Category: Featured

  • About Product Pathways and Global Context

    About Product Pathways and Global Context

    Participants hear from CTP Office of Science Director Matt Holman, among others.

    The second day of TMA’s “From Chance to Change” online seminar included a presentation by U.S. Food and Drug Administration Center for Tobacco Products (CTP) Office of Science Director Matt Holman along with panel discussions titled “Early and Often: Navigating Your Path to Market” and “Connecting U.S. and Global Trends.”

    Matt Holman

    Holman discussed the FDA’s recent actions on premarket tobacco product applications (PMTAs), key considerations in the agency’s “appropriate for the protection of public health” determinations and the final rules for PMTAs and substantial equivalence reports.

    Holman touched on the agency’s marketing granted orders (MGOs) to four Verve oral tobacco products—all of which were discontinued by Altria Group in 2019—and R.J. Reynolds Vapor Co.’s Vuse Solo vapor cigarette. In both cases, he said, the applicant had demonstrated that the products have lower toxicity levels and abuse liability risks than cigarettes along with minimal youth appeal.

    In the PMTA final rule, Holman highlighted the ability for recipients of a marketing denial order (MDO) to rectify the shortcoming in their original application with a supplemental PMTA that cross-referenced the original application, thus streamlining the process for both applicant and reviewer.

    Jennifer Smith

    Holman then participated in a “Path to Market” panel discussion, moderated by Altria Client Services Director of Regulatory Advocacy Jennifer Smith, that also included Gerry Roerty, vice president, general counsel and secretary of Swedish Match North America; Tara Couch, senior director of dietary supplement and tobacco services at EAS Consulting Group; Elaine Round, vice president of scientific and regulatory affairs at RAI Services Co.; and Kimberly Hesse, tobacco lab testing expert.

    One of the takeaways from this session was the importance of starting “with the end in mind.” Getting things right from the beginning will save applicants time and money because even minor product changes involve new, time-consuming applications under the FDA’s pathways.

    According to one panelist, the first question in the journey to market should be: Can we make this product, and can we make it consistently? Applicants should think about samples and suppliers and conduct environmental assessments. With the FDA seeking greater consumer insights, applicants should look for professional assistance in obtaining such information. And it pays to involve product testers early in the process. Lab workers may be unfamiliar with the product and require explanations on its operations. And then there are safety considerations. Hesse recalled instances of products that sparked and ignited when connected to laboratory machinery.

    Round said one lesson she learned from Reynolds’ successful Vuse Solo marketing application was that “bridging”—the referencing of existing studies—works, provided that the applicant explained it well. She also advised applicants to generate a volume of information that is “exactly enough and not too much.”

    Several panelists mentioned the challenge of obtaining consumer insights in PMTAs. They suggested that the FDA should consider allowing more of that information to be gathered as part of post-market surveillance, which would have the added benefit of generating more realistic data.

    Jeannie Cameron

    The final session of the TMA webinar explored the differences and similarities between the U.S. and the rest of the world in terms of nicotine product regulation. Moderated by Jeannie Cameron, CEO and managing director of JCIC International, this panel included Abrie du Plessis, regulatory affairs counsel at the South African Trade Law Centre; Patricia Kovacevic, general counsel and head of external affairs and regulation strategy at Cryomass Technologies; Rob Koreneef, public affairs advisor; and Flora Okereke, head of global regulatory insights and foresights at BAT.

    The discussion focused on the recently concluded ninth Conference of the Parties to the World Health Organization Framework Convention on Tobacco Control (FCTC), which was developed before the emergence of reduced-risk products and which the panelists agreed was “frozen in time.”

    Du Plessis described the positions of the various health bodies in relation to reduced-risk products. The Conference of the Parties, he said, is divided on the issue, providing no guidance on new and emerging products. The WHO has slight ideological opposition to novel products whereas the FCTC secretariat—which has gradually evolved from an administrative body to an implementation agency—appears to have no use for reduced-risk products. The secretariat, said du Plessis, is focused on getting countries to implement the FCTC’s standard measures.

    Okereke examined the diversity in regulatory regimes for novel tobacco products around the world. She distinguished three themes: how harm reduction is treated, the premarket approval process and product categorization. Tobacco harm reduction, she said, is acknowledged by regulators in the U.S., the U.K., Canada, Germany, Ireland and New Zealand. Everywhere else, it remains an elusive concept. The U.S. is the only country with a robust premarket requirement, and when it comes to categorization, the world is divided. Some countries put vapor products under existing tobacco regulations (EU); others regulate them as pharmaceuticals (Australia); and yet others ban the products altogether (Brazil, Mexico, Turkey and Japan).

    Kovacevic highlighted the discrepancy between the United States, where the CTP, which is funded by industry user fees, is required to interact with the tobacco industry, and the rest of the world, where regulators keep the industry at arms’ length. She also pointed out the irony that even though the U.S. is not a party to the FCTC, it generates much of the science that the treaty’s signatories rely on—including industry science generated through the various marketing application processes.

    During the question-and-answer session following the panel discussion, one participant asked why U.S. tobacco companies should care about the international environment. Kovacevic responded by describing the high barriers to entry in the U.S. If access to the U.S. market closes through MDOs, she pointed out, the only remaining market is abroad. And there is also a moral motive: Most of the smokers who stand to benefit from reduced-risk products live outside of the U.S., often in low-income and middle-income countries. If companies are committed to harm reduction, they have a civic duty to serve them, said Kovacevic.

    Read our summary of the first conference day here.

  • Quebec: Court Upholds Vape Ad Ban

    Quebec: Court Upholds Vape Ad Ban

    Photo: Matthew Benoit

    A panel of three Court of Appeals judges unanimously reversed the parts of a 2019 Quebec Superior Court decision that struck down some provisions of the Tobacco Control Act pertaining to vaping products, reports Global News.

    The Quebec Superior Court had ruled that some of the province’s restrictions on vaping products, such as banning advertising, went too far because they could possibly prevent smokers from switching to noncombustible products.

    The appeals court judges cited research from the World Health Organization and other experts regarding the rise in youth vaping rates, ruling that the Quebec government has the right to limit potential effects of advertising on youth and nonsmokers.

    “In this case, it was therefore reasonable for the legislator to intervene to limit the potential effect of electronic cigarette advertising, especially on young people,” Justice Benoit Moore wrote on behalf of the panel. “The risks associated with the fact that the vaping industry is evolving and that it is gradually being taken over by the tobacco companies cannot be excluded from the analysis of the legislator.”

    The court also upheld the right to ban vaping product demonstrations inside shops or specialized clinics.

  • Altria Releases Climate Financial Report

    Altria Releases Climate Financial Report

    Photo: Christian Horz

    Altria Group launched its first standalone Task Force on Climate-Related Financial Disclosures (TCFD) Report. The TCFD was formed by the Financial Stability Board in 2015 to help companies provide decision-useful information about their climate-related risks and opportunities to investors. In 2017, the TCFD published final recommendations across four core elements: governance, strategy, risk management, and metrics and targets.

    “Just as we believe in the benefits of a science-[based] and evidence-based approach for our industry and tobacco harm reduction, we believe in a science-based approach for climate action,” said Sal Mancuso, executive vice president and chief financial officer at Altria, in a statement. “We also acknowledge this is our first TCFD report, and expectations for environmental, social and governance [ESG] disclosure are rapidly changing. We intend to learn as we go while responding to this dynamic environment as we evolve our reporting in the future.”

    This year, Altria disclosed its progress and key metrics for each of its responsibility focus areas: Protect the Environment; Reducing Harm and Preventing Underage Use; Drive Responsibility Through Our Value Chain; Supporting Our People and Communities; and Engage and Lead Responsibly.

    Altria’s responsibility focus areas are guided by its materiality assessment process—a comprehensive, formal approach to identify the most impactful ESG issues that Altria believes are important to its long-term sustainability and success.

  • COEE Completes A-Round Funding

    COEE Completes A-Round Funding

    Photo: alswart

    The China-based vapor company COEE has recently completed A-round financing of several million yuan, led by QF Capital investment, followed by investments from other financial groups.

    “We mainly use A-round of financing to focus on improving our production R&D, layout in the global market channel and user development as benefits of maintaining our product competitiveness and market influence,” said Tongliang Gao, co-president of COEE, in a statement. “We are upholding the core values of long-termism, adopt[ing] innovative ‘manufacturer to sale integration’ channel strategy, consistently respond[ing] and embrac[ing] policy supervision from the government, follow[ing] to the bottom line of protecting minors, and striv[ing] to become a marathon runner in the market.”

    Established in January 2021 in Shenzhen, COEE is a user-focused vape company that integrates with vape industry supply chains and strong market channel partners, according to the release. COEE has become the standing director unit of the E-Cigarette Industry Committee and China Electronic Chamber of Commerce.

    COEE products include its first-generation “Meet” series that was launched in April. The device now offers 17 pod flavors. COEE stores have covered 30 provinces and 180 cities in the China mainland, and various stores and sales points have reached nearly 5,000. Qiyuan Liu, head of consumption investment for QF Capital, said that COEE’s core operation team previously worked in the mobile phones market.

    “COEE has unique experience in channel construction and terminal management,” Qiyuan said. “Capitals recognize COEE team capabilities very much, and we are seeing COEE consistently put efforts in responding and cooperating with the supervision of the government. We are optimistic about the future development prospects of the project driven by demand.”

  • MOP2 to ‘Strengthen Implementation’ of Protocol

    MOP2 to ‘Strengthen Implementation’ of Protocol

    Photo: Tobacco Reporter archive

    The second Meeting of the Parties (MOP2) to the Protocol on Eliminating Illicit Trade in Tobacco Products ended today. This session built on the foundations of the treaty that only entered into force three years ago. The meeting was conducted virtually due to the ongoing Covid-19 pandemic.

    The three-day session saw a series of key decisions adopted, including the launch of an innovative plan to ensure reliable funding for the protocol. To strengthen implementation of the protocol, parties agreed to set up a new investment fund to help support the drive to end the illicit tobacco trade.

    This new initiative will source financial contributions beyond the traditional health sector, establishing a capital investment fund, the earned revenue of which will be used to support the activities of the protocol.

    The protocol provides tools for preventing illicit trade by securing the supply chain. MOP2 has developed a road map that will help improve the global track-and-trace system. The objective is to secure the tobacco supply chain and prevent the manufacture and circulation of illicit tobacco products. Parties to the protocol also agreed to develop a global network so that they can exchange information on the movement of tobacco products.

    Fifty-nine parties to the MOP attended the session. The MOP2 also agreed to strengthen international cooperation to ensure greater assistance between parties—a step that is expected to accelerate the adoption of best practices and support the introduction of innovations. The parties also adopted a strategy for mechanisms of assistance and mobilization of financial resources to deepen the implementation of the protocol.

    “Taxation is the single most effective tool for reducing tobacco use, but illicit trade in tobacco products undermines the effectiveness of tax policies,” said Tedros Adhanom Ghedreyesus, director general of the WHO, in a statement. “Illicit tobacco products also exacerbate inequalities because they are often cheaper and more accessible to vulnerable populations, such as young people.”

    Adriana Blanco Marquizo, head of the WHO FCTC secretariat, said, “The protocol also supports us on matters that have been linked to our very safety and security. It is recognized that illicit trade in tobacco products is connected to transnational organized crime, raising income for its activities. Indeed, we have many reasons to work together to strengthen the effectiveness of the protocol.”

    The next Meeting of the Parties to the Protocol will be held in Panama in 2023, along with the 10th Conference of the Parties to the WHO Framework Convention on Tobacco Control.

  • North Carolina to Investigate Puff Bar

    North Carolina to Investigate Puff Bar

    Photo: Andrey Popov

    North Carolina Attorney General Josh Stein on Nov. 16 announced “major actions” against the e-cigarette industry due to ongoing concerns about kid-friendly flavors, youth marketing and poor age verification.

    In addition to suing Juul Labs’ founders James Monsees and Adam Bowen, Stein commenced a statewide investigation into Puff Bar and other e-cigarette manufacturers, distributors and retailers.

    “We made major progress in protecting young people from e-cigarette addiction when we secured a court order dramatically changing the way Juul does business and recovering $40 million to help kids conquer their nicotine addiction. But many of the billions Juul made from addicting kids to nicotine are now in the personal accounts of its founders and early investors. The people behind this company must be held accountable and pay to clean up the mess they made,” Stein said in a statement.

    “At the same time, the market Juul created still exists, and other companies are filling the vacuum. We are actively investigating Puff Bar and other companies at all stages of the distribution chain, from manufacturers to retailers and everything in between, to ensure they are not profiting off kids. Where I find illegal behavior, I will not hesitate to take legal action.”

    As Juul discontinued some its flavored products in the U.S., Puff Bar has emerged as the vape of choice among young people. In 2020, the Food and Drug Administration told Puff Bar to stop selling its flavored vaporizers as part of a broader crackdown on underage vaping. However, the company resumed sales in early 2021 with products using synthetic nicotine, which the company believes are outside the FDA remit. In response, the agency launched an investigation of the redesigned Puff Bar.

    Puff Bar sales in retail stores tracked by Nielsen totaled $156 million for the year ended Sept. 25, according to Goldman Sachs, although it is unclear how many of those sales are counterfeit products. In a federal survey released in September, 26 percent of high school vapers said they used Puff Bar. Among middle school e-cigarette users, 30 percent reported that their generic brand was Puff Bar.

  • Pyxus Announces New Chief Financial Officer

    Pyxus Announces New Chief Financial Officer

    Photo: akub Jirsák | Dreamstime.com

    Pyxus International has appointed Flavia Landsberg as its new executive vice president and chief financial officer (CFO).

    Landsberg joins Pyxus with more than 20 years of financial experience, most recently serving as CFO of High Ridge Brands, a private equity-backed company. Throughout the course of her career, she has also served as CFO of Westminster Foods, EOS Products and Bunge Limited’s Food and Ingredients division. Landsberg began her career in investment banking and holds a Master of Business Administration degree from the New York University Stern School of Business.

    “On behalf of Pyxus and the board of directors, I am pleased to welcome Flavia to the company. Her impressive background in global agricultural finance, strategic planning and data-driven analytics, coupled with her proven track record of delivering profitable growth, makes her the ideal candidate as we continue to execute on opportunities to drive the business forward,” said Pyxus President and CEO Pieter Sikkel in a statement. “I am confident that Flavia’s invaluable financial leadership experience will complement the company’s vision for the future.”

    Landsberg reports to Sikkel and is responsible for all aspects of the company’s financial strategy and operations, including financial planning and analysis, investor relations, treasury, financial reporting, tax and accounting. She succeeds Joel L. Thomas, who announced his retirement in June. Thomas will remain with the company in an advisory capacity through June 30, 2022, to help ensure a smooth transition.

    “The board and I would like to thank Joel for providing his financial leadership and dedication to the company for the past 16 years, including the seven years he has served as CFO,” said Sikkel. “Joel has been pivotal in our company’s transformation, positioning the business for long-term success. It has been a privilege to work with him, and we wish him all the best in his retirement.”

  • Experts Share Their Insights During Webinar

    Experts Share Their Insights During Webinar

    Participants heard from scientists, retailers, legal experts and CTP Director Mitch Zeller.

    Scientists, data analysts and legal experts shared their insights into the rapidly changing U.S. nicotine business on Nov. 17, the first day of TMA’s “From Chance to Change” webinar. Participants also heard from retailers and the industry regulator.

    Mitch Zeller

    Mitch Zeller, director of the Food and Drug Administration’s Center for Tobacco Products (CTP), reviewed the latest data on youth e-cigarette consumption, which he said continues to be concerning. However, Zeller was quick to point out that because the 2021 study was the first to be conducted completely during the Covid-19 pandemic, the data could not be compared to that of the previous year.

    Zeller also provided an unprecedented behind-the-scenes peek into the center as it processed millions of premarket tobacco product applications. The agency received applications covering more than 6.5 million deemed products, and most of them were submitted close to the Sept. 9, 2021, deadline—a date that, Zeller reminded his audience, had been brought forward by a full year following litigation by public health groups.

    Because companies were not required to submit their applications in a particular way, the agency had to be ready to process a wide variety of formats. “We had to prepare operationally, technically and logistically to ‘ingest’ all those applications,” said Zeller, adding that the agency was thrilled its submission system did not collapse under the volume of last-minute applications.

    The FDA has by now acted on the vast majority of applications, sending refuse-to-file letters, issuing marketing denial orders (MDOs) or, in a handful of cases, granting marketing orders. “We are down to 80,000 products—most of them in the final stages of review,” said Zeller. Those still-pending applications, he acknowledged, include ones submitted by the companies with the largest market shares because they tend to be the largest and most complex applications.

    Zeller also commented on the rising popularity of synthetic nicotine, which some MDO recipients, including market-leading Puff Bar, have embraced as a tool to keep their products on the market because they believe it is outside of the regulator’s remit. The FDA defines a “tobacco product” as anything “made or derived from tobacco that is intended for human consumption, including any component, part or accessory of a tobacco product.”

    Synthetic nicotine, said Zeller, presents a new challenge for the regulator, in part because it is increasingly difficult to distinguish the compound from its naturally derived counterpart. Nicotine, he explained, comprises two isomers: R and S. Tobacco-derived nicotine is 99 percent S, and early synthetic nicotine had a 50-50 split between R isomers and S isomers. However, newer versions of synthetic nicotine have much higher proportions of S isomers, making it harder to tell them apart from natural nicotine.

    Jim Solyst

    The first panel discussion of TMA’s online seminar, moderated by Jim Solyst, principal of JMS Scientific Engagement, debated the status quo from an applicant’s perspective. The panelists included Brittani Cushman, senior vice president, general counsel and secretary at Turning Point Brands; Beth Oliva, partner at Fox Rothschild; Brian Erkkila, director of regulatory science at Swedish Match; and John Pritchard, vice president of regulatory science at 22nd Century Group.

    While all participants expressed appreciation for the FDA’s daunting workload, some voiced disappointment with the fact that many applications appear to have received only a perfunctory “fatal flaw” review—a review in which the agency, rather than reviewing a submission on its merits, simply looks for the presence or absence of certain studies. The panelists lamented that the pathway to market is more cumbersome for reduced-risk products than it is for deadly combustible products.

    Participants worried also about how the public would interpret the lack of determinations on major applications, citing persistent misunderstanding of reduced-risk products and the continuum of risk by legislators, journalists and even physicians.

    Asked to look forward, one panelist suggested the industry should consider what it would do when the next e-cigarette or vaping use-associated lung injury (EVALI) happens, referring to a mysterious outbreak of lung injuries in 2019 that was caused by illicit THC products but tainted the entire industry. Another participant stressed the importance of enforcement after all marketing applications have been decided. If any “yahoo” can sell products without authorization, she said, it would render the investments by the good actors worthless.

    Mary Szarmach

    The second panel of the TMA webinar, moderated by Mary Szarmach, senior vice president of governmental and external affairs at Smoker Friendly, reviewed the market from a retailer’s perspective.  The panelists included Don Burke, senior vice president of Management Science Associates; Tom Briant, executive director and legal counsel at the National Association of Tobacco Outlets; and Amanda Wheeler, president of the American Vapor Manufacturers Association.

    Burke sketched the latest trends in the nicotine market. The pandemic, he said, makes comparisons with 2020 difficult. With many people working from home last year, sales of cigarettes and large cigars experienced unusual growth, but as people returned to the office in 2021, those trends are starting to level off or are even reversing. Burke expects cigarettes to resume more normal consumption patterns next year. Modern oral continues its remarkable growth, albeit at a lower pace than last year because most convenience stores are by now carrying the product. And volume sales of vapor cartridges are up by more than 18 percent as the EVALI crisis fades from memory.

    Briant provided a regulatory update, touching on the proposed nicotine tax hike in the Biden administration’s Build Back Better legislation, the FDA’s proposal to ban menthol in cigarettes and flavors in cigars and the status of graphic health warnings, which are currently being challenged in court. Litigation has pushed the implementation date to January 2023, and this could be further extended. Briant noted that there have been no hearings yet on the merits of graphic health warnings.

    Asked to analyze vapor retailers’ current predicament, Wheeler drew an analogy with the Hindenburg disaster, after which shattered public confidence marked the abrupt end of the airship era. She cited the avalanche of MDOs, the U.S. Postal Service ban on shipping vapor products and the proposed federal excise tax on vapor products, which would make vapor products more expensive than some cigarettes.

    Wheeler said these developments were driving vapers back to cigarettes, illicit products and synthetics—many of them made abroad and falsely labeled. She described a “misguided crusade,” funded by deep-pocketed donors and cheered on by the irresponsible media. “When smoking was plummeting, they took action to make it increase; when American entrepreneurs innovated a news sector, they strangled it,” she said.

    Asked what kept them up at night, the panelists named employee safety, flavor bans and lack of enforcement.

    Szarmach related how a tax increase in Colorado had instantly resulted in more break-ins and robberies at her stores—an unwelcome development at a time when workers were already in short supply. Briant said that local flavor bans drove customers away without affecting total consumption—consumers would simply buy their products elsewhere. Wheeler said Arizona was not enforcing Tobacco-21 legislations, enabling bad actors to do good business.

    The TMA online seminar continues today at 10:30 a.m. Eastern Time with a keynote from CTP Office of Science Director Matt Holman and panel discussions on “Your Path to Market” and global trends.

    Read our summary of day two of the TMA conference here

  • U.S. Cigar Association Hires New President

    U.S. Cigar Association Hires New President

    Photo: Olena

    The Cigar Association of America (CAA) has hired a new president.

    David Ozgo will be the new president of the CAA, marking the third change in leadership over 30 years. Ozgo was senior vice president of economic and strategic analysis at the Distilled Spirits Council (DISCUS) for 20 years. Ozgo takes over from longtime CAA President Craig Williamson, who last year announced his retirement.

    “David has demonstrated the ability at DISCUS to develop data-driven solutions to industry issues, to successfully deliver the industry’s message in different forums and mediums, and to work constructively with various segments of an industry whose members vary greatly in size and product portfolio. These are precisely the skills CAA and the cigar industry need to navigate through current and upcoming regulatory and legislative challenges” said Javier Estades, chairman of the board of the CAA and president of Tabacalera USA, in a statement.

    Ozgo said he “couldn’t be more excited to work in such an outstanding industry, one with issues and opportunities similar to those in the distilled spirits industry and with such a strong association. I’m honored and humbled by the board’s confidence in me.”

    Estades also praised Williamson, saying “in almost two decades with CAA, the last 10 years as president, he has been a tireless advocate for the entire cigar industry. Many of our industry’s successes have resulted from his hard work; we are grateful for his dedication and wish him well in the future.”

    Ozgo will assume his position on Dec. 6.

  • Filipino Delegate Lauded for ‘COP Courage’

    Filipino Delegate Lauded for ‘COP Courage’

    Teodoro Locsin Jr.
    (Photo: Philippine Department of Foreign Affairs)

    Tobacco harm reduction (THR) advocates and vapers have praised Philippine Foreign Affairs Secretary Teodoro Locsin Jr. for his insistence at the ninth Conference of the Parties (COP9) that the latest scientific information must be considered to solve the global smoking problem.

    “We salute his bravery at COP9 for promoting the Philippines’ balanced and evidence-based approach to safer nicotine products,” said Peter Dator, president of consumer group Vapers PH and Coalition of Asia Pacific Tobacco Harm Reduction Advocates (CAPHRA) member. “Opponents and officials have since done their best to discredit Secretary Locsin and disrespect our country’s democracy and sovereignty, but they have failed badly.”

    “In a world where smoking causes 8 million deaths every year, Secretary Locsin has done everyone a huge favor,” said Nancy Loucas, executive coordinator of CAPHRA. “Telling COP9 about the success of ‘far less harmful novel tobacco products’ and the Philippine government’s political support for them was music to the ears of the millions who’ve successful[ly] quit deadly cigarettes via vaping.”

    We salute his bravery at COP9 for promoting the Philippines’ balanced and evidence-based approach to safer nicotine products.

    Loucas organized a global livestream called sCOPe during COP9, featuring leading THR experts and consumer advocates. The livestream added to the increasing pressure on the WHO to embrace safer nicotine products.

    “How can we trust the WHO and the FCTC when they are afraid of science? In this age of fake news and alternative facts, it is important for governments to take a stand for the facts and know how to sift through the propaganda. This is what Secretary Locsin did at COP9, and I join the Philippine Cabinet and Congress in commending his actions,” said Dator.

    Earlier, Locsin had drawn fire from the Philippines Department of Health for stating that tobacco products were a “source of good through taxation” for the Philippines.

    The health department said that it was misleading to praise the tobacco industry’s role in raising tax revenues. In 2011, the cost of tobacco-related diseases was estimated at PHP177 billion ($3.54 billion) annually, the agency noted. This was seven times higher than the PHP25.9 billion collected in taxes from tobacco products.