WASHINGTON Feb 20 Lobbyists for electronic
cigarette companies have been beating a path to the White House,
hoping to prevent the administration from imposing strict, and
possibly costly, rules on the burgeoning $2 billion industry.
In November and December, more than 35 organizations
including e-cigarette companies, cigar and tobacco makers, trade
associations, physician groups, lawyers, lobbyists and public
health advocates trooped through the doors of the White House's
Office of Management and Budget.
OMB has been reviewing a rule proposed by the Food and Drug
Administration that would bring e-cigarettes under its
jurisdiction and could potentially require companies to register
and pay fees, list the ingredients in their products, obtain
prior approval for new products and restrict online sales and
marketing to children.
The OMB, which reviews proposed regulations to assess, among
other things, their economic impact, has not given a date for
when it will be finished with its review, but officials have not
had a meeting with outsiders since Jan. 17 according to public
records, suggesting they have heard all they need, or are
willing, to hear.
At stake is the future of an industry that some analysts
believe will eventually overtake the $80 billion-a-year tobacco
business. Advocates of e-cigarettes, which are battery-powered
cartridges filled with nicotine liquid that when heated creates
an inhalable vapor, say they are less dangerous than tobacco
products and can help smokers quit. Public health experts fear
they may act as a gateway to smoking for the uninitiated.
Mitch Zeller, head of the FDA's tobacco division, said in an
interview that there is a "continuum of risk" among nicotine
products currently on the market, with cigarettes on one end and
medicinal nicotine on the other. He declined to say where on the
spectrum he expects e-cigarettes to fall or what is contained in
the FDA's proposals. In general, he said, people smoke for the
nicotine and die from the tar.
"I'm not saying nicotine is benign, but when compared to the
risk associated with regular tobacco, it pales," he said.
Some, therefore, expect the FDA to exercise flexibility in
"It's not just a matter of a blanket dropping in of the
current regulations over additional products," said Diane
Canova, vice president of government affairs at the anti-tobacco
American Legacy Foundation, "Some of the current restrictions
may not fit."
TOBACCO CONTROL ACT
A law passed in 2009 gave the FDA the authority to regulate
cigarettes, smokeless tobacco and roll-your-own tobacco. It also
gave the agency the power to deem other tobacco products to be
within its jurisdiction but it must first issue a rule to that
effect. E-cigarette companies believe they should be exempt from
the full spectrum of regulations, saying they would stifle
innovation, damage small business and hurt consumers trying to
Tobacco company Lorillard Inc, owner of the blu
e-cigarette brand, is the dominant player in the field, followed
by privately-held NJOY and LOGIC Technology. The three account
for an estimated 80 percent of the market.
In a Nov. 7 presentation to OMB, representatives for NJOY
said that while the company supports product registration and
minimum age requirements, it opposes restrictions on TV
advertising and sponsorship and any regulation that would
subject e-cigarettes to the pre-market approval requirements
that traditional tobacco products face.
"The concern is that a product that is constantly changing
could be tied up in a very time-consuming process before the
products could be legally marketed," said Bryan Haynes, a lawyer
for the Electronic Cigarette Industry Group (ECIG).
The FDA is already working its way through a backlog of
nearly 4,000 applications for new or modified tobacco products.
E-cigarettes are sold online and at a variety of retail
locations including some gas stations, convenience stores,
grocery stores and drug stores.
"We think the proposals will include a potential ban on
internet sales because you can't age verify," said Vivien Azer,
an analyst at Citigroup. The FDA is expected to place age
restrictions on who can buy e-cigarettes.
Restricting internet sales would be "devastating to the
companies that have built successful businesses online," said
Cynthia Cabrera, executive director of the Smoke Free
Alternatives Trade Association (SFATA). "About quarter of the
revenue from e-cigarettes come from online sales," she added.
Another contested area is the use of flavorings. Banned in
traditional cigarettes they are used widely in e-cigarettes to
produce tastes ranging from pear and passion fruit to
butterscotch and banana cream.
Public health advocates say flavorings attract children and
threaten to create a new generation of nicotine addicts even the
government is trying to create a generation that is tobacco
Adult smoking rates have fallen to 18 percent from 43
percent in 1965. Even so, more than 3,200 young people a day
under the age of 18 try their first cigarette, a recent
government report found. The use of e-cigarettes by young people
doubled between 2011 to 2012, according to the Centers for
Disease Control and Prevention.
Once the proposed rule is announced there will be a period
for public comment, after which the FDA will develop final
regulation. The process could take a year or more. In the
meantime, critics say e-cigarette companies are using the same
promotional techniques that were used for decades by cigarette
manufacturers to attract teenagers to their products.
On Feb. 12, two Democratic U.S. representatives, Henry
Waxman and Peter Welch, and one senator, Tom Harkin, wrote to
the attorneys general in their states to bring electronic
cigarettes under the terms of a settlement reached in 1998 with
top tobacco companies that prohibited any advertising targeting
"Youth use of these products is particularly troubling since
the full extent of e-cigarette harms is not yet understood,"
Some e-cigarette companies are already positioning
themselves for a more restrictive environment. LOGIC Technology,
for one, expects advertising, flavors and online sales to be
banned or severely restricted.
"I think what is important is retail locations," Miguel
Martin, LOGIC's president, said in an interview. "In retail
locations, there is age verification. I believe that is where
the industry is going and where regulation is going. If you are
relying on the internet and TV, I think those vehicles are going
to be taken away from you."
LOGIC's products taste either of tobacco or menthol only,
the flavors allowed with traditional cigarettes.
But Martin, like other e-cigarette companies, wants his
industry to be exempt from the requirement that new or modified
products be reviewed by the FDA before hitting the market.
In the meantime, OMB officials have mostly kept their
thoughts to themselves.
"I've been in some of these meetings," said Eric Criss,
president of ECIG. "It's mostly a one-way conversation."