A customer looks over packs of menthol cigarettes and other tobacco products at a store in San Francisco. On Thursday, FDA Commissioner Dr. Scott Gottlieb pledged to ban menthol from cigarettes, in what could be a major step to further push down U.S. smoking rates.

The Food and Drug Administration said Thursday it wants to ban the sale of traditional menthol cigarettes and cigars( in addition to other flavored cigars, and limit the number of electronic cigarette flavors.

Under the plan, the only e-cig flavors that could be sold would be tobacco, menthol and mint.

The recommendations have been foreshadowed for weeks and represent a dramatically tighter regulatory approach to tobacco products.

It is projected it will take years for the FDA to go through the regulatory process to implement the heightened restrictions and the agency will likely will face multiple lawsuits from tobacco manufacturers and anti-smoking groups.

Meanwhile, the FDA said it “hopes” that tobacco manufacturers voluntarily remove within 90 days flavored electronic nicotine delivery (ENDS) products from convenience stores and from online sites that “do not have sufficiently robust age-verification procedures.”

FDA Commissioner Dr. Scott Gottlieb cautioned he is prepared to take further regulatory steps if the agency doesn’t get the cooperation it expects from manufacturers.

The agency also is recommending tighter online age-verification processes and allowing some flavored e-cigs to only be sold in vape shops, which Gottlieb claims — without accompanying data — do a better job of keeping youth from buying the products than convenience stores.

Formally, Gottlieb wants the agency’s Center for Tobacco Products to “advance a Notice of Proposed Rulemaking that would seek to ban menthol in combustible tobacco products, including cigarettes and cigars.”

“The bottom line is that these efforts to address flavors and protect youth would dramatically impact the ability of American kids to access tobacco products that we know are both appealing and addicting,” Gottlieb said.

The strategy could have a major impact on Reynolds American Inc.

Newport is the nation’s No. 2 traditional cigarette with a 14 percent overall market share, as well as 55 percent of the menthol market share. Overall, menthol represents about one-third of the traditional cigarette revenue.

Newport’s importance to traditional cigarettes was evident in Reynolds American Inc.’s $29.25 billion purchase of Lorillard Inc. in June 2015, essentially to acquire Newport. BAT spent $54.5 billion in July 2017 to acquire the 57.8 percent of Reynolds it didn’t already own.

The majority of Reynolds’ estimated 3,000 local employees work in the 2 million-square-foot plant that includes production of Newport and the Vuse e-cig, the second leading brand.

Scott Ballin, past chairman of the Coalition on Smoking or Health, predicted in 2014 that Reynolds’ purchase of Lorillard — essentially to gain Newport — would spur some public-health advocates to “use this merger as a means of calling on the FDA to move quickly to ban menthol.”

BAT’s share price continued to decline on the New York Stock Exchange, falling to a 52-week low of $35.05 during trading Thursday before closing down 3.6 percent, or by $1.33, to $35.18.

It is down 50.9 percent from the 52-week high of $71.45 of Jan. 23. When BAT completed the Reynolds deal in July 2017, the share price was $71.25.

Reynolds and BAT said in a joint statement that “while we will continue to engage with the FDA on its proposed plans, it is important to note that when the FDA first examined menthol in 2013, the published science did not support regulating menthol and non-menthol cigarettes differently. The published science since then has not changed this situation.

“While some consumers may prefer menthol cigarettes, the science has not demonstrated that menthol leads to higher levels of initiation, greater dependence, reduced ability to quit or increased health risk.”

Reynolds said any tightened regulations on menthol cigarettes “must be done through the established comprehensive rule-making process and must be based on a thorough review of the science while considering the unintended consequences of any rule.

“Failing to do so would mean any such action would not withstand judicial review,” the statement said.

Philip Morris USA said it menthol retail share was 10.2 percent, or about 20 percent of its retail share. Those sales are primarily menthol styles of its top-selling Marlboro cigarette.

Curtailing use by kids

Gottlieb repeated earlier claims that the agency’s actions are designed to curtail what he calls ”an epidemic” of flavored e-cig use by youths. He has noted a 77 percent increase in high school students’ use of e-cigs based on a small national sample size.

When he unveiled a regulatory “road map” in July 2017, Gottlieb said the agency believes menthol in traditional cigarettes, and candy and fruit flavorings in cigars and e-cigs, are used to entice underage youth to tobacco products.

Gottlieb said he chose to exclude menthol and mint e-cig flavors from prohibition because “data suggests that mint- and menthol-flavored (e-cigs) are more popular with adults than with kids.

“Unlike menthol-flavored e-cigs, there’s no evidence to suggest that menthol-flavored cigarettes may play a role in harm reduction for adult smokers.”

Gottlieb said the policy framework “also reflects a very careful public health balance that we’re trying to achieve.”

“A balance between closing the on-ramp for kids to become addicted to nicotine through combustible and non-combustible products, while maintaining access to potentially less harmful forms of nicotine delivery through ENDS for adult smokers seeking to transition away from combustible tobacco products,”. he said.

Menthol styles, which are mint-flavored, have proven controversial for decades because they are considered a smoother way to smoke traditional cigarettes and because manufacturers have been accused of specifically marketing them to minority consumers.

For anti-tobacco advocates, securing a ban on menthol flavoring would be tantamount to cutting the head off of a dangerous snake.

“Although Commissioner Gottlieb didn’t provide details on timing/implementation, we think an outright ban would be extreme and believe the FDA could propose to restrict/lower the levels of menthol in cigarettes over time, while allowing menthol flavored e-cigs to remain on the market in an effort to convert more smokers to reduced-risk products,” Wells Fargo Securities analyst Bonnie Herzog said.

“We see iQOS (heat-not-burn traditional cigarette) playing a pivotal role in this process, and as such should be approved promptly given its tobacco and menthol flavor variants, which could help accelerate conversion of cigarette menthol smokers and is less attractive to youth.”

Herzog noted the FDA’s “pointed threat to ‘revisit’ all of its (proposed) actions if the youth ‘epidemic’ fails to reverse, and explore additional actions up to proposing the removal of all such products from the marketplace.”

“A powerful threat, indeed, but not all that realistic in our view,” Herzog said.

Bill Godshall, executive director of SmokeFree Pennsylvania, has said an FDA ban or restriction of menthol in cigarettes “would create black markets, and reduce tax revenue and Master Settlement Agreement payments to states.”

He said it is possible federal judges could strike down a ban “as cigarette companies almost certainly would sue.”

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