The Food and Drug Administration (FDA) is in the final stages of announcing a new set of regulations for all electronic cigarettes (e-cigarettes) and vapor products. Free-market innovation has resulted in significant developments in the number and quality of these tobacco-free products that are helping Americans kick the unhealthiest habit known to man – smoking. The FDA’s proposal, however, threatens the very survival of the vast majority of the vapor product industry.
For large tobacco and pharmaceutical companies, this is great news. The FDA’s proposed regulations stand to benefit both industries, which represent some of the most well-funded and powerful lobbying interests in the United States.
Vapor devices compete with products marketed by pharmaceutical companies to help people quit smoking, like Nicorette gum and the nicotine patch. These nicotine replacement products have taken a hit in recent years as many consumers have turned to vapor products after pharmaceutical options have failed them.
The emergence of vaping also has Big Tobacco concerned. America’s largest cigarette companies have released e-cigarette products, but have thus far been unable to establish dominance in the market. Overly burdensome FDA rules could be just the ticket they need. Bonnie Herzog, a senior analyst with Wells Fargo Securities, commented last week that that the FDA’s proposal is “broadly positive for the big tobacco manufacturers since it will increase the barriers to entry.”
Under the FDA’s proposal, all vapor products on the market will have to retroactively undergo a “premarket” review process. For a single product application, the FDA estimates that a manufacturer will need to put out $330,000. Within the industry, the real cost is expected to easily run into the millions of dollars. Even with the lower cost estimate, the agency’s own economic analysis spells doom for all but a couple companies. That analysis predicts that approximately 99% of products on the market will not even attempt the application process, let alone gain approval.
The FDA claims that it does not have the authority to modify the premarket review requirement under the 2009 Tobacco Control Act, which gave the FDA the authority to regulate tobacco and nicotine-containing products. The agency says that the statute requires them to consider any product that has come to market since February 15, 2007 as a “new” tobacco product. The FDA calls this February 2007 provision the “predicate date.” It is this date that would needlessly roll back technology almost a decade and close businesses.
This week, members of Congress have an opportunity to change the FDA’s direction in a way that will benefit consumers, small business, and public health. On Tuesday, the House Appropriations Committee is scheduled to take up an agriculture spending package. Harm reduction advocates are hopeful that the committee will take up and pass an amendment to the bill to modernize the February 2007 predicate date for vapor products.
Changing the predicate date will not interfere with the FDA’s ability to establish rigorous safety and manufacturing rules for vapor products. The agency will retain their existing power to set product standards. If the FDA takes this route, any standard issued would apply to all products within the agency’s jurisdiction.
Without a modification of the February 2007 predicate date, Marlboro and Camel cigarettes will remain legal, but it will become a federal felony to sell tens of thousands of vapor products that are currently legally available and helping smokers quit. The status quo in the United States – smoking – will remain.
Approximately two-thirds of the vapor market is held by companies with no connections to Big Tobacco. That’s because the tobacco companies offer very few options to consumers looking to customize their quit journey. But given their ability to afford onerous regulation, Big Tobacco could be the only player left standing in the e-cigarette market.
Last year, attempts were made to change the predicate date by members of both the House and Senate. Congressional Democrats successfully killed the amendment and attacked Republicans for siding with Big Tobacco. They were misguided in that accusation. This shouldn’t be a partisan fight. Both parties should celebrate the prospect of a creation of the free market helping make cigarette companies a relic of the past.
The FDA’s current proposal will freeze innovation and kill jobs through unnecessary and costly paperwork. For the millions of Americans who try to quit smoking every year, Congress should act to ensure that overregulation does not prevent smokers from accessing effective and safer alternatives. Republicans and Democrats should welcome this much needed change.