David Wesley Page speaks with CNN reporter John Sepulvedo about the current actions taking place as the FDA has stepped in looking to set a ban on the menthol cigarettes. In 2009 the FDA got the authority to ban flavored cigarettes to prevent underage smoking. Tobacco companies agreed as long as menthol cigarrettes were discluded from the ban. Two years later the FDA is back and looking to make a lawsuit to ban the Menthol.

Lorillard Inc., the third largest manufacturer of cigarettes in the United States, said that it voluntarily implemented a precautionary recall of certain Newport Non-menthol cigarettes. The company initiated the recall “out of an abundance of caution” following its discovery that some Newport Non-Menthol cigarettes manufactured June 29 and 30, 2011, could contain small pieces of plastic.

The company sought and received guidance from the U.S. Food & Drug Administration (FDA) upon discovering the foreign substance.

No plastic has been found in any of the cigarettes. If burned, the plastic may create discomfort or irritation of the respiratory tract. The recall is limited to products distributed with the following code numbers, which are located on the bottom of the pack:
Newport Non-Menthol Box 80s: 1-O-29-750, 1-O-30-750.
Newport Non-Menthol Box 100s: 1-O-29-440, 1-O-30-440.
No other Lorillard products are affected, including Newport Menthol and other brands, said the company.

A letter provided to CSP Daily News that Lorillard sent to all direct-buying customers on July 19 said, “We are pleased to inform you that all involved Newport Non-Menthol Box 80s and Newport Non-Menthol Box 100s manufactured on 6/29/2011 or 6/30/2011 located in Direct Account locations have now been identified and segregated. As such, all Direct Account customers may resume retail shipments of all other on-hand inventories of Newport Non-Menthol products that were not segregated and discussed with you.”

A letter sent to all retail customers said, “All public distributing warehouses and our direct buying customers have already segregated this product and therefore, any future shipments you
receive have no issue. We are, however, now asking for your assistance in identifying any involved Newport Non-Menthol product that may have reached your retail outlet.”

The company added, “Should you identify any Newport Non-Menthol product in your retail outlet with the involved lot codes please hold them separately from your other Newport Non-Menthol products and arrange to have them returned to your wholesale supplier. We have authorized your wholesale supplier to accept returns of Newport Non-Menthol with the above lot codes. Also, if any of your customers have purchased any Newport Non-Menthol product with the above lot codes and returned them to you please provide them with a full refund of the purchase price and return the product to your wholesale supplier.”

Greensboro, N.C.-based Lorillard, through its Lorillard Tobacco Co. subsidiary, is the third largest manufacturer of cigarettes in the United States. Founded in 1760, it is the oldest continuously operating U.S. tobacco company. Lorillard’s flagship menthol-flavored premium cigarette brand is the top-selling menthol and second largest selling cigarette in the United States. In addition to Newport, the Lorillard product line has four additional brand families marketed under the Kent, True, Maverick and Old Gold brand names. These five brands include 43 different product offerings which vary in price, taste, flavor, length and packaging.

Much-anticipated changes to a report that could point to the fate of menthol cigarettes were released late Thursday with little effect to the original opinion, much to the relief of the tobacco industry and investors. The Food & Drug Administration’s Center for Tobacco Products released an annotated version of the Tobacco Products Scientific Advisory Committee’s (TPSAC) “Menthol Cigarettes & Public Health: Review of the Scientific Evidence & Recommendations.”

As first reported in a CSP Daily News/Tobacco E-News article early last week (click here), the annotations were of an editorial nature, and did not change TPSAC’s conclusions or recommendations. Upon distribution of the article, Lorillard Inc. “shares jumped,” according to a report in The Wall Street Journal.

As the stock market opened on Monday, June 13, Lorillard stock stood at $100 per share. Tuesday afternoon–the day the CSP story ran–the stock peaked near $114. Friday morning, the stock was trading at $112 per share.

The TPSAC report, issued in March, had concluded that the “removal of menthol cigarettes from the marketplace would benefit public health in the United States.”

Analysts, such as Christopher Collins and Wesley Moutrie II of Chicago-based Fitch Ratings in a recent report, considered the conclusion “less than damning,” because it “stopped short of recommending restrictions,” but were concerned about what proposed changes to the report could mean.

Kara Henschel, spokesperson for the FDA, confirmed for CSP Daily News companion publication Tobacco E-News that the changes do not affect either the conclusion or the recommendation of the report.

“There were editorial changes proposed to the TPSAC Menthol Report submitted between the March 18, 2011, meeting and March 23, 2011. The conclusions have not changed,” she said.
As an example of the changes, the word “generally” was added to the following sentence: “For the purposes of the present report, TPSAC is concerned generally with counterfactual scenarios in which menthol cigarettes never existed.”

Other changes included changing an “of” to “by,” adding “School of Medicine” to “Stanford University” and changing a “could” to “would.”

The FDA Center for Tobacco Products is slated to provide a progress report on its review of menthol this week.

U.S. advisers said on Friday that banning sales of menthol-flavored cigarettes would improve public health. “Removal of menthol cigarettes from the marketplace would benefit public health in the United States,” Dr. Mark Clanton of the American Cancer Society said in a statement sent to Reuters Health. The committee will send the final report to the Food and Drug Administration (FDA) by next Wednesday. The FDA will consider the advisers’ view as it decides whether to ban or otherwise limit menthol.

The FDA does not have to follow advice and is not required to take any action on the report.

Lorillard Inc. said that banning menthol cigarettes would make about 30 percent of all cigarettes illegal and would likely lead to the illegal sale of more dangerous cigarettes through an underground market.

UBS analyst Nik Modi told Reuters that he believes the FDA will ultimately not ban menthol cigarettes and they have added that the company’s shares to the UBS Alpha Preferences most preferred list.

The FDA’s tobacco center head, Dr. Lawrence Deyton, said the agency would review the findings and provide a progress report in about 90 days.

Deyton said the receipt of the report “will not have a direct and immediate effect on availability of menthol products.”

Clanton said that the committee acknowledged the possibility for illegal sales of menthol cigarettes if they were banned and suggested that the FDA consider that possibility and consult with experts.

“It’s very unlikely the FDA will end up banning menthol cigarettes based on the recommendation we got this morning,” Mark McMinimy, an analyst who follows the sector for MF Global Holdings Ltd’s Washington Research Group, told Reuters.

“If you’re calling for more research, how can you call for something like removing menthol cigarettes from the market, which seems very final,” McMinimy said.

A 2009 law restricts tobacco marketing and bars cigarette makers from adding flavors like clove or strawberry.

Menthol products account for about 30 percent of the $85 billion U.S. cigarette market. Lorillard’s Newport is the top-selling menthol brand with $5 billion a year in revenue.

Lorillard and Reynolds American, another cigarette manufacturer, sued the FDA to block the agency from “receiving or relying on” the advisory panel’s recommendations. According to the complaint filed on February 25 in federal court in Washington, three of the eight panel members have conflicts of interest.

Last year, not long after the Food and Drug Administration got legislative authority to regulate tobacco, “flavored” cigarettes were banned — on behalf of the children. This was largely a publicity stunt since Twista Lime, Kauai Kolada and other flavored cigarettes made up less than one percent of the cigarette market and manufacturers had largely scaled back their production of flavored cigarettes by the time the FDA announced the ban.

Now the FDA is embarking on something more ambitious: Going after menthol cigarettes.

Perhaps the attack on flavored cigarettes was a practice run, because the stakes are much higher now. In going after menthol cigarettes, the government seeks to outlaw 30 percent of the current cigarette market.

As with flavored cigarettes, proponents of a ban say the cool menthol taste hooks people on smoking. This time around, in addition to saying that menthol targets kids, critics are also throwing the race card into the mix because menthols are the preferred cigarettes of roughly three-quarters of black smokers.

This coming war on menthol is a study in contradictions that will affect all Americans regardless of race and whether they smoke.

First and foremost, this 21st century attempt at Prohibition will be a boon for smugglers. Cigarettes are already recognized by the Bureau of Alcohol, Tobacco, Firearms and Explosives as the likely “number-one black market commodity in the world.”

Cigarette smuggling — now largely focused on avoiding the many taxes imposed on tobacco — already got a boost in the late ’90s when additional fees were added to comply with the tobacco industry’s settlement deal with state attorneys general. If menthol cigarettes are banned entirely, a new and extremely lucrative market will open up.

According to the ATF, more than $100,000 can be made right now from just a simple minivan full of contraband cigarettes smuggled into New York City. This puts money into the hands of the mob and even would-be terrorists while simultaneously depriving straining governments of tax revenue.

By the way, the Lorillard Tobacco Company, which sells these cigarettes, estimates that outlawing menthol cigarettes would reduce state and federal tax revenues by approximately $40 billion.

Don’t forget that someone selling homemade or smuggled menthol cigarettes out of the trunk of a car is also probably not very concerned about asking for proof of age. This means that creating a new underground market for cigarettes could conceivably increase underage access to tobacco products.

And don’t expect these smuggled smokes will undergo quality checks that their currently legal counterparts face.

Then there’s the race card.

The NAACP supports a ban on menthol cigarettes. In October, NAACP Legal Defense and Education Fund president John Payton called it a “national disgrace and a tragedy” that menthol cigarettes are allegedly disproportionally marketed to blacks.

Yet the NAACP’s California State Conference gave its “unconditional endorsement” to California’s Proposition 19 ballot initiative to legalize marijuana use. Again citing disproportionality, Conference president Alice Huffman called legalizing pot a civil rights issue because of an alleged disproportionate prosecution of black pot users and dealers — a criticism echoed by the national group’s vice president, Hilary O. Shelton.

NAACP support for Proposition 19, which failed overwhelmingly, creates a double standard. For example, a review of 90 previously-published reports by the British Lung Foundation noted that three marijuana “joints” a day can be as damaging as 20 tobacco cigarettes. Marijuana tar is 50 percent more cancerous and its key ingredient hurts lung immune systems.

Quite simply, the NAACP can’t be both pro-pot and anti-tobacco when it comes to health issues.

For decades, people have been warned about the potential dangers of tobacco. Tobacco use is a choice, but the government and its supporters are trying to take the freedom away from people. In doing so, they now threaten to open a Pandora’s box of problems.

Menthol cigarettes may be less harmful to smokers than regular cigarettes, according to a study by Vanderbilt University and Meharry Medical College, but all cigarette smoking is bad for you, the study’s leader pointed out. The results were released just days after a federal panel suggested that menthol cigarettes were more harmful and that limiting them could improve public health.

The Vanderbilt/Meharry study found that among people who smoke 20 or more cigarettes a day, menthol smokers are 12 times as likely to develop lung cancer as nonsmokers, while nonmenthol smokers are about 21 times as likely as nonsmokers to get the disease.
The findings were published online Wednesday in the Journal of the National Cancer Institute.

“It has been hypothesized that menthol in cigarettes influences smoking behavior, perhaps increasing dependency or adversely affecting the biology of the lung,” said Dr. William Blot, professor of medicine at the Vanderbilt-Ingram Cancer Center, who led the study.

“However, our large study found no evidence to support those theories.”

On Friday, a U.S. Food and Drug Administration advisory panel said removing menthol cigarettes from the market would benefit public health because the minty flavoring has led to an increase in smokers and makes quitting harder. However, the agency’s Tobacco Products Scientific Advisory Committee stopped short of recommending an outright ban.
The latest findings will add to the ongoing conversation on whether the FDA should ban the sale of mentholated cigarettes, Blot said.

“All cigarettes are hazardous,” he said. “The study first indicated overall that there is no higher risk. But there are some suggestions, in fact, that menthol may be less harmful.”

The study of lung cancer risk had a racially diverse group of almost 86,000 adults enrolled. Smoking prevalence was high with menthol and nonmenthol cigarette use common among the participants. The study was conducted between March 2002 and September 2009.

The National Cancer Institute provided funding for it.

The study also found that there was no significant difference between menthol and nonmenthol smokers when it came to quitting smoking.

Ban would hit Lorillard

Meanwhile, a menthol ban or other restrictions on the flavored cigarettes would fall heavily on Lorillard Inc., whose Newport brand is the top-selling menthol cigarette in the U.S., with roughly 35 percent of the market. Menthol cigarettes are one of the few growth areas in a shrinking cigarette market.

Lorillard, the country’s third-largest tobacco company, is based in Greensboro, N.C.

Lorillard CEO Murray Kessler said the advisory committee’s conclusions lack balance and he believes the panel’s report is only a first step in a “very long process” that won’t result in a ban.

“In the absence of a difference in disease, people are allowed to smoke what they prefer,” Kessler said.

The Tobacco Products Scientific Advisory Committee advises the FDA agency on scientific issues. The agency doesn’t have to follow its recommendations but often does. Many analysts believe the FDA won’t ban menthol, which about 19 million Americans smoke.

According to a press release on March 19, 2011, by the American Cancer Society Cancer Action Network, American Heart Association, American Lung Association and Campaign for Tobacco-Free Kids, the Food and Drug Administration’s Tobacco Products Scientific Advisory Committee concluded earlier that day that “Removal of menthol cigarettes from the marketplace would benefit public health in the United States.”

FDA Control Over Tobacco Products

In 2009, Congress passed a law granting the Food and Drug Administration authority over tobacco products and tobacco product safety. Shortly after that, the FDA banned the sale of flavored cigarettes, including the popular clove cigarettes. Now, it seems that menthol cigarettes may soon join the September 21st, 2009 ban. For more information on the previous ban, read Flavored cigarette ban goes into effect, first of several tobacco restrictions.

Menthol Cigarettes Target Youth and African Americans

According to the new research released by the FDA’s Tobacco Products Safety Committee, menthol cigarettes increases the rate of experimentation with tobacco in children and youth, as well as reducing smoking cessation and increasing the overall prevalence of tobacco use among African Americans. This is largely due, the research claims, to the associated advertising. It found that “menthol cigarettes are marketed disproportionately to younger smokers” and “disproportionately marketed per capita to African Americans.”

Popularity of Menthol Cigarettes

Although it may be easy to claim that menthol cigarettes are somehow worse than regular tobacco cigarettes, they are nearly as popular overall, among many demographics. Similarly, although they may be more popular among the youth and African American demographics, no actual additional health risk was cited in the released material. It sounded more to be a matter of advertising than health considerations. Either way, attempting ban menthol cigarettes would, without a doubt, be sure to create an outrage among a very large number of people.

A Food and Drug Administration advisory panel, in a partial draft report released Thursday, said menthol cigarettes are marketed in a similar manner as regular cigarettes, a fact that could make it harder to restrict the sale of menthol products. The draft report also said tobacco companies market menthol products “disproportionately” to African-Americans.

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. the maker of the leading menthol brand, Newport. The product accounts for roughly 90% of the company’s sales. Altria Group Inc. and Reynolds American Inc. 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 nonmenthol 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 trading up 1.2% to $79.27 Thursday. The stock jumped as high as $83.25 right after FDA’s draft report was released. Altria was 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.

The use of menthol cigarettes is rising among adolescents and is “very high” among minority youth, a Food and Drug Administration advisory panel said in partial draft report released Monday. The Tobacco Products Scientific Advisory Committee is scheduled to meet later this week 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 report is due next week and the FDA has released some draft chapters of the report, but what’s 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.

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 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.

One question the FDA tobacco panel is weighing is whether menthol masks the harshness of tobacco and makes it easier to smoke cigarettes and harder to quit.

The tobacco industry has said there’s 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.

Another draft chapter of the menthol report, previously released, concluded that there’s “insufficient” evidence to conclude that smokers of menthol cigarettes have a different risk of tobacco-related disease compared to those who smoke non-menthol cigarettes.

The most recent draft chapter, which looks at patterns of menthol-cigarette smoking, said more than 80% of African-American adolescent smokers and more than half of Hispanic smokers ages 12 to 17 use menthol cigarettes.

“Use of menthol cigarettes if rising among adolescents, driven by a significant increase in the number of white youth ages 12 to 17 who are smoking menthol cigarettes,” the draft chapter said.

Overall smoking among teenagers has declined in the last decade. According to the Centers for Disease Control and Prevention, in 2009, 19.5% of students in grades nine through 12 reported smoking in the past month compared to 34.8% in 1999. About 21% of U.S. adults smoke.