officials across the world to promote its e-cigarettes, influence vaping laws, and lobby to lower taxes. We found that the Philippines has similar experiences.
With a monochrome rebrand and a Youth Prevention Program installed in the aftermath of the scandal, JUUL came to the Philippines – a home to 16 million adult smokers. By this time, tobacco giant Altria – Philip Morris’ parent company – had bought 35% of JUUL for $12 billion in December 2018.
Despite the mounting criticism in the US – including a raid by the US FDA on JUUL's offices – investor presentations showed that Altria is confident international revenues can offset the predicted slump in US growth. It hopes JUUL's global sales will match those in the US within 4 years.
JUUL Labs entered the Philippine market in June 2019 and partnered with Gokongwei-owned Better For You Corporation (BFY). A JUUL spokesperson told Rappler that they targeted the Philippines because it has one of the highest concentrations of tobacco users in Asia.
The Gokongwei family “really believed in the product and what we stood for,” the JUUL spokesperson said. JUUL, BFY, and local e-cigarette industry partners held an intimate dinner upon JUUL’s launch in the country to celebrate a newfound “common bond.”
Meeting with doctors
The same month of their Philippine debut, JUUL held an invitation-only roundtable discussion hoping to engage with Filipino doctors and learn about smokers in the Philippines. Only 4 doctors reportedly attended.
A handful of credible doctors and anti-tobacco advocates received the invitation and decided to ignore it. Southeast Asia Tobacco Control Alliance (Seatca) executive director Ulysses Dorotheo was quick to inform his colleagues, as there is an unwritten rule among advocates that they should avoid engaging with the tobacco industry unless this is in public hearings.
“It was our duty to warn other medical colleagues,” said Dorotheo. The doctors who rejected the invite included Riz Gonzalez, chair of the Philippine Pediatric Society Tobacco Control Advocacy Group, tobacco cessation expert and pulmonologist Maricar Limpin, and cardiologist Anthony Leachon.
However, one of the attendees, general physician Lorenzo Mata, was convinced by the idea of reducing, if not eliminating, harm. Just 3 months after he attended the roundtable discussion, he founded Quit for Good, a nonprofit organization that openly approves of e-cigarettes as a less harmful alternative for smokers.
Their hierarchy of options is first to quit cold turkey, then try nicotine replacement therapies, and then e-cigarettes, if they cannot quit.
Mata has made various public appearances to advocate for this cause. When President Rodrigo Duterte banned vapes in November 2019, Mata – during an episode of ABS-CBN’s Matter of Fact – appealed on behalf of his group to the President to reconsider the ban.
Mata claimed to be the only doctor in the Philippines who openly supports the use of e-cigarettes as an alternative. “I think most of the things we eat or take in, there is little harm. There is always harm there. Even the medicines that doctors prescribe, don’t tell me there’s no harm,” he said.
While Mata said he has no relationship with JUUL, according to him, it was this roundtable discussion that catalyzed the founding of Quit for Good.
“Before going to that, I had to research and study, because I’m not well-versed on smoking. I don’t know about vaping. Practically I don’t have any knowledge of that,” he said.
But Mata has been covered by a number of media outlets as the doctor and anti-tobacco group leader who supports vaping as a last-resort alternative. "They're trying to do everything they can to follow regulations. I think like everybody else, you give some people a chance," Mata said of JUUL.
Dorotheo highlighted the danger of advocacy anchored on the relative safety of e-cigarettes. "When people started smoking 100 years ago, no one had any idea that smoking was harmful. So for public health advocates and people like Dr. Mata to make claims that e-cigarettes are 95% safer without long term studies is actually quite irresponsible. It is a disservice to tell [smokers] to switch," he said.
‘Education and transparency’
Before excise taxes were finalized in the recently passed Republic Act (RA) 11467, JUUL argued in a September 2019 hearing that its product should be taxed differently from cigarettes. This was rejected by Senator Pia Cayetano who said that there is still a possibility of discovering more harmful effects of their product.
Later that same month, JUUL went through a change in leadership, with longtime Altria executive and now JUUL CEO K.C. Crosthwaite mandating a "no-marketing, no-lobbying" approach.
Still, JUUL's government affairs team meets with policy makers to have “official conversations in terms of crafting legislations,” in congressional hearings and in private. For now, their interactions are limited to top-level legislators, although the team's scope may also cover visiting local governments in the future.
With a budget for traditional advertising scrapped, JUUL said it engages in "educational" practices – one of which involves proactively reaching out to media outlets to discuss their product in newsrooms. JUUL also said it reaches out to socio-civic organizations, without going into specifics.
When asked how they respond to criticism and skepticism, JUUL said they try to be as transparent as possible. They strive to execute “ethical and responsible marketing practices.”
“To be clear, nicotine is highly addictive, and not risk free. People who do not already use nicotine should not start using nicotine. Smokers should first and foremost quit. If they can’t or won’t quit, they should completely switch to less harmful nicotine products. Underage people should not use or have access to Electronic Nicotine Delivery Systems (ENDS),” said a slide that JUUL presented in Congress.
After this, JUUL presented scientific evidence that switching from traditional cigarettes to ENDS leads to less harm on the body – such as better blood nicotine levels, reduction in harmful chemicals, and improved vascular health. But there were no slides that showed the inherent harmful effects that may occur due to vaping a JUUL product.
JUUL distances itself from the cases of e-cigarette or vaping lung injuries (Evali) in the US due to the large number of cases being linked to vapes with chemicals such as vitamin E acetate and tetrahydrocannabinol – the main psychoactive compound in marijuana. JUUL often reminds the public that their pods have neither of these chemicals. JUUL claims its 5 ingredients – nicotine, propylene glycol, glycerine, benzoic acid, and flavorings – are pharmaceutical and food grade.
But so is vitamin E acetate – it is registered as dl-Alpha Tocopheryl Acetate with the Philippine FDA. One may know vitamin E acetate as a yellow, soft gel dietary supplement that brings skin benefits. This vitamin inside an over-the-counter capsule is also the culprit behind possible lung injuries when inhaled. The FDA, however reminds consumers that just because something is safe to eat, it does not mean it is safe to inhale.
JUUL also promises sincerity, and that they are far off from the deception of the tobacco industry of the past.
“We should not confuse [our message] with the messaging of the tobacco industry from the 1960s and 1970s – that was clearly false information, that was criminal activity, which had its own consequences,” said JUUL medical representative Kureishi during the January 28 hearing.
Garcia later reacted, saying in a message to Rappler: “How can [they] distance [themselves] from the tobacco industry when JUUL is [partly] owned by the Altria Group, one of the world’s largest producers and marketers of tobacco products? Are they just using ENDS as a strategy to test the market and extend their product’s life cycle?”
Prospects of regulation bill
As Congress currently tackles regulations for ENDS, lawmakers are generally divided – some still skeptical about the tobacco industry like Garcia, while others convinced by the contested data that ENDS are "95% less harmful" than cigarettes, including ENDS regulation bill author Ace Barbers and Deputy Speaker Rodante Marcoleta.
On February 13, the House technical working group approved a motion to revert the minimum age of buying vapes to 18. Garcia was the only dissenter.
JUUL declined to comment on the age revision since it has yet to be finalized. It reiterated its support for, and advanced compliance with RA 11467, which pegs e-cigarette access age at 21, and bans non-tobacco and non-menthol flavors.
Victor Dimagiba, former director of the Bureau of Trade Regulation and Consumer Protection and now president of advocacy group Laban Konsyumer, said it is always the consumers’ right to be informed about the true levels of harm of ENDS.
“The uncertainty on safety may cause injury to a number of consumers in the absence of a well-meaning information and education program,” he said. “The government should assist and educate users, and not the industry.”
Even without long-term studies on e-cigarettes, Garcia thinks it’s never too early to take preventive measures to prioritize health.
“I would rather be prudent like the more than 30 countries that have banned or restricted products until there is conclusive evidence on its safety. The right to health is and will always be above the right to trade,” he said. – with reports from The Bureau of Investigative Journalism/Rappler.com