Chairman krishnamoorthi thank you everybody. We are going to commence the second panel with our two panelists, matthew myers, president of campaign for tobacco free kids, and ashley ould. Chief executive officer of juul labs. Please raise your right hand. I will begin by certain human. Do you swear or affirm that the testimony you are about to give truthtruth, the and nothing but the truth so help you god . Thank you. Let the record show that the witnesses both answered in the affirmative. Please be seated. I am informed that votes are about to be called on the main house floor. We try to complete our Opening Statements and then we will go as long as we can until the votes are called, then we will return and resume. Without objection, both mr. Myers and ms. Goulds statements will be made part of the record. With that, mr. Myers, you are recognized. Before i begin, i would like to tell you about the lighting system. I mentioned this i4, there is a lighting system in front of you. The green light means go, they alike means speed up, the red light means stop. With that, mr. Myers, you are now recognized for five minutes. You have to press the redbone to talk. Chairman, mr. Mr. Cloud, members of the committee. My name is mr. Myers. I am the chairman and president of tobacco free kids. I want to thank you because this is a fundamentally important issue. Youth ecigarette use is at epidemic proportions. I would like to correct a few things i heard said, which i think are important. Data shows youth ecigarette use increases the likelihood that someone becomes addictive to smoking. The data shows that is roughly 34 times more likely. The second question is there was a debate about, are we just getting kids who would have otherwise smoked to use ecigarettes . Growing, we now have a and consistent body of evidence that shows the kids who are using ecigarettes, are not the kids who would have smoked, it is a whole different population. It is one of the reasons we are concerned. It is not the ecigarettes are replacing cigarettes, they are drawing a whole new body of kids in. You saw that from d examples yesterday, which are typical. 42 of kids who use ecigarettes is no other product and never have. Third, our kids just experimenting or becoming addicted . The data since the introduction of juul shows a dramatic rise in kids who move from experimentation to very frequent use, the kind of use that is representative of addiction. In fact, the percentage of kids who go from the past 30 days ors to frequent users is higher to for cigarettes than it is is higher today for ecigarettes than it is for cigarettes. About whatet me talk you just heard. You just heard that they were shocked that young people using these ecigarettes and they did nothing to prompt that. The trouble is, when you actually look at how the product was marketed, to whom it was marketed, the tools that were used, they were inconsistent with what you just heard. , sweetoduct is a sleek flavored, high nicotine product delivering nicotine more powerful to our youth, than any product we have seen in the past. Juul responded, but the sad truth is when you look at the dates and the numbers, they only responded when they got caught. And the measures they have taken to date track the kind of measures we have seen from the pleaso industry, loud that this was a mistake, and we never intended it, proposing halfway measures that dont go to the heart of the issue, and frankly, spending more money on lawyers and lobbyists, than they spend on doing the kind of science that would allow us to answer the questions legitimately being asked today. Let me talk about juuls marketing. They claim from day one that their only target were adults. You saw examples of those yesterday, and we can show them to you. The sponsored rock concerts. Images that are exactly the kind of images that youth. To my first job in the field was conducting investigations of the cigarette industrys marketing for the federal trade commission. I could take that report from 40 years ago and lay it sidebyside with this and you would have the same exact example. Then we were told that they switched after six months. What we have seen is that if you compare the marketing after six months to the, kind of marketing that marlborough, newport, and the other Cigarette Companies did to appeal to youth for 25 years in this country, it is an exact duplicate about that. So it is one thing to come before you and say, we care deeply about this issue, but when you look at the marketing and how long the marketing was going now, there is one difference, juul had different tools than the old Cigarette Companies had, and that was socialmedia. And they used it brilliantly. With images that are exactly the kind of images that we know from study after study after study appeal directly to kids. The kind ofuple of influence or images that we saw 2015. 8, not i could show you multiples of these sorts of things. The difficulty is that the nice sounding words, and the pleas of sincerity you just heard are inconsistent with the kind of marketing we have seen before. The second issue to talk about design and flavors. You just heard that juul pushed productslavors and new in order to beat the fda regulation deadline. What we have looked for was to see, is there any study of those flavors to see if they would discourage tobacco use among kids . The answer was, none. Was it shocking . No, they both need for decades that was the case. Of key here is pleas innocence inconsistent with the actual facts of what happened need to be examined. This is not an issue of kids versus adults, it is an issue of Holding Companies responsible. That is why the fda has regulations, and that is why they should be forced to comply with them. Chairman krishnamoorthi thank you mr. Myers. Ms. Gould, you are recognized for five minutes. Ms. Gould Ranking Member, mr. Chairman and distinct members of ingress, i joined juul labs january of 2017 and served as chief administrative officer. I joined because i believe passionately in its mission, helping adult smokers switch away from combustible cigarettes. I am also a mother. And my parents across the country, i am deeply concerned about underage vaping. I dont want my son to ever touch juul products or any vapor or tobacco products. I have told them directly many times. But kids in our community are vaping, a serious problem that demands a strong response. My responsibility as a juul employee and also as a mother, is to do a lie can to make sure our company is doing the right thing. That means deploying our resources. To combat underage vaping and conducting our business responsibly. Over the past several years. , our company has taken an escalating series of military actions all aimed at combating problem. Uth vaping we banned online sales to anyone under the age of 21. In april of 2018, we announced our support of tobacco 21 legislation. At that time, we had already started with social media platforms to delete inappropriate posts and listings featuring our products. In november of 2018, we announced our plan to step up ,ur efforts to advocate for t21 stop selling nontobacco and flavored products to retail stores, and enhanced our websites thirdparty image verification process, to strengthen our compliance program, and shut done our u. S. Based facebook and histogram and committed to developing technologybased solutions. These methods will take time to develop an impact. We are pleased to note that in the last six months, a dozen loss. Have passed t21 as a result, more than half of the population resides in states that have taken this step. Juul has worked to remove our nontobacco based on it from retail shelves. Other companies stepped in flavors kidappealing come up many of them individually designed to be used in juul devices. We are working to stem the flow of these products and we hope that the fda and others will aid in the efforts. We continue to advocate for category wide action. Today, juul labs is acting unilaterally. But to reduce access to ecigarettes, the same restriction is must be applied and enforced on all those who manufacture and sell these products. We are committed to being part of the solution. We are prepared to work with our regulators, congress, state and local governments in congress. We know that parents, educators and Community Leaders will play a role. Committeean, as this is well aware, smoking is by far the leading cause of lamentable death in the United States and worldwide. More than 34 million Americans Still smoke, and it will kill about half of them. Have the potential to help millions of them switch and stop smoking entirely. Those who believe that we must choose between that goal and preventing youth from smoking, we can and must do both. That is what the thousands of employees are juul labs are working to achieve. We are dedicated to helping smokers switch to an eternit an alternative, and we will continue to do so. We are grateful for the opportunity to be here today and discuss topics, and to answer your questions. Chairman krishnamoorthi thank gould. Myers and ms. I will now recognize myself for five minutes of questioning. First of all, mr. Myers, the believe nicotine causes disease . Mr. Myers i think that we know that nicotine is harmful to adolescence, it is harmful to developing brains. Nicotine delivered to a young person at high levels increases the likelihood of addiction, and we know that addiction is a young person is far more likely to make it hard for anybody to stop later on in life. There is also much we dont know. Chairman krishnamoorthi let me stop you, you answered my question. Ms. Gould, is nicotine harmful to you, to a user . Ms. Gould it is an addictive substance. In the ftos. Fdas own words nicotine does not directly cause the deaths from smoking. Chairman krishnamoorthi so nicotine is not harmful. Ms. Gould i did not say that. I said what the fda. Chairman krishnamoorthi i know what the fda says, i am asking you. The you believe nicotine is harmful . Ms. Gould i think the fda is a better source of the answer. Chairman krishnamoorthi ok, mr. Myers, are you aware of a Clinical Trial that proved juuls 1 claim that juul devices help smokers quit cigarettes . Mr. Myers unfortunately, we dont have a Clinical Trial that accomplishes the goal. Chairman krishnamoorthi ms. Gould, why has juul never conducted a Clinical Trial to prove the 1 claim that it makes that its devices help adult smokers quit cigarettes . Are number of studies that have been conducted, randomized controlled trials. There was a study published this year using ecigarettes compared to nicotine replacement therapy. Chairman krishnamoorthi what has juul never conducted a trial to prove your claim that juul products help smokers quit cigarettes . Ms. Gould our product is intended to help smokers stop smoking combustible cigarettes, and have conducted chairman krishnamoorthi have you applied to the fda for juul to be considered a Smoking Cessation device by prescription . Ms. Gould know, we have not. Chairman krishnamoorthi so juul has not done that. I want to go to another topic, and it is clear that juul has not conducted a Clinical Trial to prove its number one claim. We heard from philip and caleb, who i believe are right there in the front row, two Highschool Students from new york city. Juul went into their school and presented a seminar and called juul totally safe multiple times. How that could happen is much clearer when you consider how the juul curriculum came to be. That program was based on stanfords acclaimed youth vaping curriculum, wasnt it, ms. Gould . Ms. Gould [indiscernible] chairman krishnamoorthi it has nothing to do with stanfords curriculum . G ms. Gould when we started receiving reports of youths using vaping products in 2017, we engaged with educational experts including several retired superintendents and principals and they advised us and helped us create a curriculum to reach out to schools. And we take the criticism that that was not well received. Chairman krishnamoorthi let me just interrupt, sorry, i am losing my time here. Stanford sent juul a cease and desist letter demanding the juul stop using their acclaimed vaping prevention curriculum because it was misappropriating it. Materials ofn the one doctor without her consent, removed key portions including the role of industry and marketing in promoting nicotine use, and misrepresented an affiliation with stanford. Juul downplayed the health juul, in that context helped explain the presentation philip and caleb hurd. We have received evidence from juul presentation that philip rd. Caleb hea we have received evidence by juul pays schools to implement a curriculum . Sed ms. Gould we end of the program in 2017. We hired educational experts to help come up with a program that we thought would be helpful to stop kids using juul. We then received feedback that it was not well received, and in addition, received input from Public Health experts telling us what Tobacco Companies had previously done, which we were not aware of. As a result of all of that information, we stopped that program. But,man krishnamoorthi ms. Gould, you dont deny the 10,000 toid schools conduct those programs in those schools . Ms. Gould my understanding is that there were six schools that refused funding from juul to implement programming to prevent teen vaping. We changed those agreements to make sure that they would not be using juul curriculum. Check which to school actually used that curriculum. Chairman krishnamoorthi we would ask that you come back to us with that information. An april 16have 2018 email about setting up a booth at a School Health fair. Julie henderson. , who is the head of juul use outreach, sheuth said she expressed concern about the optics of us, meaning juul, attending a Student Health fair, given our new understanding of how much our efforts seemed to dupe gate those of big tobacco. On may 18, 2018, we see an email from you, exhibit 17, in which you say, here is the paper that ended the think, dont Smoke Campaign undertaken by Philip Morris, and attaching an article top officials appeared to be aware that you folks are employing programs that are almost identical to what Philip Morris and other Tobacco Companies used in youth prevention programs in schools. The deny that you had written this email in may of 2018 . Ms. Gould as i was just stating, it was a Public Health official who shared this article with me which are then shared internally to say, we need to understand what came before us, and that is why we ended the program. Chairman krishnamoorthi i now recognize Ranking Member cloud for five minutes of questioning. Ok, mr. Cloud, five minutes. Cloud thank you, mr. Chairman. When juul began a marketing , it did it 2015 peaked rather young looking models in marketing. Can you explain the thinking behind that . Ms. Gould i was not at the company at the time come about my understanding is that that was targetingaign adults ages 2534, adult smokers ages 2534. We have taken and heard the criticism about the campaign, and it was cut short as a result of that. Cloud mr. Monsees has acknowledged missteps. Would you do that as well . Ms. Gould we are a Young Company that is trying to grow quickly and we try to learn quickly and change things as quickly as we can. Rep. Cloud what are you doing to try to help solve the of smoking teens in your company . Ms. Gould we have taken a number of steps. We want to ridge 21 on our website in age 17. We supported t21. Removed all nontobacco and nonmenthol flavors from retail, and now adult smokers only have access to the remaining flavors in our robust age verification system which we think is an important step in the balancing act. We have taken a program which we started in 2017 and expanded in 2018 and have escalating steps for retailers who are noncompliant. We are also working on Technology Based solutions and we think that category wide action is going to be quickly important to continuing to make progress in keeping youth away from baking products. Rep. Cloud what would you say is the companys investment . Have you all caps eluded that . That . E you all calculated ms. Gould i would say that we have reoriented the company to be focused on youth prevention. We are sending an anonymous amount of internal resources on research and develop meant for technologies to be useful. And at the time that we removed the nontobacco and nonmenthol flavors from retail, that represented over 50 of our revenue at the time. So our focus is on making concrete steps forward to make progress. Rep. Cloud you mentioned School Programs . I can tell you as a parent, i have three kids in school. I would be concerned to find out educationwent into an seminar that was sponsored by any company, frankly. You have acknowledged that is a misstep and that it has been corrected. Is there anything that juul is doing to make investments in teension and educating that does not have the juul brand attached . Ms. Gould to it to my knowledge, there are only two events, and we stopped that programming. Topic. A very difficult we believe that education is incredibly important, but we have received feedback that is not appropriate for us to be doing that. Even some feedback that we may not be upper before us to be funding directly educational programming. So this is an area where i think honestly, mr. Myers, has done a lot in education as well as in the public of industry. Rep. Cloud my next question will be for mr. Myers. What do you suggest is one of the ways we can make sure teens do not get their hands on this . Mr. Myers we have to deal with the favored issue to start with. As much as we have heard, at the time that they took the action, over 50 of kids used menthol. In addition, while they made a great announcement, juul branded juul john branded branded mingo and other favors continued to be involved. I went to a store right next to where my kids went to high school month ago, and i was able to find them. The same time the juul announced they would not sell those flavors because of concern to american kids, at the same time, they announced they would sell them to canada. Rep. Cloud i only have 10 more seconds, if i could just finish asking them a duty have data on i know that there are knockoff products coming from china, how much of this is can we help this through a trade policy . Mr. Myers great question. What we should not be doing is debating this just outside of dust we created a regulatory framework. The food and Drug Administration has the authority to regulate products. O regulate unfortunately, juul has resisted that in every stage. A month ago, they filed a pleading in court to delay further the time when the fda would be able to review these products. If we want nationwide rules that apply to everybody, that can get to the problem you are talking about, but dont beat us to this debate about kids versus adults, it is time for juul to say, we will comply with fda regulations, we will not throw more roadblocks in the way of fda regulations. Then we will be able to answer, do these products really help adults, and how do we prevent them from getting in the hands of kids . Until juul does that, we should be skeptical. Cloud ms. Gould, would you answer as well . Mangold on the flavored juul pods, we stopped selling them in 2017. If there are any in the market today, one is that they are counterfeit, and secondly, that they had been there since november of 2018. With respect to fda regulation, we are recommended by the fda currently unclear actively working towards a submission to pmda. Those artifacts. Chairman krishnamoorthi thank you ms. Gould those are the facts. Chairman krishnamoorthi thank you. Thank you, mr. Chairman. I really concerned about some of the youth targeting. Juul has tried to reach his mama in settings other than schools. Exhibit 21 is an agreement to fund a Youth Program run by richmond, californias Police Activities league. Youth agedm includes 1217 who face suspension from schools for using ecigarettes and or marijuana, and it specifies that all youth will participate in a juul labs program. Juul created this program, correct . Ms. Gould we worked with experts to grade a program that we have since seized using. Rep. Hill in exchange for payment, juul got to create an curriculum containing information presented to potential customers preteens and teens already using ecigarettes. That is another page out of big tobaccos playbook. Jo did not run a summer camp, did it . Ms. Gould so, there were a number of, and i believe we can follow up with the number, there were a number of grants that were made to several programs all focused on peace prevention or wellness. Rep. Hill exhibit 22 is a contract for juul to find a summer camp for students in a Baltimore Charter school. According to the contract, it was a fiveweek summer camp for 80 kids. The contract says student participants will be recruited 312. Rades the juul are sponsor a summer camp for thirdgraders . Ms. Gould i would have to check the contracts, but whatever grants were made were focused on youth prevention efforts. Thathill exhibit 23 shows he also paid a large payment to a Charter School and in exchange, the Charter School committed to sharing student data from surveys journals and activity logs kept by students and precomposed text course test scores. Datag to access kids data, from kids as young as eight is alarming to say the least, and i cannot imagine the possible use of that data in the hands of a Big Tobacco Company like juul. Juul also tried to reach young people through faithbased organizations. Exhibit 24 is an agreement to partner with Church Groups to provide funding to youth in baltimore. As i noted earlier, it was in may of 2018 we received information from a Public Health expert informing us on what Tobacco Companies had done previously. And we stop those activities. Exhibit 25 though is an email from Julie Henderson a month before this life skills or puzzle about how big tobacco promoted life skills training as a pr strategy to deflect attention from its pr strategy to targeting kids. Has juul ever marketed through cessation programs . We have never marketed to kids. Anything we undertook in the educational space was intended to keep youth away from paving projects dust products. Vaping products. You dont think its weird to find a select group of people in demographics highly susceptible to product your marketing. You do nothing at sound strange at all . As i noted before all of these educational efforts were intended to keep youth from using the product. When we understood that it happened before, and how these were being perceived, we stop the program. One other population of concerns about is that the company hired a Consulting Group to market to communitybased groups including veterans organizations. It states that in order to market its technology juul ,must form Strategic Partnerships that resonate with adults for prevention and cessation. Where the veterans and others participating in cessation programs aware that jill was using this as a marketing opportunity . I would have to look at that. I cannot imagine that veterans groups were aware that they were being marketed to when youre talking about Smoking Cessation programs. Mi right . Ms. Gould again, i would really need to look at the document. I would tell you why that bothers me, in particular. In my past life we worked with vulnerable veterans very thing homelessness and ptsd. Serious challenges. Many of them throughout that process became addicted to cigarettes. Particularly Vulnerable Group of people who have a high tendency toward addiction. For us to for you all to go into those kinds of groups where people are seeking treatment and care and support, and use that as a marketing tool, is incredibly disturbing to me. I think this is something we have to investigate further. Thank you i yelled back. Thankman krishnamoorthy you congressman help. Congers mentally. Congressman tlaib. Juul had an entire Marketing Program that reach many influencers. Influencers are a new tool for big Tobacco Companies like juul. Can you remain explain any problems of influencer driven campaigns and how these campaigns could have driven the youth vaping academic epidemic. Mr. Myers the use of influencers is something that all companies are doing. Mr. Myers did it juul did it as well. Theres nothing more effective than having a young person market to young person. The young people worse grained for their attractiveness and their size of their following. Young people were being misled and the most serious possible way. Aspect of find any this program that was particularly concerning. Mr. Myers there are two things concerning. One is that we are dealing with a product that is more addictive than any product being marketed to kids in decades. Second, it demonstrated that you can operate under the radar screen for government regulators, parents, or teachers even know what is going on in regard to that. Third, despite the claims they have moved away from them that, we work outside the United States as well. And we see ongoing efforts by this company to hire people for influencers and are beginning to see the same kinds of marketing targeting the same demographic population outside the United States. It calls into question the credibility when they say that is not what theyre about. Asked the company about a settlement with Philip Morris. Stating Meeting Minutes , due to requirements outlined in the settlement, we removed all juul branding that uses trying goes and diamond shapes. What does that tell us . Mr. Myers it is impossible to look at the early juul product and look at the marlborough chevron and not see the similarity the marble chevron is one of the most Effective Marketing symbols ever created for young people. And juul what have us believe that a datadriven company that is as smart ands vista gated as this one just keeps making these mistakes. It defies logic. In marlborough and Philip Morrises philip Parent Company all tree out now owns 35 juul of juul. The ecigarette with a Third Largest market share. After buying its stake juul in, all tria pulled mark 10 off the market. Ms. Gould would you commit to giving us the ultra contract within two weeks . Ms. Gould i would have to confer with my team. Was pulling mark 10 a condition of the ultra deal . Ms. Gould we do not know. When did juul first learned that ultra was considering pulling mark 10 off the market. Ms. Gould i believe it was when we learned there pulling it off the market. Juul has a large share. Big tobacco about you out and folded the main competitor with the Third Largest market share, furthering your dominance of this industry. Juul is not just owned by big tobacco, it is big tobacco today. Isnt it ms. Gould . No it isnt. Disagree. Ully i yieldthe rest of my time. Mr. Myers i wanted to ask you about a mr. Monseesat had made in a presentation that he put on youtube. He said that it is not the nicotine that is really hurting you. Do you agree with him . Particularly when we are talking about adolescence. There is reason to be concerned about the nicotine. It may not cause the cancer but it causes a high level of addiction. It causes problems with the developing brain. And it delivers delivered at the high levels it is currently been delivered longterm, we just do not know. Thank you. I would like to thank our witnesses for their testimony today. Mr. Cloud without objection whoops chairman krishnamoorthy all will have five days. I asked our witnesses to respond as promptly as youre able. This hearing is adjourned. Announcer several days before these hearings, the food and Drug Administration launched prevention tv ads to educate youth about the edge dangerous of ecigarettes and vaping. Fda also plans to provide new posters and educational materials for middle schools and high schools across the United States. As part of the real cost youth the cigarette prevention campaign. For the Public Education effort was first launched last september, with advertising on digital and social media sites. Heres a live coverage for tuesday. On cspan at 10 00 eastern, testimony on conditions at migrant detention centers. From the acting commissioner of customs and border protection. And the acting Inspector General for homeland security. Cspan2,dirty on senator tom cotton talks about immigration and National Security at an event hosted by the center for immigration studies. And the Senate Returns to continue work on judicial nominations and the possible consideration of the nominate to be u. S. Ambassador to the united nations. On cspan3, the Senate Armed Services committee all the confirmation hearing for general john heighten to be vicechairman of the joint chiefs of staff. Secretary of state mike pompeo talks about u. S. Foreign policy challenges with iran, china, russia, and north korea. He was also asked about a possible run for u. S. Senate in kansas. The Economic Club of washington, d. C. Hosted this halfhour event. [applause]
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