FDA may soon propose regulation that could ban many/most e-cigarette products, eliminate many/most companies

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Bill Godshall

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    It appears that the FDA may soon (perhaps in the next several weeks or months) follow through with the agency's April 25 stated intent (in red below) to propose a regulation that would apply Chapter IX of the FSPTCA to e-cigarette products (that contain nicotine) and other currently unregulated tobacco products, including: small cigars, large cigars, pipe tobacco, hookah/shisha tobacco, dissolvable tobacco/nicotine products (that aren't smokeless tobacco products), nicotine water, tobacco/nicotine skin cream and patches, non electronic nicotine inhalers, tobacco/nicotine nasal sprays, etc.


    April 25, 2011

    Regulation of E-Cigarettes and Other Tobacco Products

    The Agency intends to propose a regulation that would extend the Agency’s “tobacco product” authorities in Chapter IX of the FD&C Act, which currently only apply to certain specifically enumerated “tobacco products,” to other categories of tobacco products that meet the statutory definition of “tobacco product” in Section 201(rr) of the Act. The additional tobacco product categories would be subject to general controls, such as registration, product listing, ingredient listing, good manufacturing practice requirements, user fees for certain products, and the adulteration and misbranding provisions, as well as to the premarket review requirements for “new tobacco products” and “modified risk tobacco products.”

    June 16, 2011

    Sens. Merkley, Brown and 10 other Democrats pressure FDA to reverse ruling that Star's Ariva BDL and Stonewall BDL aren't smokeless tobacco products (as defined by FSPTCA), grossly exaggerate health/safety risks of dissolvable tobacco (that now includes nicotine lozenges), falsely claim products are marketed to youth, call them candy.

    New Senator Brown and Senate Colleagues to FDA: It's Time To Close The Door On Tobacco Candy
    http://www.ktvz.com/news/28300863/detail.html (6/16/11 Dem Sens. letter to Margaret Hamburg)


    Although we recognize that FDA has not yet asserted jurisdiction over the full range of tobacco products potentially subject to regulation under the statute, FDA does have authority over smokeless tobacco products. For this reason, we do not understand why Ariva-BDL and Stonewall-BDL should not be categorized as “smokeless tobacco products” and subjected to immediate FDA regulation. We fear that this action will encourage other tobacco companies to introduce new forms of dissolvable tobacco products in an effort to avoid regulation as smokeless tobacco products, an outcome that Congress intended to prevent. Already, another tobacco manufacturer, R.J. Reynolds, recently reintroduced dissolvable, candy-like Camel products, including Sticks, Strips and Orbs, in Charlotte and Denver. Yet another manufacturer, Altria has debuted its “smokeless tobacco stick” and is test marketing it in Kansas. The recent proliferation of dissolvable tobacco products—which can easily end up in the hands of children—in the marketplace, makes FDA’s decision particularly disturbing.

    October 14, 2011

    US Senate Democrats Blumenthal, Lautenberg & Brown urge FDA to "swiftly" expand tobacco regulations, falsely accuse tobacco industry of undermining FSPTCA, urge agency to apply Chapter IX to all cigars, pipe tobacco, hookah/shisha, dissolvables, e-cigarettes and other tobacco products, criticize companies for marketing exponentially less hazardous smokefree alternatives to smokers, grossly misrepresent health risks/benefits and marketing of smokefree products.
    Senators Send Letter to FDA on Other Tobacco Products

    http://www.cspdigitals.com/tobaccoenews/tom-letter.pdf (Oct. 14, 2011 letter to Margaret Hamburg from Sens Lautenberg, Blumenthal, Brown)

    Now, we respectfully request that FDA build on these successes and move swiftly to issue a strong regulation that would legally treat or deem all tobacco products, including cigars, pipe tobacco, and hookah tobacco and accessories, as subject to the Tobacco Control Act. We appreciate FDA's past work to issue this important regulatin. Now we ask that you provide us with an update on the agency's progress and anticipated timeline for completion of this regulation, commonly known as the "deeming" rule. In addition, we would appreciate the opportunity to discuss the specifics of this new rule with you, and would also ask that you respond to this letter with a date indicating your availability for such a meeting.

    On July 13, 2011, Dr. Lawrence Deyton, Director of FDA's Center for Tobacco Products, met with Senators Blumenthal, Sherrod Brown, and Merkley to discuss FDA's regulatory decision around Star Scientific's products Ariva-BDL and Stonewall-BDL, two recently-developed dissolvable tobacco lozenges. In June, FDA deemed both products to be outside the direct regulatory authority afforded the agency under Chapter IX of the FSPTCA, thus requiring FDA to issue an additional regulation in order to assert authority over such products. While we continue to respectfully disagree with this decision, we were encouraged during this meeting to hear of FDA's commitment to swiftly issue such a "deeming" regulation, and were pleased to hear of an anticipated October release.

    November 29, 2011

    Cigars | FDA | Obama Administration | Regulations | The Daily Caller


    Cigar smokers are mad as hell, and they aren’t going to take it anymore. Faced with an unprecedented assault on their guilty pleasure from President Barack Obama’s Food and Drug Administration, aficionados and industry insiders told The Daily Caller that they’re picking up their torch lighters and revolting.

    Usually divided by their preferences for mild, medium and full-bodied smokes, they’re uniting against regulations that threaten to make cigars prohibitively expensive, shut down scores of small cigar shops, jeopardize tens of thousands of jobs and erase the traditionally bright line between Camels and Cohibas.

    Cigar lovers are also recruiting members of Congress to defend what public health activists and anti-cancer crusaders see as little more than gentrified cigarettes smoked by economic one-percenters.

    “Only a couple weeks remain,” one apocalyptic online pitch warns, “to stop the FDA from ruining cigars.” If that seems like a stretch, don’t bother telling Famous Smoke Shop. The e-tailer has sent 1.7 million emails to customers on its mailing lists, asking them to encourage their representatives in Congress to co-sponsor legislation designed to tie the FDA’s hands.

    Cigar industry representatives told TheDC that efforts like this have already generated more than 113,000 messages to Congress.


    It’s no surprise, then, that 125 House members and four senators are on board. They include 26 Democrats, along with six of Congress’ 20 physicians and two of its seven nurses — all strange bedfellows for a pro-tobacco law in the making.
    Sen. Mary Landrieu, a Louisiana Democrat, announced Wednesday that she will join them. Landrieu chairs the Senate Committee on Small Business & Entrepreneurship, a crucial position from which to influence an issue that affects mostly mom-and-pop retailers.

    Cutting an Exception

    The Traditional Cigar Manufacturing and Small Business Jobs Preservation Act of 2011 arrived in the House in April and the Senate in August. Much of the domestic cigar supply enters the United States in the Sunshine State, and two Florida legislators — Republican Rep. Bill Posey and Democratic Sen. Bill Nelson — are leading the charge.

    The bill’s focus is to carve out an exception for premium cigars in the Family Smoking Prevention and Tobacco Control Act, signed into law by President Obama in 2009.

    The Tobacco Control Act (TCA) gave the FDA new authority to regulate tobacco, and the agency has most famously wielded that power by requiring garish photographic warnings this year on cigarette packs. But the law, an FDA spokesperson told The Daily Caller in an email, “also permits FDA to deem other ‘tobacco products’ subject to the TCA’s general controls by regulation.”

    The FDA spokesperson explained that a “proposed rule deeming cigars to be subject to FDA’s jurisdiction” could be “finalized” after a public-comment period expires, giving the agency the authority to regulate “any product that meets the definition of a ‘tobacco product’ under the TCA, including cigars, little cigars, and certain novel nicotine containing products (such as certain electronic cigarettes).”

    The FDA seems to be taking its longer leash seriously. On three occasions since December 2010, the agency has already put the cigar industry on notice that it intends to propose a rule to “deem cigars subject to the Tobacco Control Act.”
     
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    Bill Godshall

    Executive Director<br/> Smokefree Pennsylvania
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      The reason I stated that an FDA regulation to apply Chapter IX of the FSPTCA to e-cigarettes could ban many/most e-cigarette products (that contain nicotine) is because Section 910 of the FSPTCA could allow the FDA to ban some/many/most/all e-cigarette products that were not available in the US market before February 15, 2007.

      Under the provisions of Section 910, manufacturers/importers (of all tobacco products that weren't on the market prior to February 15, 2007) would need to submit an application to the FDA claiming that the product is "substantially equivalent" to another product that was already on the market prior to 2/15/2007, and the FDA would have sole discretion of determining whether the product is or isn't substantially equivalent to the other e-cigarette product.

      Also, Section 911 would prohibit all e-cigarette manufacturers and importers from truthfully claiming that e-cigarettes are less hazardous than cigarettes, as such a claim would render the product as a "modified risk tobacco product". Section 911 requires any company desiring to make a MRTP claim to apply to the FDA to do so, and the FDA must approve the application.

      Many other provisions in Chapter IX would basically require every e-cigarette manufacturer and importer to hire a team of lawyers just to comply with the currently pending provisions (as well as comply with regulations approved in the future).
       
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      Bill Godshall

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        In the next few days, I'll be collaborating with CASAA to develop an action alert, sample letters to send to members of Congress, and sample letters to send to newspaper editors.

        If/when the FDA proposes this regulation, we'll also need to generate thousands of public comments to the FDA urging them to reject their proposed regulation, but the agency holds all the cards (and can ignore all of the public comments and simply approve the proposed regulation).

        That is why we need to contact members of Congress (especially Republicans) urging them to oppose this potentially forthcoming power grab by FDA.
         
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        sqirl1

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          how long do you think we got? I think another thing we need is for people to donate so that we can help pay for possible legal fees, I'll be donating some $$ tomorrow when I get paid for sure! damnit this sounds bad! I'm glad we got you on our side, Bill! I'll be sending my congressman a letter pretty soon for sure! I'm getting a shiny new E-cigar tomorrow from my local supplier, they're not taking it from me!
           

          sqirl1

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            I just sent Rush Limbaugh an e-mail

            Dear Rush,

            I understand you are a vaper (aka, you use E-cigs) well it has come to my attention that the FDA is proposing regulations that could make any tobacco product (aka anything with nicotine other than patches, gum, etc.) subject to their regulations. this could mean most E-cigarette products could be banned under a section of the tobacco control act that require all tobacco products (including e-cigs) not on the market prior to 2007 to be under review until approved as "substantially equivalent" to older products. For more information I encourage you to visit CASAA | The Consumer Advocates for Smoke-Free Alternatives Association and join CASAA, which stands for the Consumer Advocates for Smoke Free Alternatives Association. also you can find detailed information on this particular regulation being proposed here http://www.e-cigarette-forum.com/fo...e-products-eliminate-many-most-companies.html ; At any rate PLEASE HELP US! I don't want E-cigs banned and I know you don't either.

            Thanks for reading,
            -G.R.

            hopefully he'll help us get the message out!
             

            sqirl1

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              Bill, what are your thoughts on the likelihood of the hardware itself being targeted? This is a concern that many of us have been debating for a while, what do you think will happen? do you think the hardware will be relatively left alone just because you theoretically don't need to use nicotine or will they try to ban that too?
               

              rstreet55

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                he reason I stated that an FDA regulation to apply Chapter IX of the FSPTCA to e-cigarettes could ban many/most e-cigarette products (that contain nicotine) is because Section 910 of the FSPTCA could allow the FDA to ban some/many/most/all e-cigarette products that were not available in the US market before February 15, 2007.

                Under the provisions of Section 911, manufacturers/importers (of all tobacco products that weren't on the market prior to February 15, 2007) would need to submit an application to the FDA claiming that the product is "substantially equivalent" to another product that was already on the market prior to 2/15/2007, and the FDA would have sole discretion of determining whether the product is or isn't substantially equivalent to the other e-cigarette product.

                What is the reasoning for only accepting products similar or equivalent to 2007 and prior? It is obvious, as with all kinds of products, they evolve and improve. What is so special about that 2/15/2007 date and the products available at that time?
                 

                nerofiend

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                  "Im mad as hell, and im not gonna take this anymore"

                  There is a level of ...... off that a person can achieve that astounds even the most resonable of humans. I am about to reach that point. I have swayed and bent my life around what these government religions (lets face it they think they are above man) my whole life and have for the most part let them get away with it by not complaining and by staying on the legit side of the law. But by god i have had enough! If this passes it will be the last time I ever help or listen to them, the last time i let them control me, and the last time i do as im told like the good boy they expect me to be.

                  Just cause they got all .... hurt cause the people actually stood up for what they wanted and voiced their opinions for a change and the courts decided to side with the people, they decide to bypass everyone and do whatever they want to protect their own wallets.

                  Guess my sides have changed, that side of the line i walked has become blurry and i feel soon i will have to choose another side to walk on.

                  [/rant]

                  Sorry this just pisses me off to no end. What right do they think they have to control the lives of millions of people when they as well as everyone else knows they are in the wrong? Its crap !!
                   

                  mwa102464

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                    They will never be able to stop hardware sales in my opinion, Modders and such will just call them flashlight tubes and sell them under something like this to protect themselves, it's the Nic we all need to be worried about, but even at that there will be black market Nic. Hell they cant seem to stop them from selling all the pills they do on the internet now, I'm not gonna get to paranoid over this but will do whatever I can to help the fight and cause for all of us anyway I can.

                    If they take away liquid Nic , and leave the sales of real cigarettes go on, this would be so obvious that it is a huge payoff. People should be knocking down there Gov't officials doors and screaming PAYOFF PAYOFF PAYOFF !!!!
                     
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                    windwalker

                    Unregistered Supplier
                      I want to toss my two cents in here, and I hope I don't offend anyone too bad in doing so...

                      First: Bill I love and respect what you do wholeheartedly... and I want to encourage and support you in anyway I can...

                      Second: When picking a fight with a fast moving train the only solutions are: get out of the way, or ride it.

                      What's happening is called: "Industry Evolution Phase Four: Regulation and Consolidation" Troutman and Sanders talk about it at length, and even the great Peter Drucker addresses it in depth... In this case, it's e-cigs / tobacco vapors, but "Industry Evolution Phase Four: Regulation and Consolidation" is an organic process that happens to any industry once it reaches a certain size... For all intents and purposes, inevitable.

                      Basically, when enough revenue is moving around, the people who command the guns want a cut of it. It really is that simple.

                      It may happen in a few weeks, months, or even years... But it will happen, and this is what it will look like:

                      1. Imported Tobacco Vapors will pick up a mandatory 32% excise tax.
                      This will cause a surge in the domestic cottage industry...

                      2. Tobacco Manufacture Certificates and Licensees will become mandatory.
                      This will crush the domestic cottage industry, as almost no one will be able to get the certificates or licenses at first.

                      3. Tobacco Control Customs Warehouses will become mandatory as the import trade again swells.
                      This will channel excise, warehouse, custom fees back to the government as consumers watch prices soar (we'll all pay double for our liquid without too much complaint - ie. $.5/ml is delightful, $1/ml is doable, $2/ml becomes the market thresehold as E-cigs and Tobacco vapors pick up heavy luxury tax penalties...)

                      4. Tobacco Retailer licenses will become mandatory industry wide (and fairly easy to get), while the PACT act will be found to encompass E-Cigs / tobacco vapors ending Interstate Internet Tobacco Vapor trafficking completely as several buyers have their property ceased and are made examples of (yes, they will call it trafficking - and they will take cars, houses, levy huge fines - and a few high profile people will do jail time. This is merely done to set an example, once the example is set, people will begin to avoid internet purchases and look to local retailers) As the demand at local retailers increases:

                      5. Elaborate State by State Tobacco Tax stamps for Tobacco 'E-liquids' will be issued to licensed Manufacturers. Manufacturers will in truth be 'rebranders' adding private labels to products produced from a handful of companies able to get the very difficult to obtain production permits. Most of these will be in China, bolstered by large international and pharmaceutical interests. During this stage, the true producers of the liquids will dramatically increase MOQ's (minimum order quantities for rebranding) thus further consolidating the Domestic supply into a handful of labels large enough to meet minimum order volumes...

                      As we enter stage 5 of the consolidation, the handful of companies remaining will be faced with massive point of sale challenges and those that succeed will be either:

                      A. The Most Morally Bankrupt (corruption has a way of winnowing the pack, like viruses getting stronger after treated with antibiotics) ~ you'll see, some real ....ers with crap products will make it through the consolidation bolstered by exceeding low cost of production (market supply quality will decrease at first due to this)...

                      B. Extraordinarily Talented Administrators - As the tobacco stamps become Status Quo, the paperwork for interstate commerce will become nearly unfathomable to entrepreneurs whose talents of creativity are so often ill suited for the tedium of endless administration, and trivial paperwork...

                      C. Big Tobacco Interests As the consolidation settles, Big Tobacco will step in and capitalize with a line of hyper-addictive, additive laden E-Cig products, and using their existing POS distribution networks, will consume the industry, buying up the handful of businesses that survived the consolidation...

                      6. A handful of clever entrepreneurs will finally discover the import loophole in the FTC, TTB side of the regulation: "Properly labeled and disclosed, tobacco for personal use may be imported" and they will set up offshore corporations to avoid regulations, and regain control over internet trafficking... This will fail based on impious executive authority (it will get seized anyways, even though they're legal)

                      7. A second insurgence of the cottage industry will grow on a state by state basis with no interstate trafficking as vendors seek to avoid stiff interstate tariff, licensure, and trafficking penalties... These hobbyists will be tolerated at the 500 unit per month level without the need for tax stamps.

                      You can print this out, put in on your wall, and date those events as they occur in that order...

                      I applaud your efforts at holding back the storm and fighting the good fight, and I want to encourage you in every way possible to keep it up for as long as you can, as loud as you can. Whatever I can do to support you, let me know personally, and I will do whatever I can to try and boost the volume on your megaphone...

                      Simultaneously, I want to bring your attention to the only fight in this we actually have a chance of winning:

                      It's called the "1ml, 5ml, 10ml debate", and it is the single variable in an otherwise unwavering path. You see, excise will be made on invoiced shipment value... That's 32% right off the boat, the E-liquid will go into TCW's (tobacco control warehouses) and to get it out, you'll need to pay the excise.

                      But the tax stamps, and the cottage industry "500 Unit Cap" will be based on the definition of a unit.

                      Make sense? Why do all USA packs of tobacco contain 20 cigarettes and 1.2oz to 1.5ox of tobacco? Why do all cans of chewable tobacco contain 1.2oz to 1.5 oz of tobacco? It's because the threshold for the taxable unit of tobacco is ~1.5oz. Now bare in mind, that in some states, the unit tax is $2 per unit.

                      Now, brilliant market leading companies like BLU, Green Smoke, V2, V4l all love to sell the phrase "1ml = 1 pack of cigarettes" - - - As vapors, we all know that is total crap. The University of Catania study puts it closer to 3ml - 4ml, and many high voltage vapors (more vapor per puff) put it closer at 5-10ml = 1 pack.

                      So that's a 10 x variance of opinion from people all on the same team!

                      But imagine, the regulators will eagerly jump on the 1000's of pages of bogus 'affiliate driven' review sites all claiming that 1ml = 1pack, and 1ml could logically become the taxable unit.

                      At that level, a 10ml bottle, after excise and stamps would cost $35.
                      If 1ml becomes the taxable unit, the state by state cottage industry (surviving by staying under the 500 unit radar) will be completely destroyed... DIY will be destroyed... And big tobacco will not need to enter the industry as the whole thing becomes cost prohibitive to consumers and the supply chain is compromised...

                      I hope, someone like you can sway the game, as the UK NUDGE committee recommended: "We must incentivize this industry with tax exemptions." If you can convince the Domestic Oligarchy to act morally, and to incentivize this industry during the consolidation - you will have a place in history as the man who saved over 500 million lives this century... It is truly a windmill worth tilting at...

                      But, most likely, unless Ron Paul wins, the Oligarchy will protect itself, and its private ventures... The liberty bell cracked the day they made it, and imagining our ruling regime acting morally or in the interest of liberty is delightful, yet without precedent...

                      In my eyes, the only real chance we've got is that the appropriate studies can be completed during the regulation phase of the consolidation to push the taxable unit away from 1ml and up to 5ml.

                      If 5ml becomes the taxable unit, the industry will survive. It will still consolidate and be regulated, that is inevitable, but it will survive, thrive, and eventually flourish if 5ml becomes the unit - In fact, we will be well served and benefited by improved quality control and a stabilized supply chain... Once we pay our proper protection money, we will get the proper protection that money brings.

                      Of all the issues at hand, it is this single issue upon which all the others hinge, and Big Pharma and Big Tobacco will work together pushing for the 1ml taxable unit.

                      That is of course, unless a regime change occurs and we Americans remember that we all pledged our allegiance to protect and preserve liberty. If we can elect leaders who remember that our country is founded on liberty, there is still hope...

                      So personally I support you in your activism and tireless campaign, I know there still is hope... But simultaneously - I understand how a protection racket works... and it's very difficult to unseat entrenched racketeers. I think the best we can realistically look for is to try and position for favorable, (potentially survivable) terms of taxation.

                      We must also remember, that the market leaders in our industry are also eager for the consolidation... It serves their interests to crush the cottage industry, but they've all failed to realize - their immoral advertising campaigns serve to endanger their businesses as well...
                       

                      Ande

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                        If you're right about regulation and consolidation (which you may be, but it isn't money in the bank) then what we're eventually likely to see is essentially prices swelling to whatever the market will bear, and selection of products reducing to whatever minimum the market absolutely demands.

                        Not the worst result in the world. (Though not my favorite.)

                        But what your analysis and predictions leave out is that this is not exactly a new industry, at least not in the theoretical pure way that they teach in economics or business classes.

                        Smoking, smoking cessation, and tobacco control are all existing industries. When the powers that be are already beholden to an existing industry (and is the FDA ever beholden to drug companies) then new products which compete with that existing industry have a way of disappearning without much of a trace.

                        You're right- regulation is practically inevitable (in a best case scenario) and the fight for reasonable regulation is one we need to focus on. (Including, as you mention, determining what the unit is.)

                        But the fight against disappearing without a trace is also real.


                        Best,
                        Ande
                         
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