Will FDA Regulation Preserve Or Destroy The E-Cigarette Industry?

The first time the Food and Drug Administration (FDA) moved to regulate electronic cigarettes, it tried to ban them. Last week it took a different approach that may ultimately have a similar effect. Much will depend on whether the FDA irrationally decides to treat e-cigarettes as a menace to public health or recognizes them as a lifesaving alternative to conventional cigarettes.

On the face of it, the proposed rule that the FDA published last week is much more accommodating than its 2009 attempt to ban e-cigarettes as unapproved “drug-device combination products,” which was blocked by the courts. This time the FDA is classifying e-cigarettes as “tobacco products.” That in itself is rather puzzling, since e-cigarettes do not contain any tobacco. They do, however, contain nicotine derived from tobacco, which is the court-endorsed legal pretext for FDA regulation.
By the same logic, nicotine gum, lozenges, patches, and inhalers are also tobacco products, except that the FDA already regulates them as pharmaceuticals. As tobacco products, e-cigarettes should have a much better chance of remaining on the market. After all, the FDA is not trying to ban conventional cigarettes, which are far more dangerous because they deliver nicotine in a cloud of tobacco combustion products rather than a propylene glycol aerosol.

But there’s a catch. All the familiar brands of conventional cigarettes were grandfathered by the Family Smoking Prevention and Tobacco Control Act, the 2009 law that gave the FDA authority over tobacco products. According to the FDA, so were e-cigarettes, as long as they were on the market as of February 15, 2007—the cutoff date set by the statute. Since the e-cigarette business was just getting started in the United States at that point, this grandfather clause does not cover much.

E-cigarette companies that did not exist in early 2007 can get permission to continue selling their products by demonstrating that they are “substantially equivalent” to the early models, which means they have “the same characteristics” or raise the same public health issues. Will they be able to meet this test? I asked three people who are familiar with the e-cigarette industry that question, and I got three different answers.

The most optimistic answer came from Chip Paul, founder of the Oklahoma-based e-cigarette franchise Palm Beach Vapors, which sells vaping equipment and store-blended fluids to go with them. “I think everybody will be able to make that argument, that they are just furthering the technology that existed in 2007,” Paul says. One major change has been the shift from disposable cartridges of e-cigarette fluid to refillable tanks, but the underlying technology remains the same. “We don’t think what’s on the market today is substantially different from what was on the market in 2007,” Paul says. “There have been improvements in the technology, and there have been some design changes, but the way the liquid is delivered to the user is fundamentally the same, and the liquid is fundamentally the same. I think everybody who is in business today will be able to [satisfy that test] and be OK.”

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