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 In November and December, more than 35 organizations
including e-cigarette companies, cigar and tobacco makers, trade
associations, physician groups, lawyers, lobbyists and public health
advocates trooped through the doors of the White House's Office of
Management and Budget.
OMB has been reviewing a rule proposed by the Food and Drug
Administration that would bring e-cigarettes under its jurisdiction
and could potentially require companies to register and pay fees,
list the ingredients in their products, obtain prior approval for
new products and restrict online sales and marketing to children.
The OMB, which reviews proposed regulations to assess, among other
things, their economic impact, has not given a date for when it will
be finished with its review, but officials have not had a meeting
with outsiders since January 17 according to public records,
suggesting they have heard all they need, or are willing, to hear.
At stake is the future of an industry that some analysts believe
will eventually overtake the $80 billion-a-year tobacco business.
Advocates of e-cigarettes, which are battery-powered cartridges
filled with nicotine liquid that when heated creates an inhalable
vapor, say they are less dangerous than tobacco products and can
help smokers quit. Public health experts fear they may act as a
gateway to smoking for the uninitiated.
Mitch Zeller, head of the FDA's tobacco division, said in an
interview that there is a "continuum of risk" among nicotine
products currently on the market, with cigarettes on one end and
medicinal nicotine on the other. He declined to say where on the
spectrum he expects e-cigarettes to fall or what is contained in the
FDA's proposals. In general, he said, people smoke for the nicotine
and die from the tar.
"I'm not saying nicotine is benign, but when compared to the risk
associated with regular tobacco, it pales," he said.
Some, therefore, expect the FDA to exercise flexibility in
regulating e-cigarettes.
"It's not just a matter of a blanket dropping in of the current
regulations over additional products," said Diane Canova, vice
president of government affairs at the anti-tobacco American Legacy
Foundation, "Some of the current restrictions may not fit."
TOBACCO CONTROL ACT
A law passed in 2009 gave the FDA the authority to regulate
cigarettes, smokeless tobacco and roll-your-own tobacco. It also
gave the agency the power to deem other tobacco products to be
within its jurisdiction but it must first issue a rule to that
effect. E-cigarette companies believe they should be exempt from the
full spectrum of regulations, saying they would stifle innovation,
damage small business and hurt consumers trying to quit smoking.
Tobacco company Lorillard Inc, owner of the blu e-cigarette brand,
is the dominant player in the field, followed by privately-held NJOY
and LOGIC Technology. The three account for an estimated 80 percent
of the market.
In a November 7 presentation to OMB, representatives for NJOY said
that while the company supports product registration and minimum age
requirements, it opposes restrictions on TV advertising and
sponsorship and any regulation that would subject e-cigarettes to
the pre-market approval requirements that traditional tobacco
products face.
"The concern is that a product that is constantly changing could be
tied up in a very time-consuming process before the products could
be legally marketed," said Bryan Haynes, a lawyer for the Electronic
Cigarette Industry Group (ECIG).
The FDA is already working its way through a backlog of nearly 4,000
applications for new or modified tobacco products.
E-cigarettes are sold online and at a variety of retail locations
including some gas stations, convenience stores, grocery stores and
drug stores.
"We think the proposals will include a potential ban on internet
sales because you can't age verify," said Vivien Azer, an analyst at
Citigroup. The FDA is expected to place age restrictions on who can
buy e-cigarettes.
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Restricting internet sales would be "devastating to
the companies that have built successful businesses online," said
Cynthia Cabrera, executive director of the Smoke Free Alternatives
Trade Association (SFATA). "About quarter of the revenue from
e-cigarettes come from online sales," she added.
Another contested area is the use of flavorings. Banned in
traditional cigarettes they are used widely in e-cigarettes to
produce tastes ranging from pear and passion fruit to butterscotch
and banana cream. Public health advocates say
flavorings attract children and threaten to create a new generation
of nicotine addicts even the government is trying to create a
generation that is tobacco free.
Adult smoking rates have fallen to 18 percent from 43 percent in
1965. Even so, more than 3,200 young people a day under the age of
18 try their first cigarette, a recent government report found. The
use of e-cigarettes by young people doubled between 2011 to 2012,
according to the Centers for Disease Control and Prevention.
ADVERTISING RESTRICTIONS
Once the proposed rule is announced there will be a period for
public comment, after which the FDA will develop final regulation.
The process could take a year or more. In the meantime, critics say
e-cigarette companies are using the same promotional techniques that
were used for decades by cigarette manufacturers to attract
teenagers to their products. On February 12, two
Democratic U.S. representatives, Henry Waxman and Peter Welch, and
one senator, Tom Harkin, wrote to the attorneys general in their
states to bring electronic cigarettes under the terms of a
settlement reached in 1998 with top tobacco companies that
prohibited any advertising targeting youth.
"Youth use of these products is particularly troubling since the
full extent of e-cigarette harms is not yet understood," they wrote.
Some e-cigarette companies are already positioning themselves for a
more restrictive environment. LOGIC Technology, for one, expects
advertising, flavors and online sales to be banned or severely
restricted. "I think what is important is retail
locations," Miguel Martin, LOGIC's president, said in an interview.
"In retail locations, there is age verification. I believe that is
where the industry is going and where regulation is going. If you
are relying on the internet and TV, I think those vehicles are going
to be taken away from you."
LOGIC's products taste either of tobacco or menthol only, the
flavors allowed with traditional cigarettes.
But Martin, like other e-cigarette companies, wants his industry to
be exempt from the requirement that new or modified products be
reviewed by the FDA before hitting the market.
In the meantime, OMB officials have mostly kept their thoughts to
themselves.
"I've been in some of these meetings," said Eric Criss, president of
ECIG. "It's mostly a one-way conversation."
(Reporting by Toni Clarke in Washington;
editing by Michele Gershberg and Marguerita Choy)
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