Tuesday, September 20, 2016

FDA-Induced Crumbling of E-Cigarette Market Begins: NJOY Files for Bankruptcy

It didn't take long after the FDA enacted its deeming regulations for the first of many e-cigarette companies to lose their ability to stay in the market. Just one and a half months after the FDA's deeming regulations went into effect, NJOY - one of the largest independent e-cigarette manufacturers in the U.S. - has filed for bankruptcy.

While a major reason for NJOY's inability to stay afloat was the failure of its King cig-a-like product, the company also cites the "substantial expenses of preparing for the Food and Drug Administration (FDA) deeming regulations."

As I have argued for some time, the capital costs involved in preparing pre-market applications under the deeming regulations are prohibitive for all but the tobacco companies and perhaps the largest independent manufacturers. With the loss of NJOY, it is not even clear whether any of the independent companies will survive, and even if they do, whether there will be any significant diversity in the e-cigarette market that remains.

The result will be the devastation of the overall e-cigarette market and the squandering of an amazing opportunity to substantially reduce smoking-related disease and death.

Today's story illustrates how the change in the e-cigarette market away from cig-a-likes and toward more advanced vaping products - including open systems - has been the key to the growth of the market. By essentially making it impossible for the smaller companies that manufacture more advanced products like open systems to survive and restricting the market to the more traditional cig-a-likes, the FDA has ensured that market growth will be stunted, essentially blocking the shift from combustible cigarettes to safer alternatives.

It is a sad day for public health because the FDA has contributed toward putting an anti-smoking company out of business. NJOY's value proposition was to make smoking obsolete," which is exactly what the FDA should be trying to do.

The Rest of the Story

The rest of the story is that the FDA is perversely pursuing the exact opposite of what it should be doing. The FDA is committed to the preservation of cigarette smoking and to the protection of cigarettes from competition from much safer products. The agency's obsession with the pre-market approval process - which was never intended for e-cigarettes - is destroying the long-term potential to replace combustible tobacco products with much safer tobacco-free and smoke-free products, at the expense of the protection of the public's health.

The result of the FDA's actions will be the re-normalization of smoking as the predominant vehicle for nicotine use in the United States. It is becoming clear that this really could be about "a billion lives."

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