WASHINGTON — Makers of so-called electronic cigarettes have taken to Washington to protest the Food and Drug Administration’s proposed regulation for the emerging technology.
The FDA does not regulate e-cigarettes the way it does traditional tobacco cigarettes, but a new rule would redefine what a “tobacco product” is — meaning more items, including e-cigarettes, would be subject to federal oversight.
According to the FDA, electronic cigarettes are battery-operated devices the turn nicotine or other chemicals into a vapor that is inhaled by the user.
Products already on the retail market, such as Lorillard, Inc.’s top-selling product blu, may have to go through the FDA approval process before they are able to continue selling on the market.
“We see e-cigarettes as a new product segment for the industry and if there are regulations, they should be reasonable and workable and acknowledge that e-cigarettes are a very different kind of product than traditional tobacco products like cigarettes,” said Tom Briant, executive director and legal counsel at the National Association of Tobacco Outlets, Inc.
Organizations such as the tobacco association and the Smoke-Free Alternatives Trade Association, which lobbies for e-cigarette manufacturers, said regulation of electronic cigarettes should be in a different category than that of tobacco cigarettes, since they are different products.
“What we’re advocating for is a separate framework for regulating this product,” said Cynthia Cabrera, the smoke-free group’s executive director. “When the Family Smoking Prevention and Control Act was passed in 2009, there was no evidence that Congress intended to include e-cigarettes. Adding them to this [regulation under that law] is just not appropriate.”
Analysts project that sales of electronic cigarettes could reach between $1.7 billion and $1.8 billion by the end of 2013 as sales of traditional tobacco cigarettes stay flat. “We continue to expect consumption of e-cigs could surpass consumption of traditional cigs within the next decade,” Wells Fargo analyst Bonnie Herzog said in a report.
The Big Three tobacco companies – Altria Group Inc., Reynolds American Inc. and Lorillard—are still new to the market, with April 2012 marking Lorillard as the first big tobacco firm to enter the e-cigarette business. Small businesses, Cabrera said, command about 60 percent of the market and drive technological advancements for the industry. Stiffer regulation, she said, could quell the innovation of the smaller companies that dominate the industry.
“Stifling innovation would have a negative impact on consumers as well as companies entering or already in the market,” Cabrera said. “Those are the true entrepreneurs and embody the spirit of innovation.”
Large companies have the finances to withstand the extra costs that tighter oversight might bring, Cabrera said. In a letter to the FDA last month, Marlboro-maker Altria offered support for regulation. But the company also asked for flexibility and defended the need for innovation in the industry.
“The FDA should reject the call by some to [both] stifle innovation and adopt a ‘one-size-fits-all’ approach to regulating tobacco products,” said James Dillard, Altria senior vice president of regulatory affairs, in the letter. “Such an approach does not reflect the harm-reduction potential of lower risk products and could have the real-world consequence of preventing new forms of tobacco products from playing an important role in harm reduction.”
Uncertainty over the regulation makes small businesses such as Michigan-based Purebacco wary about expanding its operations. Purebacco CEO Dan Walsh “has been apprehensive to move forward with business. This guy is responsible for 18 percent of employment of his county in Michigan,” Cabrera said.
Earlier this week, Cabrera and officials from 24 smoke-free company members lobbied on Capitol Hill to voice their concerns about the impending regulation.
Of course, some health advocates are fighting in favor of the rules.
“The American Lung Association is very concerned about what’s in e-cigarettes and what their impact to public health may be,” said Erika Sward, assistant vice president for National Advocacy at the American Lung Association. “We don’t know what’s in them, we don’t know what the harms of them may be, and that’s why it’s so important that FDA begins its oversight of these products.”
The FDA passed sent its proposal to the Office of Information and Regulatory Affairs for review on Oct. 1, right after the partial government shutdown ended. The review could last upwards of 90 days before it is issued and opened for a public comment period.