Fighting for change

Fighting for change

December 1, 0201

Vapor companies are meeting with the White House as it reviews the FDA’s proposed rules for e-cigarettes.

By Timothy S. Donahue

And the waiting continues. Deeming regulations for the U.S. vapor industry are now with the Office of Management and Budget (OMB). The Food and Drug Administration (FDA) sent its final rule to regulate additional tobacco products, including e-cigarettes and cigars, for White House review on Oct. 19. Currently, the FDA only regulates vapor products that are marketed as therapeutic devices. Various vapor companies have met or are getting ready to meet with the OMB to discuss the FDA’s proposal. However, it could still be weeks or even months before the rule is actually released.

FDA spokesman Michael Felberbaum said the OMB is required to review all significant regulatory actions and has 90 calendar days to do so. “However, this time frame can be extended to allow for additional interagency discussion,” he said. “At this time, the FDA cannot provide any further comment until the final rule is published.” This would put a possible completion date somewhere in mid-January or mid-February. However, the OMB could extend the date well beyond those time frames.

While some companies have already had their meetings with the OMB, at least two companies that spoke with Vapor Voice on the condition of anonymity said that they had appointments to discuss deeming regulations scheduled well into mid-December. This would imply that the OMB is taking review of the proposed rule seriously. Talking with the OMB while they review the document will be one of the final opportunities for industry stakeholders to voice their opinion. The next opportunity would likely be after the fact—in court.

Based on what they saw in the original draft, which was proposed more than a year ago, some players have been preparing for litigation. However, several e-cigarette regulatory experts expect major changes. “There are likely to be some surprises in the final rule, things people aren’t anticipating,” said Andrew Perraut of the San Francisco-based advisory firm Radiant Strategies and a former staffer at the White House Office of Information and Regulatory Affairs (OIRA), a statutory arm of the OMB.

After reviewing the proposed rule before leaving the office in August 2014, Perraut said there is more room for change in this rule than in any other he’s previously reviewed. “The requirements may very well change because the state of the science is very different [from before],” he said during a vapor association conference in Washington, D.C. Perraut added that the FDA has a particular perspective concerning the vapor industry—the protection of public health. “The impact on the regulated community is not of great interest to them,” he said.

The OIRA, however, serves a different role, taking into consideration the impact of regulations on the affected industry and society at large. “As ‘deeming’ wraps up, OIRA is a place where your interests will really be taken into account. It is your best chance to impact how these policies come about,” he said. According to Perraut, the FDA will have to justify its thinking because the science seems to indicate that e-cigarettes are substantially less risky than the agency has admitted in its proposed rule.

A crucial aspect of the OMB’s review will be determining the regulations’ likely economic impact on the $3.5 billion industry. This type of analysis typically examines the effect of a regulatory change by measuring changes in business revenue, business profits, personal wages and/or jobs.

The FDA’s own economic-impact analysis, carried out in 2014, was met with some skepticism because, among other things, the agency was unable to accurately estimate the number of e-cigarette products and manufacturers in the U.S. “The FDA’s estimate is grossly understated,” says Julie Woessner, executive director of the Consumer Advocates for Smoke-free Alternatives Association (CASAA), a vapor advocacy group. “A year and a half ago, CASAA estimated more than 100,000 products on the market, and that number has only continued to grow.”

Some states, local governments and even vapor industry manufacturers are already initiating several FDA suggestions from the initial deeming proposal. For example, sales of vapor products to minors have been outlawed by state and local legislation in 47 states. Many manufacturers have started to print nicotine warnings on their products. E-liquid manufacturers also expect the FDA to require them to register a list of ingredients for their products.

Interestingly, a recent study by Yale University’s Abigail Friedman, published in the Journal of Health Economics, showed that prohibiting sales to minors could be counterproductive. “Bans on e-cigarette sales to minors yield a statistically significant 0.9 point increase in the smoking rate among 12- to 17-year-olds.” Friedman said that it was enough of an increase to negate all the progress made by other avenues to reduce youth smoking rates.

One vapor advocacy group claiming to have obtained a copy of finalized deeming regulation (but is refusing to release it to the public), says the FDA aims to leave intact the provision that most concerns the industry: a mandate that any nicotine delivery devices that hit stores after Feb. 15, 2007, will have to apply retroactively for approval. The FDA has previously stated it lacks the authority to alter or amend the grandfather date because it was set by statute in the TCA [Tobacco Control Act]. Industry groups argue the process would cost millions of dollars, making it prohibitively expensive for companies to keep their products on store shelves.

Greg Conley, president of the American Vaping Association, said that without a change to the grandfather date, 99.9 percent of the 100,000-plus vapor products currently available on the market will be banned. “When even Big Tobacco is worried about getting their products through [the FDA’s premarket review] process, no one in the vapor space should delude themselves into believing that this proposal will benefit their company,” said Conley. “In its current form, the FDA’s proposal is not about regulation; it’s about prohibition.”

There is still hope, however. Proposed legislation, such as the Cole Bill, would amend the TCA to change the grandfather date for “deemed tobacco products.” This change would allow all vapor products currently on the market to remain on the market without being subject to the burdensome premarket FDA approval application process.

Another bill, sponsored by Alabama Republican Representative Robert Aderholt, would similarly prevent the FDA from requiring premarket reviews of e-cigarettes that are already on the market. The bill would essentially limit the FDA by prohibiting the agency from spending money on regulation of newly deemed tobacco products unless it allows products already on the market to stay. Like the Cole proposal, this bill would move up the grandfather date and allow companies to use grandfathered products when seeking to file substantial equivalence applications.

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