The FDA May Soon Be Able To Vaporize E-cigarette Products

Source from:  Market Watch 11/16/2015

The recent rise in popularity of e-cigarettes has become a new source of worry for parents of teenagers, but upcoming federal regulations could make them less available than tobacco cigarettes.

Vapor retail sales are expected to reach $3.5 billion this year, according to Wells Fargo WFC, -1.09% with e-cigarette sales making up $1.5 billion and other larger and custom vaporizing devices accounting for $2 billion in sales. (Vaporizers use heat to release active ingredients in a liquid or plant without combustion.) The market is expected to expand to $10 billion by the end of 2018, but an extension of regulatory power of the Food and Drug Administration could effectively slow that growth.

Vaporizers aren't regulated in any capacity, but an expansion of authority proposed by the FDA in April 2014 would allow the agency to require manufacturers of e-cigarettes, nicotine gels and other tobacco-related products to obtain its approval before going to market. The proposal was submitted for review by the Office of Management and Budget in October, which is the penultimate step for approval. Vaporizing devices for marijuana wouldn't be affected, since the FDA doesn't regulate cannabis due to its federally illegal status.

FDA approval would result in "retroactive premarket review," or intensive scientific study and other measures which could cost companies "millions and millions," says Gregory Conley, president of the American Vaping Association, a nonprofit trade organization. Companies would have two years from the effective date of the regulations to comply or be taken out of the market. Some big tobacco companies - like Altria MO, -0.85% which manufactures Marlboro cigarettes - manufacture e-cigarettes and may be able to manage the costs, but smaller companies would be effectively squeezed out.

A spokesman for the FDA says the purpose of the proposal is "to protect Americans from tobacco-related disease and death in today's rapidly evolving industry."

The proposal contains a "grandfather rule" which would allow products on the market before February 2007, or products similar to them, to bypass these regulations. Conley says that while many tobacco cigarette products were introduced well before that date, the only vaping products - vaporizers and e-cigarettes - on the market at that time was an e-cigar.

Conley estimates that more than 99% of e-cigarette products currently on the market would be banned for their inability to meet the approval requirements. He adds that vaping products have been effective in helping smokers quit tobacco cigarettes.

Smokers trying to quit without professional help were 60% more likely to be successful using e-cigarettes than nicotine patches or other over-the-counter methods, according to a 2014 study by the University College of London.

While e-cigarettes don't contain tobacco, they do contain nicotine and additive chemicals, and little is known about their long-term effects, according to a Harvard T.H. Chan School of Public Health study released in October. There are also concerns that the devices will popularize smoking in public places.

The study found that while 44% of Americans believe e-cigarettes are less harmful than tobacco cigarettes, 32% considered them equally as hazardous, and 51% of those who had smoked e-cigarettes said they were harmful to the health of those that used them. The majority of respondents said e-cigarette advertisements should be regulated like tobacco advertisements and 94% agreed that e-cigarette packaging should contain a nicotine warning label.

What's more, the FDA has previously found that e-cigarettes vary widely in reliability and quality, and didn't always do what they said on the package. Cartridges labeled "no nicotine" did contain nicotine, for instance, and three different e-cigarette cartridges with the same label emitted a markedly different amount of nicotine with each puff, it said.

As popular support for some form of regulation emerges, the number of high-school students using e-cigarettes has increased. The Centers for Disease Control and Prevention found that in 2014, one in four high-school students reported ever using e-cigarettes while one in eight had used an e-cigarette in the past 30 days, up from one in 50 in 2011. While the CDC found that most adult e-cigarette smokers were current or former tobacco cigarette smokers, it reported that in 2013, 250,000 high-school students who had never smoked a tobacco cigarette had smoked an e-cigarette.

State governments have taken note of the increase, and as of May 2015, 43 states have passed laws enforcing age restrictions on e-cigarettes, according to the Tobacco Control Legal Consortium.

The FDA expects regulation to further restrict teenage use, stating that "a final rule will also allow us to address product safety issues and educate consumers about risks associated with use, reduce sales to youth, help to correct consumer misperceptions and prevent misleading health claims."

Conley says the vaping industry is taking steps to block the approval of the regulations as they stand. A bill introduced to Congress in April 2015 would push back the grandfather date to the effective date of the regulations, allowing all current products to stay on the market. He says the AVA is also open to litigation if the bill fails to pass. "If litigation or congressional intervention is not successful, it's the death of 10,000 vape shops and 1,000 manufacturers," Conley says. Enditem