Sunday, May 08, 2016

FDA Draft Guidance Confirms that Deeming Regulations Will Decimate the E-Cigarette Industry

Last Thursday, I provided a review and commentary on the FDA e-cigarette deeming regulations based on my initial reading of the 499-page document released that morning. Now, I have had more time to fully digest the new regulations as well as the draft guidance on pre-market tobacco product applications (PMTAs) that the FDA also released last Thursday. Based on my review, it is even more apparent that these regulations will decimate the e-cigarette industry because the requirements necessary to complete a PMTA are prohibitively expensive for all but the very largest of e-cigarette manufacturers.

The reason for this strengthening in my belief that these regulations make it financially impossible for all but the largest of manufacturers to prepare successful applications is that the draft guidance places extremely burdensome conditions on companies in terms of what they must demonstrate in a PMTA. While the outline below is not exhaustive, these selections from the guidance illustrate the reasons why it will not be possible for most e-cigarette manufacturers to survive.

The Rest of the Story

Below is a sampling of some of the specific provisions of the draft guidance that demonstrate the huge financial burden that the deeming regulations impose on e-cigarette manufacturers. I conclude that a PMTA application will cost a minimum of $1 million - a capital cost that the overwhelming majority of manufacturers will simply not be able to afford. I predict that without Congressional intervention, most e-cigarette manufacturers will take whatever business they can get in the next three years and then find some other line of work. Most will not even bother to submit an application (or if they do, it will come nowhere close to meeting the FDA's guidelines). Another possibility is that e-cigarette companies will trim their inventory down to the bare bones, eliminating most of their flavors and just choosing a small number of products to sell. While this could perhaps result in more companies surviving, it will still decimate the market because it will greatly restrict the choices that consumers have and it will certainly eliminate products that many tens of thousands of current vapers are using.

Moreover, it is not even clear to me that any company - even the largest - will be able to successfully complete a PMTA within two years. As you will see below, the applications will require large, long-term epidemiological studies and clinical trials that I do not think can be completed in 24 months.

1. Every combination of nicotine strength and flavorings will be considered to be a different product.

The draft guidance confirms that even minor differences in e-liquid composition result in a different product, requiring a separate PMTA and a specific showing of public health benefit for that specific product. Thus, if an e-cigarette manufacturer produces four types of starter kits, four types of cartomizers, five types of mods, and 40 e-liquid flavors, each coming in three nicotine strengths, then that manufacturer will have to submit 133 pre-market tobacco applications! This is a conservative estimate, as there are many companies that sell more than 100 flavors of e-liquids. These companies are being required to submit approximately 300 different product applications. The companies have to demonstrate that each one of the 300 different products will be beneficial for the public's health. This alone will be enough to preclude most manufacturers from being able to afford the PMTA process, but it is only the beginning of a long saga.

2. Manufacturers are asked not only to compare the public health implications of their products to cigarettes, but also to other e-cigarette/e-liquids that are on the market.

This is a Herculean undertaking. It is not enough to compare your product to tobacco cigarettes. You also have to compare the public health implications of introducing your product into the marketplace with the risks associated with other vaping products. As the guidance states:

"Because it is expected that consumers of current products that are in the same product category may  switch to a newly marketed product, it is important that FDA be able to evaluate whether this  switching would result in a lower or higher public health risk. As an example comparison between products within the same category, if your PMTA is for an e-liquid, we recommend a comparison to other e-liquids with similar nicotine content, similar flavors, or other similar ingredients."

This is not something I had anticipated, and it greatly complicates the criteria that must be met to demonstrate that your product is beneficial to the public's health. You not only have to show that it is beneficial compared to real cigarettes, but now you also have to show that it offers public health benefits when weighed against other vaping products that are on the market.

3. Manufacturers are asked to compare the health effects of their products to the health effects of not only cigarettes, but other vaping products as well.

Similar to #2, this adds to the complexity of the task, as you must not only study your own product, but must provide data about other vaping products as well in order to make this comparison.

4. Manufacturers are asked to quantify the levels of aerosol constituents for each product under a range of operating conditions and use patterns. 

This means that if you sell an e-cigarette with three voltage settings and you sell 100 flavors, then you will have to quantify the level of aerosol constituents for each flavor at each of the three voltage settings and under conditions of light, medium, and heavy use. Thus, you will have to contract with a laboratory to conduct a gas chromatographic/mass spectrometric analysis of 900 samples. Even at the bargain basement price of $300 for an analysis, we are talking about a capital cost of $270,000 for chemical testing alone.

5. Manufacturers must, for each product, quantify the likelihood that nonsmokers will start using the product, the likelihood that former smokers will relapse back to nicotine use by using the product, the likelihood that nonsmokers who do start using the product will progress to cigarette smoking, the likelihood that former smokers who relapse back to nicotine use will then progress to smoking, the likelihood that consumers will use the product in conjunction with other tobacco products, and the likelihood that smokers who start using the product would otherwise have quit smoking.

Answering these questions will require a huge research undertaking lasting several years and costing millions of dollars. I don't even think that existing NIH research - in its totality - will be able to answer all of the above questions for a single product within two years. Imagine having to answer these questions for each of your products!

These questions simply cannot be answered without conducting clinical trials with hundreds of subjects and costing millions of dollars. I budgeted a bare bones clinical trial to answer just one of these questions at the bargain basement price of $2.8 million. I'm not sure that any company, with the possible exception of tobacco companies, can afford this.

6. Chemical analyses must be conducted on a minimum of three different batches with at least 10 replicates per batch.

So you can scratch everything I wrote in #4 above because now it turns out that the 900 samples that must be analyzed by the typical e-cigarette company outlined above must be analyzed for 10 replicates of three different batches. That brings the total number of analyses to 27,000. Even if a lab offers you an "economy of scale" discount at $100 per analysis, you're still looking at a capital cost of $2.7 million. Moreover, at that volume of sampling, you will basically be occupying the entire resources of the lab for months at a time. There is not even the capacity of chemical testing labs to handle the required volume of sampling so that it can be completed within 24 months.

7. Chemical testing must be done for a minimum of 29 different chemicals, including volatile organic compounds, tobacco-specific nitrosamines, and metals. 

OK - so this means that you can throw out the estimate in #6 above because now we can no longer rely on one type of chemical analysis. Now we have to conduct at least two different types of tests because we must quantify metals in addition to volatile organics. So now a typical manufacturer is looking at having to conduct 54,000 analyses in order to keep all its current products on the market. And we're up to $5.4 million in capital costs for the chemical testing alone.

8. The manufacturer is asked to provide a full report of the stability of the product over time, including changes in aerosol constituents over the product's lifetime.

Throw away the estimate in #7. For now, the manufacturer must test each product not only at baseline, but after it ages for its shelf-life. At a minimum, this doubles the number of tests that must be conducted. We're up to 108,000 analyses and $10.8 million.

Conclusions

I just can't go on any longer. And we haven't even come to the safety testing requirements. All we've done up to this point is found out what's in the aerosol of each product under various conditions. Now, we have to study the toxicity of each component of the aerosol. For each, we have to now conduct toxicology studies and possibly clinical studies as well. We also have to consider using "computational modeling using surrogate chemical structures" if we aren't able to complete toxicological testing of each constituent.

And we still haven't come to the required assessment of the acute and chronic health effects, user typography, consumer perception of product risk, packaging, and labeling, consumer comprehension of product labeling and instructions, and a study of unintended uses of the product, including abuse liability. Plus, for each constituent in the aerosol, we need to provide data on health effects, including "changes in physiological measurements, such as heart rate and blood pressure, changes in lung, cardiac, and metabolic function; adverse experiences, such as throat irritation and cough; and changes in laboratory values, such as mediators of inflammation and complete blood count indices."

The rest of the story is that these regulations are absolutely insane. The FDA has no idea what it is doing. And what it is doing is completely losing its perspective. The agency is prepared to divert nearly all of its resources to implement and process the PMTA applications, which do nothing to directly protect the public's health and which actually harm the public's health by decimating a product that would otherwise compete with combustible tobacco cigarettes.

It is difficult to believe that a public health agency could promote the continuation of the cigarette smoking epidemic in the way that the FDA is doing with these regulations.

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