Who Profits from JUUL v FDA Battles?
This year has seen a back-and-forth between the rising vape company JUUL and the FDA threatening to pull its products off the shelves for marketing to teens. Representing both sides... is McKinsey the global consulting juggernaut. Recently McKinsey paid out more than $600 million for its role in the opioid crisis as it’s consultants simultaneously counseled the FDA and Purdue Pharma into making the decisions that benefited both parties.
While McKinsey alleges that it keeps its clients that are in a conflict of interest with separate consultants who don’t collaborate, text messages and emails regarding Purdue Pharma show it's an imperfect system. McKinsey has worked with all the tobacco majors since 1956. McKinsey set out to make JUUL the “Nespresso of e-vapors” (NYT) and it succeeded. McKinsey set about surveying teens as young as 13 to rank the flavors, and it was from these tests that predicted mint would fly off the shelves. It wasn’t until 2009 that the FDA began regulating tobacco, but when the FDA turned to McKinsey’s consulting on the topic, it seems they were (somehow?) unaware of McKinsey’s role in tobacco sales for many decades.
Subsequently, the agency paid McKinsey $11 million for advice on tobacco regulation. A former director of the Office of Policy for the Center of Tobacco Products told the New York Times, “we didn’t think, duh, they are going to serve the (tobacco) industry”. Sometimes hindsight is 20/20. JUUL’s stumbling attempts to rebrand from teens to older adults are visible and awkward. For less than two years of consulting that’s been kept on the down low, JUUL paid McKinsey $15-$17 million. There's been a lot of regulating nicotine products this year. Check out previous coverage here.