The Wait Is Over

Melissa Kress, Convenience Store News

7/27/2014

The long wait is over ? sort of. Three years after saying it would regulate electronic cigarettes as tobacco products, the Food and Drug Administration (FDA) finally released its proposed deeming regulations in late April. However, when the regulations will be implemented ? and what they will look like in the end ? remains to be seen.

The agency has the authority to regulate tobacco products under the Family Smoking and Tobacco Control Act of 2009, but the FDA must issue deeming regulations to extend its authority to cover additional tobacco products. Products included in this latest proposal include electronic cigarettes, cigars, pipe tobacco, nicotine gels, water pipe (or hookah) tobacco and certain dissolvables not already under the FDA?s authority. The agency currently regulates cigarettes, cigarette tobacco, roll-your-own tobacco and smokeless tobacco.

The proposed deeming regulations call for minimum age and identification restrictions to prevent sales of the products to underage youth; requirements to include health warnings; and prohibition of vending machine sales unless in a facility that never allows minors, such as bars and nightclubs.

With the effects of electronic cigarettes on public health still largely unknown, the warning labels for e-cigarettes will only be addictive warnings, Mitch Zeller, director of the FDA?s Center for Tobacco Products, said during a briefing on April 24, the day its proposal was released.

According to the FDA, under the proposed rules, manufacturers of newly deemed tobacco products would have to, among other requirements:

Register with the FDA and report product and ingredient listings;
Only market new tobacco products after FDA review;
Only make direct and implied claims of reduced risk if the FDA confirms that scientific evidence supports the claim, and that marketing the product will benefit public health as a whole; and
Not distribute free samples.

A 75-day public comment period began April 24 and was recently extended by 30 days to Aug. 8.

?This is an important moment for consumer protection and a significant proposal that if finalized as written would bring FDA oversight to many new tobacco products,? stated FDA Commissioner Margaret A. Hamburg. ?Science-based product regulation is a powerful form of consumer protection that can help reduce the public health burden of tobacco use on the American public, including youth.?

WHAT?S MISSING?

Electronic cigarette industry watchers were expecting the proposed regulations to closely mirror those of cigarettes, which the FDA began implementing in 2009. While the proposal does include some components of cigarette regulations, it does not immediately call for a flavor ban, restrictions on marketing such as television advertising or a ban on online sales, nor does it set product standards.

Any future regulation will require separate rulemaking and public comment once the proposed deeming rule is finalized. In order to impose restrictions on marketing and advertising, for example, the FDA must first have jurisdiction over the products, which is what deeming regulations accomplish, according to Zeller.

?It is sort of walk before you run,? he explained.

Zeller added that although online sales are not prohibited under the proposal, they will be subject to the age restriction provision once the deeming rule is finalized.

Bonnie Herzog, managing director of beverage, tobacco and convenience store research at Wells Fargo Securities LLC, pointed out that the FDA cannot enact a federal tax on e-vapor products or ban Internet sales because those actions fall under the realm of Congress. In addition, the agency cannot legally ban e-cigarette advertising because it is considered ?commercial speech,? which is protected by the First Amendment.

?We believe the process could take as long as two years before final regulations are implemented given the rulemaking process, though some items will need to be complied with immediately,? Herzog concluded.

In Their Own Words

Electronic cigarette manufacturers were quick to react to the Food and Drug Administration?s (FDA) proposed deeming regulations. While fearing the worst and hoping for the best, many industry players were happy the agency ?followed the science? when crafting its proposal.

Lorillard Inc., maker of blu eCigs, applauded the agency?s initial efforts to establish a ?reasonable? regulatory framework for the e-cigarette category ? something it has supported since the beginning ? such as establishing minimum age-of-purchase requirements, setting product quality and safety standards, and listing ingredients and other relevant consumer information.

?It appears the FDA is taking a science-based approach and that the proposed rule itself defines a constructive process that recognizes that e-cigarettes are different than combustible cigarettes,? said Murray S. Kessler, chairman, president and CEO of Lorillard. ?Despite what I am sure will be a robust give-and-take process over the coming months, we remain committed to our belief that electronic cigarettes represent a major opportunity to align the interests of business and public health.?

Eli Alelov, CEO and founder of LOGIC Technology Development Corp., echoed the sentiment. He told Convenience Store News he?s happy the FDA took a science-based approach to regulating electronic cigarettes, noting that the agency took a very strong position in supporting the e-cigarette industry.

Scottsdale, Ariz.-based NJOY has also been in favor of electronic cigarette regulations and welcomed the FDA?s proposal. ?We have long supported FDA regulation of electronic cigarettes and believe the issuance of [the] proposed regulations is a critically important milestone,? said Craig Weiss, NJOY?s president and CEO. ?By resisting calls to regulate ahead of ? and indeed in opposition to ? the science and data, the FDA has brought NJOY a giant step closer to achieving its corporate mission of obsoleting cigarettes. There are encouraging signs that 10 years from now, this date will be remembered as the beginning of the end of the tobacco epidemic.?

VOLCANO eCigs applauded the FDA?s decision to take measured steps in establishing sensible regulation for the electronic cigarette industry. However, the company?s chief said more details are needed on the proposed rules that create manufacturing and labeling standards, as well as required registrations. Cory Smith, CEO and co-founder of Honolulu-based VOLCANO eCigs, also raised questions about the application process.

?I think the main concern for all manufacturers and retailers will be the application process and the cost companies will have to bear to get through it. The FDA?s proposal will require that all electronic cigarette products introduced onto the market after February 2007 be registered with the FDA, which equates to nearly 99 percent of all products currently on the market. In the interim, though, the FDA is proposing to allow companies to conduct business as usual,? Smith said.

Kyle Newton, president and CEO of SSO Choice LLC, maker of 7?s Electronic Cigarettes, told CSNews that he believes the FDA?s new proposed controls are a powerful form of consumer protection that can help reduce the public health burden of tobacco and bolster support of electronic cigarette distribution that fortifies convenience store sales.

?The growth of the electronic cigarette industry has reached a welcomed FDA regulatory stage that defines what we believe are requirements that help ensure quality, functionality, numerous comparative benefits and value,? he said.