Your post-deeming strategy starts with a proper understanding of the FDA’s new rules.
By David Jaroslaw
On May 5, 2016, the U.S. Food and Drug Administration (FDA) published its long-awaited final rule for deeming other tobacco products to be subject to its authority. While cigarettes and smokeless tobacco have been subject to FDA regulation since the original passage of the Family Smoking Prevention and Tobacco Control Act (TCA) in 2009, the deeming regulations set forth what additional types of tobacco-related products will be regulated by the FDA, and which restrictions will apply to the introduction, sale, marketing and labeling of those products.
Some had advocated that the FDA apply different rules to different products, based on an assessment of their comparative health risks and usage patterns, particularly the extent to which they were used by youth. However, the FDA has instead opted to “deem”—i.e., to subject to its jurisdiction—all tobacco or tobacco-related products, including e-cigarettes, cigars, pipe tobacco and hookah tobacco, and to apply to all these products a generally uniform set of standards, with the only significant differences being related to product warning labels. The deeming regulations were formally published in the Federal Register on May 10, 2016, and have an effective date of Aug. 8, 2016.
This article addresses (i) the methods the FDA has established for gaining FDA approval for tobacco products, (ii) the relevant time periods for submissions of applications for such products, (iii) the FDA’s rationale for regulating e-cigarettes and cigars in essentially the same manner as cigarettes, (iv) the relevant restrictions on sale and marketing of such products, and (v) the warning labels that such products must carry.
- Introduction of new tobacco products
Following the passage of the TCA in 2009, the FDA issued regulations regarding the regulatory approval of the sale of cigarettes, the dominant tobacco product in the market. These regulations set forth three “pathways” for approval. These pathways were:
- Substantial equivalence (SE)
- Exemption from SE
- Premarket tobacco product application (PMTA)
Under the SE pathway, the FDA allowed manufacturers to make comparisons with products already on the market as of Feb. 15, 2007 (the “grandfather” date for product approval). Thus, because cigarettes have been on the market for over a century, manufacturers of cigarettes that were essentially similar to a product already on the market as of the grandfather date (such a pre-2007 product is referred to as a “predicate product”) could apply for FDA approval using the SE pathway. Substantial equivalence was defined as a product not differing from a predicate product in ingredients, mode of heating or health risks. If a cigarette manufacturer could show such substantial equivalence, the product would be eligible for FDA approval. Once a product was approved, minor changes in characteristics, such as the use of previously approved flavorings, would require only an application using the “exemption from SE” pathway. Manufacturers of all other products—i.e., those that had no predicate product or those that differed from existing products in ingredients, mode of use or health risks—would have to submit a detailed application using the PMTA pathway. Under this pathway, a manufacturer would have to submit information regarding product composition and mode of use and, of particular note, scientific data regarding the likely health risks of using the product.
Under the TCA as originally passed in 2009, the FDA provided cigarette manufacturers with a relatively straightforward approval process, using the SE pathway to address relatively uniform products arguably little different from commonly available predicate products. However, under the new deeming regulations, manufacturers of e-cigarettes and cigars face a more difficult road.
For e-cigarettes, the problem is the lack of predicate products, without which manufacturers cannot use the SE pathway. E-cigarettes differ fundamentally from combustible tobacco products. They do not burn or even contain tobacco, and thus do not produce tobacco smoke. Rather, e-cigarettes heat and vaporize a nicotine-containing liquid. They were first invented in their current form in the mid-2000s and were not generally commercially available until this decade. Manufacturers and others commenting on the proposed deeming regulations noted that while the grandfather date of Feb. 15, 2007, was uncontroversial for cigarette manufacturers, application of this same date to e-cigarettes would effectively exclude e-cigarette manufacturers from using the SE pathway. Instead, such manufacturers would be required to use the far more burdensome and costly PMTA pathway. Estimates of how much it would cost to complete a PMTA vary, but the deeming regulations note that costs are expected to be more than $800,000 per manufacturer in the first year of compliance. In the final deeming regulations, however, the FDA concludes that it is compelled by the language of the TCA to use the same Feb. 15, 2007, grandfather date for all tobacco-related products. The FDA comments that there may have been products on the market as of that date that could be used as a predicate product (it referred specifically to one unflavored e-cigar as a possibility) but notes that this will require further analysis.
Additionally, the deeming regulations state that a product that differs from a putative predicate product in any significant way, including differences in flavoring or strength, is in fact a different product, requiring its own PMTA. Indeed, given that the various e-cigarette products differ from each other precisely in flavoring and strength, each product (rather than a brand family) will likely require its own PMTA. Moreover, a significant percentage of the current e-cigarette market consists of small “manufacturers,” such as vape shops, which often create their own custom products. It is unlikely that many such small-scale producers could afford the cost of a PMTA for even a single product, leave aside the cost of an application for each individual blend. Thus, in what is a considerable understatement, the deeming regulations note that the proportion of vape shops that mix their own blends is likely to fall during the initial compliance period.
For cigar manufacturers, the problem is not the lack of predicate products on which to base an application using the SE pathway—cigars have been on the market even longer than cigarettes. Rather, the difficulty lies in the variations in tobacco blends between types of cigars. While the deeming regulations state that blending changes made solely to address natural variations in tobacco, such as seasonal variation, will likely not prevent a manufacturer from using the SE pathway, changes that affect characteristics such as pH, nicotine levels or flavors (the regulations refer specifically to changes in “smoothness” and “harshness”) will require a manufacturer to use the PMTA pathway for each product variety. An important part of the cigar market is the introduction of new products, particularly in the premium cigar sector. Further, much as is the case with e-cigarettes, many cigar manufacturers, particularly in the premium market, are relatively small-scale operations and might not be able to afford the substantial expense of a PMTA.
- Time periods for new product applications
The deeming regulations provide a “staggered” schedule for the submission of applications seeking FDA approval for newly deemed tobacco products. The period for the simplest application, the “exemption from SE” pathway, is the shortest; the period for the most complex application, the PMTA pathway, is the longest. These time periods are as follows:
- Exemption from SE: 12 months from the effective date
- SE: 18 months from the effective date
- PMTA: 24 months from the effective date
If an application for a product is not submitted for review within 24 months of the effective date, the product will be subject to enforcement action by the FDA, meaning its removal from the market, along with possible penalties or injunctive action. The deeming regulations state that the FDA expects that it should take 180 days (six months) to complete its review of an application. However, the deeming regulations also state that, regardless of the state of review, enforcement will begin 12 months after the application is submitted.
There is, however, an important caveat to this schedule: Tucked into a footnote in the deeming regulations is a statement that the delayed enforcement period applies only to products on the market as of the effective date. Any products introduced into the market after Aug. 8, 2016, will be subject to immediate enforcement. Thus, it can be expected that many manufacturers will seek to bring new products to market before this date, in order to take advantage of the 36-month window prior to enforcement.
All manufacturers will be required to provide a list of “hazardous or potentially hazardous constituents” within 36 months of the effective date, though the FDA has indicated it will provide additional guidance in this regard.
Restrictions on sales and marketing (see Section IV, below) take effect 90 days from the effective date.
III. Rationale for deeming
Much of the text of the deeming regulations consists of a series of comments, essentially FDA summaries of comments submitted by interested parties with regard to its proposed regulations, and responses by the FDA to these comments. Many of these comments and responses address the merits of extending the FDA’s existing regulatory structure for cigarettes to e-cigarettes and cigars. E-cigarettes and cigars (especially the former) are generally considered to have lower health risks than cigarettes. The following provides brief analysis of the FDA’s rationale for its approach.
- E-cigarettes
A broad discussion has occurred in scientific, public health and regulatory circles, in the U.S. and worldwide, with regard to e-cigarettes and the concept of tobacco harm reduction. Tobacco harm reduction proceeds from the principle that there is a continuum of risk among tobacco products, with some products posing a higher health risk to users and others a lower risk. It posits that tobacco users should be encouraged to move from higher-risk products, most commonly referring to combustible cigarettes, to those with lower risk. The working premise is that if cigarette smokers smoke as a way of obtaining nicotine, but die from the smoke itself, then such smokers should be encouraged to find other ways of obtaining nicotine—ones that do not produce tobacco smoke—that they find sufficiently satisfactory to reduce or eliminate their use of cigarettes.
Two major public health bodies from the United Kingdom, the quasi-public entity Public Health England (PHE) and the Royal College of Physicians (RCP), a body analogous to the American Medical Association, have recently published reports accepting the basic principles of tobacco harm reduction and continuum of risk; these reports take the position that smokers of combustible cigarettes should be actively encouraged to switch to e-cigarettes. The PHE report states that the “current expert estimate” is that the use of e-cigarettes is “around 95 percent safer than smoking” and further notes that there is an “inaccurate perception” that e-cigarette use is “as harmful as cigarettes.” The report also states that there is no evidence that e-cigarette use is “undermining the long-term decline in cigarette smoking,” and that “encouraging smokers who cannot or do not want to stop smoking to switch to [e-cigarettes] could help reduce smoking related disease.” The RCP report similarly states that new products such as e-cigarettes fit into a harm reduction strategy by “providing smokers with the nicotine to which they are addicted without the tobacco smoke that is responsible for almost all of the harm caused by smoking” and adds that these products provide a “viable harm-reduction option.”
The deeming regulations specifically discuss the concept of continuum of risk, and Mitch Zeller, the director of the FDA’s Center for Tobacco Products, has publicly discussed the opportunity for the FDA to develop “a comprehensive nicotine regulatory policy that is agency-wide and that is keyed to … the continuum of risk.” However, in the deeming regulations, the approach formally adopted by the FDA is very different, choosing to treat all tobacco-related products similarly. This is so despite language in the deeming regulations that suggests a split within the FDA with regard to whether e-cigarettes can serve a positive role in reducing the harm from tobacco use.
For example, although the deeming regulations contain a subsection titled “Continuum of Risk,” this subsection does not actually provide any data regarding the comparative risk of using the various tobacco-related products covered by the regulations. Rather, it states only that “there is general evidence of harm for all classes of newly deemed products.” The deeming regulations note the assessment by PHE that use of e-cigarettes is likely around 95 percent safer than smoking combustible cigarettes but conclude that there is a “lack of hard evidence” regarding the health risks of e-cigarette use and that, as a result, “the FDA does not find the beliefs … to be sufficiently conclusive on the relative risks of using different tobacco products.” Similarly, the deeming regulations state that while “the effects from nicotine exposure by inhalation are likely not responsible for the high prevalence of tobacco-related death and disease” and that “nicotine has not been shown to cause the chronic disease associated with tobacco use,” there are still “risks associated with nicotine.” With regard to potentially harmful constituents found in at least some samples of e-cigarette vapor, the regulations refer to a Japanese study reporting that e-cigarette vapor contains formaldehyde at one-fiftieth the level found in cigarette smoke, but they once again conclude that there is not adequate long-term data regarding health effects. Finally, in its discussion of usage patterns of e-cigarettes, the FDA states that it must take into account “the increased or decreased likelihood that existing users of tobacco products will stop using such products … and the increased or decreased likelihood that those who do not use tobacco products will start using such products.” The deeming regulations add that while some studies report that usage of e-cigarettes is more common among persons trying to quit smoking combustible cigarettes, “it cannot be determined by the research findings: (1) whether former cigarette smokers who now exclusively use e-cigarettes would not have ceased smoking cigarettes regardless of e-cigarette use; and (2) whether the e-cigarette use preceded quitting or the quitting occurred first and then was followed by later e-cigarette use.”
- Cigars
Cigars have been on the market for centuries, and there is a considerable body of scientific studies regarding the long-term health effects of their use. The major question regarding how the FDA would treat cigars was posed in the proposed regulations and request for comments published by the FDA in April 2014: whether premium cigars (in part defined as those retailing for $10 or more), which have distinct use patterns, would be exempted from the deeming regulations, or at minimum be subject to less onerous regulation. In the deeming regulations, the FDA has opted to treat all cigars similarly. While entities supporting differential regulation of premium cigars noted that users of these products are adults, not youth, and tend to smoke relatively few cigars, typically less than one per day, and that epidemiological data did not support there being an increased risk of mortality among cigar smokers who smoked fewer than two cigars per day, the FDA relies on data reporting that premium cigars are not inherently different in toxicological profile from other cigars, and therefore should be considered to pose the same health risks. The FDA identifies three key reasons for its decision to treat all cigars similarly: that all cigars are similar in composition, from a health risk perspective; that the data provided did not sufficiently establish a difference in usage patterns between cigar types; and that the data regarding youth usage were not sufficient to convince the FDA that this group did not or would not use these products.
- Restrictions on sale and marketing
The deeming regulations extend the restrictions on sales and marketing of tobacco products, which are currently applicable to cigarettes and smokeless tobacco, to all newly deemed products, including e-cigarettes and cigars. The primary restrictions, which take effect 90 days from the effective date, are a prohibition of sale to persons under 18 years of age, with proof of age required for purchase, and a prohibition of sales via vending machines (unless the machines are located in areas where entry by persons under 18 is prohibited).
- Warning labels
The deeming regulations draw one major distinction between e-cigarettes and combustible tobacco products—they will require a different health warning. E-cigarettes will be required to carry a single warning that states: “WARNING: This product contains nicotine. Nicotine is an addictive chemical.” Alternatively, the products may replace the first sentence with the following statement: “This product is made from tobacco.”
Cigars, in contrast, must carry a rotating series of warnings. These warning are:
- WARNING: This product contains nicotine. Nicotine is an addictive chemical.
- WARNING: Cigar smoking can cause cancers of the mouth and throat, even if you do not inhale.
- WARNING: Cigar smoking can cause lung cancer and heart disease.
- WARNING: Cigars are not a safe alternative to cigarettes.
- WARNING: Tobacco smoke increases the risk of lung cancer and heart disease, even in nonsmokers.
- WARNING: Cigar use while pregnant can harm you and your baby. (Or, as an optional alternative statement: SURGEON GENERAL WARNING: Tobacco use increases the risk of infertility, stillbirth and low birth weight.)
For cigars sold in boxes, these warnings must cover at least 30 percent of the two main display panels of each box, while for cigars sold individually, they must be displayed on a sign located at the point of sale. For advertisements, the warnings must cover at least 20 percent of each advertisement.
It remains to be seen how the FDA will implement the deeming regulations in practice. Will a predicate product be found to allow e-cigarettes to use the SE pathway? Will there be some additional leeway granted to small manufacturers (of both e-cigarettes and cigars)? If not, will the group of manufacturers shrink to a small set of large entities with the resources to afford the costs of the PMTA pathway? What sorts of information will the FDA deem suitable for submission in connection with the evaluation of newly deemed products? (The FDA has begun the process of providing draft guidance in this regard, but the path ahead is far from clear.) Given the likely complexity of each new product application, manufacturers of newly deemed products will have to start by navigating with relatively few tools.
David Jaroslaw is a shareholder in Greenspoon Marder’s litigation practice group. He has litigated a broad spectrum of complex civil and criminal matters in both federal and state courts, at the pretrial, trial and appellate levels. Jaroslaw has provided product liability advice and litigated on behalf of manufacturers of products, including tobacco and e-cigarettes, in the United States, Europe and Asia.