Shares of tobacco companies are falling sharply after the U.S. Food and Drug Administration announced a comprehensive regulatory plan, under which it will pursue lowering nicotine in cigarettes to non-addictive levels and create "more predictability" in tobacco regulation.

WHAT'S NEW: The FDA announced a new comprehensive plan for tobacco and nicotine regulation that will serve as a multi-year roadmap to "better protect kids and significantly reduce tobacco-related disease and death." The approach shifts focus to nicotine and the issue of addiction as the center of the agency's tobacco regulation efforts. The aim, according to the agency, is to ensure that the FDA has the proper scientific and regulatory foundation to efficiently and effectively implement the Family Smoking Prevention and Tobacco Control Act. Commenting on the matter, FDA commissioner Scott Gottlieb said, "Unless we change course, 5.6M young people alive today will die prematurely later in life from tobacco use. Envisioning a world where cigarettes would no longer create or sustain addiction, and where adults who still need or want nicotine could get it from alternative and less harmful sources, needs to be the cornerstone of our efforts - and we believe it's vital that we pursue this common ground."

PRICE ACTION: In morning trading shares of Altria (MO), British American Tobacco (BTI), Philip Morris (PM), and Reynolds American (RAI) are down a respective 9.2%, 5.3%, 5.4%, and 2.2%.