[House Hearing, 116 Congress]
[From the U.S. Government Publishing Office]


     EXAMINING JUUL'S ROLE IN THE YOUTH NICOTINE EPIDEMIC: PART II

=======================================================================

                                HEARING

                               BEFORE THE

              SUBCOMMITTEE ON ECONOMIC AND CONSUMER POLICY

                                 OF THE

                         COMMITTEE ON OVERSIGHT
                               AND REFORM

                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED SIXTEENTH CONGRESS

                             FIRST SESSION
                               __________

                             JULY 25, 2019
                               __________

                           Serial No. 116-54
                               __________

      Printed for the use of the Committee on Oversight and Reform


                  [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
                                    
                  Available on: http://www.govinfo.gov
                    http://www.oversight.house.gov or
                        http://www.docs.house.gov
                        
                        
                              ___________

                    U.S. GOVERNMENT PUBLISHING OFFICE
                    
37-950 PDF                 WASHINGTON : 2019   



                   COMMITTEE ON OVERSIGHT AND REFORM

                 ELIJAH E. CUMMINGS, Maryland, Chairman

Carolyn B. Maloney, New York         Jim Jordan, Ohio, Ranking Minority 
Eleanor Holmes Norton, District of       Member
    Columbia                         Paul A. Gosar, Arizona
Wm. Lacy Clay, Missouri              Virginia Foxx, North Carolina
Stephen F. Lynch, Massachusetts      Thomas Massie, Kentucky
Jim Cooper, Tennessee                Mark Meadows, North Carolina
Gerald E. Connolly, Virginia         Jody B. Hice, Georgia
Raja Krishnamoorthi, Illinois        Glenn Grothman, Wisconsin
Jamie Raskin, Maryland               James Comer, Kentucky
Harley Rouda, California             Michael Cloud, Texas
Katie Hill, California               Bob Gibbs, Ohio
Debbie Wasserman Schultz, Florida    Ralph Norman, South Carolina
John P. Sarbanes, Maryland           Clay Higgins, Louisiana
Peter Welch, Vermont                 Chip Roy, Texas
Jackie Speier, California            Carol D. Miller, West Virginia
Robin L. Kelly, Illinois             Mark E. Green, Tennessee
Mark DeSaulnier, California          Kelly Armstrong, North Dakota
Brenda L. Lawrence, Michigan         W. Gregory Steube, Florida
Stacey E. Plaskett, Virgin Islands   Fred Keller, Pennsylvania
Ro Khanna, California
Jimmy Gomez, California
Alexandria Ocasio-Cortez, New York
Ayanna Pressley, Massachusetts
Rashida Tlaib, Michigan

                     David Rapallo, Staff Director
              Richard Trumka, Subcommittee Staff Director
      William Cunningham, Chief Counsel and Senior Policy Advisor
                     Joshua Zucker, Assistant Clerk

               Christopher Hixon, Minority Staff Director

                      Contact Number: 202-225-5051
                                 ------                                

              Subcommittee on Economic and Consumer Policy

                Raja Krishnamoorthi, Illinois, Chairman
Mark DeSaulnier, California,         Michael Cloud, Texas, Ranking 
Katie Hill, California                   Minority Member
Ro Khanna, California                Glenn Grothman, Wisconsin
Ayanna Pressley, Massachusetts       Chip Roy, Texas
Rashida Tlaib, Michigan              Carol D. Miller, West Virginia
Gerald E. Connolly, Virginia



                         C  O  N  T  E  N  T  S

                              ----------                              
                                                                   Page
Hearing held on July 25, 2019....................................     1

                               Witnesses

Mr. James Monsees, Co-founder and Chief Product Officer, JUUL 
  Labs, Inc.
    Oral Statement...............................................     5
Mr. Matthew L. Myers, President, Tobacco-Free Kids
    Oral Statement...............................................    32
Ms. Ashley Gould, Chief Administration Officer, JUUL Labs, Inc.
    Oral Statement...............................................    34


Written opening statements and witnesses' written statements are 
  available at the U.S. House of Representatives Repository: 
  https://docs.house.gov.


                           INDEX OF DOCUMENTS

                              ----------                              

The documents entered into the record are listed below, and 
  available at: https://docs.house.gov.

  * Exhibits1-30; submitted by Chairman Krishnamoorthi.

  * ``Ahead of Congressional Hearing JUUL Crosses $1 Million in 
  Quarterly Lobbying Payouts for the First Time,'' article, 
  Forbes, submitted by Rep. Hill.

  * Question for the Record: from Chairman Krishnamoorthi to JUUL 
  Labs.

  * Question for the Record Responses: to Rep. Krishnamoorthi 
  from JUUL Labs.


 
    EXAMINING JUUL'S ROLE IN THE YOUTH NICOTINE EPIDEMIC: PART II

                              ----------                              


                        Thursday, July 25, 2019

                  House of Representatives,
      Subcommittee on Economic and Consumer Policy,
                         Committee on Oversight and Reform,
                                                   Washington, D.C.
    The subcommittee met, pursuant to notice, at 2:27 p.m., in 
room 2154, Rayburn House Office Building, Hon. Raja 
Krishnamoorthi (chairman of the subcommittee) presiding.
    Present: Representatives Krishnamoorthi, DeSaulnier, Hill, 
Pressley, Tlaib, Cloud, Grothman, Comer, and Miller.
    Also present: Representatives Cummings, Wasserman-Schultz, 
Jordan, and Meadows.
    Mr. Krishnamoorthi. Good afternoon. Sorry for the delay. 
The subcommittee will come to order. Without objection, the 
chair is authorized to declare a recess of the committee at any 
time.
    This hearing is titled ``Examining JUUL's Role in the Youth 
Nicotine Epidemic: Part II.'' I wanted to briefly address the 
spectators in the hearing room today. We see there is 
tremendous interest in this hearing. We welcome you and respect 
your right to be here. We also ask, in turn, for your respect 
as we proceed with the business of the committee today. It is 
the intention of this committee to proceed with this hearing 
without any disruptions. Any disruption of this committee will 
result in the U.S. Capitol Police restoring order.
    Now listen up. This is very important. If a disruption 
occurs, a Capitol Police officer will go up to the individual 
and instruct that they cease the demonstration. If the person 
does not cease or begins a demonstration after the initial 
warning by the officer, the individual or individuals will be 
removed from the hearing room.
    We are very grateful for your presence today and we very 
much appreciate that you want to listen to the witness. But we 
also ask you to respect the witness' ability to express 
himself. I would also remind all members to avoid engaging in 
adverse personal references.
    I now recognize myself for five minutes to give an opening 
statement.
    Big Tobacco preyed upon generations of America's youth. 
Eventually, we stood up as a country and said ``enough.'' state 
attorneys general reached a master settlement agreement more 
than 20 years ago, with the five largest cigarette 
manufacturers, forcing them to stop marketing to kids. The U.S. 
Department of Justice then brought RICO charges against Big 
Tobacco for their engagement in a decades-long conspiracy to 
hide the dangers of smoking, manipulate the nicotine delivery 
of cigarettes, deceptively market products, and target kids.
    While we made tremendous progress in preventing youth 
nicotine addiction at the start of the millennium, we face a 
much different challenge today. In 2018, more than 20 percent 
of high school and five percent of middle school students are 
using e-cigarettes. In fact, 3.6 million high school and middle 
school students used e-cigarettes in 2018, an increase of 1.5 
million in one year. As a parent of three young children 
myself, including a teenager, these statistics are alarming.
    In 2018, the leading manufacturer of e-cigarettes, a 
company by the name of JUUL, saw its share of the e-cigarette 
marketplace grow from 24 percent to 76 percent, and that 
company's growth also accompanied a spike in youth e-cigarette 
use by 76 percent. The surge of e-cigarette use caught nearly 
everyone off guard. It was quickly labeled an epidemic but the 
U.S. Surgeon General, the Food and Drug Administration, the 
Centers for Disease Control and Prevention, and the Department 
of Health and Human Services.
    So how did we get here? First, from the documents my office 
has received thus far in our investigations, I am extremely 
concerned about JUUL's marketing tactics, especially and 
potentially targeting youth. Today, we will learn how JUUL 
effectively used social media influencers to build a youth-
oriented brand, making vaping a cultural phenomenon.
    As an aside, just before I came to this hearing my wife 
informed me that my child's high school is now installing vape 
detectors in the restrooms.
    I am very concerned about the negative health consequences 
of youth nicotine addiction. The ability for kids to get 
addicted to e-cigarettes and the inability for adults to 
prevent it poses an unparalleled and unprecedented challenge. 
Cigarettes were easy to detect. They produce smoke and they 
produce a smell that lingers.
    E-cigarettes, on the other hand, are small. They are easily 
concealable products that produce only a small amount of 
aerosol that quickly dissipates. Unlike cigarettes that have a 
harsh taste, JUUL sells many flavors that appeal to youth, 
including mango, fruit, and mint. In addition, JUULs contain 
triple the nicotine content of previous e-cigarettes. Yet two-
thirds of Americans between the ages of 15 and 24 do not know 
that e-cigarettes even contain nicotine. Instead, they think it 
only contains flavors.
    Yesterday, our subcommittee heard from two brave high 
school students. JUUL went into their school and gave a 
presentation that was supposed to be about anti-vaping. After 
teachers left the room, and outside the presence of any 
parents, the high school students reported to us, in sworn 
testimony yesterday, that JUUL gave a presentation that painted 
their vaping instruments as healthy, and left kids believing 
that they could use e-cigarettes without health risks.
    When the Big Tobacco companies settled with states 
attorneys general, they were required to release mountains of 
proprietary documents detailing their plans. Today we will 
examine whether or not JUUL used these documents as a model for 
their own marketing campaigns.
    Before I conclude I want to make one thing clear. The most 
important task ahead of us today is to help prevent youth e-
cigarette use and nicotine addiction. But to effectively do so, 
we must trace the origins that led to this epidemic, expose the 
health risks associated with vaping, and hold accountable 
anyone, and everyone, who knowingly put children in harm's way.
    With that, I would like to recognize the ranking member, 
Jim Comer.
    Mr. Comer. Thank you, Mr. Chairman, and I want to thank all 
of our witnesses who are here today on both panels. As I noted 
yesterday, we know, beyond a shadow of a doubt, that smoking is 
dangerous and linked to approximately 480,000 preventable 
deaths in America each year. But these deaths are only 
preventable if the individuals stop smoking. The research 
suggests that electronic cigarettes, such as JUUL, are 95 
percent less harmful than tobacco cigarettes.
    The focus of our hearing today is on one manufacturer of 
electronic cigarettes, JUUL. What concerns me about this 
hearing is, once again, this committee is using its oversight 
authority to bring in another private company and question them 
about their business. While this is certainly an important 
topic because of the legislation pending in Congress, I would 
like to emphasize again that I hope this subcommittee will 
refocus its efforts on providing oversight of government. We 
are the government oversight committee, not the private 
business oversight committee.
    This hearing has been an interesting experience--a Senator 
testifying, spreading out over two days, in numerous panels. We 
are here today at a hearing entitled ``Examining JUUL's Role in 
the Youth Nicotine Epidemic.'' I am interested to hear from 
JUUL about the topic of this hearing, and I hope this 
discussion will be respectful and seek facts to inform public 
policy decisions.
    Just a few years ago, the company was started in a Stanford 
dorm room and it has grown to be valued at over $30 billion and 
represent approximately 70 percent of the electronic cigarette 
market. JUUL has insisted that its product was never designed 
for youth usage and will have the opportunity to present their 
cases here today on steps they have taken to protect against 
youth usage.
    The potential for harm reduction suggests that products 
such as JUUL should be considered as a component of cessation. 
There is a growing consensus in the scientific community that 
electronic cigarettes are significantly less harmful than 
traditional tobacco products. Though the FDA has not yet 
determined that e-cigarettes are effective for this purpose, 
other studies have found that e-cigarette use was associated 
with nearly twice the rate of successful smoking cessation than 
other nicotine replacement therapies.
    Let's be clear about one thing. No one wants kids to use 
tobacco. No one wants kids vaping. Let me repeat that. No one 
wants kids using tobacco and no one wants kids vaping. And no 
one wants vaping companies to target children with 
advertisements. JUUL needs to recognize this, and it has an 
important role to play in ensuring all possible steps are taken 
to deter new smokers.
    I am sure we will hear more from JUUL about their efforts 
in testimony and questions to follow. If Congress moves ahead 
with pursuing additional regulations for these products, we 
should know the effects on positive public health alternatives. 
Prematurely over-regulating companies such as JUUL could have a 
disastrous effect that impedes access to one of the most 
successful products for smoking cessation.
    I look forward to the discussion this afternoon and with 
that, Mr. Chairman, I yield back.
    Mr. Jordan. Mr. Chairman?
    Mr. Krishnamoorthi. Yes, Mr. Jordan?
    Mr. Jordan. I am just curious. I thought the witnesses 
hearing was presented to the minority, and frankly presented to 
the public as we are going to have one panel. I see now that 
you have switched to two panels, but initially it was Mr. 
Monsees and Ms. Gould from JUUL who were supposed to be on the 
panel together. Is there a reason that you are making the 
change?
    Mr. Krishnamoorthi. That was never agreed to, Mr. Jordan. I 
think Ms. Gould requested to be on the panel. We accommodated 
her by having a second panel, and we added a witness. But we 
never agreed to have Mr. Monsees and Ms. Gould testify 
together.
    Mr. Jordan. But they are here, and I thought you agreed 
that we were going to have one panel. We have got three 
witnesses. You waited a half an hour to start the hearing, even 
though we were here, and we have got three witnesses, and yet 
you are going to divide it up into two panels? I am just 
looking at what makes sense, I think, in a practical sense.
    The way it was noticed to us was there would be one--you 
had a hearing yesterday and there was going to be one panel 
today with the respective witnesses from JUUL on that panel.
    Mr. Krishnamoorthi. We provided notice of two panels, but 
that is how we are going to proceed.
    So now we are going to allow the witness to give his 
opening statement.
    Today we are joined on Panel 1, by Mr. James Monsees, Co-
Founder and Chief Product Officer of JUUL Labs. If you would 
please----
    Mr. Meadows. Mr. Chairman, point of order. I am looking at 
the notice and while I really respect the chairman, and perhaps 
he has been misinformed to how it was noticed, we did maybe 
talk about two panels but maybe the first panel was Senator 
Durbin, because the only panel I see has Ms. Gould and Mr. 
Monsees together. I mean, I have got the actual----
    Mr. Krishnamoorthi. The notice apparently has been posted 
on the website for days, Mr. Meadow.
    Mr. Meadows. Well, we just----
    Mr. Krishnamoorthi. I have to waive you onto the committee, 
by the way.
    Mr. Meadows. Well, you don't have to waive me on. I can be 
a pain, if not. But I guess the question is, what reasonable 
reason do we have two panels? I mean, what is the reason?
    Mr. Krishnamoorthi. We have a lot of material to get 
through and so we are going to have two panels. Also, the 
second panel is going to have another witness as well, so it is 
going to balance out. So that is how we are going to proceed, 
and I need to waive you on so you can participate.
    Mr. Comer. Mr. Chairman, I would like to note the presence 
of Mr. Meadows from North Carolina, and ask unanimous consent 
that Mr. Meadows be allowed to participate at today's hearing.
    Mr. Krishnamoorthi. Without objection, Mr. Meadows is 
waived on.
    Mr. Jordan. Mr. Chairman, just one last point and then I 
will stop.
    Mr. Krishnamoorthi. Yes, sir.
    Mr. Jordan. The two panels were yesterday. Today it has 
always been one panel. We have a grand total of three 
witnesses, and you are going to divide them up, even though you 
waited a half an hour to start a hearing that was announced for 
2. So I don't get that, but if that is how you are going to go, 
you guys in the majority, it wasn't how you portrayed it. It 
wasn't how you announced it. It wasn't how it was noticed. But 
you are going to make the change at the last minute, even 
though all three witnesses are here, ready to testify in front 
of the committee that started a half an hour late.
    Mr. Krishnamoorthi. Thank you, Mr. Jordan.
    Today we are joined, on Panel 1, by Mr. James Monsees, Co-
Founder and Chief Product Officer of JUUL Labs, Inc. If you 
would please rise and raise your right hand I will begin by 
swearing you in.
    [Witness sworn.]
    Mr. Krishnamoorthi. Thank you. Let the record show that the 
witness answered in the affirmative. Thank you, and please be 
seated.
    The microphones are sensitive, Mr. Monsees, so please speak 
directly into them. Without objection, your written statement 
will be made part or the record, and with that, Mr. Monsees, 
you are now recognized for five minutes. There is a lighting 
system in front of you. Green means you are in good shape. 
Yellow is different than like stoplights. Here you have to 
speed up, not slow down. And red means please stop. Okay?
    So, Mr. Monsees, with that you are recognized for your 
opening statement of five minutes.

   STATEMENT OF JAMES MONSEES, CO-FOUNDER AND CHIEF PRODUCT 
                    OFFICER, JUUL LABS, INC.

    Mr. Monsees. Thank you, Mr. Chairman, ranking member, 
distinguished Members of Congress.
    My name is James Monsees. Adam Bowen and I founded JUUL 
Labs and I now serve as the Chief Product Officer of that 
company. I am really quite grateful for the opportunity to be 
here today and address you all.
    From the moment Adam and I began the journey that would 
lead to the JUUL system, we were clear in our goal--to help 
improve the lives of adult smokers. We are proud of the 
progress we have made toward that goal. We never wanted any 
non-nicotine user, and certainly nobody underage, to ever use 
JUUL products. Yet the data clearly shows a significant number 
of underage Americans are doing so. This is a serious problem. 
Our company has no higher priority than fighting it.
    To understand our stance on youth vaping it is helpful to 
understand how this company came about in the first place. Adam 
and I smoked. We tried to quit and we failed. We were on our 
way to becoming one of the nearly 500,000 Americans who die 
each year from smoking-related disease. For us, giving up 
smoking required an alternative which did not exist at the 
time. We founded JUUL Labs to invent one.
    The product we developed holds the promise to do what no 
previous technology has done--help adult smokers stop smoking 
combustible cigarettes on a widespread and consistent basis. 
Recent behavioral studies find that more than half of adult 
smokers who purchase and use JUUL products switch completely 
from smoking cigarettes within six months, a fact that we could 
not be more proud of. That study aligns with real-world 
experience. In 2018, cigarette sales declined five percent, the 
fastest rate of decline in a decade.
    Mr. Chairman, put simply, JUUL Labs isn't Big Tobacco. We 
are here to eliminate its product, the cigarette.
    Our difference from tobacco manufacturers is fundamental. 
First, our product does not involve burning tobacco, which 
unleashes 7,000 chemicals, at least 250 of which are known to 
be harmful.
    JUUL products do contain nicotine, which is addictive, but 
it is not directly responsible for the many diseases associated 
with smoking. Public health authorities, such as Public Health 
England, have concluded that vaping is a fraction of the risk 
of smoking, at least 95 percent harmful--less harmful, and of 
negligible risk to bystanders.
    Second, our company's incentives are totally different from 
those of tobacco companies. Traditional cigarette companies 
face a saturated, concentrated global market. JUUL Labs, on the 
other hand, has reached just 0.3 percent of a global market of 
1 billion smokers, 70 percent of whom want to quit actively. 
Our incentive is to help them achieve their goal of 
transitioning from cigarettes. It is an astonishing business 
opportunity, no doubt, but it is a historic opportunity for 
public health. Underage use of our products does not advance 
that goal. It imperils it.
    Third, unlike cigarette manufacturers, our company swiftly 
acknowledges and acts upon public health data. We embrace 
appropriate regulation, and we have acted voluntarily to 
restrict our own practices in service of public health goals. 
These action included unilaterally ceasing sale of certain 
products to retail stores, investing our own funds to drive 
retailer compliance, and proactively advocating for raising the 
legal age to buy our own products.
    We believe that if the steps we have already taken became 
the category-wise standard it would go a long way to driving 
down underage access and usage of vapor products.
    Mr. Chairman, we are prepared to do more. We have met with 
many of our sharpest critics and have sought their suggestions 
for how we can improve. We remain open to their input. We are 
committed to cooperating with this committee, state attorneys 
general, and other officials who wish to examine our practices, 
and we are dedicated to learning from our mistakes and not 
repeating them. In doing so, we hope to earn the trust of this 
committee, Congress, our regulators, our customers, and the 
American public.
    We are grateful for the opportunity to discuss these 
important topics, and look forward to answering your questions.
    Mr. Krishnamoorthi. Thank you, Mr. Monsees. Without 
objection, I would first like to enter some exhibits that are 
going to be referenced during the questioning by different 
members. I would like to now enter Exhibits 1 through 30, 
without objection. So entered.
    Mr. Krishnamoorthi. I now recognize myself for five minutes 
of questioning.
    Mr. Monsees, on August 17, 2006, Judge Gladys Kessler ruled 
in U.S. v. Philip Morris that Philip Morris and other Big 
Tobacco companies were liable for intentionally marketing to 
youth while denying the adverse health effect of smoking. Are 
you familiar with this case, sir?
    Mr. Monsees. More or less, yes.
    Mr. Krishnamoorthi. Now Philip Morris owns the Marlboro 
brand. Is that right?
    Mr. Monsees. That is correct.
    Mr. Krishnamoorthi. And Philip Morris' parent company, 
Altria, now owns 35 percent of JUUL. Correct?
    Mr. Monsees. That is correct.
    Mr. Krishnamoorthi. Yesterday, sir, Dr. Robert Jackler, a 
professor from Stanford University, testified under oath before 
this subcommittee, that you confirmed to him that you reviewed 
Stanford's online library of cigarette advertising and found 
it, quote--and this is in sworn testimony--``very helpful as 
you designed JUUL's advertising,'' close quote.
    You did, in fact, meet with Dr. Jackler, didn't you?
    Mr. Monsees. I did, but I did not make that statement to 
Dr. Jackler.
    Mr. Krishnamoorthi. Okay, sir. So you are under oath and 
you are denying that you made that statement to Dr. Jackler. Is 
that correct?
    Mr. Monsees. I think the--I think that, unfortunately, Dr. 
Jackler may have misheard my commentary. In fact, the resource 
that he compiled is a useful resource. Back when Adam and I 
were at Stanford we were very interested in understanding more 
about the historical bad actions of tobacco companies, and at 
that point we were very interested in using his research to 
understand exactly what bad actions those tobacco companies 
have taken, to familiarize ourselves with how not to run a 
business.
    Mr. Krishnamoorthi. Okay. So you deny his statement under 
oath. I would like to put his assertion in context. Please show 
Advertisement 1.
    Sir, these images that you see on Advertisement 1 contain a 
few different images. Right over here is a picture of 
Marlboro's trade dress; in the middle is the original JUUL 
design that you came up with; and then on the far right is the 
most recent JUUL design.
    Now early on in your advertising you entered into a 
settlement with Philip Morris, and in a board--set of board 
minutes from August 12, 2016, that you produced to us, it says, 
quote, ``Due to requirements outlined in the PMI settlement, we 
removed all JUUL branding that uses triangles and diamond 
shapes,'' close quote.
    PMI is Philip Morris International. Right?
    Mr. Monsees. That is correct.
    Mr. Krishnamoorthi. You settled a lawsuit with Philip 
Morris where they allege that you copied Marlboro's trade 
dress. Is that correct?
    Mr. Monsees. That was the--yes, that was what they said.
    Mr. Krishnamoorthi. How much did you pay as part of the 
settlement with Philip Morris?
    Mr. Monsees. Zero dollars.
    Mr. Krishnamoorthi. So it involved no exchange of money, 
but it required that you abandon the triangles and diamonds, 
which are very similar to Marlboro's trade dress. Is that 
correct?
    Mr. Monsees. We never designed the product to look anything 
like Marlboro. I mean, quite frankly----
    Mr. Krishnamoorthi. You deny that they look similar?
    Mr. Monsees. I do deny that you are comparing here--with 
all due respect, Mr. Chairman, you are comparing a piece of 
packaging to a piece of product hardware. There was never any 
intent. The last thing we wanted was to be confused with any 
major tobacco company.
    Mr. Krishnamoorthi. So the board minutes say, ``Due to 
requirement outlined in PMI settlement, we removed all JUUL 
branding that uses triangles and diamond shapes.'' Do you deny 
that that is what was said in your board minutes?
    Mr. Monsees. I do not deny that.
    Mr. Krishnamoorthi. We would request that you provide this 
subcommittee with the PMI settlement agreement within two 
weeks. Would you do that please?
    Mr. Monsees. I will have to get back to you on that. I 
don't see why that would be a problem, but I will check with my 
colleagues.
    Mr. Krishnamoorthi. Great. We will subpoena it if that is 
required.
    Dr. Jackler testified that Marlboro is, quote, ``the 
leading youth initiation cigarette.'' So, unfortunately, it 
says something that JUUL chose Marlboro to emulate.
    Please go to Ad 2. Let's look at the flavors highlighted in 
this ad. As you can see on the right are the Marlboro products, 
depicted in the advertisement. On the left are the JUUL 
products. You notice the colors are very similar between the 
two companies' products, and one very interesting thing that I 
would like to point out is the flavors. Let's talk about the 
flavors for a second. You have mint, creme, mango, and Virginia 
tobacco. Sir, which flavor is currently JUUL's top-selling 
product?
    Mr. Monsees. Well, currently, after we have pulled, 
voluntarily, all of our flavored products off the market and 
now they are only available on our website, with double age 
verification, the top-selling product, I believe, is the mint 
product, shortly followed by Virginia tobacco.
    Mr. Krishnamoorthi. That is right. Mint accounts for about 
74 percent of your company's sales, and mint is a flavor, 
obviously.
    Mr. Monsees. Mint is a menthol-based product intended to 
appeal to consumers that are using menthol-based cigarettes.
    Mr. Krishnamoorthi. It is a menthol-based flavor. Correct?
    Mr. Monsees. It is a menthol-based flavor. That is correct.
    Mr. Krishnamoorthi. Okay. Can you please put Slide 3, or Ad 
3 up?
    So recently you took out a full-page ad in the Washington 
Post. You said taking flavored products out of stores--and I 
think that is what you alluded to a moment ago. The problem 
here, that I see, is that you left what you call the menthol-
based flavors in the stores--correct?--such as mint.
    Mr. Monsees. That is correct, yes.
    Mr. Krishnamoorthi. So mint is still a flavor that is 
available over the counter, in the stores, and according to the 
2016-2017 Population Assessment for Tobacco Health, 96.1 
percent of 12-to 17-year-olds started with a flavored product. 
Additionally, it found that 97 percent of current youth e-
cigarette users used a flavored e-cigarette in the past month, 
such as mint. Flavors hook kids, and though you say that you 
took all the flavors out of the stores, you left the mint 
flavor.
    Mr. Monsees. Mr. Chairman, with all due respect, I think 
that what you will find is that this was--these were 
unprecedented actions that we took. We head these concerns, and 
I agree with you that we should be concerned. Ever since we 
first heard these concerns we looked to ourselves--without new 
regulation coming and being imposed upon us we took this action 
in and of ourselves.
    The products that we pulled from market, the flavored 
products that we pulled from market, represented more than 50 
percent of our business at the time. I can't imagine a more 
responsive, proactive step that we could take, to exactly the 
point that you are making.
    Mr. Krishnamoorthi. But when you pulled the other flavors 
off the market, mint took their place. Mint is a flavor, and it 
took the place of all the other flavors.
    Mr. Monsees. So, unfortunately----
    Mr. Krishnamoorthi. Do you disagree with that?
    Mr. Monsees. I do. Unfortunately, what has mostly taken the 
place of pulling those products off of the market is illicit--
illegal products that don't comply----
    Mr. Krishnamoorthi. Is mint in your stores, or not?
    Mr. Monsees. It is, sir.
    Mr. Krishnamoorthi. Okay. That is all I need to know. It is 
a flavor. It is a flavored product. It is still in the stores.
    With that I will now recognize Ranking Member Comer for 
five minutes of questioning.
    Mr. Comer. Thank you, Mr. Chairman, and Mr. Monsees, great 
to have you here.
    Do you feel that JUUL has ever purposely used deceptive 
marketing tactics to convey that their products are not 
harmful?
    Mr. Monsees. No. Never.
    Mr. Comer. What was the purpose of creating fruity-flavored 
pods?
    Mr. Monsees. The purpose of flavors is to create a more 
efficacious solution so that--the mission of this company is to 
eliminate the death and disease--to improve the lives of a 
billion adult smokers around the world. Now we know that 70 
percent of those people want to quit, and there were a number 
of tools that we used as we were designing the JUUL platform in 
the first place, through need finding and empathetic research 
with smokers, where we could see opportunities to make a 
product that could be superior to cigarettes. It would make 
cigarettes ultimately obsolete.
    Now what we see in studies, plenty of studies that we have 
run now, is that flavored products over index on switching 
efficacy. I said in my opening statement that 54 percent of 
adult smokers who pick up JUUL and use JUUL quit smoking 
entirely after a six-month period. Even more importantly, that 
number continues to go up as we look more longitudinally. That 
number is much higher, by as much as 30 percent, when those 
consumers have access to flavored products. That is our intent.
    Mr. Comer. So you essentially created the company to 
disrupt the cigarette industry.
    Mr. Monsees. Look, smoking cigarettes is the leading cause 
of preventable death on earth. It kills almost 500,000 
Americans every year, and it costs us $300 billion.
    Mr. Comer. Mr. Monsees, are you concerned by the number of 
teenagers who report vaping or using JUUL?
    Mr. Monsees. I could not be more concerned about that. It 
is----
    Mr. Comer. Was your product ever intended for underage use?
    Mr. Monsees. No. So--absolutely not. One hundred percent 
not.
    Mr. Comer. So you never intended on that product having the 
rates of underage usage that it apparently has?
    Mr. Monsees. So, look. Unfortunately, the long history of 
tobacco is also the long history of underage use of those 
tobacco products. For as long as tobacco products have been 
available, underage consumers have accessed those products and 
used them, oftentimes, pretty much for always, illegally. I was 
one of those underage youths. I bought those products illegally 
and I used them. There hasn't been a lot of advancement in the 
way that we control access to those products.
    Now in building these products, not only are they not 
designed for youth, it imperils the business if youth use these 
products. What we really need to do is work with hopefully this 
committee, every tobacco researcher analyst possible, everyone 
we can get our hands on, to help us create industry-wide 
practices. We are trying to prove what those practices should 
be and what they really can be.
    Mr. Comer. So preventing underage usage is a priority for 
JUUL.
    Mr. Monsees. There is no higher priority for this company.
    Mr. Comer. So what steps are you taking to prevent this?
    Mr. Monsees. Sure. So as I mentioned earlier, so last year, 
in November 2018--going back even further than that. We have 
taken escalating steps as we have learned about these problems. 
Unfortunately, most of the criticism that we receive doesn't 
come directly to the company, while we welcome that and we 
would love to work more directly with people that have 
critiques with the company. But when we hear that criticism we 
take this extremely seriously and we take action.
    So those escalating steps really moved through to one that 
I really want to highlight. In November 2018, we pulled over 50 
percent of our revenue off of the market, proactively. There 
was nothing that required us to do that, but we were hearing a 
lot of critique about flavored products. What we left on the 
market were tobacco-based and menthol-based products, just the 
same way that cigarettes exist on the market.
    Mr. Comer. Let me ask one last question. Have you been 
working with the FDA to institute any changes to the regulatory 
environment to prevent youth use of your product?
    Mr. Monsees. So there have been some conversations that the 
FDA has taken up with us, where they provided some guidance on, 
in particular, how to run surveys. Now understand, when we want 
to better understand the usage issue, it is very difficult for 
us to study youth directly. So one of the ways in which I think 
we have had the most valuable or positive relationship with the 
FDA thus far was just getting guidance from them on how we can 
better study youth usage.
    Mr. Comer. Well, thank you, and, Mr. Chairman, my time has 
expired.
    Mr. Krishnamoorthi. Thank you. Congresswoman Hill, you have 
five minutes.
    Ms. Hill. Thank you, Mr. Chairman. I want to set the stage 
really quick, because we have a recent acquisition by Altria, 
or investment by Altria, that brings you up to 35 percent stake 
and double the value of JUUL. We have also seen a recent uptick 
in similar tactics as was used by big cigarette companies, Big 
Tobacco companies, in the years leading up to the crisis that 
we faced the last generation of tobacco users, including--I 
have an article that I would like to ask unanimous consent to 
enter into the record, ``Ahead of congressional hearing JUUL 
crosses $1 million in quarterly lobbying payouts for the first 
time.'' That is a Forbes article.
    Also just today, on my phone, I was reading a Politico 
article, and an ad popped up that is from JUUL, saying, ``Learn 
more about how we are combating youth vaping,'' and I don't 
think there are a whole lot of people outside of the political 
sphere that read Politico.
    So anyway, here we are, and I want to just talk about 
influencers who are pushing the product. I know that social 
media is clearly the place where young people are getting a lot 
of their information. And just so everyone is on the same page 
with terminology, influencers are social media users who have 
large online followings and established audience credibility. 
Many of them have hundreds of thousands, if not millions of 
online followers. Many companies, ranging from clothing brands, 
cosmetic lines, food and beverages, and so on, sign contracts 
with known influencers on sites like Instagram, to help sell 
their products.
    Mr. Monsees, are you aware of what an influencer program is 
and how one might be used to sell products?
    Mr. Monsees. I am generally aware of how an influencer 
program would work.
    Ms. Hill. Great. Giving the growing popularity of 
influencers as a brand marketing tool, companies now have the 
ability to authentically market their products directly through 
the smartphones of potential consumers, which means it will 
inevitably be seen by people of all backgrounds, including race 
and ethnicity, gender identity, geography, age, and so on.
    And just out of curiosity, Mr. Monsees, do you happen to 
know, off the top of your head, how old you need to be to 
create an Instagram account?
    Mr. Monsees. I don't.
    Ms. Hill. Thirteen. You have to be 13 years old.
    So in advance of this hearing we sent JUUL a letter asking 
you to identify, quote, ``every celebrity, influencer, and 
marketing agency that was engaged by JUUL,'' and, Mr. Monsees, 
JUUL's June 21 letter response pointed to only four influencers 
and states that you, quote, ``do not have a traditional 
celebrity or influencer program.'' Was that response accurate?
    Mr. Monsees. I believe it is, yes.
    Ms. Hill. So let's turn our eyes to some of the documents 
you did graciously provide in advance of this hearing.
    Exhibit 4 is a March 2, 2015, contract with Grit Creative 
Group for the, quote, ``JUUL Launch Influencer Seeding 
Program.'' The contract required Grit to, quote, ``curate and 
identify 280 influencers in LA and New York to seed JUUL 
product over the course of three months.'' Is this correct?
    Mr. Monsees. I am sorry. I don't have a copy of that 
document.
    Ms. Hill. We will be happy to provide one for you.
    Is there a reason that JUUL failed to mention these 280 
influencers in your response to the subcommittee?
    Mr. Monsees. I am sorry. I would have to at least take a 
look at the document. I am not----
    Ms. Hill. It is information you provided us.
    Mr. Monsees. There were a lot of documents we provided. I 
am sorry, I----
    Ms. Hill. Okay. Well, while the staff works on that, let's 
look at Exhibit 5, a second Grit contract, dated July 27, 2015, 
to secure, quote, ``social media buzzmakers with a minimum of 
30,000 followers'' and to develop, quote, ``influencer 
engagement efforts to establish a network of creatives to 
leverage as loyalists for JUUL.''
    So, Mr. Monsees, Grit wasn't the only company you hired to 
engage influencers like this. There are others. Correct?
    Mr. Monsees. Look, maybe I can help get to the--maybe I can 
help cut this short a little bit. There were a number of 
different things that we tried early on in pursuit of the 
mission of this company. We know that of the billion smokers 
globally, 70 percent want to quit. What we also knew was that 
younger consumers, aged 25 to 34, was going to be the target of 
our initial campaign--thank you--was going to be the target of 
our initial campaign, because what we found was they would be 
more receptive to new technology solutions that had not been 
available before.
    Ms. Hill. Okay. I am running out of time, so I want to just 
get to a couple of other things.
    So in Exhibit 6--and you have got your documents now--is a 
May 6, 2015, email from Kate Morgan, your field marketing 
manager, who oversaw influencers and launch parties. She 
references the 280 JUUL influences from Grit and says, quote, 
``We are doing a target to build 1,000 JUUL influencers 
internally via an email campaign.'' Exhibit 7 shows JUUL 
analyzing its own email lists and identifying 29,000 
influencers.
    So I realize that you are saying that you were doing this 
to target young people, and that is fine, but in Exhibit 8, an 
August 4, 2015, marketing update, stated, quote, ``The 
container tour will get JUUL into the hands of over 12,500 
influencers, subsequently introducing JUUL to over 1.5 million 
people.''
    And let's go back to this June 21 letter to the 
subcommittee. You said you do not have a traditional celebrity 
or influencer program, but in Exhibit 9, May 17, 2018, the JUUL 
document entitled ``JUUL Influencer Program'' details steps 
that your influencer team had already taken. We continued 
through this from June 5--I am sorry, December 5, 2017, in 
Exhibit 10; May 29, 2018, Exhibit 11, including the email 
saying ``Influencer Department Roundup.'' We have got 200 
casted influencers.
    So do you still maintain that you didn't have an influencer 
program?
    Mr. Monsees. To the best of my knowledge, we--I am sorry. 
Are you talking about a paid influencer program? Is that what 
we are discussing here?
    Ms. Hill. No. We are talking an influencer program.
    Mr. Monsees. Okay. Look----
    Ms. Hill. But you are on the record, and you said a moment 
ago that you did not have a traditional celebrity or influencer 
program. Do you want to maintain that?
    Mr. Krishnamoorthi. I will let the witness answer, but we 
are running out of time. Go ahead.
    Mr. Monsees. Sure. Look, it sounds like we are getting into 
territory I am not completely familiar with, so I am more than 
happy to look into----
    Ms. Hill. Okay. So we are going to ask you to respond in 
writing then, as a followup to this, about your influencer 
program, and whether you would like to revise your statement 
that says that you did not have a traditional celebrity or 
influencer program. When kids learn about a dangerous product 
from influencers on social media, it avoids public detection by 
parents, especially when many of these social media sites are 
used by millions of kids under 18, which could help explain how 
JUUL got its product into the hands of over 20 percent of high 
schoolers before parents had even heard of JUUL, let alone had 
a chance to step in.
    Thank you.
    Mr. Krishnamoorthi. Thank you. I now recognize 
Congresswoman Miller for five minutes of questioning.
    Mrs. Miller. Thank you, Mr. Chairman, and Ranking Member 
Cloud.
    Mr. Monsees, yesterday in our hearing with public health 
experts we heard about how important non-combustible e-
cigarettes can be to help adults quit smoking. What is JUUL's 
relative success in getting adults to quit?
    Mr. Monsees. Yes. So there is--so, Congresswoman, there are 
a number of different studies that show--that speak to the 
category, in general. There is a New England--the New England 
Journal of Medicine shows a two times more likely--higher 
likelihood of quitting -- compared to once consumers use e-
cigarettes. There is a Rigotti Tobacco Control Study that shows 
a 77 percent increased correlation in quitting. And in the 
Journal of Addiction, which is survey data of close to 19,000 
smokers, that is also associated with nearly double the odds.
    Now all of these studies look at the category in general, 
and what you asked, in particular, was how well JUUL does. 
Well, traditional nicotine replacement therapies, which are 
generally regarded as the gold standard of tools, right, for 
quitting, those are nicotine in a patch or a gum form, 
typically, and the efficacy rates on those hover just below 
about 10 percent or so.
    JUUL--we ran a very large study of JUUL consumers, ex-
smokers who had picked up JUUL, and looked at them, looked at 
their usage on a longitudinal basis, which is usually the way 
that we want to look at this, in a sophisticated fashion. What 
we found was that 54 percent--and this was actually not us; 
this is the Center for Substance Use Research, a third-party 
independent agency, running a study that we did fund. What we 
found was that after 90 days, 54 percent of those smokers had 
stopped smoking completely, for a minimum of 30 days already.
    The most interesting part of this study is that if you 
follow it out further, to 180 days, that number continues to go 
up dramatically, and that is quite the opposite of what happens 
with traditional nicotine replacement therapies.
    Mrs. Miller. I think we can all agree that it is important 
to keep these products out of the hands of underage youth while 
also ensuring that they are available to adults who would like 
to quit smoking combustible cigarettes. JUUL products can be 
bought both in a store and online. Is that correct?
    Mr. Monsees. That is correct, although the kinds of JUUL 
products that are available still at stores are very limited in 
scope.
    Mrs. Miller. When an individual buys a product in a store, 
what are the steps that they have to go through to ensure that 
they can purchase the product?
    Mr. Monsees. When a consumer buys the product online, first 
of all it is only available via JUUL. If you find the product 
available on a different website then it is an illicit product 
and no one should purchase from a different--from anywhere else 
online. Now these sorts of sites pop up constantly now. It has 
been a tremendous effort for the company. We take down tens of 
thousands of these websites selling illicit products that do 
not have good quality control standards and are breaking the 
law in number of different ways.
    When you come to our website what we find is we don't just 
ask you your age. We actually register you as a user of it. So 
what we will do is, first of all, check your ID, so do an ID 
scan. We will run that and make sure that that person, who 
exists, is of a valid age. Now we don't end on that one. What 
we sometimes still do is look for--is ask the last four digits 
of one's Social Security number that has to tie back to their 
license. What we have started to do, and this is even much more 
sophisticated, is actually use two-factor authentication in 
nearly all circumstances, and that means that that user has to 
enter both their name and phone number, and that has to match 
up with their driver's license. They get a text message on 
their phone. That phone is registered, and has a credit check 
run when you register that phone, to the individual, not just 
to a family, that verifies exactly who that person is and what 
age they are. Those credit checks are public--use public 
records, sort of akin to what you would check when you are 
looking for a loan if you are going to buy a house.
    Mrs. Miller. Okay. I think I am out of time, aren't I?
    Mr. Monsees. Sorry. I ran a little long.
    Mrs. Miller. Thank you.
    Mr. Krishnamoorthi. Thank you. I now recognize 
Congresswoman Pressley for five minutes of questioning.
    Ms. Pressley. Thank you, Mr. Chair. Mr. Monsees, I want to 
ask a little bit about the FDA's process for regulating e-
cigarette and vaping products.
    Under the FDA's Deeming Rule, vaping products which were on 
the market prior to August 8, 2016, the date with which the 
Deeming Rule went into effect, could avoid FDA regulation. Can 
you explain what it means for a product to be on the market 
before that date?
    Mr. Monsees. So, and I am sorry. You are talking about the 
Deeming date of 2006?
    Ms. Pressley. For example, so let me just be more specific, 
because I am short on time and I want to get through a lot 
here. Okay?
    So would selling pods at one single store be sufficient?
    Mr. Monsees. Would it be sufficient----
    Ms. Pressley. Yes.
    Mr. Monsees [continuing]. to run a business? Is that what 
you are----
    Ms. Pressley. Let me read the question again. You are very 
a bright man so I am sure you can follow me, and I don't want 
you eating my time here.
    Mr. Monsees. I am doing my best.
    Ms. Pressley. So under the FDA's Deeming Rule, vaping 
products that were on the market prior to August 8, 2016, the 
date in which the Deeming Rule went into effect, could avoid 
FDA regulation. Can you explain what it means for a product to 
be on the market before that Deeming day? What does it mean?
    Mr. Monsees. Oh, I see. So my best recollection of the 
standard there is that the product has to have been offered for 
commercial sale, and that is effectively the definition of--I 
think that is right.
    Ms. Pressley. Okay, and I am going to move on. Did JUUL 
rush--the point is, did you rush any products onto the market 
before the August 8 grandfathered date, in order to beat that 
effective date?
    Mr. Monsees. We did. I think that is a very fair way to put 
it. This is what effectively every product in the category 
facing that hard deadline did. Now none of those products are 
products that were----
    Ms. Pressley. I am reclaiming my time. I am sorry.
    Mr. Monsees. Okay.
    Ms. Pressley. I am short on time here.
    So Exhibit 2--unfortunately, our screens are not working, 
but, you know, I can recite well here--a February 2, 2016, 
internal email, six months before this grandfathered date, from 
Sarah Richardson, the Communications Director to a group, 
including JUUL's Executive Director of Brand and Product 
Marketing and the Director of Global Customer Implementation.
    The email, it says, quote, ``Wanted to recap you on our 
chat this a.m. regarding JUUL's limited SKU messaging, i.e., 
various nicotine levels, new flavors, bottled juice. 
Guidelines: (1) For grandfathering purposes we don't want to 
frame these SKU launches as being a test or being a short-term 
SKU. Limited launch or limited locations is preferable. Don't 
want to imply that they are going away. (2) We also don't want 
to imply anything around timing for expanded availability to 
protect ourselves, as many may very well not be available by 
the end of this year.''
    So, Mr. Monsees, JUUL did try to introduce limited runs to 
beat the grandfathered date. Correct?
    Mr. Monsees. I think I already admitted to that, yes.
    Ms. Pressley. Very good. Okay. Well, very bad, but thank 
you for honoring it.
    So why was it important that you, quote, ``not frame these 
SKU launches as being a test or being a short-term SKU''?
    Mr. Monsees. So I will give you one specific example here. 
When we were first launching JUUL we were a very small company 
with, you know, very limited resources, and we had wanted, from 
the very beginning, to, for example, have a number of different 
nicotine strengths available to consumers. Now, when we were 
faced with this grandfathered date that was coming very 
quickly, we did do a lot of work. I mean, there was a lot of 
legwork done to develop all of those products and actually push 
them out. Now we did actually sell those products to consumers, 
and this was, in general, what the whole industry was doing to 
try to basically preserve optionality, given the situation.
    Ms. Pressley. Thank you. I want to get through a couple 
more things here.
    Mr. Monsees. Yes.
    Ms. Pressley. You know, what I am getting at and what is 
very disturbing about this, and problematic, is that it seems 
that you were looking to circumvent FDA regulation, and that is 
what is troublesome about this paper trail and what you are 
corroborating here today.
    Mr. Monsees. I----
    Ms. Pressley. So--because JUUL did not want to, quote, 
``imply that they are going away,'' but in the next line 
acknowledges that many may very well not be available by the 
end of this year.
    Mr. Monsees. Right. So, as I said, we did a----
    Ms. Pressley. I am sorry. Reclaiming my time.
    Mr. Monsees, how many limited SKU launches did you 
introduce after this email and how many are still available 
today?
    Mr. Monsees. I don't know exactly when that----
    Ms. Pressley. Okay. You can get back to me.
    So Exhibit 3 is from August 12, 2016, board minutes. It 
shows the volume of new products that JUUL tried to introduce 
between December 2015 and August 2016, when the Deeming Rule 
went into place. You added, and I quote, ``Three JUUL starter 
kits, 11 JUUL device colors, 17 pod flavors, 29 partner pod 
flavors, with seven major juice brands; 21 pod flavors and two 
to three additional nicotine strengths, and 27 bottled juice 
flavors in three nicotine strengths.'' That is a major push.
    Mr. Monsees. That is absolutely correct, yes.
    Ms. Pressley. So, Mr. Monsees, is it your belief that all 
of that is grandfathered and, therefore, shielded from FDA 
regulation?
    Mr. Monsees. So we have a very limited set----
    Ms. Pressley. And we have limited time, so yes or no. Is it 
your belief that all this is grandfathered, and, therefore, 
shielded from the FDA regulation, and that is why you rushed 
these products?
    Mr. Monsees. So every product that is on market right now 
was in no way rushed. It was legitimately on the market, has 
been sold for some period of time. We have no intention of 
introducing any new flavors whatsoever until after PMTA takes 
place.
    Mr. Krishnamoorthi. Congresswoman, the time has expired.
    Ms. Pressley. Thank you, Mr. Chair.
    Mr. Krishnamoorthi. Thank you. I now recognize the 
gentleman from North Carolina, Mr. Meadows, for five minutes.
    Mr. Meadows. Thank you, Mr. Chairman. Mr. Monsees, we have 
got two competing narratives here. One is a desire to help 
people get away from traditional smoking. Is that correct?
    Mr. Monsees. Absolutely.
    Mr. Meadows. And, as a Member of Congress whose father died 
from lung cancer, I am very sensitive to both narratives, one, 
trying to get people away from those carcinogenic tobacco 
products, and yet, at the same time, the No. 1 complaint I get 
from teachers is all about vaping in schools.
    So those are the two narratives we have, and we need your 
help. You said it is a priority, but what we have to do is 
really be very strong in making sure that vaping doesn't get in 
the hands of youth.
    Would outlawing the product for anybody under the age of 21 
help?
    Mr. Monsees. Right. So, actually that has been quite a 
crusade for us recently. So for the past nearly--I believe it 
was the past nearly two years or so-- we have been really 
pushing Tobacco 21 regulation. Now I will tell you why that 
would help, we believe, substantially. Within high schools, our 
best understanding right now is that social sourcing, meaning 
basically one student buys from a student who is actually above 
the legal age of purchase, sells or gives the product 
illegally, right, to another student. So if we create that 
distance, right, that divide, so that it is much harder for 
someone in high school to find a willing participant to 
illegally buy products and distribute them to minors, then that 
goes a really long way in youth prevention.
    Mr. Meadows. All right. So you are saying you support 
outlawing these products for anybody that is not of 21 years of 
age or greater. Is that correct?
    Mr. Monsees. Absolutely. All tobacco products. We are 
strong supporters of a clean Tobacco 21 bill, and I think we 
have seen tremendous progress on it. It sounds like by the end 
of, I believe next year, over half of all people in this 
country will be covered by Tobacco 21. I know there has been a 
number of people that have had long-fought efforts trying to 
push Tobacco 21, but I think our support has really pushed that 
over the edge substantially.
    Mr. Meadows. As you know, there are a number of bills that 
are floating around, both on the Senate side and the House 
side. I know Diane DeGette has one that we have supported.
    So is it true that you have given over 180,000 pages of 
documents to this committee for review?
    Mr. Monsees. That is my belief, yes.
    Mr. Meadows. So [there are] 180,000 pages of documents for 
this committee to review, in terms of your intentions and what 
you did and what you should have done. So I can just tell you, 
I have been on this committee--this is now my fourth term in 
Congress to be on this committee-- and that level of 
participation is certainly unique. In fact, I would say it is 
even greater than most Federal agencies, in terms of their 
responding.
    How many of those pages, of the 180,000 pages of documents 
that you have given, have you redacted most of the information 
on those, where there are blank pages?
    Mr. Monsees. I believe none, as far as I am aware.
    Mr. Meadows. Okay. So in that spirit of transparency here 
is what I would ask you, is knowing that your goal is to help 
people get off of traditional tobacco products--in North 
Carolina, I can tell you, we know tobacco, and vaping has 
gotten to be a big problem in high schools. Actually, Skoal and 
those other products is still a big problem in terms of typical 
chewing tobaccos and the like.
    How do you think that we can best address the concerns of 
increased nicotine use among youth and yet, at the same time, 
not prohibit--and the chairman was talking about mint. Let's be 
clear--it is menthol. Let's also be clear that the users of 
menthol products have a unique demographic. I see menthol being 
very different than bubble gum or cotton candy. Would you agree 
with that?
    Mr. Monsees. One hundred percent, sir. It is one of the 
major unfortunate facts that as a result of our action, pulling 
our flavored products off of the market, that market has been 
backfilled by a number of, you know, third-party manufacturers, 
mainly Chinese fly by-night companies with little to no 
manufacturing practice to it. We have raided a number of these 
facilities proactively, in China, actually, and it is startling 
what you will see there, the low quality standards. Now this is 
what is backfilling these products, and actually giving us, 
oddly enough, a much worse reputation because now people 
believe that JUUL sells cotton candy-flavored products.
    Mr. Meadows. So here is what I would ask, with the 
chairman's indulgence, three things that I think would help 
this committee. I need you to help us identify those areas that 
are counterfeit and that are really preying on the lives of 
teenagers, whether it be in marketing or importing from China, 
if you will do that. The second is more than just outlawing it 
at 21. What are three other steps that we can do to make sure 
that it doesn't get in the hands of youth? And the third thing 
is how are you willing to partner with Congress, in terms of 
legislation, to accomplish the first two?
    Mr. Chairman, I will yield back. I thank you.
    Mr. Krishnamoorthi. Thank you, Mr. Meadows. Without 
objection, Debbie Wasserman-Schultz, the gentlewoman from 
Florida, shall be permitted to join the subcommittee on the 
dais and be recognized for questioning the witnesses. I would 
also like to recognize that our chairman is with us as well.
    So Ms. Wasserman-Schultz, you have five minutes.
    Ms. Wasserman Schultz. Thank you, Mr. Chairman. I 
appreciate the indulgence of the committee allowing me to come 
and participate.
    Mr. Monsees, the rise in e-cigarette use among children is 
deeply troubling, and I know I have met with kids in my 
district who have become addicted to nicotine through your 
products.
    This year I introduced the PROTECT Act, which would 
authorize $100 million in annual funding for a CDC initiative 
to address this public health epidemic. I know your company is 
supportive of the PROTECT Act and I certainly appreciate that. 
I want to take your statements today in good faith, that you 
are taking the epidemic of youth e-cigarette use seriously.
    But unfortunately there is so much evidence to the 
contrary, so I am hoping that you can offer me some answers and 
some clarity.
    When your product entered the market, existing e-cigarettes 
contained between 10 and 20 milligrams of nicotine per 
milliliter of liquid. You use a nicotine salt formulation that 
removed the harshness and bad taste of the nicotine and then 
tripled the nicotine content over existing products, making 
JUUL the most potent e-cigarette on the market. The EU and the 
UK have capped nicotine levels at 20 milligrams of nicotine per 
milliliter of liquid, a third of your U.S. product.
    With that cap, you do still a product in the EU and UK. 
Correct?
    Mr. Monsees. We do.
    Ms. Wasserman Schultz. Last year, Israel also capped 
nicotine content at 20 milligrams per milliliter, calling 
JUUL's higher nicotine product, quote, ``a grave danger to 
public health.'' JUUL's 59 milligram per milliliter product was 
already on the market there. You recalled your 59 milligram per 
milliliter product and entered that market, in Israel, with a 
20 milligram per milliliter product. Correct?
    Mr. Monsees. Correct.
    Ms. Wasserman Schultz. So obviously JUUL has determined 
that it can still make money selling a product at less-
dangerous nicotine levels. So yes or no--do you think that a 20 
milligrams per milliliter JUUL can accomplish your stated 
mission of helping adult smokers to quit smoking conventional 
cigarettes?
    Mr. Monsees. So let me provide a little bit of context 
there.
    Ms. Wasserman Schultz. Not that much context. If you could 
answer briefly.
    Mr. Monsees. I understand. So the first concentration, the 
five percent product that you are talking about right now, was 
designed to mimic, but never exceed, the pharmacokinetic 
curvature of a cigarette.
    Ms. Wasserman Schultz. Okay. I really just want a clear 
answer of can you achieve your stated mission of helping adult 
smokers to quit smoking conventional cigarettes using a 20 
milligram per milliliter product?
    Mr. Monsees. We would love to try.
    Ms. Wasserman Schultz. Okay. But you are already trying in 
every country except this one.
    JUUL often cites a UK study for the proposition that e-
cigarettes may help people quit smoking, but you failed to 
mention that participants in that study were using e-liquid 
below the 20 milligram per milliliter number, nowhere near the 
59 level in your U.S. product.
    Mr. Monsees, late last year it was reported JUUL began 
developing a pod that would comply with 20 milligram per 
milliliter caps, but would also increase the voltage and 
temperatures of the device and, therefore, deliver more 
nicotine to the blood. Is that accurate?
    Mr. Monsees. I am not sure what you are referring to with 
voltage and temperature.
    Ms. Wasserman Schultz. The actual delivery device, where 
you were increasing the voltage and the temperature of the 
device. Instead of having a 59 milligram per milliliter cap you 
would have your--go down to 20 and you would deliver a more 
potent delivery system of nicotine into the bloodstream. Is 
that accurate?
    Mr. Monsees. I am not sure what--I am not aware of----
    Ms. Wasserman Schultz. Okay.
    Mr. Monsees [continuing]. what you are talking about.
    Ms. Wasserman Schultz. So if you can answer that question 
for the record I would appreciate that. That is mind-boggling 
that you don't know the answer.
    Are you aware that this could make the pods, assuming it is 
correct, even more addictive, heightening the risk for young 
people--if that were the case?
    Mr. Monsees. If we were to increase the voltage of the 
product?
    Ms. Wasserman Schultz. And the temperature at which the 
liquid is delivered.
    Mr. Monsees. So our products are quite notably temperature 
controlled for product safety. We are the only product on the 
market that is closely temperature controlled.
    Ms. Wasserman Schultz. Okay.
    Mr. Monsees. We would never increase the temperature of the 
product.
    Ms. Wasserman Schultz. Okay. So then you are saying it is 
not accurate. I would like you to get more specific information 
back for the record.
    Verbally, JUUL has been supportive of regulations, but your 
actions speak differently. Developing a product that 
technically complies with nicotine caps while manipulating 
nicotine delivery seems to disregard the spirit and intent of 
the law. You appear to be marketing yourself as a smoking 
cessation device. However, you are not FDA approved for that 
purpose, and efforts to increase nicotine delivery highlight 
why that is the case. FDA-approved smoking cessation products 
include instructions for stepping down nicotine intake and for 
weaning off nicotine entirely.
    Mr. Monsees, does your product come with these 
instructions?
    Mr. Monsees. It does not and we would never market it as a 
cessation product. Let me be very clear--JUUL is not a 
cessation product.
    Ms. Wasserman Schultz. So you don't market your--that is 
news to me, and probably everyone in this room, that JUUL is 
not marketing yourselves as a nicotine or a smoking cessation 
product. So that is every other vaping product except yours?
    So when someone starts on JUUL, would you have any problem 
keeping them as a customer for life? So that is what your 
intent is? You don't want to use your product as a smoking 
cessation tool. You just want people to be addicted to nicotine 
for their entire lives?
    Mr. Monsees. Absolutely not. No. Seventy percent of the 
world's 1 billion smokers want to stop smoking immediately. Now 
the first and most important thing that they can do to improve 
their life expectancy is move away from cigarettes. Now that is 
the stage that we are at right now. JUUL does a great job of 
that.
    Ms. Wasserman Schultz. Is it correct that Altria owns 35 
percent of your company?
    Mr. Monsees. It is true, yes.
    Ms. Wasserman Schultz. So do you consider yourself a part 
of Big Tobacco?
    Mr. Monsees. I consider a traditional Big Tobacco company 
as a major investor in our company.
    Ms. Wasserman Schultz. Right. Okay. Actions speak louder 
than words. Thank you. I appreciate the chairman's indulgence.
    Mr. Krishnamoorthi. Sure. Thank you, Congresswoman. I now 
recognize Congressman Grothman for five minutes of questioning.
    Mr. Grothman. Sure. Can you just--kind of followup on the 
last thing. Is there any correlation since JUUL and similar 
products came on the market and the rate of cigarette sales?
    Mr. Monsees. Any--oh, sure, and since JUUL has come on the 
market cigarette sales have declined quite a bit. So in 2018, 
we saw five percent declines in the tobacco market. So far this 
year we are seeing year-over-year declines of about eight 
percent in the traditional--in combustible tobacco.
    Mr. Grothman. How long have you been available, largely all 
over the country? How long?
    Mr. Monsees. I would say we were--we began to be widely 
distributed sometime in 2016.
    Mr. Grothman. Okay. In general, when I think of e-
cigarettes, I think of people who want to stop smoking. Do 
people buy your product for that reason?
    Mr. Monsees. Yes. I would say nearly everyone uses our 
product as an alternative to traditional tobacco products.
    Mr. Grothman. Okay. Now there have been a lot of things on 
the market my whole life--nicotine gum, da-da-da. Have there 
been any studies to see the success--and I know somebody who 
couldn't quit at all. I don't know if she used JUUL, but one of 
these type products, and finally was able to quit smoking. Have 
there been any studies done comparing how effective you are 
with your product compared to these other things?
    Mr. Monsees. Absolutely. So not necessarily direct studies, 
where a study is looking at one versus the other. But the 
efficacy rates of nicotine cessation therapies, which are, I 
believe, speaking to--are well known. So there are studies of 
e-cigarettes by the New England Journal of Medicine, Rigotti 
Tobacco Control, and Addiction, all very well respected and 
very well run studies, that generally, in general, show, for 
the category, about a 2X improvement in cessation, or the 
ability for a consumer to stop smoking completely. Now they may 
continue using e-cigarettes afterwards, but they have stopped 
using cigarettes.
    In fact, one of these--actually, one of these studies, the 
Rigotti study, I believe, looks more specifically at does 
anyone continue to use these products ad infinitum?
    Now all of the studies I just mentioned are great but they 
don't study JUUL. So the studies that we have commissioned via 
a third-party research laboratory looked at about 18,000--I 
believe it was about 18,000 JUUL consumers on a longitudinal 
basis, so smokers who picked up JUUL. Fifty-four percent of 
those smokers quit smoking completely within the first 90 days, 
and to mean switching completely they had to have abstained 
totally from using a combustible cigarette for over 30 days at 
that point. If you follow out the data on an even longer-term 
basis, those numbers continue to go up.
    You were asking about these, you know, traditional 
cessation products. The interesting thing is that while the 
efficacy rates for those products look meaningful, not nearly 
as promising as 54-plus percent that--you know, around 10 
percent, that is something. The long-term efficacy for those 
products tends to go down quite substantially. The longer-term 
efficacy for these studies on JUUL continue to go up, to as 
much as 80 percent.
    These are huge opportunities for public health.
    Mr. Grothman. Okay. I take it, you know, any health 
downsides--I mean, some people have got to keep using. I know a 
guy who quit smoking. He had nicotine gum for 25 years. It 
always worked, but he had it for 25 years.
    Your product is wildly more healthy than cigarettes?
    Mr. Monsees. Yes. So there are a number of different----
    Mr. Grothman. I will give you another question. I don't 
know if you have thought of this. Maybe you want to send a 
question to the committee later on. Given that many more people 
have stopped smoking with JUUL or similar products than these 
other things like the patch and that, and given that, you know, 
life expectancy for cigarette smokers goes down, do you know 
how many lives have been saved so far by people using JUUL 
compared to these other things?
    Mr. Monsees. I--you know, it is tough to say, because it 
would completely depend on them staying off of cigarettes.
    Mr. Grothman. You must be able to make an estimate. Why 
don't you--because I would think that is something you would be 
happy to brag about for your company. Why don't you have people 
go back and put pencil to paper, you know, percentage of people 
quitting with gum, percentage of people quitting with JUUL, and 
see--make a stab at how many lives your company has saved so 
far.
    Mr. Monsees. I would be happy to do that.
    Mr. Krishnamoorthi. Thank you. Congresswoman Tlaib, you 
have five minutes of questioning.
    Ms. Tlaib. Thank you, Mr. Chairman. Mr. Monsees, I just 
want to ask you a yes-or-no question. But when you say ``I 
don't know'' and you actually know, it is actually lying too. 
So I just want you to know that. If you say you don't know 
something, but you actually do, it is the same thing as a lie. 
I just want you to know that.
    So, Mr. Monsees, when the extent of your epidemic became 
clear and Federal health agencies pointed to JUUL as the source 
of the problem, your actions did not seem to grasp the urgency 
of this problem. Instead, you simply transitioned to marketing 
JUUL as a healthy alternative to cigarettes for smokers to, 
quote, ``switch to.''
    If we can put up--right behind me is saying smoking--I just 
want to ask you this, yes or no--smoking means cigarettes. 
Correct?
    Mr. Monsees. Correct.
    Ms. Tlaib. And switch means JUUL--correct?
    Mr. Monsees. Correct.
    Ms. Tlaib. After 30 lines, starting with ``quit,'' the ad 
says ``switch,'' followed by no further mentions of start 
smoking again. You were a smoker. Does this ad give a smoker 
hope that there might be a way to quite cigarettes for good?
    Mr. Monsees. I think the intention of this ad is to make it 
very clear to consumers that there is an alternative, finally, 
to combustible cigarettes. I am one of those people.
    Ms. Tlaib. Do you agree that the ad conveys that there--
that your product can help smokers quit smoking cigarettes?
    Mr. Monsees. No. I think what the ad is trying--what we 
tried to convey with this ad, to the best of my knowledge, at 
least, is this is the pattern of action----
    Ms. Tlaib. You are trying to get a way around FDA 
regulations, Mr. Monsees. But the FDA regulates smoking 
cessation devices, the things that actually help people quit 
smoking. But JUUL has avoided explicitly calling itself a 
cessation device, which JUUL believes helps it avoid this 
particular FDA regulation.
    Mr. Monsees, I imagine that you chose your words very 
carefully in these ads. Yes or no, did your lawyers tell you 
that this ad was not claiming to be a therapeutic cessation 
device?
    Mr. Monsees. We do not----
    Ms. Tlaib. Yes or no
    Mr. Monsees [continuing]. plan broadly----
    Ms. Tlaib. Did your lawyers say that this does not convey 
that?
    Mr. Monsees. I am giving you an even broader answer here. 
We do not claim for JUUL to be a cessation product. Let me tell 
you exactly why. The history of cessations products have 
extremely low efficacy. That is the problem we are trying to 
solve here. So if we can give consumers an alternative----
    Ms. Tlaib. Sure.
    Mr. Monsees [continuing]. and market it right next to other 
cigarettes, then we can actually----
    Ms. Tlaib. Yes.
    Mr. Monsees [continuing]. make something work.
    Ms. Tlaib. You targeted children to do that too.
    Did your lawyers tell you that the words ``switch'' and 
``switching'' were not therapeutic cessation claims?
    Mr. Monsees. Not--I--I don't recall exactly with our 
lawyers----
    Ms. Tlaib. Mm-hmm. Are you allowed to say that your 
products are healthier than cigarettes?
    Mr. Monsees. I believe in these chambers we are allowed to 
do so.
    Ms. Tlaib. You are allowed to say it here. Got it. You must 
feel really constrained right now.
    Mr. Monsees. Ma'am----
    Ms. Tlaib. If you say that your products help people quit 
cigarettes, the FDA would regulate you. If you say your 
products are safer, the FDA would regulate you.
    You created an enterprise markets team of at least 20 
people to pitch JUUL to companies and insurers to help their 
employees stop smoking and supposedly lower their health care 
costs. You hired Douglas Roberts, a former health care 
executive, to run that team. Why would employers or insurers 
partner with JUUL unless you were conveying that JUUL was 
effective for smoking cessation or safer than cigarettes?
    Mr. Monsees. I think the real opportunity here is to 
improve lives of a billion people worldwide, and work 
together----
    Ms. Tlaib. But why would JUUL tell employers and insurers 
about supposed health benefits of JUUL?
    Mr. Monsees. Look, I just explained that. There is an 
opportunity here for public health. Why would insurance 
companies not want to explore all options----
    Ms. Tlaib. But you are saying it is a healthier option.
    Mr. Monsees [continuing]. to save people's lives.
    Ms. Tlaib. But you are not telling--so if you made the 
direct statement to the U.S. Government that your products were 
a smoking cessation device, or, what you have been telling 
these other folks, healthier than cigarettes, you would expect 
to be regulated that day, wouldn't you?
    Mr. Monsees. I can't state more emphatically. JUUL is 
specifically, and on purpose, not a cessation product.
    Ms. Tlaib. On July 14, JUUL sent a letter to the U.S. trade 
representative about Trump's tariffs on lithium batteries which 
are used in your products. You state, quote, ``Imposing a 25 
percent duty on JUUL's portable charging case will indirectly 
increase the cost of health care. Levying an additional duty 
would cause undue harm to American consumers who are hoping to 
improve their lives by reducing or eliminating the use of 
tobacco products. Making JUUL's product cost-prohibitive, may, 
in turn, lead them to revert to the use of tobacco products, 
which may increase the cost of health care to consumers as well 
as U.S. health insurers.''
    How are those not direct claims that your product is a 
smoking cessation device and healthier than cigarettes, Mr. 
Monsees?
    Mr. Monsees. I am sorry. I have never seen that document 
before.
    Ms. Tlaib. Of course not. Mr. Chairman, if I may, let's 
just be clear. One model found that every one adult that 
successfully switched--switched--cigarettes to e-cigarettes to 
eventually non-use of any nicotine product, 81 adolescent 
teens, like my son behind me, a young adult, that try e-
cigarettes will eventually become daily smokers by the age of 
40.
    Thank you so much, Mr. Chairman, for doing this hearing and 
for your leadership on this issue.
    Mr. Krishnamoorthi. Thank you, Congresswoman. I now 
recognize Mr. Jordan for five minutes of questioning.
    Mr. Jordan. Thank you, Mr. Chairman. Mr. Monsees, you have 
got a product consumers like, don't you?
    Mr. Monsees. Certainly, yes.
    Mr. Jordan. If I understand this story right, you and your 
friend, or young people sitting around at college, and you 
said, ``You know what? We are going to develop a product. We 
would like to try to develop a product that is much less 
harmful than traditional cigarettes, could actually be a way to 
get people away from smoking traditional cigarettes,'' and you 
actually did that, right?
    Mr. Monsees. That is correct.
    Mr. Jordan. You developed that product, and when you 
developed that product and started marketing that product, did 
you follow the law?
    Mr. Monsees. We did, absolutely.
    Mr. Jordan. You never broke any laws when you were--you 
had, I think, someone said 70 percent growth in market share 
over the last couple of years. Is that right?
    Mr. Monsees. That sounds about right, yes.
    Mr. Jordan. So you had this amazing product that you 
developed, you had this tremendous market share growth, and you 
followed the law through the entire time you had that growth. 
Is that right?
    Mr. Monsees. I believe so, yes.
    Mr. Jordan. Followed the law, developed a product that 
people want, a product that is going to take us away from more 
harmful, traditional cigarettes, a product that can actually 
help you phase off of using nicotine altogether, and somehow 
you are a terrible guy.
    Mr. Monsees. This is a very complex company. No doubt about 
it. In large part, look, empathetically I want to really 
express this, I don't mind--I mean, this isn't my favorite 
thing, right, to be here today, but I don't mind, right. I 
don't mind because this is extremely important, and I very much 
understand the skepticism. This is an industry that has done 
wrong for a truly long period of time, and we are changing 
that, from the inside out, with products that are delivered 
from innovative people, from a company that is 100 percent 
committed to changing the fabric of this market, to eliminating 
cigarettes for good. We are seeing that these tools actually 
work.
    We do not--and I think this was stated by the chairman 
extremely well at the very beginning--we don't want any 
underage consumers using this product. We need to work together 
to make sure that no underage consumers use this product. It is 
terrible for our business. It is terrible for public health. It 
is terrible for our reputation. None of this is good stuff. We 
want to get on to the business of eliminating cigarettes and 
saving lives.
    Mr. Jordan. Even though you followed the law there were 
some things that took place in this time when you had this 
amazing growth in market share that you are now changing. Is 
that right? You are no longer marketing on social--on media 
platforms. Is that right?
    Mr. Monsees. That is correct.
    Mr. Jordan. Yes. You are placing limits on the quantity and 
types of things that can be sold at retail outlets. Is that 
right?
    Mr. Monsees. That is correct.
    Mr. Jordan. Yes. Even though you followed the law, you 
don't have to make those changes. You said for reputational 
concerns, you, as a company, have made a decision to do those 
two things.
    Mr. Monsees. And not just for that reason alone, but let me 
build on that a little bit.
    Mr. Jordan. For the safety of young people. Right?
    Mr. Monsees. For the safety of young people and as an 
example. Right? So I stated this earlier and I will state it 
again. I think the actions that we are taking, we are trying to 
lead by example. We are trying to show that we are willing to 
take independent action, if needed, to protect young people 
from access to these products. And if those standards were 
adopted on an industry-wide basis, if it was required on an 
industry-wide basis, ii would stop these counterfeit products 
from entering the market. If other companies that weren't 
willing to do these things on a proactive basis were held 
accountable to the same standards, then we believe we would be 
looking at substantially lower youth usage numbers.
    Mr. Jordan. How many people work for JUUL?
    Mr. Monsees. About 3,000.
    Mr. Jordan. 3,000 jobs you provide.
    Mr. Monsees. Yes.
    Mr. Jordan. So you develop a product as a way to have an 
alternative to more harmful traditional cigarettes, as a way to 
help people move off of traditional cigarettes and hopefully 
stop smoking altogether. An amazing product that now has got a 
70 percent--76 percent growth in market share. You employ 3,000 
people. You made some decisions, maybe early on, that you 
decided to change, just to make sure young people, like we have 
in the audience, don't get access to your product, like 
stopping marketing on social media platforms and limiting the 
quantity that can be sold at retail outlets. You have publicly 
come out and said you don't think anyone should be using any 
tobacco products, including your own, until they are 21. Yet 
the reward for all that is you get brought in front of Congress 
and you get yelled at by Democrats.
    Mr. Monsees. We--look. I think it is just an incredibly 
important mission, right, and, yes, we have 3,000 people now. I 
have never met a more mission-oriented group of folks than the 
people that come here. Because we know there is a lot of 
stigma, historically, in this industry, and we know that it is 
easy to assume that we are Tobacco 2.0. But we are quite the 
opposite.
    Mr. Jordan. I yield back.
    Mr. Krishnamoorthi. Thank you, Mr. Jordan. I now recognize 
Chairman Cummings--thank you for being with us, sir--for five 
minutes of questioning.
    Mr. Cummings. Thank you very much.
    Mr. Monsees, JUUL made a statement that, quote, ``We are as 
committed as ever to combating usage, but don't take our word 
for it. Look at our actions,'' end of quote. We are looking at 
your actions and they are deeply troubling.
    In 2017, the city of San Francisco banned flavored tobacco 
products. Then Big Tobacco company, R.J. Reynolds, tried to 
reverse that with a ballot measure. The voters rejected Big 
Tobacco and upheld the flavor ban by a whopping 68 percent.
    Last month, San Francisco banned the sale of e-cigarettes. 
Just like your fellow Big Tobacco company, JUUL is trying to 
overturn it with a ballot measure. But your ballot measure is 
even bolder than R.J. Reynolds'. Beyond overturning the e-
cigarette ban, is it true that it would also repeal the flavor 
ban, 68 percent of San Franciscans already approved?
    Mr. Monsees. I am sorry, Chairman. If there is a provision 
in that--I may be unfamiliar with this, but are you suggesting 
that there is a provision in that legislation that would repeal 
flavor ban on cigarettes----
    Mr. Cummings. Yes.
    Mr. Monsees [continuing]. on combustible cigarettes? I am 
not aware of that. I personally would not support that.
    Mr. Cummings. Kids are essentially, especially attracted to 
flavored tobacco products, and you know that, right?
    Mr. Monsees. We have taken direct action against those 
concerns.
    Mr. Cummings. Well, let me--I said but would you agree with 
that? I just asked you one sentence. Young people are attracted 
to flavored tobacco products--yes or no?
    Mr. Monsees. We have certainly heard that concern and we 
have taken action against it.
    Mr. Cummings. The National Institute on Drug Abuse found 
that 66 percent--and this is very interesting--66 percent of 
teenage e-cigarette users believe the product only contains 
flavoring. They do not realize there is nicotine. So it is 
shameful to fight cities that find flavors too dangerous for 
kids.
    Mr. Monsees. So----
    Mr. Cummings. Do you agree?
    Mr. Monsees. So, unfortunately, that was quite a flawed 
study. I agree with you, right, that if underage consumers are 
being attracted to flavored products and getting access to it, 
then we need to do something about it.
    Mr. Cummings. Okay.
    Mr. Monsees. Those are the actions we wanted to allude to 
when we pulled those flavors, proactively, off of the market.
    Mr. Cummings. But your ballot measure goes even further. It 
would preempt local public health laws, effectively barring 
local bodies from protecting their communities. Do you believe 
that JUUL knows what is best for local communities better than 
the communities themselves?
    Mr. Monsees. Congressman, I am not nearly familiar enough 
with the details of that law to comment on it, but I can tell 
you, you have piqued my interest and I am certainly going to 
investigate this with my team afterwards.
    Mr. Cummings. How long have you been in your position?
    Mr. Monsees. Well, the company, in some form or another, 
was started out of graduate school back in 2007, so for a long 
time.
    Mr. Cummings. Thousands of retailers have been caught 
selling your products to children. Your ballot measure also 
seeks to insulate those peddlers from liability by raising the 
standard to, quote, ``knowingly,'' end of quote, selling to 
minors. If you wanted to keep your products away from kids, you 
would support holding bad businesses accountable for illegal 
sales, not adding loopholes.
    How does making it harder to hold retailers accountable for 
selling your product to children help keep your products out of 
children's hands?
    Mr. Monsees. Again, Mr. Cummings--I am sorry, Congressman--
I can't really--I can't--I don't know the details of that. But 
you have very much piqued my interest. I hear your concerns and 
I thank you very much for asking these questions in a way that 
we can go investigate and take some proactive steps to get back 
to you. We certainly will do that.
    Mr. Cummings. Well, what I will do is I will prepare a 
series of questions for you, and I would like to have the 
answers, and then I am going to encourage the chairman to 
perhaps bring you back so you can answer all the questions, 
because I think this is a very urgent issue.
    Thank you very much, Mr. Chairman.
    Mr. Krishnamoorthi. Thank you, Chairman Cummings, for being 
with us.
    I now recognize Ranking Member Cloud for five minutes of 
questioning. Mr. Cloud?
    Mr. Cloud. Thank you, Chairman. Thank you for being here.
    What is your current role at JUUL?
    Mr. Monsees. It is Chief Product Officer.
    Mr. Cloud. What was it back in 2015?
    Mr. Monsees. At the first half of 2015 I was still the CEO 
of what was called PAX Labs at the time, before the JUUL--it 
gets a little bit confusing.
    Mr. Cloud. Right. Right.
    Mr. Monsees. I stepped down as CEO in, I believe, September 
2015.
    Mr. Cloud. Okay. Who handles the marketing decisions in 
your company?
    Mr. Monsees. Who does now?
    Mr. Cloud. Yes.
    Mr. Monsees. We have a Chief Marketing Officer now named 
Craig Brommers.
    Mr. Cloud. Okay, versus 2015?
    Mr. Monsees. In 2015 we had a different CMO. Funny enough 
you are asking about these two bookended CMOs. We had a long 
gap where we just had no CMO and effectively no marketing 
department. But those were the two CMOs we have ever had.
    Mr. Cloud. Can you touch on how your management structure 
has changed? You have grown a lot, I guess, from 2015 until 
current. Can you speak to that?
    Mr. Monsees. The company has grown dramatically since then. 
So the--let's see. When we first launched JUUL----
    Mr. Cloud. Quickly.
    Mr. Monsees [continuing]. I am just going to have to kind 
of estimate. We have probably had about 70 people in my company 
in total.
    Mr. Cloud. Back then?
    Mr. Monsees. Back then, yes.
    Mr. Cloud. Okay. So from 17 to----
    Mr. Monsees. Seventy. About 7-0, I think.
    Mr. Cloud. Okay. And the management team would have been 
about how many people?
    Mr. Monsees. Five? Four?
    Mr. Cloud. Versus now is----
    Mr. Monsees. The management team is, I believe, 28 people 
right now.
    Mr. Cloud. Okay. Who has the final say, I guess, on what 
the company is doing now, operationally, related to marketing?
    Mr. Monsees. You know, it is a combination between Kevin 
Burns, our CEO, and then our board, of which I am a member.
    Mr. Cloud. Okay. My understanding is that the CEO offered 
and asked to testify before this committee. Is that your 
understanding?
    Mr. Monsees. Yes.
    Mr. Cloud. Was he denied? Permitted? Why is he not here 
today?
    Mr. Monsees. I can't--I am not exactly sure of why he was 
denied nor--we were told that Ashley and I were also going to 
testify together. A lot of things have changed that I am just 
not familiar with.
    Mr. Cloud. Would it have been helpful to have him here, to 
question?
    Mr. Monsees. Kevin--Kevin is amazing at keeping his pulse 
on a lot of things at one time. I think Kevin could have 
certainly helped answer some of these questions more 
definitively, or with some more clarity.
    Mr. Cloud. I would to switch to flavors for a moment. Could 
you talk about what has happened in flavors offered in 2015 
versus now?
    Mr. Monsees. Sure. Initially----
    Mr. Cloud. And flavors were offered in 2015, I guess?
    Mr. Monsees. Yes. We had flavors on the market in 2015, 
yes.
    Mr. Cloud. And what have you done since then?
    Mr. Monsees. The flavors have increased a little bit. There 
is eight flavors now, that sort of slowly happened a little bit 
over time. We also have introduced three percent strength pods 
as well.
    Mr. Cloud. And you have changed the names dramatically too, 
is my understanding?
    Mr. Monsees. We have also done that, yes. So we have been--
again, with an excess of caution, every time we hear any 
concern about what we can do better, we are trying to be as 
responsive to that as possible. We would love to do that in a 
more, you know, open dialog sort of setting.
    Mr. Cloud. I have seen the original flavor names. I wasn't 
all that familiar with the product before this. But I could 
understand the concern. Could you explain a little bit of the 
thinking that went into the original marketing ideas?
    Mr. Monsees. Sure. What we saw, first of all, when we were 
launching JUUL was there was a market for e-cigarettes already, 
and, in fact, within that market, 16 percent of underage 
consumers were already using e-cigarette products. 
Unfortunately, those same e-cigarette products were not 
resonating with adult consumers. Sixty percent of all adult 
smokers, before we even launched JUUL, had tried e-cigarettes, 
but only a few percent actually repeat-purchased those 
products.
    What we saw was an industry that was failing, and failing 
at a promise that it could hold to actually dramatically 
improve----
    Mr. Cloud. I just have one more question to get in.
    Mr. Monsees. I am sorry.
    Mr. Cloud. You can finish explaining this one if you want, 
as well. Could you also speak to why do you think Altria has 
invested so heavily in your company?
    Mr. Monsees. Altria has invested heavily in our company 
because we represent something of an inevitability, I hope. 
Obviously we are facing a lot of pressure and scrutiny here, 
but the hope is that we can, in collaboration with Altria, 
accelerate the decline and basically the alteration of their 
business to one that just doesn't kill people anymore. That is 
a sustainable business.
    Mr. Cloud. I yield back.
    Mr. Krishnamoorthi. Thank you, Mr. Cloud. Congressman 
DeSaulnier, you are recognized for five minutes.
    Mr. DeSaulnier. Thank you, Mr. Chairman. It has come to the 
committee's attention that JUUL falsely claimed it partnered 
with Stanford University to create a vaping prevention 
curriculum. In reality, you took a Stanford researcher's work 
without their permission and changed it to suit your needs.
    Mr. Monsees, isn't it true that Stanford issued JUUL a 
cease and desist letter demanding that you stop using the 
misappropriated content?
    Mr. Monsees. I am sorry but I am not aware of anything 
along those lines.
    Mr. DeSaulnier. Exhibit 30 in your book is a timeline in 
which the author of that research details her correspondence, 
demanding that JUUL stop working--stop using her work. She 
says, and she publicly stated, that your curriculum, quote--
this is Dr. Halpern-Felsher of Stanford--her quote is ``does 
not meet standards to be an evidence-based curriculum to fully 
educate youth and prevent their use of JUULs.'' She also says, 
of the assessment of JUUL's curriculum shows a company with 
attentions to mislead and misrepresent its dangers to youth. 
She believe your behavior is typical of Big Tobacco and comes 
from Big Tobacco's playbook.
    Mr. Monsees, I would like to turn to something different. 
JUUL claims that one JUUL pod delivers about an equivalent 
amount of nicotine as one pack of cigarettes. Is that correct?
    Mr. Monsees. That is the reference point that we refer to, 
yes.
    Mr. DeSaulnier. So that is correct.
    A single JUUL pod is several dollars cheaper than a pack of 
cigarettes. Correct?
    Mr. Monsees. Depending state-to-state, but it can be, yes.
    Mr. DeSaulnier. On an average it is. Correct?
    Mr. Monsees. That sounds about right.
    Mr. DeSaulnier. All right. Is it true that a retailer makes 
a higher profit margin selling JUUL than they do selling 
cigarettes?
    Mr. Monsees. I don't know if I can answer definitively.
    Mr. DeSaulnier. We will be happy to help you.
    Exhibit 27 is a JUUL Retailer Education Flyer, highlighting 
that retailers make a 36 percent profit margin selling JUUL. 
Your documents show why. Exhibit 28 shows that a cigarette 
manufacturer pays $3.57, on average, in the United States in 
taxes, on each pack of cigarettes, compared to JUUL's $0.07. It 
seems like a very nice competitive advantage.
    That has allowed JUUL to sell its products cheaper than 
cigarettes and give retailers the higher profit margins for 
selling it.
    So my question to you, retailers have more incentive, 
obviously, to sell your product because they make a lot more 
money selling your product than cigarettes. Given how many 
retailers have sold your products to children, do you believe 
that incentive has contributed to selling to minors?
    Mr. Monsees. Absolutely not. No.
    Mr. DeSaulnier. You went to Stanford. It is not a difficult 
question. You have made more money, so the retailers are not 
motivated to sell to children. They made more money. I will 
tell you----
    Mr. Monsees. I am sorry. The--would you like me to answer?
    Mr. DeSaulnier. Mm-hmm.
    Mr. Monsees. Okay. The incentive structure there is to beat 
cigarettes, right, for adult smokers. To throw--I am not sure I 
understand where the----
    Mr. DeSaulnier. They are making more money. The retailer is 
making more money, irrespective of who they are selling it to. 
You have been marketing to younger people, ergo you make more 
money.
    Mr. Monsees. So we have been marketing--the intent, 
certainly, and, look, I believe--I don't want to sound--come 
across as defensive here--we have certainly made missteps. I 
understand the criticism of some of our past action, but we 
moved on very quickly. Our earlier marketing efforts were 
targeted to 25-to 34-year-old adult smokers. We would never 
want any of our retailers to sell to underage consumers. If you 
are asking whether the----
    Mr. DeSaulnier. I am sorry. I am going to have to----
    Mr. Monsees [continuing]. the financial----
    Mr. DeSaulnier [continuing]. because I have got a limited 
amount of time and I am trying to control my anger, to be 
perfectly honest.
    Mr. Monsees. Yes.
    Mr. DeSaulnier. Tax treatment aside, would you consider 
raising your prices so it was more equivalent to cigarettes? We 
heard Senator Durbin talk yesterday about how cost has affected 
whether young people buy cigarettes or not. If you raise your 
prices it would lower the sale to young people. You say you 
want to lower the sales to young people.
    Mr. Monsees. So that is an interesting question, and one 
that I think deserves debate, absolutely. Now we are focused on 
a number of different efforts that we believe to be potentially 
more efficacious than that particular one that you are 
mentioning. It is certainly not off the table, though.
    The challenge here is that it is, in large part, that 
differential pricing that also makes the product appealing to 
smokers who would otherwise have a 50 percent chance of dying 
if they don't move off of cigarettes.
    Mr. DeSaulnier. Let's look at Exhibit 29. ``Long-term 
pricing''--I am quoting--this is to investors, in June 2018, to 
prospective investors, you said, ``Long-term pricing is two 
times plus potential to bring JUUL's retail price in line with 
premium cigarettes and reclaim excess margins.'' In that same 
investor page you said that your product is, quote, ``insulated 
from pricing shocks by demand profile.''
    I just--I want to tell you, I have been involved with 
public health for a long time in the Bay Area. You, sir, are an 
example to me of the worst of the Bay Area. You ask for 
permission. You don't ask for permission--you ask for 
forgiveness. You are nothing but a marketer of a poison, and 
your target has been young people.
    I yield back.
    Mr. Krishnamoorthi. Okay. That will conclude this first 
panel with Mr. Monsees. We will take a very short, two-minute 
break to bring the next panelists up. If the audience would 
remain seated we will then expeditiously begin the second 
panel.
    Thank you, Mr. Monsees.
    [Pause.]
    Mr. Krishnamoorthi. Thank you, everybody. We are going to 
commence the second panel with our two panelists, Matthew 
Myers, President of the Campaign for Tobacco-Free Kids, and 
Ashley Gould, the Chief Administrative Officer of JUUL Labs. 
Thank you both for coming. If you would please rise, and if you 
would both please raise your right hand I will begin by 
swearing you in.
    [Witnesses sworn.]
    Mr. Krishnamoorthi. Thank you. Let the record show that the 
witnesses both answered in the affirmative. Thank you and 
please be seated.
    I am informed that votes are about to be called on the main 
House floor. We will try to complete our opening statements and 
then we will go as long as we can until the votes are called, 
and then we will return and resume.
    Without objection, both Mr. Myers and Ms. Gould's 
statements will be made part of the record.
    With that, Mr. Myers, you are recognized, but before I 
begin I just want to tell you about the lighting system. I 
mentioned this before, but there is a lighting system in front 
of you. The green light means go, the yellow light means speed 
up, and the red light means stop.
    So with that, Mr. Myers, you are now recognized for five 
minutes.

  STATEMENT OF MATTHEW MYERS, PRESIDENT, CAMPAIGN FOR TOBACCO-
                           FREE KIDS

    Mr. Myers. Thank you, Mr. Chairman, Mr. Cloud, members of 
the committee. My name is Matthew Myers. I am the President of 
the Campaign for Tobacco-Free Kids. It is an honor and a 
pleasure to be here, and I want to thank you because this is a 
fundamentally important issue.
    As we have heard repeatedly, youth e-cigarette use is at 
epidemic proportions. Before I go through, what I would like to 
do is correct a few things that I heard yesterday that I think 
are really quite important. First is do we have data that shows 
youth e-cigarette use increases the likelihood someone becomes 
a smoker? The answer to that today is quite definitively yes, 
we do. The data shows it is roughly three to four times more 
likely.
    The second question that there was a debate about is are we 
just getting kids who would otherwise have smoked to use 
cigarettes? Here, too, we now have a growing body of consistent 
evidence and that is that the kids who are using e-cigarettes 
are not the kids who would have smoked. It is a whole different 
population. It is one of the reasons that we are really 
concerned, because what has happened is it is not that e-
cigarettes are replacing cigarettes. E-cigarettes are drawing a 
whole new body of kids in. You saw that from the examples 
yesterday, which are typical. Forty-two percent of kids who use 
e-cigarettes use no other product, and never have.
    Third, are kids just experimenting or are they becoming 
addicted? The data since the introduction of JUUL shows a 
dramatic rise in the number of 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 being past-30-day users to frequent users is higher 
today for e-cigarettes than it is for cigarettes. We have a 
problem. That is not the issue that we should be debating.
    Second, let me talk a little bit about what you have just 
heard. You know, you just heard that they were shocked that 
young people are using e-cigarettes and that they have done 
nothing to prompt that. The trouble is when you actually look 
at how this product was marketed, to whom it was marketed, the 
tools they used, they are inconsistent with much of what you 
just heard.
    This product is a sleek, sweet-flavored, high-nicotine 
product delivering nicotine more powerful to our youth than any 
product that 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 to when they got caught, and the measures they 
have taken to date track the kind of measures we have seen from 
the tobacco industry--loud pleas that this was a mistake and we 
never intended it, proposing halfway measures that don't 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 that are 
legitimately being asked here today.
    You know, first, let me talk about JUUL's marketing. You 
know, JUUL claims, from day one, that its only target was 
adults. You saw examples of those yesterday, and we can show 
them to you. You know, they sponsored rock concerts. They used 
images that are exactly the kind of images that appeal to 
youth.
    My very first job in this field was conducting an 
investigation of the cigarette industry's marketing for the 
Federal Trade Commission. I could take that report from 40 
years ago, lay it side-by-side with this, and you will have the 
same exact example.
    Then we were told that they switched after six months. What 
we have seen is if you compare the marketing after six months 
to the kind of marketing that Marlboro, 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 when you look 
at how long the marketing was going.
    Now there is one difference. JUUL had a different tool than 
the old cigarette companies had, and that is social media, and 
they used it brilliantly. They used it with images that are 
exactly the kind of images that we know, from study after study 
after study, appeal directly to kids.
    You know, here are a couple of the kind of influencer 
images that we saw in 2018, not 2015. I could show you 
multiples of these sorts of things. The difficulty is that the 
nice-sounding words and the pleas of sincerity that we just 
heard are inconsistent with the kind of marketing that we have 
seen before.
    The second issue to talk about, design and flavors. You 
just heard that JUUL pushed out new flavors and new products in 
order to beat the FDA regulation deadline. What we have looked 
for is to see, was there any study of those products, those 
flavors, to see if they would discourage tobacco use among 
kids? The answer was no, none. Is it shocking, the sweet 
flavors? No. We and they both knew for decades that that was 
the case.
    I think the key here is pleas of innocence inconsistent 
with the actual facts of what happened need to be examined. 
This is not an issue of kids versus adults. This is an issue of 
holding companies responsible. That is why FDA has regulations 
and that is why they should be forced to comply with them.
    Thank you.
    Mr. Krishnamoorthi. Thank you, Mr. Myers.
    Ms. Gould, you are recognized for five minutes.

 STATEMENT OF ASHLEY GOULD, CHIEF ADMINISTRATIVE OFFICER, JUUL 
                           LABS, INC.

    Ms. Gould. Mr. Chairman, Ranking Member, distinguished 
Members of Congress, my name is Ashley Gould. I joined JUUL 
Labs in January 2017, and serve as Chief Administrative 
Officer. I joined JUUL Labs because I believe passionately in 
its mission--helping adult smokers switch away from combustible 
cigarettes. I am also a mother, and like parents across the 
country, I am deeply concerned about underage vaping. I do not 
want my sons to ever touch JUUL products or any vapor or 
tobacco products. I have told them that directly, and many 
times.
    The kids in our community are vaping. It is a serious 
problem that demands a strong response. My responsibility to 
them, as a JUUL employee and also as a mother, is to do all I 
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.
    Mr. Chairman, over the past several years our company has 
taken an escalating series of voluntary actions, all aimed at 
combating the youth vaping problem. In August 2017, we banned 
online sales to anyone under the age of 21. In April 2018, we 
announced our support of Tobacco 21 legislation. At that time, 
we had already started working with social media platforms to 
delete inappropriate posts and listings featuring our products.
    In November 2018, we announced our plan to step up our 
efforts to advocate for T21--stop selling non-tobacco and non-
menthol-based JUUL pods to traditional retail stores, enhanced 
our website's industry-leading third-party age verification 
process, strengthened our retailer compliance program, shut 
down our U.S.-based Facebook and Instagram accounts, and 
committed to developing technology-based solutions. These 
actions will take time to have an impact but they are steps in 
the right direction.
    We are also pleased to note that in the last six months 
alone a dozen states have passed T21 laws. As a result, more 
than half of the American population reside in states that have 
taken this step, and more must be done.
    As JUUL Labs worked to remove our non-tobacco, non-menthol-
based products from retail shelves, other companies stepped in 
offering kid-appealing flavors we never have sold, many of them 
illegally designed to be used in JUUL devices. We are working 
to stem the flow of these illegal products and hope that the 
FDA and others will join us in that effort.
    In a similar spirit, we continue to advocate for category-
wide action. Today, JUUL Labs is acting unilaterally, but to 
reduce youth access to e-cigarettes the same restrictions must 
be applied and enforced on all those who manufacture and sell 
vapor products.
    We are committed to being part of the solution. We are 
prepared to work with our regulators, Congress, state and local 
governments, and law enforcement. We also know that parents, 
educators, and community leaders will play a crucial role.
    Mr. Chairman, as this committee is well aware, smoking is 
by far the leading cause of preventable death in the United 
States and worldwide. More than 34 million Americans still 
smoke, and if they persist in doing so, it will kill about half 
of them. JUUL products 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 
vaping are accepting a false choice. We can and must do both.
    That is what the thousands of employees at JUUL Labs are 
working tirelessly to achieve. We are dedicated to helping the 
world's smokers switch to an alternative that will improve 
their lives, and, at the same time, to combating underage 
vaping. We will continue to do so and are grateful for the 
opportunity to be here today to discuss these important topics 
and to answer your questions.
    Mr. Krishnamoorthi. Thank you, Mr. Myers and Ms. Gould. I 
will now recognize myself for five minutes of questioning.
    First of all, Mr. Myers, do you believe nicotine causes 
disease?
    Mr. Myers. I think that we know that nicotine is harmful to 
the adolescent. It is harmful to the developing brain. Nicotine 
delivered to a young person, particularly at high levels, 
increases the likelihood of addiction, and we know that 
addiction as a young person is far more likely to make it hard 
for anybody to stop later on in life.
    There is also much that we don't know because we have never 
delivered----
    Mr. Krishnamoorthi. Let me stop you. You answered my 
question.
    Ms. Gould, nicotine--is it harmful to you, to a user?
    Ms. Gould. Nicotine is an addictive substance. In the
    FDA's own words, nicotine does not directly cause the 
estimated 480,000 deaths each year from smoking-related 
disease, and our product was designed to give----
    Mr. Krishnamoorthi. So nicotine is not harmful. Is that 
what you are saying?
    Ms. Gould. I didn't say that.
    Mr. Krishnamoorthi. Okay. Is it harmful? Yes or no.
    Ms. Gould. I said what FDA has said.
    Mr. Krishnamoorthi. I know what the FDA says. I am asking 
you. Do you believe nicotine is harmful?
    Ms. Gould. I think FDA is the better source for that 
answer.
    Mr. Krishnamoorthi. Okay. Mr. Myers, are you aware of a 
clinical trial that proves JUUL's No. 1 claim that JUUL devices 
help adult smokers quit cigarettes?
    Mr. Myers. Unfortunately, we do not have a clinical trial 
that accomplishes that goal.
    Mr. Krishnamoorthi. Okay. Thank you. Ms. Gould, why has 
JUUL never conducted a clinical trial to prove the No. 1 claim 
that it makes, that its devices help adult smokers quit 
cigarettes?
    Ms. Gould. JUUL has undertaken a number of studies and will 
continue to do that. We have--there are a number of studies 
that have been conducted, randomized controlled trials. There 
was a study published this year in the New England Journal, not 
with JUUL but using e-cigarettes compared to nicotine 
replacement therapy.
    Mr. Krishnamoorthi. Okay. But why has JUUL never conducted 
a clinical trial to prove your No. 1 claim that JUUL devices 
help adult smokers quit cigarettes?
    Ms. Gould. JUUL says that our product is intended to help 
smokers stop smoking combustible cigarettes, and we have 
conducted----
    Mr. Krishnamoorthi. Have you applied to the FDA for JUUL to 
be considered a smoking cessation device, by prescription?
    Ms. Gould. No, we have not.
    Mr. Krishnamoorthi. Okay. So JUUL has not done that.
    Now I want to go to another topic, which is this, and it is 
clear that JUUL has not conducted a clinical trial to prove its 
No. 1 claim.
    Yesterday we heard from two kids, Phillip and Caleb, who I 
believe are right there in the front row, two high school 
students from New York City. JUUL went into their school and 
presented a seminar, and called JUUL, quote/unquote, ``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 Stanford's acclaimed Youth Vaping 
Prevention Curriculum, wasn't it, Ms. Gould?
    Ms. Gould. That is not my understanding.
    Mr. Krishnamoorthi. So it has nothing to do with Stanford's 
Youth Vaping Prevention Curriculum?
    Ms. Gould. So when started seeing major reports of youth 
using JUUL products, in 2017, we engaged with educational 
experts, including several retired superintendents and 
principals, and they advised us and helped us to create a 
curriculum and advised reaching out to schools, and we take the 
criticism that that was not well received, and we----
    Mr. Krishnamoorthi. Let me just--let me just interrupt. 
Sorry. I am losing my time here. Stanford sent JUUL a cease and 
desist letter, demanding that JUUL stop using their acclaimed 
Youth Vaping Prevention Curriculum because it was 
misappropriating it. JUUL had taken the materials of Dr. Bonnie 
Halpern-Felsher, without her consent, removed key portions 
including the role of industry and marketing in promoting 
nicotine use, and misrepresented an affiliation with Stanford. 
JUUL's key deletions downplayed the health effects of JUUL, and 
that context helps explain the presentation Phillip and Caleb 
heard.
    Now we have received evidence from JUUL that it is now--it 
has a school program where it actually pays schools $10,000 or 
more to implement JUUL curriculum. Is that correct?
    Ms. Gould. That is not currently the case. We ended that 
program in the fall of 2018, and as I was saying before, we had 
hired educational experts to help us come up with a program 
that we felt would be helpful to stop kids using JUUL. We then 
received feedback that that was not well perceived, and, in 
addition, received input from a public health expert 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.
    Mr. Krishnamoorthi. But, Ms. Gould, you don't deny that 
JUUL had paid schools such as Agua Fria Union School District 
in Arizona $10,000 to conduct those programs in those schools. 
Correct?
    Ms. Gould. My understanding is that there were six schools 
that received 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. I would have to 
check which schools actually used that curriculum.
    Mr. Krishnamoorthi. We would ask that you come back to us 
with that information.
    Finally, we have an April 16, 2018, email about setting up 
a booth at a school health fair. Julie Henderson was the head 
of JUUL Youth Outreach. Later on she 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 seem to duplicate those of Big Tobacco.
    On May 18, 2018, we then see an email from you--that is 
Exhibit 17--in which you say ``here is the paper that ended the 
Think, Don't 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, quote/
unquote, ``youth prevention programs in schools.'' Do you deny 
that you had written this email in May 2018?
    Ms. Gould. I was just stating, it was a public health 
official who shared this article with me, which I then shared 
internally to say we need to understand what came before us, 
and that is why we ended the program.
    Mr. Krishnamoorthi. I now recognize Ranking Member Cloud 
for five minutes of questioning. We will try to get your 
questions in.
    Okay, Mr. Cloud. Five minutes.
    Mr. Cloud. Thank you, Chairman. Thank you for being here.
    When JUUL began, Ms. Gould--when JUUL began a marketing 
campaign in 2015, shortly after it was founded, it did depict, 
as has been much talked about, rather young-looking models in 
social situations and parties and such. Can you explain the 
thinking behind that?
    Ms. Gould. I wasn't at the company at the time but my 
understanding, from discussions and documents that I have seen, 
is that that marketing campaign was targeting adults age 25 to 
34--adult smokers, age 25 to 34. Now we take and heard the 
criticism about that campaign, and it was cut short as a result 
of that.
    Mr. Cloud. Okay. Mr. Monsees has acknowledged missteps. 
Would you acknowledge that as well?
    Ms. Gould. Absolutely. We are a company that is still young 
and growing quickly, and we try to learn quickly and change 
things as quickly as we can.
    Mr. Cloud. What are you doing to help solve the epidemic of 
it reaching teens, as a company?
    Ms. Gould. We have taken a number of escalating steps. We, 
as I noted, went to 21 on our website in 2017. We have 
supported T21. In November 2018, we removed all non-tobacco and 
non-menthol flavors from retail, and now adult smokers only 
have access to the remaining flavors on our robust age 
verification system, which we think is an important step in the 
balancing act.
    We have undertaken a secret shopper program which we 
started in 2017, and expanded in 2018, and have escalating 
steps for retailers who are non-compliant. We are also working 
on technology-based solutions and really think that category-
wide action is going to be critically important to continuing 
to make progress in keeping youth away from vaping products.
    Mr. Cloud. What would you say is the company's investment? 
Have you all calculated that in targeting----
    Ms. Gould. I don't think that there is a particular----
    Mr. Cloud [continuing]. not targeting teens?
    Ms. Gould. Right. I would say that we have really 
reoriented the company to be incredibly focused on youth 
prevention. So we are spending an enormous amount of internal 
resources on research and development for technologies that 
could be useful. At the time that we removed the non-tobacco 
and non-menthol flavors from retail, that represented over 50 
percent of our revenue at the time. So our focus is on making 
concrete steps forward to make progress against youth access.
    Mr. Cloud. Now you mentioned the school programs. I mean, I 
can tell you, as a parent--I have three kids in school--I would 
be concerned to find out that they went to an education seminar 
that was sponsored by any company, frankly. You have 
acknowledged that, even as a misstep, and that has been 
corrected.
    Is there anything that JUUL is doing to make investments in 
educating teens that does not have the JUUL brand attached to 
it?
    Ms. Gould. So I just want to acknowledge that there are, to 
my knowledge, only two events at schools where we presented, 
and we stopped that programming.
    So this is a very difficult topic because we feel like 
education is incredibly important and yet we have received the 
feedback that we are not the ones--it is not appropriate for us 
to be doing that, and even some feedback that it may not be 
appropriate for us to be funding directly educational 
programming.
    So this is an area where, honestly, I think Mr. Myers could 
be quite helpful. He has done a lot in the past in education, 
as have others in the public health industry, and we would love 
to be part of that.
    Mr. Cloud. Thank you. That is a segue. My next question was 
going to be for Mr. Myers. What would you suggest as one of the 
top ways we can make sure teens do not get their hands on this?
    Mr. Myers. Well, I think we have to deal with the flavored 
issue, to start with. You know, as much as we have heard, at 
the time they took the action, over 50 percent of kids used 
menthol. In addition, while they made a great announcement, 
JUUL-branded menthol--excuse me--JUUL-branded mango and other 
flavors continued to be involved.
    I visited a store a block from where my kids went to high 
school just a month ago and was able to find them. Equally, at 
the same time that JUUL announced they weren't going to sell 
those flavors because of concerns about America's kids, they 
announced they were going to sell them in Canada. In the few 
months right after JUUL entered the Canadian market we saw 
skyrocketing----
    Mr. Cloud. I only have 10 more seconds, if you could 
finish--conclude this.
    Mr. Myers. Sure.
    Mr. Cloud. Do we have data on--I know there are knockoff 
products coming from China--what the current use is of JUUL 
products versus--I mean, how much of this----
    Mr. Myers. Well, we----
    Mr. Cloud. I am trying to figure out, do we--can we help 
this with trade policy? You know, the point is, how do we----
    Mr. Myers. Well, the way we could----
    Mr. Cloud [continuing]. we have got to get in the weeds of 
the policy as much we----
    Mr. Myers. Great question.
    Mr. Cloud. We have to get in the weeds to really get to a 
solution.
    Mr. Myers. A great question because what we shouldn't be 
doing is debating this just outside of--we created a regulatory 
framework. The Food and Drug Administration has the authority 
to regulate flavor. They have the authority to evaluate 
products. Unfortunately, JUUL has resisted that at every stage. 
Just a month ago, they filed a pleading in court to delay 
further the time when 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, that don't lead 
us to this debate about kids versus adults, it is time for JUUL 
to say, ``We are going to comply with FDA regulations. We are 
not going to throw more roadblocks in the way of FDA 
regulation,'' and then we will be able to answer the question, 
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.
    Mr. Cloud. Mr. Chair, if you could indulge a response from 
Ms. Gould, as well?
    Mr. Krishnamoorthi. Let me--okay, Ms. Gould. Why don't you 
answer.
    Ms. Gould. Thank you. So just two point, one on the mango 
pods. We unequivocally ceased distribution to retail 
establishments in November 2018. So if there are JUUL pods out 
in retail today, they are one of two reasons. One is that they 
are counterfeit, and we do take a lot of action against 
counterfeit product. And the second is that they have been 
there since November 2018. So I wanted to be clear on that 
point.
    With respect to FDA regulation, we are regulated by FDA 
currently, and we are actively working toward a PMTA 
submission. So those are the facts.
    Mr. Krishnamoorthi. Thank you. Thank you. Now I would like 
to recognize Congresswoman Hill for five minutes.
    Ms. Hill. Thank you, Mr. Chairman. I know that you have 
said that these activities have since stopped but I am really 
disturbed by some of the youth targeting and I think we need to 
dig into it a little bit more. JUUL has tried to reach youth in 
settings other than schools, as was briefly touched on, but 
Exhibit 21 is an agreement for JUUL to find a youth program run 
by Richmond, California's Police Activities League. JUUL signed 
an agreement with Richmond PAL, stating that the program 
includes, quote, ``youth aged 12 to 17 who face suspension from 
schools for using e-cigarettes and/or marijuana,'' and it 
specifies that, quote, ``all youth will participate in the JUUL 
Labs' developed program moving beyond.''
    So, Ms. Gould, JUUL created the tobacco prevention 
curriculum that would be presented to these kids. Correct?
    Ms. Gould. Congresswoman, as I noted earlier, we did work 
with experts to create a curriculum that we have since ceased 
using.
    Ms. Hill. Okay. So the contract shows that JUUL paid the 
Richmond PAL $89,000. In exchange for that payment, JUUL got to 
provide its curriculum, controlling the information presented 
to a group of potential customers, preteens and teens already 
using e-cigarettes. That is another page out of Big Tobacco's 
playbook.
    So, Ms. Gould, perhaps an odd question for you, JUUL didn't 
run a summer camp, did it?
    Ms. Gould. So there were a number of--and I believe--I will 
get--we can followup with the number--there were a number of 
grants that were made to several programs that were all focused 
on youth prevention or wellness.
    Ms. Hill. So Exhibit 22 is a contract for JUUL to fund a 
summer camp for students of Baltimore's Freedom and Democracy 
Charter School. According to this contract it was a five-week 
summer camp for 80 kids, centering on, quote, ``healthy life 
adventures.''
    Ms. Gould, this contract says that, quote, ``student 
participants will be recruited from grades 3 through 12.'' Did 
JUUL honestly sponsor a summer camp for third-graders?
    Ms. Gould. I would have to check the contracts, but as I 
stated, whatever grants were made were focused on youth 
prevention efforts.
    Ms. Hill. So JUUL covered the cost for personnel, travel, 
equipment, and supplies, and Exhibit 23 shows an invoice for 
$134,000 to fund this program. Of that, JUUL paid $76,000 to 
hire 19 people to run the program.
    So, Ms. Gould, in exchange for that large payment, the 
charter school committed to sharing student data--this is the 
part that is a particularly disturbing to me--sharing student 
data from pre and post surveys, journals and activity logs kept 
by students, and pre and post test scores. Why did you need 
that data?
    Ms. Gould. I am not aware of the details of that so I would 
have to get back to you.
    Ms. Hill. So paying to access kids' data--data from kids as 
young as eight is alarming, to say the least, and I can only 
imagine the possible uses of that data in the hands of a Big 
Tobacco company like JUUL.
    JUUL also tried to reach young people through faith-based 
organizations. Exhibit 24 is an agreement with Lifeskills, 
Inc., to partner with JUUL and church groups to provide health 
education to 1,000 youth in Baltimore.
    Ms. Gould, was JUUL aware that Big Tobacco had funded 
similar Lifeskills programs, beginning in the late 1990's?
    Ms. Gould. As I noted earlier, it was in May 2018, we 
received information from a public health expert informing us 
on what tobacco companies had done previously, and we stopped 
those activities.
    Ms. Hill. So Exhibit 25, though, is an email from Julie 
Henderson, a month before this Lifeskills proposal, about how 
Big Tobacco promoted Lifeskills training in the 1990's as a PR 
strategy to deflect attention from its efforts to targeting 
kids.
    So, Ms. Gould, has JUUL ever marketed through cessation 
programs?
    Ms. Gould. We have never marketed to kids. Anything that we 
undertook in the educational space was intended to keep youth 
away from vaping products.
    Ms. Hill. You don't think it is weird? You don't think any 
of this sounds strange, to find a select group of people who 
are of a specific demographic that is highly vulnerable to 
marketing, the type of marketing and the type of education that 
you are providing, to use your products? You don't think that 
sounds strange at all?
    Ms. Gould. As I noted before, all of these educational 
efforts were intended to keep youth from using the product. 
When we understood what had happened before and how these were 
being perceived, we stopped the program.
    Ms. Hill. Okay. Well, one other vulnerable population that 
I have concerns about is that in Exhibit 26, JUUL hired the 
Trevino Consulting Group to market smoking cessation programs 
run by community-based groups, including veterans 
organizations. It states that, quote, ``In order to market its 
technology, JUUL must form strategic partnerships and develop 
programs that resonate with adults for prevention and 
cessation.''
    Were the veterans and other smokers participating in the 
cessation programs aware that JUUL was using them as a 
marketing opportunity?
    Ms. Gould. I would really have to look at the document to 
be able to----
    Ms. Hill. Well, I can't imagine that veterans groups were 
aware that they were being marketed to, when you are talking 
about smoking cessation programs. Am I right?
    Ms. Gould. Again, I would really need to look at the 
document before----
    Ms. Hill. I will tell you why that bothers me, in 
particular, is that when we are working--in my past life we 
worked with vulnerable veterans, experiencing homelessness, who 
experienced PTSD, serious challenges. Many of them, throughout 
that process, became addicted to cigarettes, and they are a 
particularly vulnerable group of people who are highly tending 
toward addiction. So 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, and I think that this is something that we 
have to investigate further.
    Thank you. I yield back.
    Mr. Krishnamoorthi. Thank you, Congresswoman Hill. Finally, 
Congresswoman Tlaib, you are on the clock for five minutes.
    Ms. Tlaib. Thank you, Mr. Chairman. Mr. Myers, on the last 
panel we learned about JUUL's substantial influencer program. 
JUUL had an entire influencer department, and it reached 
thousands of influencers. Was the extent of that program 
previously disclosed by JUUL?
    Mr. Myers. No, it was not.
    Ms. Tlaib. Mr. Myers, influencers are a new tool for Big 
Tobacco companies like JUUL. Can you explain to us any problems 
created by an influencer-driven campaign and how promoting JUUL 
through influencers could have contributed to the youth vaping 
epidemic?
    Mr. Myers. Use of influencers is something that all the 
cigarette companies are doing, and JUUL did as well, and they 
did it with great effectiveness, because there is nothing more 
powerful than having a young person market to a young person. 
In this case, the young people who are doing so were screened 
for their popularity with young people, for their 
attractiveness, and for the size of their following. What that 
meant was that young people were being misled in the most 
serious possible way.
    Ms. Tlaib. Mr. Myers, did you find any aspect of JUUL's 
influencer program discussed particularly concerning? Anything 
specific that was truly concerning?
    Mr. Myers. I think there are two things that are 
concerning. One is we are dealing with a product that is more 
addictive than any product we have marketed to kids in decades. 
Second, it demonstrated that you can operate under the radar 
screen before government regulators, parents, or teachers even 
know what is going on with regard to that. Third, despite the 
claims they have moved away from that, we work outside the 
United States as well, and we see ongoing efforts of JUUL to 
hire people for influencers, and are beginning to see the same 
kind of marketing targeting the same demographic population 
outside the United States. It calls into the question the 
credibility when they say that is not what they are about.
    Ms. Tlaib. Mm-hmm. Mr. Myers, we also asked JUUL about a 
settlement with Philip Morris, referenced in JUUL's documents. 
Exhibit 1 is from August 12, 2016, board meeting minutes 
stating, quote, ``Due to requirements outlined in PMI 
settlement we removed all JUUL branding that uses triangles and 
diamond shapes.'' What does that tell us?
    Mr. Myers. Well, it is impossible to look at the early JUUL 
product and look at the Marlboro chevron and not see the 
similarity.
    Ms. Tlaib. I agree.
    Mr. Myers. What is incredibly important to understand is 
the Marlboro chevron is one of the most effective marketing 
tools ever created for young people. JUUL would have us to 
believe that a data-driven company that is as smart and as 
sophisticated as this one just keeps making these mistakes. It 
defies logic.
    Ms. Tlaib. So Marlboro's and Philip Morris' parent company, 
Altria, now owns 35 percent of JUUL. Altria owned the e-
cigarette with the third-largest market share, Mark 10. After 
buying its stake in JUUL, Altria pulled Mark 10 off the market.
    Ms. Gould, will you commit to giving us the Altria contract 
within two weeks?
    Ms. Gould. I would really have to confer with our--with my 
team on that. That is not my decision.
    Ms. Tlaib. Ms. Gould, was pulling Mark 10 a condition of 
the Altria deal?
    Ms. Gould. We had nothing to do with that.
    Ms. Tlaib. When did JUUL first learn that Altria was 
considering pulling Mark 10 off the market?
    Ms. Gould. I believe we did when they published that letter 
to FDA.
    Ms. Tlaib. JUUL has 76 percent share of the e-cigarette 
market. Only a handful of competitors even have a one percent 
share. Big Tobacco bought you out and folded a main competitor, 
with the third-largest market share, furthering your dominance 
of this industry.
    JUUL isn't just owned by Big Tobacco, it is Big Tobacco 
today. Isn't it, Ms. Gould?
    Ms. Gould. No. I don't agree with that at all.
    Ms. Tlaib. Yes. We are going to respectively disagree.
    Thank you so much, Mr. Chairman. I yield the rest of my 
time.
    Mr. Krishnamoorthi. Thank you. Let me just ask a couple of 
remaining questions.
    Mr. Myers, I wanted to ask you about a statement that Mr. 
Monsees had made back in a presentation that he put on YouTube. 
He said, ``It is not the nicotine that is really hurting you.'' 
Do you agree with him?
    Mr. Myers. Particularly when we are talking about 
adolescents, there is serious reason to be concerned about the 
nicotine. Nicotine may not cause the cancer, but it causes high 
level of addiction, it causes problems with the developing 
brain, and delivered at the high levels it is currently being 
delivered long-term, we just don't know.
    Mr. Krishnamoorthi. Thank you.
    I would like to thank our witnesses for their testimony 
today. Without objection, all members will have five 
legislative days within which to submit additional written 
questions for the witnesses to the chair, which will be 
forwarded to the witnesses for responses. I ask our witnesses 
to please respond as promptly as you are able.
    This hearing is adjourned.
    [Whereupon, at 4:46 p.m., the subcommittee was adjourned.]

                                 [all]