A new study claims that those using e-cigarettes to quit smoking found them to be less helpful than more traditional smoking cessations aids such as patches and gum.
The study, published Monday in the journal BMJ, analyzed the latest 2017 to 2019 data from the Population Assessment of Tobacco and Health (PATH) Study, which follows tobacco use among Americans over time.
“This is the first time we found e-cigarettes to be less popular than FDA-approved pharmaceutical aids, such as medications or the use of patches, gum, or lozenges,” said John Pierce, the director for population sciences at the Moores Cancer Center at the University of California, San Diego, according to CNN.
A three-month randomized trial in the United Kingdom, published in 2019, found e-cigarettes, along with behavioral interventions, did help smokers quit tobacco cigarettes. In guidance published in late 2021, the UK National Institute for Health and Care Excellence decided to recommend that smokers use e-cigarettes to help them quit.
Another recent study, published in JAMA Network Open, found adult smokers with no plans to quit are more likely to stop smoking if they switch to daily vaping, according to new research led by Roswell Park Comprehensive Cancer Center.
The Roswell Park study also used data collected from 2014 to 2019 as part of the PATH study.
The first industry trade show of the year opened its doors yesterday in Las Vegas. The Tobacco Plus Expo (TPE) runs from Jan. 26-28 and brings together representatives from several segments of the vapor, tobacco and alternative product industries. The number of exhibitors this year increased significantly compared to last year’s show, which was held in May after being postponed for four months, rising to 425 exhibitors compared to 350 in 2021.
Attendance for the first day of the show was an estimated 4,000 visitors, according to a TPE representative. That’s a nearly 30 percent increase from opening day for last year’s event which drew an estimated 2,500 to 3,000 visitors. The show didn’t “feel” like there were that many attendees, however, it’s such a large floorplan it would be impossible to guess an estimate.
There was a noticeable reduction in the number of nicotine vaping companies showing on the floor. The impact of premarket tobacco product applications (PMTAs) and PACT Act regulation was evident. There were only an estimated 12–14 e-liquid vendors, including Coastal Clouds, BLVK E-liquid, Bantam, Pacha Mama and Ripe Vapes. There were eight to 10 hardware manufacturers, including Mi-One Brands, Myle, First Union and Vaporesso, and most of the manufacturers produced their own brands.
There were also a few e-liquid brands selling products that have already received a marketing denial order (MDO) from the FDA. One company told Vapor Voice that there really isn’t much enforcement and getting warning letters is the only thing that has happened to them.
There were, however, a very large number of disposable synthetic nicotine brands. One new brand at the show, Hook’d – with its tagline “one puff and you’re Hook’d” – seemed to take taunting the U.S. Food and Drug Administration to another level according to Kim, a show attendee who asked not to use her last name. “Why would you put a brand out there like that,” she said. “It’s just disappointing.” A person working the Hook’d booth, when asked why the Hook’d name, told Vapor Voice the name was “just catchy.”
Next year’s TPE is scheduled to take place Feb. 22-24, 2023. While most likely not an issue for vapor and alternative industry representatives, the TPE’s cigar segment may find itself split in several directions. Not only is that week traditionally when Procigar, the Dominican Republic’s cigar festival, takes place, it also may be competing against the Festival del Habano—Cuba’s cigar festival— that typically takes place in late February (traditionally the week after Procigar).
In 2019, both festivals took place during the same week and were scheduled to take place the same week in 2022 before the Habanos festival was cancelled due to Covid concerns. Neither Procigar nor the Festival del Habano has announced dates for 2023.
A new report finds that combustible cigarettes will become less expensive than vaping products and nearly 43,000 jobs would be lost if the proposed nicotine tax contained in the Build Back Better bill (HR 5376) were to become law. The Vapor Technology Association (VTA) funded study, The Negative Economic Impacts of the New Nicotine Tax Imposed Only on Vapor Products In the Reconciliation Bill, conducted by economist John Dunham & Associates, is being billed as a comprehensive analysis of the negative effects that the proposed tax will have on smokers, the industry and the economy.
“Our analysis finds that the bill would not create anything close to parity with cigarette taxes but, rather, would tax vapor products at a much higher rate – up to nine times higher – than the tax on a pack of cigarettes,” the report states. “The proposed nicotine tax in the Reconciliation Bill would lead to a net price increase on vapor products at retail of about 53 percent (21.2 percent for a standard two-pack of closed-system pod products and 73.5 percent for a standard 60 milliliter bottle of open system e-liquid), while the price of cigarettes and other tobacco products would remain unchanged as they would not be subject to any additional federal tax.”
The study also concludes that the proposed nicotine tax would lead to a reduction of nearly 42,800 full-time equivalent jobs and the loss of $2.2 billion in wages and benefits, negatively impact the size of the overall economy which would fall by about $7 billion and would result in states and their localities losing $620 million in taxes while the federal government attempts to generate revenues.
“A pack of cigarettes contains approximately 204 milligrams of nicotine (10.2 mg/cigarette x 20 cigarettes per pack). Applying the proposed nicotine tax of 2.78-cents per milligram to cigarettes, means that the tax on a pack of cigarettes should be $5.41, not $1.01,” the study states. “Viewed another way, the federal tax on cigarettes, if applied to their nicotine content, would only amount to less than half a penny per milligram, not the 2.78-cents Congress seeks to impose on e-cigarettes ($1.01 per pack / 204 mg of nicotine per pack).”
As defined in the bill, the proposed tax would be equal to about $2.22 on the standard closed system nicotine vapor product (such as a two pack of JUUL pods), and a $10.01 on the standard average 60 milliliter bottle of nicotine containing e-liquid used in an open system vapor device,” according to the study.
If passed, the proposed tax would also lead to a loss of about 31.9 percent of vapor product sales or 3.7 million milliliters of e-liquid consumed. Of this loss, 61.2 percent would be the result of consumers switching to other tobacco products, including combustible cigarettes. An additional 18.5 percent of these lost sales would move to the black market, according to the study.
“Modeling suggests that a large portion of consumers would react by purchasing unregulated products over the black market or make their own e-liquids,” according to the study. “These figures (which reflect a price increase resulting from the tax of 53 percent) are conservative and are not out of line with other studies examining the substitution of vapor products and combustible cigarettes when taxes are imposed.”
Experts say Congress’ latest attempt to tax nicotine is complicated, confusing and harmful to public health.
By Timothy S. Donahue
To help pay for an infrastructure bill, the U.S. Congress has again introduced an excise tax on next-generation nicotine products, such as e-cigarettes and snus. The excise tax would apply to nicotine vapor products using both natural and synthetic nicotine as well as nicotine pouches. Experts say the provision, which would ultimately be paid by tobacco consumers, goes against U.S. President Biden’s campaign promise to not increase taxes on those making less than $400,000, negatively impact tobacco harm reduction efforts, increase sales of combustible tobacco products and boost an already growing black market.
The nicotine tax has been removed and reintroduced to Biden’s Build Back Better (BBB) legislation at least three times. The proposed vapor tax provision is now part of the latest version of the administration’s social spending and climate bill. According to Ulrik Boesen, a senior policy analyst with the Center for State Tax Policy at the Tax Foundation, taxes on tobacco and nicotine products tend to serve at least two purposes: to improve public health and raise revenue. He claims that a nicotine tax could do that if it is properly designed.
Ulrik Boesen / Credit: Tax Foundation
“A good design means internalizing externalities related to consumption of a product,” Boesen stated. “With tobacco and nicotine product consumption, these externalities are the health risks connected to frequent use and [the] quantity consumed. Nicotine is the addictive substance in the products but not the harmful ingredient. In other words, the proposal does not target the harmful behavior directly.”
Taxing based on nicotine content would favor low-nicotine liquids and could encourage increased consumption in the quantity of liquid, according to Boesen. “For example, a vapor pod that has a nicotine content of 3 percent and contains 1 mL of liquid would be taxed at $0.83 whereas a vapor pod that has a nicotine content of 5 percent and also contains 1 mL of liquid would be taxed at $1.39 even if there is no difference, or even a negative differential, in broader health effects of the two pods,” he states, adding that the effects of the tax are most substantial for nicotine pouches, such that the category is unlikely to survive.
Other estimates show that a 60 mL bottle of e-liquid with 12 mg of nicotine e-liquid would be taxed at $20.02. A four-pack of 8 mL pods with 5 percent nicotine salt pods would be taxed at $4.45 and a 15-pouch can of 8 mg nicotine pouches would be taxed at $3.34 (alongside state and local taxes, the cost of a single can could grow to $20 in some states).
Bryan Haynes, a partner with the law firm Troutman Pepper who specializes in tobacco and vapor regulations, said that, at a minimum, the proposed nicotine tax is “a hastily written addition” that will “have a negative impact on tobacco harm reduction efforts and public health.” He said that it’s the first time the tobacco industry has seen an excise tax placed on an ingredient instead of a finished good. “This is an unprecedented type of tax that will ultimately drive former smokers back to combustible products,” said Haynes, adding that taxing an ingredient could also cause unforeseen issues for manufacturers, such as moving material between factories.
Bryan Haynes / Credit: Troutman Pepper
“If a company is producing nicotine or even synthetic nicotine, moving product from one factory to another could trigger the need for an Alcohol and Tobacco Tax and Trade Bureau (TTB) license, and when product is removed, so to speak, from their factory, they would be responsible for remitting the taxes,” explained Haynes. “There may be a way, for example, if the company removed the nicotine from their factory and transported it in-bond to another TTB factory that you could make that work. But it’s just not clear. There is the potential for a lot of unforeseen issues to arise the way the tax is currently being proposed.”
States often tax nicotine products by its cost. Boesen says the tax on the product will pyramid since the federal tax would be levied at the manufacturer level and the state tax is levied at the distribution level. “In effect, the state tax base includes the federal tax and becomes a tax on a tax. This means that even if the taxes on tobacco and other nicotine products are approximately equal at the federal level, by the time it reaches the consumer, the nicotine product will carry a higher tax (and often a higher price),” he states. “This is highly problematic when considering that cigarettes are much more harmful than nicotine products. That makes the federal tax proposal look like a harm-maximizing strategy.”
Credit: Tax Foundation
The bill also subjects synthetic nicotine products to the nicotine tax. Many in the industry have expressed concern that this provision could allow the U.S. Food and Drug Administration to assert authority over the substance. Synthetic nicotine is covered not only in the proposed tax bill but also in the Prevent All Cigarette Trafficking (PACT) Act, which bans the U.S. Postal Service from mailing any vaping products.
Azim Chowdhury, a partner at the law firm Keller and Heckman who specializes in vapor, nicotine and tobacco product regulation, said that’s just not possible and Haynes agrees. “The definition of a tobacco product in the Tobacco Control Act (TCA) is clear. It’s just not ambiguous; a product must be made or derived from tobacco, or a component or part of a tobacco product, to be a tobacco product,” said Chowdhury.
Azim Chowdhury
“Congress would have to change the Tobacco Control Act’s definition of a tobacco product in order to give FDA’s Center for Tobacco Products the authority to regulate synthetic nicotine products as tobacco products. That won’t happen overnight. I also see a scenario where synthetic nicotine could be regulated as a drug and that would be a whole different and more onerous regulatory regime.”
The FDA could, however, cite the inclusion of synthetic products in the PACT Act and the latest nicotine tax proposal in its lobbying efforts to change the TCA’s definition of tobacco, said Haynes. “I could see the FDA telling Congress, ‘You just amended the Internal Revenue Code to make these products subject to federal excise taxes just like tobacco-derived nicotine, so it’s not a big stretch to amend the Tobacco Control Act’ in the same way,” he explains. “That’s how I would do it. It’s not really a legal argument, but it could be a decent lobbying argument.”
It isn’t just vapers, business owners and attorneys that find fault with the proposed nicotine tax; researchers suggest the tax could also harm public health. Michael Pesko, an associate professor in the Department of Economics at Georgia State University, used a $1.4 million dollar grant from the National Institutes of Health (NIH) to conduct e-cigarette policy evaluation research, including the evaluation of e-cigarette taxes (Pesko receives no funding from the tobacco industry or related groups). Pesko found that e-cigarettes and other nicotine vaping products function as what economists call “substitutes” for conventional cigarettes.
“In practical terms, if e-cigarettes and cigarettes are substitutes, then raising the price of one on average leads people to increase use of the other. Given extensive peer-reviewed evidence indicating that these products are substitutes, an unintended but inevitable effect of increasing taxes on e-cigarettes is to increase cigarette use,” Pesko said. “Given that cigarettes are believed to be substantially more harmful than e-cigarettes, this effect on [combustible] cigarette use is concerning …. A wide array of research suggests that this boost in cigarette use as a result of large e-cigarette tax increases would significantly increase overall tobacco-related death and disease.”
Michael Pesko / Credit: GSU
These findings prompted Pesko to send a letter to Congress concerning the proposed vape tax. In the letter, he states that his research team’s economic evaluations of existing state and county e-cigarettes taxes found that increasing e-cigarette taxes to parity with the combustible cigarette tax rate would “sizably increase cigarette use across teens, adults and pregnant women compared to taxing tobacco products differentially in proportion to their health risk.”
Pesko said researchers found several concerning consequences of large e-cigarette tax increases:
Simulating the current bill’s e-cigarette tax on teen tobacco use indicates that this policy would reduce teen e-cigarette use by 2.7 percentage points but that two in three teens who do not use e-cigarettes due to the tax would smoke cigarettes instead. This would result in approximately a half million extra teenage smokers overall. This finding that teens substitute to cigarettes in response to e-cigarette taxes has also been documented using National Youth Tobacco Survey data.
The tax would raise the number of daily adult cigarette smokers by 2.5 million nationally and reduce adult e-cigarette users by a similar number.
For every e-cigarette pod eliminated by an e-cigarette tax, more than 5.5 extra packs of cigarettes are sold instead.
For every three pregnant women that do not use e-cigarettes due to an e-cigarette tax, one smokes cigarettes instead (study).
Pesko told Vapor Voice he was surprised to find that increased e-cigarette tax consistently resulted in substitution across various data sources. “And the magnitudes are fairly sizable,” he noted. “This is an unusual level of accordance for academic research.” Pesko believes that any tax on nicotine products should be based on quantity.
Boesen agreed. He stated that for vapor products, the “obvious choice” is taxing the liquid by volume (per mL), and for nicotine pouches, a tax by weight or per pouch is a straightforward solution. “It is the administratively simplest and most straightforward way for the federal government to tax these goods as it does not require valuation and as such does not require expensive administration,” he stated. “The nicotine tax proposal in the Build Back Better Act neglects sound excise tax policy design and by doing so risks harming public health. Lawmakers should reconsider this approach to nicotine taxation.”
Chowdhury said that the industry must do more and that interested stakeholders and consumers should reach out and push back on the nicotine tax because it will be devastating to the vapor industry. “It seems like the general industry feels like [this nicotine tax] won’t get through somehow, that some people will prevent it from being in the final bill, but I think it’s a huge risk,” said Chowdhury. “Without serious pushback, it could end up there; it could very well end up becoming law.”
Haynes said that if the nicotine tax bill ever makes it to Biden’s desk, “he’s going to sign it.”
The 5th U.S. Circuit Court of Appeals has ruled that Triton Distribution can continue selling its flavored e-cigarettes despite a decision to the contrary by the Food and Drug Administration, reports Reuters.
In a unanimous opinion on Oct. 26, the 5th U.S. Circuit Court of Appeals said that when the FDA last month denied the Texas company’s application to sell its products, the agency did not adequately consider Triton’s marketing plan to reduce the products’ appeal to youth.
The court found the FDA pulled a “surprise switcheroo” from earlier guidance stating that manufacturers would not need long-term studies to support e-cigarette applications.
The FDA initially said in guidance accompanying the deeming rule that it did not expect companies would need long-term studies to support their application. However, in an August announcement that it would deny a first batch of applications, the agency said that manufacturers would likely need studies that followed a cohort of people over time to show that their products’ use in helping adult smokers quit cigarettes outweighed the risk to youth.
Triton challenged the agency’s decision, saying it had relied on the earlier guidance in its application.
Multiple companies have challenged their MDOs in recent weeks. In early October, the FDA rescinded MDOs it has issued to Turning Point Brands and Fumizer, placing their products back under review.
According to Filter, Bidi and Gripum too recently received some temporary form of stay, and My Vape Order has demanded a recission due to the fact its PMTA includes some of the same data and studies that also appears in TPB’s applications.
Imperial Brands has stepped up market testing of its heated-tobacco products through a national rollout in Greece.
Insights from Greek consumers on the Pulze device and iD heat sticks will help inform the potential for further launches in a focused number of European markets. Earlier this month, Imperial Brands launched a pilot trial for its tobacco-heating products in the Czech Republic.
Building a targeted and sustainable next-generation product (NGP) business is a key part of Imperial’s new strategy and its commitment to make a meaningful contribution to harm reduction.
According to the company, heated-tobacco is an established NGP category in a number of European territories, including where Imperial already has a strong route to market for its traditional tobacco products.
“Heated-tobacco continues to gain traction among adult smokers in Greece, and we see significant growth opportunities for our promising products in this category,” said Imperial Brands’ chief consumer officer, Anindya Dasgupta, in a statement.
“The valuable consumer insights we gain from the pilot initiatives in Greece and the Czech Republic will inform the scale and pace of further market rollouts.”
Heated-tobacco currently accounts for more than 10 percent of the total tobacco sector in Greece, with further strong growth anticipated.
The Pulze device heats but doesn’t burn iD heat sticks to provide nicotine and tobacco aromas containing fewer and substantially lower levels of the harmful chemicals found in combustible cigarette smoke.
Unlike other heated-tobacco products, the Pulze device does not require a charging case, offering up to 20 consecutive uses. It is available in copper and silver colors.
ID tobacco consumables are being made available in Greece in four flavors: Rich Bronze, Balanced Blue, Capsule Polar and Ice.
One new brand at the show, Hook’d – with its tagline “one puff and you’re Hook’d” – seemed to take taunting the U.S. Food and Drug Administration to another level according to Kim, a show attendee who asked not to use her last name. “Why would you put a brand out there like that,” she said. “It’s just disappointing.” A person working the Hook’d booth, when asked why the Hook’d name, told Vapor Voice the name was “just catchy.”
