Experts Weigh In On E-Cig Deeming Regulations

ecigarettes“Our quick take on the proposed deeming regulations is that they are broadly as expected and not as restrictive as some had feared,” noted Bonnie Herzog, managing director, Beverage, Tobacco & Convenience Store Research, Wells Fargo Securities LLC.

After the FDA proposed deeming regulations for e-cigarettes, Wells Fargo Securities LLC noted that at first glance, the regulations are “not as bad as feared,” and called the regulations “positive for the industry.”

Among highlights of the regulations:

•Companies would have to apply for FDA product approval, but have two years after rules are finalized to do so, and can keep their products on the market in the interim, as well as continue to bring new products to market.

•No free samples of e-cig products

• No sales to minors

• No health claims in any advertising

• Manufacturers must register with the FDA and list the ingredients in their products, although it is not clear yet if these ingredients will be required to be listed on products

• A warning label stating that nicotine is addictive is required and would have to be added no later than two years after the rule is finalized.

But Wells Fargo also pointed to what the rule surprisingly did NOT include. “Importantly the proposal did NOT include: (1) restrictions of flavors (although it has been suggested this could be re-evaluated at a later time); (2) a ban on Internet sales to adults; (3) a ban on TV advertising.”

“As a reminder, the FDA cannot enact a federal tax on e-vapor products or ban Internet sales as these would fall under the realm of Congress,” noted Bonnie Herzog, managing director, Beverage, Tobacco & Convenience Store Research, Wells Fargo Securities LLC. “Further, the FDA cannot legally ban e-cigarette advertising as that is considered ‘commercial speech,’ which is protected by the First Amendment.”

Following the publication of the proposed regulations, there is now a 75-day comment period. Then FDA will review the comments, eventually issuing a final rule, which must be reviewed by the Office of Management and Budget before being enacted, a process which Wells Fargo predicts could take as long as two years.

“Our quick take on the proposed deeming regulations is that they are broadly as expected and not as restrictive as some had feared. In general, they increase the barriers to entry for existing manufacturers, which is positive. However, our main concern remains around e-cig/e-vapor innovation, which, if stifled, could dramatically slow down industry growth and conversion from combustible cigs, which would ultimately result in net negative public health impact. Clearly, this would be in direct opposition of the agency’s goal,” Herzog said.

Thomas Briant, executive director and legal counsel for the National Association of Tobacco Outlets (NATO), noted that NATO will be submitting comments to the FDA on the proposed regulations during the 75-day comment window, and will assist its members in submitting comments to the FDA as well.  

Briant noted that after FDA reviews comments, they will decide whether to draft additional regulations or change any of the proposed regulations.  Then, FDA must submits the revised regulations to the White House Office of Management and Budget, which will conduct a final review of the regulations from an economic impact perspective.  Lastly, FDA would actually issue the final regulations and set a date for when the regulations would actually take effect.  “In other words, the proposed regulations are not in effect and will not become effective for some time because of these steps the agency must follow in finalizing the deeming regulations,” Briant said.

 

 

 

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