The long-awaited proposal, which would subject the
$2 billion industry to federal regulation for the first time, is not
as restrictive as some companies had feared and will likely take
years to become fully effective.
Bonnie Herzog, an analyst at Wells Fargo, said the proposal is
"positive for industry."
But public health advocates lamented the fact that the proposal does
not take aim at e-cigarette advertising or sweetly-flavored
products, which they say risk introducing a new generation of young
people to conventional cigarettes when little is known about the
long-term health impact of the electronic devices.
"It's very disappointing because they don't do anything to rein in
the wild-west marketing that is targeting kids," said Stanton Glantz,
a professor at the Center of Tobacco Control Research and Education
at the University of California, San Francisco.
FDA Commissioner Margaret Hamburg said at a briefing on Wednesday
that the proposal represented the first "foundational" step toward
broader restrictions if scientific evidence shows they are needed to
protect public health.
That declaration worries some companies.
"The window is still open for a more draconian approach," said Jason
Healy, president of Lorillard Inc's blu eCigs unit, which holds
roughly 48 percent of the market. "I think the proposal shows a good
science-based reaction here from the FDA, but there is a lot we have
to go through during the public comment period."
Lorillard, together with privately-held NJOY and Logic Technology
account for an estimated 80 percent of the market. Other big tobacco
companies, including Altria Group Inc and Reynolds American Inc, are
also entering the market.
E-cigarette advocates welcomed the FDA's light touch.
Dr. Michael Siegel, a professor of community health sciences at
Boston University, said a ban on flavorings would have "devastated
the industry, as the flavors are a key aspect of what makes these
products competitive with tobacco cigarettes."
Similarly, a ban on all e-cigarette advertising "would have given
tobacco cigarettes an unfair advantage in the marketplace," he said.
NO FREE SAMPLES
A law passed in 2009 gave the FDA authority to regulate cigarettes,
smokeless tobacco and roll-your-own tobacco and stipulated the
agency could extend its jurisdiction to other nicotine products
after issuing a rule to that effect. E-cigarettes use
battery-powered cartridges to produce a nicotine-laced inhalable
In the short term, the new rules would prohibit companies from
distributing free e-cigarette samples, forbid vending machine sales
except in adult-only venues and prohibit sales to minors.
Companies would also be required to warn consumers that nicotine is
addictive, but no other health warnings would be required. The
addiction warning would have to be added no later than two years
after the rule is set and the e-cigarette companies would not be
allowed to make health claims in any advertising.
The proposal is subject to a public-comment period of 75 days.
Vince Willmore, a spokesman for the Campaign for Tobacco Free Kids,
said the proposal "by no means does everything we think needs to be
done, but it starts the process. What is critical now is that they
finalize this rule and then move quickly to fill the gaps."
He said the FDA should aim to establish the rule within a year, but
many are skeptical the agency will act that quickly.
"The reality of these things is that every step takes years," said
UCSF's Glantz. "By not addressing the youth-directed marketing it
means it won't be addressed for a very long time."
Some e-cigarette companies that sell primarily through convenience
stores were surprised at the lack of restrictions on online sales,
since it can be difficult to verify a customer's age over the
"The Internet thing is very surprising to me," said Miguel Martin,
president of Logic Technology. "It reduces the visibility of the
sales of the products and the type of products that the government
has awareness of."
[to top of second column]
The new rules would also require companies to submit new and
existing products to the FDA for approval. They would have two years
to submit applications from the time the rule goes into effect.
Companies may continue selling their products and introducing new
products pending the FDA's review.
In the meantime, e-cigarette companies would be required to
register with the FDA and list the ingredients in their products.
They would not be required to adhere immediately to specific product
or quality control standards. That could come later, Hamburg said.
THE "VAPING" INDUSTRY
E-cigarettes and other "vaping" devices generate roughly $2 billion
a year in the United States, and some industry analysts expect their
sales to outpace the $85 billion conventional-cigarette industry
within a decade.
Advocates of e-cigarettes claim they are a safer alternative to
conventional cigarettes, since they do not produce lung-destroying
tar, though long-term safety data is thin.
The FDA's proposal leaves many questions unanswered about how new
products would be regulated over the long run. One key question
relates to how products are approved.
Under current law, new tobacco products can be approved if they
are "substantially equivalent" to a product that was on the market
before February 15, 2007. It is unclear whether any e-cigarettes
were on sale before then, to be used as a benchmark.
Mitch Zeller, head of the FDA's tobacco division, said at a briefing
that the agency would be seeking more information during the
public-comment period on whether the "substantial equivalence"
pathway is even valid for e-cigarettes.
If it is not, e-cigarette companies would have to use a different
process, which would require them to prove their products are
appropriate for public health, a higher hurdle to clear.
Also up in the air is the regulatory fate of some cigars. The
current proposal would include e-vaping products and other tobacco
products, but premium cigars may be excluded.
The FDA said it would seek public comment on whether all cigars
should be regulated equally. One option proposed by the agency is to
regulate them all. The other is to define a category of premium
cigars that would not be subject to the FDA's authority.
Physicians said the possible exemption of premium cigars from
regulation was troubling.
"Any exemption for any kind of tobacco product proven to cause lung
and heart disease and cancer is unacceptable," said Harold Wimmer,
chief executive of the American Lung Association.
Cigar companies, backed by some members of Congress, had lobbied
heavily for a regulatory carve-out for premium cigars. In a December
2013 letter to Hamburg and Sylvia Mathews Burwell, director of the
White House's Office of Management and Budget, 24 Republican
lawmakers asked that premium cigars be exempt.
"As you know," they wrote, "premium cigars are a niche product with
an adult consumer base, much like fine wines. The majority of people
who enjoy a cigar do so occasionally, often in social or celebratory
Under the proposed rule, premium cigars are considered those wrapped
in whole tobacco leaf, made manually by combining the wrapper,
filler and binder, have no characterizing flavor, have no filter,
tip or non-tobacco mouthpiece and are relatively expensive.
(Editing by Larry King and G. Crosse)
[© 2014 Thomson Reuters. All rights
Copyright 2014 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.