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  • The Investor’s Perspective

    The Investor’s Perspective

    Photo: Chris Ferenzi

    The 2009 Family Smoking Prevention and Tobacco Control Act charged the U.S. Food and Drug Administration with regulating tobacco products for the protection of public health; so, from one point of view, it was dismaying to hear a panelist on the Investor Panel of the recent GTNF describe how, under the tutelage of the FDA, the U.S. tobacco and nicotine market had become a resilient one for combustible cigarettes.

    Of course, this being an investors panel, the panelist’s comment was less about the FDA and more about Altria, whose short-term fortunes are tied to a large extent to the resilience of the combustible segment and whose reduced-risk strategy was said by another panelist to be unclear. Altria’s appeal as an investment opportunity was contrasted with that of another U.S.-listed company, Philip Morris International, which has had success in moving its sales from higher risk to lower risk products.

    The panelists discussed the proposed acquisition of Swedish Match by PMI, which, if it goes ahead, would allow PMI to use SM as a vehicle for marketing in the U.S. the heated-tobacco device IQOS, which has marketing approval and is the subject of an FDA modified-risk order but which is currently banned from being imported following a patents dispute, a ban that is being challenged in the courts. According to one panelist, Altria has an agreement with PMI to market IQOS in the U.S. until April 2024, but there is apparently a question mark over whether the agreement provides for Altria to extend the agreement for another five years.

    This raises the question of how an Altria shorn of its right to market IQOS would fare. Well, apparently, Altria is said to be due to unveil a heated-tobacco product toward the end of this year, but with FDA approval necessary, it would take some time for the company to start commercializing a new product. One interesting comment made the point that while PMI was years ahead of Altria in the heated-tobacco product field, the two companies used to be one.

    There seemed to be an assumption at times that PMI would be able easily to muscle in on the U.S. market, but not everybody was having that. One panelist made the point that Altria and other U.S. companies were likely to prove highly competitive, and another added that IQOS might not be welcomed with open arms by U.S. consumers who had access to a range of reduced-risk products, including e-cigarettes, which had out-competed IQOS on some other markets. But on the other side of this coin, PMI was said to be starting to widen the focus of its reduced-risk strategy in respect of product categories.

    It would seem that a week is a long time in the investment arena. During the panel discussion, Altria was seen as being in a difficult position when it comes to vaping. Its investment in Juul Labs involved a no-competition clause, and Juul has suffered a setback in the form of an FDA marketing denial order (MDO). The panelists indicated that the MDO was being contested, however, and that it would be open to Altria to make an outright bid for Juul. Less than a week after the panel met, however, Altria announced that it had exercised its option to permanently terminate its noncompetition obligations to Juul.

    Surprisingly, perhaps, threats raised by the potential cigarette menthol ban and the imposition of a very low-nicotine cigarette standard in the U.S. were not yet seen as particular drags on tobacco businesses’ appeal to investors since, partly because of likely legal challenges, they were seen as being some way off.

    On a wider front, while PMI was seen as a growth company, it was said to be facing headwinds created by the strength of the dollar and its exit from Russia. Or not. One panelist said that only Imperial Brands had exited Russia completely and that he would be surprised if the other major companies, which had invested heavily in the country, had exited Russia without providing for a way back.

    On a more general level, the investment case for tobacco was seen as strong, partly because most companies—the exception seems to be PMI—are undervalued but also because they offer strong and secure cash flows and high yields. This situation was said not to have changed but to be more appreciated now than it was two or three years ago, particularly in the face of a recession. And while the appeal of tobacco stocks would be negatively impacted by the current increases in interest rates, on the positive side, most tobacco company debt was at fixed rates. Still, environmental, social and governance issues comprised an overhang in respect of getting investors interested in tobacco stock.

    The discussions were heavily skewed toward the U.S. market and U.S. companies to the extent that the chairman apologized for ignoring the world outside the U.S. and Europe. The upcoming EU directives on excise taxes and tobacco products were mentioned, the former in a fairly good light given that it seemed that harmonized taxes would not be set at the same level across product categories but at a lower level on less risky products. Such a rational policy seems at odds with the tobacco product directive, which seems set to retain the irrational ban on snus.

    BAT and Imperial Brands were said to be undervalued by investors. BAT’s multi-category reduced-risk portfolio was held up as the way ahead, and its success with Vuse was highlighted a couple of times. Mention was made of a new management at Imperial that was said to be getting to grips with the business, focusing on the areas where it could perform well, resetting its new-generation products business and creating an opportunity for some geographical divestments.–George Gay

  • Philip Evans

    Philip Evans

    Photo: Chris Ferenzi

    Philip Evans, senior advisor at the Boston Consulting Group, provided an outside perspective on the challenges and opportunities of transformation through innovation.

    Evans started by reflecting on the successes and failures of other sectors that, like the tobacco industry today, had faced existential crises. He cited Netflix CEO Reed Hastings’ decision to walk away from the business of distributing DVDs in favor of streaming video, thereby transforming the company and creating staggering amounts of economic value—and contrasted that with BP’s fruitless attempt to rebrand as “Beyond Petroleum.”

    What can such experiences teach the tobacco industry about transformation through innovation? Evans identified five lessons.

    First, transformation requires a crisis—the more acute, the better. Transformation takes place regularly in the military—always after defeat, when generals are forced to fundamentally rethink their strategies. And one reason the fast-moving tech industry is so innovative is that when a crisis hits, it tends to hit quickly, which means it cannot be evaded.

    Second, while companies can try to overcome their problems through mergers and acquisitions, this will not necessarily achieve the type of transformation that the tobacco industry is interested in. Evans cited the example of the American Can Co., a low-margin commodity business that transformed itself into a life insurance company by buying other businesses. “Over time, the only thing that transformed was the business card of the chief executive,” said Evans, adding that “a bunch of investment bankers probably got very rich in the process.”

    The third lesson in transformation, according to Evans, is that it almost invariably takes new leaders to set a new direction—and those leaders need a single-minded, long-term vision, along with the security and legitimacy to withstand short-term reversals, which is the fourth lesson. Evans noted that successful transformers were often led by a sole proprietor. Bill Gates was able to overcome the threat posed by the internet to Microsoft’s software-based business model in part because he was a uniquely powerful controller and owner of the company.

    As the fifth lesson, Evans stressed the importance of a clearly articulated strategy and purpose. “Companies that lose their way cannot recruit good people,” he said. Talented candidates are attracted by the promise of growth and vitality, especially through innovation.

    Evans then set out to dispel the myth that big companies are unable to innovate. “It’s untrue,” he said. To illustrate his point, he showed a chart plotting the number of patent filings against the population levels in America’s biggest cities. The cities with the most people clearly filed the most patents. “Innovativeness is a function of the breadth and comprehensiveness of the other ideas to which an individual is exposed,” explained Evans. “That exposure is much greater in a large network than it is in a small one. If appropriately structured, there can be positive economies of scale to innovation; big is indeed beautiful.”

    The other secret of cities’ success in innovation is their lack of hierarchies. According to Evans, it’s the hierarchy rather than the scale that squelches the ability of many large organizations to innovate. If a large organization wants to be successful in innovation, it should replicate the hierarchy-free social structure of cities.

    To illustrate his point, Evans showed charts revealing patterns of collaboration within Google, Apple and Amazon—companies that are large and innovative. While each of these companies operates in a different part of the innovation cycle, the charts revealed patterns of considerable collaboration.

    Openness is key, according to Evans. Google, for example, is deeply networked in academia and does not assert intellectual property in the traditional sense.

    This lesson was learned the hard way by the pharmaceutical industry toward the end of the 20th century. In the late 1980s, there was little collaboration among pharmaceutical companies, with each player jealously guarding its intellectual property. When large molecule biotechnology emerged in the early 1990s, many traditional pharmaceutical companies stuck to old models of who owns what—and therefore got marginalized.

    In the ensuing decades, they were forced to buy their way back into the business by acquiring some of these biotech companies. According to Evans, the pharmaceutical companies have since learned their lesson. But the point, he noted, is profound: Innovation requires openness and sharing. “It is incompatible with a lot of the traditional ideas about exclusivity, secrecy and ownership,” he noted.

  • Innovating for Tomorrow

    Innovating for Tomorrow

    Photo: Chris Ferenzi

    When creating a smoke-free world, innovation must take place not only in terms of products but also in terms of regulation, communication and sustainability. That was one of the messages of the “Innovating for Tomorrow” panel discussion during the recent Global Tobacco and Nicotine Forum (GTNF) in Washington, D.C.

    Ming Deng, head of Next-Generation Products (NGPs) Industry Study at Yunnan University, spoke about his desire to make NGPs smart and mobile. At present, he said, the electronic functions that differentiate an NGP from a combustible cigarette just serve as a marketing tool. However, the Artificial Intelligence of Things (AIoT)—the combination of artificial intelligence with the Internet of Things—offers considerable opportunity to improve human-machine interactions and enhance data management and analytics, among other benefits. “With AIoT, producers could trace consumers’ needs and innovate products accordingly,” said Deng.

    For Meisen Liu, R&D director at Shenzhen Zinwi Bio-Tech, lower temperature atomization is one of the most important objectives in current research as it is safer for human health. A higher atomization temperature causes atomizing agents to decompose into harmful aldehydes whereas atomizing agents with a low boiling point decrease the atomizing temperature and reduce the emission of harmful substances. Liu also described how nicotine salts derived from different acids had different properties regarding sensory stimulation or taste. His company, he said, had created a new type of nicotine salt that allows for enhanced stimulation in markets where the amount of nicotine in e-liquids is restricted.

    Kevin Peng, advanced technology scientist at the ALD Group, spoke about technologies to reduce the carbon footprint of vape product manufacturing and consumption. Earlier this year, his company launched a “green cigarette,” a disposable vape product featuring 6 percent lower carbon emissions than combustible cigarettes. The company also developed a super-slim pod for reusable vaping devices made from a material that has only one-third of the carbon emission of ALD’s older materials. This way, he said, his company had achieved a 50 percent emission reduction compared to other pod products.

    ALD also conducted an emission assessment for its organization and products. “ESG [environmental, social and governance] is a much more difficult thing than we thought,” Peng stated. “We found that most suppliers are not very responsive in terms of such requirements.” He called for a unified industry ESG standard for suppliers, which would make it easier to reduce emissions.

    To help accelerate its transformation, BAT established Btomorrow Ventures two-and-a-half years ago. Lisa Smith, the subsidiary’s managing director, related how Btomorrow had set up a number of innovative ecosystems. “It’s a highly competitive market,” she said. “It’s difficult to find the best innovators out there.” Her company’s role is to be the “handshake” to the outside world to show that BAT is an appropriate partner for innovators. Among the many tasks in BAT’s transformation are to quickly promote the ESG agenda and move beyond nicotine. In order to achieve the latter, she said, the company had to build science and credibility.

    ICCPP, a provider of solutions for e-cigarettes and heated-tobacco products, believes that the key to innovation in vaporization might be the ceramic coil. The company, which focuses on research and manufacture of electronic atomizing technologies and is the parent company of the Voopoo vaping brand, introduced the world’s first nano-microcrystalline ceramic core in 2021. According to William Yu, vice president of global ODM business at ICCPP, the core is based on environmentally friendly mineral materials that result in an increased nicotine delivery and stable flavors. In combination with a powder-free technology and a porous structure, the core enables a significant increase in atomization, according to Yu. The company also develops environmentally friendly products, such as a disposable cigarette made from special recyclable paper.

    Continuing to innovate is essential as the industry is at a crossroads, said George Cassels-Smith, CEO of Tobacco Technology Inc. (TTI). After the Food and Drug Administration, through its onerous market authorization processes, had “frozen” the U.S. market for next-generation products, TTI opened a new manufacturing site in Italy, which according to Cassels-Smith is more open to innovation. “It’s vital to involve science, which is one of the pillars of what is a quick-moving new technology,” he said. “It needs expertise to focus on this direction because, ultimately, we must find superior products to combustible cigarettes.”

     

  • Gal Cohen

    Gal Cohen

    In his keynote, Gal Cohen, head of scientific affairs at North Carolina-based Rose Research Center (RRC), which specializes in tobacco dependence research, including research on smokers, addiction, smoking cessation, tobacco harm reduction and the use of other tobacco products, discussed the opportunities offered by e-research versus traditional in-lab clinical studies for clinical trials in the field of vaping as the technology for virtual trials is maturing.

    One of the crucial issues in a clinical trial is recruitment. In a typical trial setting, Cohen concluded from a comparison of 100 recently completed e-cigarette randomized controlled trials, many studies are underpowered and thus limited in scope as the intended number of subjects is often not recruited. Eighty percent of clinical trials finish late, and 20 percent are delayed for more than six months. Cohen said that it was not unusual for recruitment to take up to four years. Costs for clinical procedures, administrative staff, site monitoring, recruitment and retention as well as a laboratory were named as the top cost drivers.

    The virtualization of trials, on the other hand, offers an opportunity to reduce recruitment time and facilitate larger trials, improve data quality and trial execution. Several developments facilitate this trend, among them smart phones and improved connectivity. In the U.S., for example, there is one cell phone per individual; in Russia there are close to two per individual. Meanwhile, connected sensors can use modalities such as breath or heart rate to track biomarkers like exhaled carbon monoxide. GPS shows where a current use pattern takes place and allows for detailed analyses. Despite the obvious advantages of e-trials, though, there are still instances where you want to bring the subject into a lab, Cohen said. Abstinence or quitting, for example, are best studied in a controlled setting.

    The RRC recently introduced eResearch, the first mobile clinical research platform for volunteers who want to advance research in nicotine, smoking cessation and harm reduction. Implementation takes place via a cloud-based platform, and participants have access through an app on their phones. On the other side, there is an administrator who is running the study and monitoring it. The system includes a secure database and offers the opportunity to bring in data from other apps and devices.

    The phases of a clinical study are also represented in the virtual study. The setup is designed for easy use and features a web administration portal, customizable study design, volunteer profile management and role-based access and permissions. Recruitment, screening and verification of eligibility involve scanning a driver’s license, taking a picture and validating that a volunteer is the right participant, and a medical eligibility screening. Clinical study process management includes connectivity with PayPal or other payment portals so that participants can get immediate monetary rewards if they achieve certain goals. The platform is globally scalable. For the last phase, data management, there is a dashboard with data export and visualization, which is updated in real time.

    The advantages of virtual trials, Cohen summarized, include scalable recruitment, ease of compliance for participants, ease of administration, real-world use patterns and connected diagnostics, devices and apps on top of a compliant quality system.

  • Global Regulatory Issues

    Global Regulatory Issues

    Photo: Chris Ferenzi

    It’s been almost 60 years since a U.S. Surgeon General first stated the dangers of cigarette smoking and 50 years since scientists found out that the inhalation of smoke rather than nicotine is the major cause of smokers’ health problems. With goals in tobacco harm reduction (THR) long set, regulators should be able to solve the problem and shape rational regulation, argued moderator David Sweanor, adjunct professor of law at the University of Ottawa. “In all cases, it’s only small steps forward. What would happen if we saw this as a matter of urgency and, for instance, allow more products at a time?”

    Gizelle Baker, vice president of global scientific engagement at Philip Morris International, stressed the role of science as a basis for policymaking. “Science isn’t perfect, but it has evolved,” she said. “We need to look at the data we need in the future to correct our idea and come to conclusions that can drive policy. Because the only way to shape policy is to use science, data and facts.” Knowledge about long-term effects or which part of the population in certain countries will use a reduced-risk product (RRP) can only be gained if the products are put on the market, she stated.

    Konstantinos Farsalinos, research fellow at Onassis Cardiac Surgery Center, noted that there are no missing data, only missing common sense. “We will never be fully informed about anything,” he said. “At one point, we have to make a decision.” The bar of proof for THR has been set extremely high, Farsalinos noted. In some markets, this forces smaller companies to leave the market to big companies that can afford the approval process. “We live in a high-risk society—let’s consider THR like any other harm reduction strategies,” he said.

    Marewa Glover, director of the Center of Research Excellence on Indigenous Sovereignty and Smoking, spoke about New Zealand’s Smoke-Free Aotearoa 2025 Action Plan, which is currently under review and includes a smoking ban for all those born after 2008, a drastic reduction of legal retail outlets for RRPs, and the reduction of nicotine content in combustible cigarettes to nonaddictive levels. Glover said the draft bill lacks not only common sense but also compassion. “The regulatory intent is to not allow vaping to become normalized but denicotization,” she said. “As a smoker, you should switch to vaping temporarily and then quit completely. Anyone who quits vaping should never go back.” She predicted a domino effect on other countries and urged regulators not to follow the example of New Zealand.

    The objective of THR, said Sharon Goodall, group head of regulatory science at BAT, is very clear: to reduce the number of smoking-related deaths. The sentiment of positivity that comes with this prospect should be maintained in the industry’s talks with regulators who are willing to change their approach toward THR. “We must not get distracted. We must react to individual events but remain focused on the long-term outcome. There are insufficiencies in the system, markets without open dialogue, therefore we must continue to work with regulators.”

    Focusing on the role of market structure and competition in the U.S., David Levy, professor of oncology at Georgetown University, pointed out that before 2005, the cigarette industry was static and homogeneous and, for tobacco control, the epitomized enemy. After 2005, the market fragmented, with consumers using multiple products. After 2012, e-cigarettes quickly gained market share.

    Tobacco companies responded by producing their own e-cigarettes. They played a role but didn’t control the market. Vaping became a highly competitive market. Recently, it has been joined by heated-tobacco products, which, Levy said, could play an important role as they solved problems e-cigarettes couldn’t solve. “Companies have to be serious in THR because it’s decisive for their businesses,” he said. “New Zealand and the U.K. have done well in THR. In low-[income] and middle-income countries [LIMCs], such as India or Pakistan, oral nicotine could replace the highly harmful chewing tobaccos. However, restrictive policies, such as a ban of RRPs, will drive smokers back to cigarettes.” Levy saw clues for a closer cooperation between the industry and public health.

    Fadi Maayta, president and co-founder of Alternative Nicotine Delivery Solutions, provided a snapshot of the situation in LMICs by portraying the Middle East and North Africa (MENA) region, which he called a forgotten region in the picture of THR.

    Of the 547 million who live in the region, there are 140 million adult smokers. In some countries like Jordan, there is a smoking incidence of more than 60 percent, and cigarette sales are growing across the region. Governments are employing the typical measures to curb consumption, such as tax hikes and increases in customs. Saudi Arabia was the region’s only country to introduce plain packaging, which resulted in a burgeoning illicit cigarette market.

    Eight out of the 22 MENA markets have regulated vape products whereas the remaining 14 have banned them altogether. In these markets, however, vape products are still around—and unregulated. But even in regulated markets, 80 percent to 90 percent of the markets are illicit products because government followed an aggressive path when regulating the products, introducing a fiscal and regulatory framework that is stricter than that for cigarettes.

    “Throughout the region, misinformation is polluting the whole idea of THR,” said Maayta. “Regulators rely on articles about the harm of e-cigarettes, instead [of] on robust science, and still believe that nicotine causes cancer.” An opportunity, he said, could be to cooperate with global THR associations.

     

  • Christopher Russell

    Christopher Russell

    Flavors other than tobacco will not be allowed on the U.S. market. In order for that to happen, a manufacturer would need to show the U.S. Food and Drug Administration that flavors other than tobacco are appropriate for the protection of public health (APPH), and that may be more complicated than once thought. This was the opinion of Christopher Russell, director at Russell Burnett Research and Consultancy.

    Presenting at the GTNF 2022 in Washington, D.C., Russell described the regulatory rationale and features of several types of research studies that can be conducted to compare the efficacy of flavored electronic nicotine-delivery system (ENDS) products versus tobacco-flavored ENDS products for facilitating switching and reducing cigarette consumption among adult smokers.

    For a premarket tobacco product application, the FDA requires a range of valid scientific data and other research information to determine whether permitting the marketing of the new tobacco product qualifies as APPH. However, Russell explains, the Food, Drugs and Cosmetics (FD&C) Act, which guides the FDA’s authority, doesn’t clearly define APPH.

    “Instead, to determine whether a new tobacco product meets the APPH standard, Section 910 of the FD&C Act requires FDA to, among other things, weigh the risks and benefits of the new tobacco product to the population as a whole, including users and nonusers of tobacco products, and taking into account both the likelihood that existing tobacco users will stop using such products if the new product is marketed and the likelihood that individuals who do not currently use tobacco products will start to use tobacco products if the new product is marketed,” Russell said.

    To consider the marketing of a new tobacco product to be APPH, the FDA states that a PMTA must contain sufficient valid scientific information that demonstrates that the new tobacco product significantly reduces harm or the risk of tobacco-related diseases to individual tobacco users. Additionally, allowing adults access to ENDS and other noncombustible tobacco products cannot come at the expense of addicting a new generation of children and teenagers to nicotine.

    “Though the FDA has sought to strike a balance in recent years between reducing youth appeal and access to ENDS on one hand while maintaining opportunities for addicted adult smokers to access ENDS on the other hand, the FDA’s current position expressed most recently in the issuance of marketing denial orders (MDOs) for flavored ENDS products is that the evidence available to FDA is clear in showing that the appeal and the likelihood of use of flavored ENDS by youth harms the public health to a level that is not outweighed by the health benefits of adult smokers switching to ENDS products,” said Russell. “In fact, flavored ENDS do not confer any incremental benefits over and above tobacco-flavored ENDS.”

    The FDA has indicated that it may require a randomized controlled trial (RCT) and or a longitudinal cohort study (LCS) that demonstrates the benefit of an applicant’s flavored products help adult smokers more than they entice youth to start vaping. The FDA said it would also consider data that showed the same results through other research routes.

    An RCT uses control factors not under direct experimental control. Examples of RCTs are clinical trials that compare the effects of drugs, surgical techniques, medical devices, diagnostic procedures or other medical treatments, according to Russell. An LCS is a research study that follows large groups of people over a long time. The groups are alike in many ways but differ by a certain characteristic (for example, vapers who use flavors other than tobacco, those who vape tobacco and those who smoke combustible cigarettes).

    “I think FDA is—without being explicit—they are strongly communicating that an RCT or a longitudinal cohort study would provide the strongest evidence of an added benefit of a flavored ENDS product and that any application for a flavored ENDS product that does not contain one of those two studies or both of those studies will leave FDA in a position where they cannot possibly be confident that the potential benefits of the flavored ENDS would outweigh or overcome the risks to youth or would exceed the benefits of a comparable tobacco-flavored product,” said Russell. “I cannot see any circumstance in which flavored ENDS products will receive marketing authorization without having provided FDA with reliable and robust evidence from at least one of these two study designs. RCT is the gold standard in interventional research, and longitudinal cohort studies [are] the gold standard in observational research.”

  • FDA Completes 95 Percent of Synthetic Nicotine Applications

    FDA Completes 95 Percent of Synthetic Nicotine Applications

    Photo: pixelrobot

    As of Oct. 7, the U.S. Food and Drug Administration has issued refuse to accept (RTA) letters for more than 889,000 non-tobacco nicotine (NTN) products in premarket tobacco product applications (PMTAs) that do not meet the criteria for acceptance, the agency announced on its website.

    The agency has accepted over 1,600 applications, with the vast majority being for e-cigarette or e-liquid products.

    “While the application review is ongoing, FDA remains vigilant in overseeing the market and will continue to use our compliance and enforcement resources to curb the unlawful marketing of [non-tobacco nicotine] NTN products,” the FDA wrote. “To date, FDA has issued a total of over 60 warning letters to manufacturers, including brands popular among youth such as Puff Bar. The manufacturer warning letters include those for products for which an application had been submitted but where the agency has taken a negative action, such as a [RTA].”

    The FDA has also issued over 300 warning letters to retailers for violations in relation to their sale of NTN products to underage purchasers, and imposed civil money penalties against two retailers for sales of NTN products to underage purchasers.

    “To date, the FDA has not authorized any NTN products. Therefore, all NTN products on the market are marketed unlawfully and risk FDA enforcement action,” the FDA stated. “It is illegal for a retailer or distributor to sell or distribute e-cigarettes that the FDA has not authorized, and those who engage in such conduct are at risk of FDA enforcement, such as a seizure, injunction, or civil money penalty.”

  • ‘Current FDA Oversight to Have Minimal Impact’

    ‘Current FDA Oversight to Have Minimal Impact’

    Photo: Postmodern Studio

    Current U.S. Food and Drug Administration oversight of the vaping industry in the U.S. is likely to have minimal impact, suggests an analysis of the regulator’s warning letters for marketing violations, published online in the journal Tobacco Control.

    The regulator is failing to target the key players or the products most popular with young people, the analysis suggests, with over 90 percent of warnings sent to small online retailers rather than leading tobacco companies, and a focus on refillable devices.

    While the prevalence of vaping among U.S. adults remains low, at just under 4 percent in 2020, it is four times higher among young people.

    In 2016, the FDA announced plans to regulate the vaping industry, including a requirement for the manufacturers of e-cigarettes to obtain premarket approval (PMTA) to ensure that their products protect public health.

    In 2017, the regulator began sending warning letters to manufacturers, retailers and distributors for potential violations, such as advertising to young people, selling to minors, packaging or labeling that contravened regulations, and failure to apply for a PMTA.

    But little is known about who received these letters, the types of product they concerned, or details of the violations and their consequences.

    To try and find out, researchers from Truth Initiative assessed the content and recipients of publicly available FDA warning letters issued in 2020 and 2021. In total, the FDA issued 303 warnings: 126 in 2020 and 177 up to Sept. 9, 2021.

    The analysis revealed that in 2021, over 98 percent of all the targeted companies fulfilled all three roles (manufacturer, distributor and retailer).

    But nearly all the letters (97 percent) were sent to small online retailers, none of which were large companies with measurable market share, as evidenced by sales data.

    Companies were cited for between one and three infractions. Most involved failure to obtain a PMTA. In 2020 and 2021, respectively, 56 percent and 99 percent-plus of the infractions concerned a PMTA violation.

    And more than 90 percent of the products cited—880 different ones in total—were flavored refillable e-cigarette liquids rather than the disposable vaping devices that the evidence indicates are most popular with young people.

    Penalties ranged in severity from product detention to product seizure and fines. But loss of tobacco distributor license and criminal charges appeared less frequently in both years than these other consequences.

    At the time of the review, most (72 percent) of the websites cited for 2020 infractions were still operating as were 29 percent of websites cited for 2021 infractions.

    And as the authors note, it was impossible to find out how the targeted companies responded and whether the FDA followed through with the consequences cited in the warning letters because that information isn’t publicly available.

    “While current research estimates that online sales comprise around one-third of the marketplace, data tell us that most young people get their products from friends (32.3 percent), buy them from another person (21.5 percent) or purchase from a vape shop (22.2 percent),” the authors noted in a statement.

    “Prioritizing the products most accessed by youth, which are made available from a variety of sources, will be important to curb youth use,” they add.

    “Strong, impactful and transparent consequences need to be in place to prevent the sale of products that violate regulations necessary in protecting the health of adult users of e-cigarettes and preventing youth use alike,” the authors added.

    “The FDA should use its enforcement powers to target the manufacturing, distribution and sellers of the tobacco products that have the greatest impact on youth and products that provide no public health benefit.”

  • Confusion Persists About Magellan MDO

    Confusion Persists About Magellan MDO

    Photo: Damir Khabirov

    The U.S. Food and Drug Administration has confirmed that Magellan Technology received marketing denial orders (MDOs) on Oct. 6 for 32 products.

    In response to the FDA press statement announcing the order, Magellan Technology denied having received an MDO, saying the agency had refused to accept its premarket tobacco product application (PMTA) on a technicality without reviewing the PMTA on its merits.

    Magellan Technology demanded that the FDA not only retract the press announcement but also issue a corrective statement, making clear that the FDA did not issue an MDO to Magellan and that it has not yet conducted a scientific review of Magellan’s products.

    In response to an inquiry by Vaping360, the FDA reiterated that it had served Magellan Technology with an MDO.

    “After reviewing premarket tobacco applications for 32 Hyde e-cigarettes, FDA issued marketing denial orders for these applications submitted by Magellan Technology Inc. on Oct. 6,” the agency told Vaping360. “In addition to the MDOs issued on Oct. 6, as acknowledged by Magellan Technology Inc. in their statement, FDA also issued a Refuse to Accept letter for other Hyde e-cigarette products.”

  • Menthol Use Up Among U.S. Adult Smokers

    Menthol Use Up Among U.S. Adult Smokers

    Photo: New Africa

    Menthol use has increased over the past decade among U.S. adult smokers, according to a study released by Columbia University Mailman School of Public Health and The City University of New York. Menthol use is much more common among adult smokers who are younger, from racial/ethnic minoritized groups and with mental health problems. The results are published in the journal Nicotine and Tobacco Research.

    According to the study, menthol use was common among approximately two out of five cigarette smokers overall. Over 80 percent of Black smokers preferred menthol in 2020, which is stable relative to prior reports. “That approximately 50 percent of smokers who were Hispanic, female, ages 18–25 and 26–34, lesbian/gay and adults with mental health problems, used menthol in 2020 is higher than previously reported and suggests use has expanded across all segments of the population of adults who smoke cigarettes,” noted said Renee D. Goodwin, who works in the department of epidemiology at Columbia Mailman School, in a statement.

    To estimate trends in menthol use among adults who smoke cigarettes by sociodemographic, mental health and substance use variables, the researchers analyzed nationally representative annual, data from 128,327 individuals ages 18 and older residing in the U.S. from the 2008–2019 and 2020 from the National Survey on Drug Use and Health (NSDUH). Depression was assessed using the DSM-IV criteria for a major depressive episode.

    There was a significant overall increase in menthol cigarette use among adults smoking cigarettes from 34 percent in 2008 to 41 percent in 2019. In 2020, 43 percent of adults who smoked cigarettes in the past month used menthol. Menthol use was most common among Black adults (80 percent). Over 50 percent of Hispanic, female, young (ages 18–34), lesbian/gay, with serious psychological distress, and with cigar use also used menthol. Menthol use grew more rapidly among adults, among Hispanics, light cigarette users (1–5 per day) and those who smoked cigars.

    A notable finding was the increase and majority menthol use among Hispanic adults over the study period (34 percent in 2008 to 48 percent in 2019) and 51 percent in 2020, with a more rapid increase among Hispanic compared with Non-Hispanic white smokers. “Until now, there was a lack of research in this area,” observes Goodwin, who offers a number of possible explanations for the increased popularity of menthol cigarettes among Hispanic smokers. “For one, there is evidence of greater marketing of menthol cigarettes to Hispanic adults.”

    “Our study shows persistent and unmitigated inequities in menthol use among tobacco use disparity group members in particular,” said Goodwin. “Data from 2020 demonstrate that the increase in menthol use among smokers over the past decade was broadly evident across subgroups.”

    The Food and Drug Administration’s Center for Tobacco Products intends to ban menthol as a characterizing flavor in cigarettes. However, given the regulatory process required to issue a product standard and the potential for tobacco industry litigation, menthol cigarettes will likely remain on the market for a considerable amount of time.