Monday, July 18, 2016

Altria Urges Changes in FDA E-Cigarette Regulations that Would Decrease Its Share of Vaping Market and Help Save Many Smaller Manufacturers

In a move that casts serious doubt on anti-tobacco groups' maligning of the motives of the tobacco companies in marketing vaping products, Altria Client Services, on behalf of Nu Mark (the maker of Mark Ten e-cigarettes), has submitted comments to the FDA that blast its pre-market tobacco application (PMTA) requirements for e-cigarettes, arguing that these requirements are unduly burdensome, unnecessary, and beyond the scope of the agency's jurisdiction under the Tobacco Control Act.

In the comments, Altria Client Services expresses particular concern that the burdensome PMTA requirements will force many manufacturers out of business, undermining the Tobacco Control Act's public health goals.

Altria writes: "The Draft Guidance is not aligned to the FSPTCA's goal of promoting public health because the complexity of information recommended for the application process and the short compliance period for FDA to complete PMTA reviews may result in some existing ENDS products being forced off the market."

Altria also notes that FDA itself acknowledged that a large number of e-cigarette companies would go out of business, yet failed to account for this in its regulatory impact analysis.

To remedy the situation, Altria suggests an approach similar to what I have been advocating: the agency should "establish baseline performance standards for ENDS products that, when met, would serve as the basis for an abbreviated or alternative marketing authorization pathway to satisfy the statutory PMTA requirements."

Two of Altria's main goals, as stated in the comments, are to:

1) "support manufacturers' efforts to develop and bring to market innovative products that may advance the public health."

2) "allow industry participants to engage and compete in a dynamic market."

The Rest of the Story

For tobacco control advocates and groups which continue to argue that the tobacco companies have failed to change their behavior, they need to check their calendars and realize that we're now in 2016, not in the pre-Engle time period. Things have changed substantially, and nowhere is this seen more noticeably than with the tobacco industry's embrace of true harm reduction products, especially e-cigarettes and vaping products.

Many of my colleagues continue to argue that Altria and Reynolds American are insincere in wanting to promote vaping, that they are merely trying to promote smoking by encouraging vaping as a mechanism to avoid smoking cessation, and that their main purpose is to try to recruit new smoking customers by getting youth addicted to e-cigarettes and then encouraging them to proceed on to tobacco cigarette smoking. Many of the anti-tobacco groups continue to accuse Altria and Reynolds American of marketing their products to youth and using slick advertising and youth-oriented flavorings like gummy bear and cotton candy to appeal to kids.

The truth is that these are not your father's cigarettes. What Altria and Reynolds American are doing with vaping products is nothing like what they used to do with the marketing of tobacco cigarettes.

In fact, Altria and Reynolds American are not offering youth-friendly flavors like bubble gum, cotton candy, and gummy bear. Their marketing is not targeted at youth, either in its advertising placement or content. Their sales practices for Vuse and Mark Ten are not directed at facilitating the youth purchase of these products.

Candy and fruit flavors: None prior to 2015. Only tobacco and menthol. Last year, introduced four new flavors: Mint, Chai, Berry, and Crema.
Internet sales:  None. Only available in retail stores.
Disposable products: None. Only available in more expensive, rechargeable sets.

Candy and fruit flavors: None before last year. Only tobacco and menthol. Last year, introduced two new flavors: Fusion and Mint.
Internet sales:  None. Only available in retail stores.
Disposable products: None. Only available in more expensive, rechargeable sets.

If these companies were truly going after kids, why would they be actively avoiding youth-friendly flavorings? Why would they refrain from selling disposable products, which are much less expensive and are most likely the type that youth purchase?

To be sure, there are a small number of "bad actors" in the e-cigarette industry. But Altria and Reynolds American are not among them.

Please note that I am not arguing here that companies which are selling e-cigarettes via the internet, marketing disposable products, or selling multiple flavors are targeting kids or that they have any desire for youth to use their products. Quite the opposite: these aspects of the market are essential to reach adult smokers and curtailing any of them would decimate the market, leading tens of thousands of ex-smokers to return to smoking and discouraging smokers from switching to vaping products in the future. I am simply pointing out that Altria and Reynolds American are clearly not targeting youth and using these points to demonstrate how inaccurate the anti-tobacco groups are in characterizing the behavior of these companies.

If there were any remaining doubt about the sincerity of the two major domestic cigarette companies in marketing vaping products, it should disappear after reviewing Altria's comments to the FDA. (First of all, recognize that these comments are not a publicity ploy because the company is not publicizing them -- I was unable to even find them online.) In these comments, Altria supports policy changes that are not in its best financial interests in the sense that the current burdensome regulations are in Altria's favor and without changes to make them less burdensome, these regulations would essentially hand the entire vaping market to Altria and Reynolds American. Virtually no other companies have the financial resources to develop the required PMTAs. So Altria could easily just sit by quietly and then enjoy an oligopoly in the vaping market.

But this is not what Altria is doing. The company is actually trying to save at least some vitality in the e-cigarette and vaping market by urging the FDA to weaken the burdensome requirements so that many more manufacturers have an opportunity to stay on the market. And these two tobacco companies are also strongly behind the Bishop-Cole amendment which would grandfather existing vaping products, thus preventing the decimation of the e-cigarette market and the creation of a Big Tobacco oligopoly.

Anti-tobacco advocates are going to have to come to terms with the apparently threatening reality that our long-term mantra is no longer valid. Their entry into the vaping market is not merely a ploy to get youth hooked on nicotine so that they can get new smoking customers. They are legitimately interested in creating a new and robust market for harm reduction products.

Now I am not arguing that financial incentives do not play a role. Of course they do. The companies see an eventual decline in the use of combustible tobacco products in the United States, and they want to be able to derive some economic benefit even as smokers move away from these combustibles. By entering the vaping product market, the companies have an alternative source of revenues to help sustain them. And they can use price increases with their traditional cigarettes to help lessen the financial blow, by protecting revenue even as sales decline. And while their market share will not be nearly as high in a robust, thriving vaping market, the overall market will likely be much greater if there are a large variety of alternative choices for smokers who want to quit but do not feel able to do so without the aid of a vaping device.

But instead of denying that this could possibly be happening, we need to open our eyes and see that this is one example where there is a confluence of public health goals and economic incentives for the vaping industry. Profits from the sale of vaping products increase as the sale of traditional cigarettes fall.

At some point, we need to figure out what our goal is. Is the goal to save lives and improve the public's health by decreasing the tremendous burden of smoking-related morbidity and mortality. Or is the goal simply to continue an unrelenting attack on the cigarette companies, which creates nice publicity for our organizations' membership and helps to attract larger donations?

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