Tobacco Companies Sue FDA Over Required Pre-Approval of Cigarette Label Changes in Substantial Equivalence Guidance

This Tuesday, the major tobacco companies filed suit against the FDA in federal district court. The chief claim is that in its March guidance on substantial equivalence, the FDA essentially promulgated a new rule requiring pre-approval of many cigarette package labeling changes, even if there is no change whatsoever in the cigarettes in the package.

According to a Reuters article: "the tobacco companies said the FDA's authority to regulate labeling was limited to products that claim to reduce tobacco-related harm or other circumstances addressed by formal rulemaking. The guidelines go far beyond that authority, the plaintiffs said, by requiring FDA authorization to make any labeling changes that would render a product already on the market "distinct," like a name change. Although the FDA has framed the guidelines as non-binding recommendations, they create "specific legal obligations with clear and draconian consequences for violations," including civil or criminal penalties, the lawsuit said. The companies said the guidelines violated First Amendment protections for commercial speech by presumptively blocking certain labeling statements until they receive FDA approval. They also accused the FDA of depriving stakeholders of the chance to weigh in on the directive by issuing it as guidance and not through formal rulemaking."

The contentious part of the FDA's guidance is the following:

"In the draft of this guidance issued September 2011, FDA indicated that it would consider the “label” of the tobacco product to be a “part” of that tobacco product, and accordingly, any modification to a tobacco product’s label after February 15, 2007 would make the product a new product subject to premarket review. After reviewing the comments and information submitted in response to the September 2011 draft guidance, FDA has carefully reconsidered this policy. We have concluded that a label is not a “part” of the tobacco product. FDA does conclude, however, that if a product’s label is modified in any way that renders the product distinct from the predicate, even if its characteristics remain the same, the modified product is a new product under section 910(a)(1)(A) of the FD&C Act because that product was not commercially marketed in the United States as of February 15, 2007."

The FDA provides some examples of what labeling changes might be considered to make a product distinct and thus to require pre-approval.

For example, changing the background color from green to red would make a product distinct, but changing the color from white to cream would not. Changing the logo from a star to a lion would render a product distinct, while changing the logo from a small lion to a large lion would not. Adding the words "premium tobacco" to a product label would make the product distinct, while italicizing descriptors already on the label would not.

The tobacco companies argue that these requirements are arbitrary and capricious. Moreover, they were issued without a formal rulemaking process and the FDA does not have such authority, according to the tobacco industry complaint.

Ultimately, the tobacco companies argue that by requiring pre-approval of certain package labeling changes, the agency is exercising prior restraint over the commercial speech of the companies and thus violating the First Amendment rights of these companies.

The Rest of the Story

There are two rather complex legal issues here. The first is whether or not the FDA guidance actually represents the promulgation of specific legal obligations or whether they are simply non-binding recommendations or guidance. The second is whether the pre-approval of cigarette package labeling is unauthorized under the Tobacco Act or whether it is simply a part of enforcing its pre-market application rules.

Several things, however, are quite clear. First, the FDA has completely contradicted itself in this guidance. On the one hand, the FDA concludes that the product labeling is not part of the product. But if the labeling is not part of the product, then how can a change in the labeling - with no change whatsoever in the product - constitute the creation of a new "product?" It would seem that a label change is not changing the product because the label is not part of the product. How then, can the agency declare authority to require pre-approval of labeling changes (unless it were to exercise its formal rule-making authority)?

Second, the requirements do appear to be problematic. Essentially, the agency has issued a rule that bans the use of the term "premium tobacco" on a cigarette label without agency pre-approval, an action that appears to go beyond its existing statutory authority under the Tobacco Act. Nowhere in the Tobacco Act is the FDA granted the authority to pre-approve all cigarette package labeling for products already on the market.

Third, the requirements do appear to be quite arbitrary. Why would changing a logo from a star to a lion create a new product, but a change from a tiny lion to an enormous lion not create a new product? If a change from white to cream does not create a new product, what about a change from beige to brown? How about a change from purple to fuchsia or from Navy blue to azure?

At the very least, this lawsuit helps to expose how inane the requirements of the Tobacco Act are, how arbitrary they are, how little direct connection they have with protecting the public's health. Never has such a huge bureaucratic system of applications, reviews, and guidances been created without having any substantial, tangible, and direct connection to protection of the public's health.

Banning lions on cigarette packs is not going to save lives. However, setting actual product standards to make cigarettes safer could save lives. But in six years, the FDA has yet to issue a single product standard or to do anything to make cigarettes safer and/or less addictive. The agency is wasting all of its time in creating and managing a huge bureaucratic nightmare in which its resources are wasted trying to regulate the changes in colors of cigarette packaging, rather than the safety and addictiveness of the actual product that is within the packaging.