Convenience Store Operators Face a Changing Backbar
NATIONAL REPORT— Befuddled by some or all of the regulatory balls in play for tobacco this year? You're not alone. There's much confusion among convenience store retailers regarding Food and Drug Administration (FDA) rulemaking, including what the process is, if and when regulations will take effect, what constitutes an unlawful product, if enforcement can take place against retailers selling unlawful products, and more.
To maintain a handle on what's happening at the federal level of tobacco regulation and litigation, Convenience Store News has compiled the following playbook outlining the top issues, complete with the latest updates and bottom-line conclusions.
Menthol Cigarette & Flavored Cigar Bans
In late April of last year, the FDA published two new proposed regulations, referred to as product standards. A product standard is the power Congress gave to the FDA to reduce or eliminate an ingredient in a tobacco product or a constituent in tobacco smoke.
"This is a very significant power because it can result in products being removed from the market," explained Thomas Briant, executive director and legal counsel for the National Association of Tobacco Outlets (NATO). Such is the potential here. The first proposed regulation would prevent menthol as a flavor in cigarettes, roll-your-own (RYO) cigarette tobacco and heated tobacco products. The second regulation would prohibit all flavors in cigars.
The FDA has received more than 175,000 public comments (including from retailers) on the menthol ban, and almost 72,000 public comments on the cigar ban — most in opposition. The FDA must read every single comment and issue a report on the comments before any regulation is finalized, according to Briant.
In early January of this year, the agency issued a statement that it expects both the menthol cigarette and flavored cigar ban regulations to be finalized this August.
"That does not mean the regulation will go into effect in August," Briant emphasized. "And, before the regulation can be finalized, the FDA needs to send the final regulation to the White House Office of Management and Budget (OMB) to conduct its own review of the regulation because this regulation would be economically significant to the country."
Beyond that, the FDA asked for public feedback when it first proposed the regulation on extending the effective date to two years, rather than the usual one-year period. Some manufacturers asked in their comments that the FDA make the effective date six years after the regulations are finalized. "Then, there's also the possibility that lawsuits will be brought against the regulation if it is finalized by the FDA, which may further delay an effective date," Briant pointed out.
Even if this regulation is finalized this August, it will not take effect for at least one year, two years, or possibly even more years down the road.
Very Low Nicotine Plan
The FDA has a comprehensive plan for products that contain nicotine, whether derived from tobacco or not (synthetic nicotine). Essentially, this plan involves lowering nicotine to what the agency believes is a minimally addictive or nonaddictive level. The goals of this plan are to reduce the likelihood of future generations becoming addicted to nicotine and make it easier for current smokers to quit tobacco products.
Last June, the FDA stated that it plans to pursue a regulation that would set a maximum level of nicotine in cigarettes and possibly other combustible tobacco products but, at this time, it has not said what that maximum level would be.
Currently, cigarettes range from nicotine levels of approximately 7.5 milligrams up to approximately 13.5 milligrams.
This January, the FDA indicated it would propose this regulation by October of this year. Once it is proposed, as with any regulation, the public would be given time to submit comments. Then, the agency would be required to read all the comments and issue a report responding to them, before finalizing any such regulation.
The PMTA Process
Federal law and FDA regulations require that tobacco products introduced after Feb. 15, 2007, have a premarket tobacco product application (PMTA) submitted to the FDA for review, and that the agency must submit a marketing granted order (MGO) authorizing the product for sale in the U.S. market.
The filing deadlines have passed: tobacco-derived product PMTAs were due by Sept. 9, 2020, while synthetic nicotine product PMTAs were due by May 14, 2022. To receive authorization, the agency must determine that the marketing of the product is "appropriate for the protection of the public health."
The agency received applications for more than 8 million tobacco-derived products, the vast majority of which were electronic cigarette or nicotine vapor products. Of the roughly 8.9 million e-cigarette products in the PMTA process, more than 8.6 million have been denied to date due to either a refusal to accept, a refusal to file or a marketing denial.
"As of this March, the FDA has authorized only 45 MGOs for tobacco and vapor products. Only tobacco flavor has been allowed in any of those," Briant said.
Given that of the roughly 10 million tobacco-derived and synthetic nicotine products with submitted PMTAs, only 45 are allowed so far on the U.S. market, the NATO director added that "as a percentage, that's 0.0000045 percent."
Recently, the FDA issued two MDOs for Logic menthol e-cigarettes. However, Logic filed for and obtained an emergency stay. Further court proceedings are pending. Also, in the past two months, the FDA issued MDOs for four Vuse menthol refills for e-cigarette devices. The manufacturer, R.J. Reynolds Vapor Co., subsequently filed an emergency temporary injunction, which the court granted. Those proceedings are still pending, too.
PMTAs remain under review for additional e-cigarette and vapor products made by Juul, Vuse, NJOY, Logic, blu, Smok and Puff Bar. "Pursuant to a court order, the FDA filed a report that it expects to complete the review of pending PMTAs by Dec. 31, 2023, for those electronic cigarette and vapor products that have a 2 percent or greater market share," Briant explained.
Regarding synthetic nicotine products, the agency received PMTAs for almost 1 million products. To date, it's issued refuse-to-accept letters for more than 925,000 of them. The FDA accepted 8,600 of the applications, most of them e-cigarettes, for which the review process is ongoing. "It's important to note that so far, no MGOs have been granted for synthetic nicotine products," said Briant.
Lawful Vs. Unlawful Products
Lawful tobacco products include products on the market on or before Feb. 15, 2007; those products determined to be substantially equivalent or have a substantially equivalent exemption; and PMTA products for which the FDA issued an MGO.
The latter category includes eight Swedish Match General products, two 22nd Century Group VLN cigarettes, eight Marlboro Heatstick products, four U.S. Smokeless Tobacco Co. Verve products, nine R.J. Reynolds Vapor Co. Vuse products, eight Logic products and six NJOY products.
Unlawful tobacco products are a much larger pool. According to Briant, they include all new products after Feb. 15, 2007, without an MGO or a substantially equivalent exemption; products with no PMTA submitted; products with a PMTA submitted that were denied application, filing or marketing; and all products with pending PMTAs under review by the FDA (this includes e-cigarettes, cigars, pipes, RYO, smokeless tobacco and synthetics).
The FDA released a statement on unlawful products: "All new tobacco products, including all e-cigarettes, on the market without the statutorily required premarket authorization are marketed illegally and are subject to FDA enforcement action."
The FDA is beginning a new level of enforcement, especially against manufacturers. Why now and not sooner? "Because the agency has been quite rightly overwhelmed by the sheer number of PMTAs that require agency authorization to be marketed and they have limited resources and limited personnel," said Briant.
Now, though, the FDA is able to start prioritizing its enforcement efforts on products with no PMTAs submitted, products with a marketing denial order, flavored cartridge e-cigarettes that are not tobacco or menthol flavor, e-cigarette manufacturers not preventing youth access, and e-cigarettes that are targeted to youth, Briant outlined.