Tomorrow’s deadline for the submission of premarket tobacco product applications (PMTAs) to the U.S. Food and Drug Administration (FDA) marks the start of a new era for the e-cigarette industry, according to an article published by The Motley Fool.
Companies who fail to apply for marketing authorization by the deadline will be required to remove their hardware and e-liquids from store shelves, and The Motley Fool expects many e-cigarette companies to exit the business.
Because the cost of complying with the regulations is staggeringly high, many manufacturers will not be able to make it over the hurdle, and the e-cigarette market will be left largely to the tobacco giants.
Although the FDA estimates a single PMTA costs anywhere from $117,000 to $466,000, those figures are considered low by the industry. The Rocky Mountain Smoke-Free Association estimates a single PMTA costs between $8.6 million and $11.1 million per stock keeping units. It forecasts 14,000 small vape businesses employing 166,000 workers will be destroyed, representing $24 billion in economic activity.
Deep-pocketed Philip Morris International, by contrast, already has four separate PMTAs approved: one for its IQOS heated-tobacco device and three for flavors of its disposable HeatSticks.
As of Aug. 31, the FDA had received applications for around 2,000 deemed products, of which around 40 percent have been resolved, according to Mitch Zeller, director of the agency’s Center for Tobacco Products.