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Lauren Etter

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2021-06-29
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2021-06-29
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  1. But it was also a catastrophe. And it was really bad for the industry, really bad for public health. But it also does underscore that there's still a lot of research that needs to be done on e-cigarettes to determine if they do cause any long-term health problems.

    2021-06-29 · Decoder with Nilay Patel · Juul and the business of addiction, with Lauren Etter · IDENTIFIED FROM THE TRANSCRIPT

  2. Their product had taken such a hit on the market. People were so spooked by vaping and by jeweling that by the time that the CDC clarified things, it was kind of too late. There are all sorts of people who were furious at the CDC and the FDA for taking so long to come to that conclusion and for wrongly kind of singling out just vaping as the problem. However, I will point out that the CDC to this day continues to say that there's a small percentage of these long injuries that were tied to nicotine-only products, so not the THC products. Then you heard stories of people who started going back to cigarettes because they were so spooked by the lung injuries and people saying, oh my God, the FDA should have or the CDC should have cleared this whole thing up earlier. It was a large misunderstanding.

    2021-06-29 · Decoder with Nilay Patel · Juul and the business of addiction, with Lauren Etter · IDENTIFIED FROM THE TRANSCRIPT

  3. He went on national television and said, we just don't know. We don't know if vaping is safe. But as the FDA and the CDC began their investigation into the lung injuries, they over months, it took them months to figure out that it probably was linked to bootlegged THC products that were being vaped. So these were like pods that were laced with this product called vitamin E acetate, which is kind of a syrupy golden liquid that a lot of the bootlegged products were cut with in order to either make it more syrupy or in order to cut their product to make it last longer to go farther. And so the CDC ultimately said it was most likely related to these products that contain this. Vitamin E acetate. So by the time that the CDC got around to announcing that,

    2021-06-29 · Decoder with Nilay Patel · Juul and the business of addiction, with Lauren Etter · IDENTIFIED FROM THE TRANSCRIPT

  4. Initially, when the lung injury outbreak happened, everybody just assumed it was Jewel, or at least it was vaping because basically you had these kids showing up to hospitals who had chronic lung injury, like almost as if their lungs had been burned, they were on breathing machines and that type of thing. I mean, it was a very serious problem. And then you had adults showing up in the emergency rooms, the same thing. They had these chronic lung injuries. I think immediately the media attention gravitated toward Jewel because Jewel was the most popular product on the market. Jewel had been sort of singled out as the one causing the youth vaping epidemic. And now suddenly you have all these kids who vaped showing up at the emergency rooms. It was a huge PR crisis for Jewel. And the CEO at the time had this kind of fateful interview where

    2021-06-29 · Decoder with Nilay Patel · Juul and the business of addiction, with Lauren Etter · IDENTIFIED FROM THE TRANSCRIPT

  5. Lot of the scrutiny around Jewel happened because of the vaping related illnesses and deaths that were happening in the Midwest. That led to a crisis of is vaping. Which is yet another track from Is Nicotine Bad, right? It's another way to conflate all this. Is vaping bad? What was the result of all that? And how did Jewel get caught up into it?

    2021-06-29 · Decoder with Nilay Patel · Juul and the business of addiction, with Lauren Etter · IDENTIFIED FROM THE TRANSCRIPT

  6. Continues to addict new generations of users. So that's why I say it's almost a sociocultural question about why do we want nicotine in society? Why is it good? Should we all just be hooked up to like a nicotine drip? Would that be a better way? People like nicotine, but the bottom line is they're addicted to it.

    2021-06-29 · Decoder with Nilay Patel · Juul and the business of addiction, with Lauren Etter · IDENTIFIED FROM THE TRANSCRIPT

  7. Before the age of 25. So the whole concept dating back to the 1990s was if you can cut off the youth from nicotine addiction, you won't have a next generation of users and from a public health standpoint, that's fantastic because then they wouldn't be smoking cigarettes. For the tobacco industry, that's a complete disaster because that means they have, if we do not have the next generation of users, they do not have an industry that has a long life. So for me, the kind of controversial issue is less about whether adult smokers should be using an e-cigarette to quit smoking and more about the continuation of nicotine addiction that

    2021-06-29 · Decoder with Nilay Patel · Juul and the business of addiction, with Lauren Etter · IDENTIFIED FROM THE TRANSCRIPT

  8. And it was very gung ho about that. And he described it to me in a way that I thought was really interesting. He said, companies have made billions of dollars getting people to suck something into their lungs. He says, I hate to say it so clear, but how could you possibly sell that? There's only one answer, and the answer is nicotine. It's never been about anything else but nicotine. Without it, there's nothing. There's no cigarettes. There's no jewel. There's none of it. And for me, that was a powerful conversation because it highlights and underscores just how dependent these industries are on addiction. One other thing that's important to point out is that 90% of adult smokers today began smoking before the age of 18. 99% began smoking before 18.

    2021-06-29 · Decoder with Nilay Patel · Juul and the business of addiction, with Lauren Etter · IDENTIFIED FROM THE TRANSCRIPT

  9. There's a pretty compelling case to say that a less harmful product that does not involve combustion like an e-cigarette can actually have a net benefit to society. So the problem for Jewel was that they didn't set up the opportunity for themselves to initially go after the adult smokers. They ruined their opportunity early on by essentially committing the cardinal sin in America, which is contributing to a new youth nicotine epidemic. I think those two issues often get conflated and people start yelling over one another. They're kind of talking about different things, but unfortunately they're intertwined. Like there's a moment in my book where I interview Mike Moore, the former famous attorney general who in the 1990s essentially took on the tobacco industry.

    2021-06-29 · Decoder with Nilay Patel · Juul and the business of addiction, with Lauren Etter · IDENTIFIED FROM THE TRANSCRIPT

  10. Two questions. It's can you prevent youth from getting addicted to nicotine? Because I think most people agree that there's no real redeeming quality for a teenager to just start using nicotine. First of all, their brains are not fully developed. There's all kinds of science and studies showing that nicotine before your brain is developed can have all kinds of adverse health effects on brain development. You become more addicted because the pathways in your brain become solidified. And so you develop a greater addictive potential. It's really a question about who's the problem, like where does the problem lie? If we're talking about youth usage, then I think most people would agree that we don't want kids adopting a new nicotine habit. But if you're talking about current cigarette smokers,

    2021-06-29 · Decoder with Nilay Patel · Juul and the business of addiction, with Lauren Etter · IDENTIFIED FROM THE TRANSCRIPT

  11. To focus on the adult smoker. So back in the 1990s, at the height of the tobacco wars, almost 40% of teens smoked cigarettes. They were tobacco user. By 2015, when Jewel launched, it was down to like 10%. So it had been this huge public health coup. They had successfully gotten the youth tobacco use rate down to such a low percentage. So when jeweled launched and other e-cigarettes as well, suddenly you saw this rapid increase in the number of teenagers who were using e-cigarettes. Now, yes, better than a cigarette, but still adopting a nicotine habit. I mean, it's really...

    2021-06-29 · Decoder with Nilay Patel · Juul and the business of addiction, with Lauren Etter · IDENTIFIED FROM THE TRANSCRIPT

  12. Well, I will point out that there haven't been enough long term clinical studies to show that there are zero adverse health effects. I think most people agree and most studies show that there is a net benefit if you quit smoking and only use e-cigarettes. A lot of e-cigarette users also continue to smoke cigarettes. That's called dual use. In general, if you're an adult smoker and you just switch from cigarettes to jewel, for example, you're probably better off in the long run. The issue revolves around the kids, the teens, the youth who become attracted to the product and develop a lifetime nicotine addiction. If you can separate that controversy out from the adult usage issue, then the industry would be okay. I think that's the industry's plan e-cigarettes industry's plan to survive.

    2021-06-29 · Decoder with Nilay Patel · Juul and the business of addiction, with Lauren Etter · IDENTIFIED FROM THE TRANSCRIPT

  13. So people smoke cigarettes because they want the nicotine. Why do people want nicotine? Well, they're addicted to it. I think the addiction element is sort of the most important and I think most interesting aspect to focus on because what's so bad about nicotine, well, you could potentially become a lifelong user of nicotine. So I think when we're talking about adult smokers We know the reason they smoke is because of the nicotine they want the nicotine fix. So why not give them a better alternative, a less harmful alternative that doesn't involve combustion? And that's the e-cigarette. So it sounds great.

    2021-06-29 · Decoder with Nilay Patel · Juul and the business of addiction, with Lauren Etter · IDENTIFIED FROM THE TRANSCRIPT

  14. You're hitting on the exact kind of controversy. And I think it's super important to talk about it in this way. First of all, it's partly a sociocultural question about nicotine and about why do people use nicotine? Why do they want to use nicotine? It provides pleasure. It does lots of great things. It provides pleasure. It can help you concentrate. It can help you focus. It can relax you. There are all kinds of appealing.

    2021-06-29 · Decoder with Nilay Patel · Juul and the business of addiction, with Lauren Etter · IDENTIFIED FROM THE TRANSCRIPT

  15. The jewel team had none of that baggage. They were able to say what people want is nicotine, which the tobacco companies really could not say given the regulatory scrutiny. And then they were able to deliver the nicotine salt formula in the pods of the jewel. And I think a lot of people would tell you they're very happy using a jewel instead of smoking a cigarette. And that is probably a net good, although I have some questions about that too. Thing that I struggle with in this entire story is It's better than smoking. So, like, if the tobacco companies were not able to make this product, is it a net good thing that a startup that made a lot of mistakes along the way didn't need to ask permission to exist, eventually did develop a product that is in some measurable way better than smoking?

    2021-06-29 · Decoder with Nilay Patel · Juul and the business of addiction, with Lauren Etter · IDENTIFIED FROM THE TRANSCRIPT

  16. Let me ask you about that because the lack of baggage enabled them to make a product that the tobacco industry, I mean, and you go through this in detail in the book, that Philip Morris and the other big tobacco companies had been trying to invent jewel-like products for years. And because of their own regulatory problems and their own wacky international corporate structures, they weren't really able to do it well.

    2021-06-29 · Decoder with Nilay Patel · Juul and the business of addiction, with Lauren Etter · IDENTIFIED FROM THE TRANSCRIPT

  17. They had not been through the trenches and they didn't approach the industry, this highly addictive product, nicotine. They didn't approach it with the necessary care in order to give their product a chance at surviving and asking permission from society. It's like the motto of Silicon Valley, move fast and break things, ask for forgiveness, not permission. And that's exactly the mentality that they embodied early on when they launched Jewel. And it's also the mentality that allowed them to crush the market, to take over, and to basically flood the nation with Jewel. So there are lots of similarities, lots of parallels between those two narratives.

    2021-06-29 · Decoder with Nilay Patel · Juul and the business of addiction, with Lauren Etter · IDENTIFIED FROM THE TRANSCRIPT

  18. They realized that they needed to have this permission to exist, and Jewel essentially finds itself in the exact same position now where they're kind of operating only if the FDA gives them permission to operate. They've realized that they created a youth usage crisis or helped create it and that they have to be incredibly careful about it. But the interesting thing is that when Jewel launched, when Adam and James decided to innovate on the cigarette, They had none of that baggage that the tobacco industry had.

    2021-06-29 · Decoder with Nilay Patel · Juul and the business of addiction, with Lauren Etter · IDENTIFIED FROM THE TRANSCRIPT

  19. And the costs related to treating smoking related disease. Every week there was a new headline about the misdeeds of the tobacco industry in the 90s. It was on the front page of the Wall Street Journal in the New York Times. And it really was kind of this important moment that I thought almost does parallel where we are today with Jewel.

    2021-06-29 · Decoder with Nilay Patel · Juul and the business of addiction, with Lauren Etter · IDENTIFIED FROM THE TRANSCRIPT

  20. Right, correct. The book starts in the middle of a hurricane in Puerto Rico. And Philip Morris, the company now known as Altria, had gathered all of its corporate relations officials and executives and met here as kind of a retreat to talk about this huge moment in the industry where they had to basically admit that they had deceived the American people, that they had lied, that they had covered up all of this information and evidence about how deadly cigarette smoking was. And it had all come out into the public. The FDA commissioner, David Kessler at the time, had made it his mission to essentially go after the tobacco industry to bring it under its regulatory authority for the first time. State attorneys general were suing the tobacco industry and the tobacco companies for all of the public health effects.

    2021-06-29 · Decoder with Nilay Patel · Juul and the business of addiction, with Lauren Etter · IDENTIFIED FROM THE TRANSCRIPT

  21. Yes, that's exactly right. I started the book in the middle of a hurricane in Puerto Rico because I felt like it was emblematic of what the industry was going through the tobacco industry. So back in 1998.

    2021-06-29 · Decoder with Nilay Patel · Juul and the business of addiction, with Lauren Etter · IDENTIFIED FROM THE TRANSCRIPT

  22. That the entire tech industry is facing right now. Right. You and I are talking, and Congress is literally talking about antitrust bills simultaneously with our discussion today. But it just feels like that attitude shift created the opportunity for someone to not have the baggage and make the jewel. Philip Morrison invented the jewel. I mean, their business would have been secured in a different way, but they were just unable to

    2021-06-29 · Decoder with Nilay Patel · Juul and the business of addiction, with Lauren Etter · IDENTIFIED FROM THE TRANSCRIPT

  23. What struck me about your book is that you don't start with Jewel at all. You start with Altria, which is the company that was known as Philip Morris. They made Marlborough. And you start with them in sort of the very late 90s, early 2000s. Seems like what the entire cigarette industry was struggling with was we're going to be a regulated industry now. We'll be intertwined with government regulators, we'll be intertwined with health officials. We have to learn. To be that kind of company where the government is kind of always up and our shit. Tell me about that because that is to me there's a really big parallel. Not in terms of the product, but in terms of the attitudinal shift.

    2021-06-29 · Decoder with Nilay Patel · Juul and the business of addiction, with Lauren Etter · IDENTIFIED FROM THE TRANSCRIPT

  24. Right. There's definitely been IP litigation over this, and there probably will be in the future. I just don't know how much Jewel is going to be able to prevail on essentially owning chemistry, its basic organic chemistry. So I just don't know if it on first glance gives them the protection that you might think

    2021-06-29 · Decoder with Nilay Patel · Juul and the business of addiction, with Lauren Etter · IDENTIFIED FROM THE TRANSCRIPT

  25. They pick benzoic acid, they have a patent, the patent lists like every other kind of acid you might want to use down to citric acid. Prevents anyone else from doing this right? Was that it? Was there another way around this problem? When I first saw that patent, I was like, oh, Jules going to win. Now they can block everybody else from doing the thing that made their product better than everybody else.

    2021-06-29 · Decoder with Nilay Patel · Juul and the business of addiction, with Lauren Etter · IDENTIFIED FROM THE TRANSCRIPT

  26. Would give you the highest level satisfaction? Which would make your heart rate race the fastest? What would, you know, when you take these little surveys, what would be the most satisfying one? So they did all kinds of like just really like organic research and ended up settling on benzoic acid as your organic acid that was the most satisfying. What this enabled them to do was something that no other company had really done, which is devise a nicotine solution that had a high nicotine content, in this case 5%, which was ultimately marketed, but with a very low aversive component to it.

    2021-06-29 · Decoder with Nilay Patel · Juul and the business of addiction, with Lauren Etter · IDENTIFIED FROM THE TRANSCRIPT

  27. Inhale a large amount of nicotine without it burning your throat, without you starting to cough a lot. I should also point out that they hired tobacco industry scientists. They had them on speed dial. They would call them and they would ask about the different various organic acids and how that could modulate the pH. And they did all kinds of research and they absolutely turned to tobacco industry executives and to the tobacco files, the archives to help them solve the problem. They eventually did their own sort of experimentation in the dog patch and their offices there where they were adding various organic acids to nicotine to see what the most satisfying ones were. And they ended up going to New Zealand where they did their own tests on human subjects, including on Adam Bowen himself, to determine which organic acid in nicotine.

    2021-06-29 · Decoder with Nilay Patel · Juul and the business of addiction, with Lauren Etter · IDENTIFIED FROM THE TRANSCRIPT

  28. All kinds of science about nicotine and about tobacco, the science of tobacco smoke and nicotine chemistry is extremely complicated and complex. And they were able to use basically some early research that showed if you modify the pH levels of tobacco smoke, you can deliver different kind of satisfaction levels, enjoyment levels, that type of thing. There's also a body of research that showed if you add organic acids to nicotine, it lowers the pH, but you can have higher levels of nicotine. You essentially by adding the organic acids, you create a nicotine salt. And that essentially allows the pH to go lower, but you have a higher amount of nicotine. So what that does is it enables you to...

    2021-06-29 · Decoder with Nilay Patel · Juul and the business of addiction, with Lauren Etter · IDENTIFIED FROM THE TRANSCRIPT

  29. Is like Jules's secret sauce, the nicotine salts, of course. So early cigarettes, what they did was they essentially just took nicotine and they added some flavors to it. But the problem with just using nicotine is it's extremely harsh. It has a high pH level. It burns your throat. Early iterations of e-cigarettes, they essentially could only put in small amounts of nicotine. So it wouldn't be so aversive to your lungs. The problem with that was that it didn't satisfy smokers because there wasn't enough nicotine in it. So they'd have to like puff and puff and puff on the thing and it just wouldn't deliver the satisfaction. So that'd been like the number one complaint by e-cigarette users. So Adam and James, they had done tons of research. They had delved into these tobacco archives, which contained

    2021-06-29 · Decoder with Nilay Patel · Juul and the business of addiction, with Lauren Etter · IDENTIFIED FROM THE TRANSCRIPT

  30. The big innovation with Jewel was not really the design or the pods, it was the nicotine formulation. How do they stumble on a nicotine formulation that hits like a cigarette? Because early vapes were really, really harsh.

    2021-06-29 · Decoder with Nilay Patel · Juul and the business of addiction, with Lauren Etter · IDENTIFIED FROM THE TRANSCRIPT

  31. That is just a staggering rise and fall, right? It's two kids at Stanford looking at a product that they're using, doing the tech industry thing, asking this kind of hilarious bubble question of why hasn't anybody innovated this thing realizing that actually lots of people have tried to innovate it using some of that and then all the way to now we're potentially facing regulatory doom

    2021-06-29 · Decoder with Nilay Patel · Juul and the business of addiction, with Lauren Etter · IDENTIFIED FROM THE TRANSCRIPT

  32. Which once stood at $38 billion was just tumbling quarter after quarter after quarter. And now there's been a huge reorganization in the company. They've brought in all these new executives, many from the tobacco industry. And they're essentially fighting for their survival right now. Jewel, like every other e-cigarette maker, has submitted an application to the FDA. And now the FDA has to determine whether or not it's in the public health interest, essentially, to allow this product to continue to be marketed. So basically, we're all waiting. It's expected sometime this year for the FDA to decide whether or not it can be sold. If the FDA does not allow it to go forward, Jewel has no product to sell. And if it does, I think Jewel is well positioned to continue to grow and take over the market. So they're at a real inflection point right now.

    2021-06-29 · Decoder with Nilay Patel · Juul and the business of addiction, with Lauren Etter · IDENTIFIED FROM THE TRANSCRIPT

  33. Everybody agreed that the business was only going to continue to decline as people realized the adverse health effects of smoking. And it was not as cool to smoke cigarettes anymore. And so as big tobacco tries to innovate, they cannot out innovate Silicon Valley. So at the end of the day, Altria, the maker of Marlborough Cigarettes, decides to invest in jewel. In my book, I write That was the moment the glass shattered for Jewel. It just attracted so much scrutiny because all of these years, the founders of Jewel had been saying we are the anti-cigarette. We're going to kill the cigarette. We're going to kill the tobacco industry. And suddenly they're in bed with the tobacco industry. So that really kind of put them on blast in a new way. They were under health regulator scrutiny.

    2021-06-29 · Decoder with Nilay Patel · Juul and the business of addiction, with Lauren Etter · IDENTIFIED FROM THE TRANSCRIPT

  34. And it just became extremely popular. And as it became popular among the 20 year olds, it soon became popular among the teenagers as well, middle school and high school students. So that was the moment as it became just a runaway success that it attracted the attention of public health regulators, of the FDA, of members of Congress. And it just became this huge issue where Scott Gottlieb, the then FDA commissioner, called it an epidemic of youth usage. So basically the company finds itself under this incredible scrutiny from every angle. And at the same time, the traditional tobacco industry had been trying to also innovate on the cigarette, their declining business. The cigarette had been in decline for decades.

    2021-06-29 · Decoder with Nilay Patel · Juul and the business of addiction, with Lauren Etter · IDENTIFIED FROM THE TRANSCRIPT

  35. So as I embarked on that, they essentially found some of these old tobacco documents that had surfaced during the 1990s in the heat of the tobacco wars. And there were millions of documents that the tobacco companies had to hand over to make public as a result of litigation that had nearly buried them. So they tapped into that, had many, many iterations of their product before it became Jewel. launches in 2015 ultimately. And just becomes the most popular e-cigarette on the market. They marketed it on social media, on Instagram, on Facebook, on Twitter. They sent kind of traveling troops of these nicotine jewel marketers that handed out free samples at parties on yachts in the Hamptons, at Raves.

    2021-06-29 · Decoder with Nilay Patel · Juul and the business of addiction, with Lauren Etter · IDENTIFIED FROM THE TRANSCRIPT

  36. Yeah, so most people know about Jewel having launched in the summer of 2015 with this flashy nicotine device called Jewel and quickly taking off and taking over the entire industry and leading to a youth health crisis, youth usage. All the teenagers started using it.

    2021-06-29 · Decoder with Nilay Patel · Juul and the business of addiction, with Lauren Etter · IDENTIFIED FROM THE TRANSCRIPT

  37. Story of Jewel without telling the story of the tobacco industry. Those two industries, the tobacco industry and jewel were so intimately intertwined that it became evident to me that I needed to also write about the tobacco industry as well. So that's why I ended up with these two intertwined narratives.

    2021-06-29 · Decoder with Nilay Patel · Juul and the business of addiction, with Lauren Etter · IDENTIFIED FROM THE TRANSCRIPT

  38. So I started writing about Jewel after the outbreak of the lung injuries, this mysterious lung injury outbreak called E-Valley. And I was just started writing about it from sort of a health perspective and trying to figure out what was going on, just like the rest of the nation, trying to figure out, is this related to Jewel? Is this related to vaping? So I started writing some of those stories. And then I became interested in Jewel as a business story. It was fascinating to me that a company that had found itself in the middle of this public health crisis was a Silicon Valley firm. So that's then how I started writing about Jewel. So I wrote about that. And then as I embarked on a book, I was really endeavoring to tell the story of Jewel, but I quickly realized it was impossible to tell the complete story.

    2021-06-29 · Decoder with Nilay Patel · Juul and the business of addiction, with Lauren Etter · IDENTIFIED FROM THE TRANSCRIPT

  39. After a huge $12.8 billion investment from Altria. Altria used to be known as Philip Morris, and you probably know it by its most famous product, Marlborough Cigarettes. Then it all fell apart. The lawsuits came, the Federal Trade Commission sued to unwind the deal, the valuations of both jewel and Aldria collapsed, and Jewel itself now faces being regulated entirely out of existence in the United States.

    2021-06-29 · Decoder with Nilay Patel · Juul and the business of addiction, with Lauren Etter · IDENTIFIED FROM THE TRANSCRIPT

  40. But this party was for a product called The Jewel. That's J-U-U-U-L. It's a vape. And the jewel was and still is one of the most potent and effective nicotine delivery devices that's ever been created. Jules Big Innovation was a nicotine formula that made its vape hit just like a cigarette. And the party kicked off a marketing blitz that seemed directly targeted towards teenagers on social media. After that, the jewel became a sensation and a sensationally dramatic story. Yes, the marketing helped, but it also turns out nicotine is addictive as hell. A tech startup that had been founded in a Stanford design studio to disrupt the smoking industry had upended years of tobacco regulation in the United States, gotten a new generation of teenagers addicted to nicotine after years of declining teen smoking rates and eventually found itself valued at $38 billion.

    2021-06-29 · Decoder with Nilay Patel · Juul and the business of addiction, with Lauren Etter · IDENTIFIED FROM THE TRANSCRIPT