Thursday, July 09, 2015

Wall Street Journal Article Predicts that FDA Deeming Regulations Could Decimate the E-Cigarette Industry

According to an article by Tripp Mickle which appeared in Tuesday's Wall Street Journal, the FDA deeming regulations, which are expected to be released later this summer, could decimate the e-cigarette industry by forcing thousands of small companies and shops out of business.

According to the article: "Within the next two months, the Food and Drug Administration is expected to complete rules that would require federal approval for nearly all flavored liquid nicotine juices and e-cig devices sold in vape shops ... The approval process could cost anywhere from $2 million to $10 million to collect data and put forward an application for each item, according to the regulatory consulting company SciLucent LLC. ... After the FDA finalizes its rule, the association [Smoke-Free Alternatives Trade Association] estimates that 99% of the industry will go out of business."

The Rest of the Story

While I think the estimated cost of application development may be exaggerated, even if the cost is closer to $400,000, that is enough to put most small e-cigarette vendors out of business. If promulgated as initially proposed last year, the regulations would require every e-cigarette product on the market (including devices and liquids) to file a new product application. An application would be required for every flavor. Thus, a vape shop might have to file hundreds of applications if it carries hundreds of flavors. Even if the cost is not prohibitive, the resource requirement will be.

These applications are not just a matter of filling out a bunch of forms and providing information. Instead, the company must demonstrate that the product in question will benefit the public's health, while taking into account not only benefits to the user, but also the possibility that nonsmokers (including youth) will start using the product. The applications need to demonstrate that the benefits of the product outweigh the risks.

Clearly, to meet the statutory requirements for new product approval, the applications will need to provide data showing that the product is effective in helping smokers quit or greatly cut down on their tobacco consumption, that the product is much safer than tobacco cigarettes, and that any costs associated with the uptake of vaping the product among youth and nonsmoking adults will not outweigh the benefits.

This is not straightforward research. It would require some rigorous studies, including clinical trials, for example, just to answer the question of how effective the product is in helping smokers quit. It seems that some sort of survey, perhaps even a longitudinal study, would be required to estimate the potential costs related to uptake of the product among youth. And it is unlikely that the FDA will accept simple chemical analysis studies to demonstrate the relative safety of e-cigarettes over real cigarettes, because the agency has stated that based on such studies that have already been conducted, it is not convinced that smoking is any more hazardous than vaping.

Moreover, separate safety studies would be required for every flavor, since the flavorings could potentially have health effects.

As I have argued before, this is not an appropriate way to regulate e-cigarettes, and I hope that the FDA regulations have not gone in this direction. Instead of creating this huge bureaucracy that will decimate the industry while doing nothing to protect the public's health, the FDA should instead simply promulgate a set of safety standards for e-cigarettes that all products must meet. Then, the companies would have to simply submit information to verify that they are in compliance with these standards. It would be a much simpler, less expensive, and reasonable process that would actually serve to protect the public's health by minimizing the costs of the product while maximizing its benefits.

There is at least some hope for a resolution of this problem even if the FDA promulgates a rule that relies on the new product application approach. Congress is considering legislation that would automatically remove any requirement for a new product application for all products already on the market at the time of the rule's effective date.

Unfortunately, this is not enough because new products introduced after the effective date of the regulations would have to submit new product applications. This would completely stifle the market, discouraging innovation that would otherwise result in safer and more effective products. It would significantly impede progress in protecting and promoting the public's health.

Congress may need to force the FDA to scrap the pre-approval requirements entirely, requiring the agency to simply promulgate a set of uniform safety standards.

Hopefully, there will not be a need for this legislation. However, based on the approach that the FDA has initially proposed, I am not hopeful that the agency is going to take the path that I recommend. It seems that the FDA is headed towards treating e-cigarettes similarly to real cigarettes. Instead, I think that the agency needs to carve out a separate and distinct regulatory framework for electronic cigarettes.

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