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FDA plan to reduce nicotine already has Big Tobacco hurting

The Food and Drug Administration on Friday announced a plan to help Americans kick the habit by reducing the amount of nicotine in cigarettes. And Big Tobacco is already feeling the effects.

The details are scant so far, but news of the initiative immediately drove down the market value of some of the world’s biggest tobacco companies, including Altria Group and British American Tobacco. It’s a shift for these stocks, which have generally been performing pretty well since Donald Trump became president and started on a deregulatory tear.

Besides cutting the amount of nicotine, the FDA plan under consideration would also encourage “innovations” — such as e-cigarettes — that aim to wean people off old-fashioned cigarettes. The agency said in its Friday release that it intends to extend the deadline for “newly regulated tobacco products” that can help smokers quit.

“Because nicotine lives at the core of both the problem and the solution to the question of addiction, addressing the addictive levels of nicotine in combustible cigarettes must be part of the FDA’s strategy for addressing the devastating addiction crisis that is threatening American families,” said FDA Commissioner Scott Gottlieb, who was confirmed by the Senate in May.

Though tobacco usage has been waning in the U.S. over the past few decades — especially among young adults 18 to 29 — a 2014 report from the Surgeon General said that smoking-related disease costs the country over $300 billion annually. And these costs are not borne equally; more recent research indicates that while smoking rates among the college-educated fell 83 percent between 1966 and 2015, they fell only 52 percent, by comparison, for those who did not finish high school.

The tobacco companies won’t likely let the FDA move forward without a fight. Big Tobacco donated $1.5 million for the Trump inauguration proceedings, and tobacco companies and their trade associations spent $4.7 million on lobbyists in the first quarter of 2017.