Registration is open for Keller and Heckman’s 3rd Annual E-Vapor and Tobacco Law Symposium being held January 29-30, 2019 in Miami, Florida. Click here to register.

This comprehensive 2-day course will address regulatory and business issues relevant to e-vapor, e-liquid and tobacco product manufacturers, distributors and retailers including, among other things:

  • FDA enforcement and inspections – how to prepare and protect your business;
  • Product compliance – including advertising and labeling compliance, and preparing for Premarket Tobacco Product Applications (PMTAs);
  • Testing for Harmful and Potentially Harmful Constituents (HPHCs) – how to comply before the November 2019 deadline;
  • Going global – Presentations by experts on EU TPD, Canada, Asia and more;
  • State law update – Overview of new state and local laws, permitting/licensing and tax requirements, local flavor bans;
  • Environmental, hazardous waste and OSHA compliance;
  • Update on Deeming Rule appeal – Modified Risk Claims, PMTA and free samples;
  • Potential product standards including flavors and online sales;
  • Getting into CBD – how to stay legal; and
  • Business and intellectual property issues to protect your growing business.

A detailed agenda will be provided soon.  Register now for the early bird rate!

Seminar Details
Dates:
January 29 – January 30, 2019

Location:
Miami Marriott Biscayne Bay

Price:
$899 early rate
$1,099 regular rate

More information on speakers and a final agenda will be available soon. We look forward to seeing you at the program!

Take a look at highlights from this year’s conference:

 

For additional information, please contact:

Sara Woldai
Manager, Meetings and Events
Keller and Heckman LLP
woldai@khlaw.com

Photo of Azim ChowdhuryPhoto of Eric GottingPhoto of Adam Susser

On September 11, 2018, Nicopure Labs, LLC and the Right to be Smoke-Free Coalition (the “Appellants”) appeared for oral argument before a three-judge panel in the United States Court of Appeals for the District of Columbia Circuit to appeal a decision issued last year by the U.S. District Court for the District of Columbia, which ruled in favor of the U.S. Food and Drug Administration (“FDA”) in the first lawsuit challenging various provisions of the Family Smoking Prevention and Tobacco Control Act (“TCA” or “Act”) and FDA’s Deeming Rule as they are being applied to the vapor industry.[1]

During oral argument, the Appellants argued that the Modified Risk Tobacco Product (“MRTP”) preclearance requirement imposed by Section 911 of the TCA violates the First Amendment as applied to vapor products. In addition, the Appellants argued that application of the Act’s free sample ban to vapor products violates the First Amendment, and that FDA failed to tailor the Premarket Tobacco Application (“PMTA”) requirements to ensure the continued availability of vapor products.  Below, we provide a brief overview of the issues discussed at the oral argument. The recording of the hearing is available here.[2]  For background on the appeal, see our previous blog posts, including copies of the legal briefs, available here and here.

Modified Risk Claims

Appellants argued that the dichotomy in the current law – that manufacturers are legally permitted to sell vapor products for recreational purposes, but not allowed to make objectively truthful statements about those products (e.g., that they do not contain or produce tar, ash, or smoke, among other harmful chemicals found in cigarette smoke), or simply repeat FDA’s and various public health organizations’ statements that vapor products pose less risk than cigarettes – runs afoul of the First Amendment, which protects commercial speech. Indeed, Appellants stated that the requirement to ask permission is a First Amendment injury itself. Further, the Appellants contended that under current law, even if every federal judge in the country found a vapor company’s statements about its products to be true, if FDA determines that such a statement does not benefit public health, it would still be prohibited.

Appellants also discussed application of the Supreme Court’s intermediate scrutiny test to the MRTP provision. Under that approach, restrictions on commercial speech are judged under the four-pronged Central Hudson test, in which Courts ask whether: (1) the speech concerns a lawful activity and is not misleading; (2) the asserted government interest is “substantial”; (3) the restriction directly and materially advances the governmental interest; and (4) the restriction is no more extensive than is necessary to serve that interest.[3] As to the third prong, Appellants maintained that the MRTP provision does not directly and materially advance the government’s interest because others can make similar public statements without any preclearance approval.

The Appellants also noted that the clear trajectory of modern U.S. Supreme Court First Amendment jurisprudence requires that, under the fourth prong of Central Hudson, if the government can achieve its interest in a way that is less restrictive than a prior restraint, it must do so. For example, FDA could rely on non-speech alternatives standing alone or in combination with each other to prevent potentially misleading modified risk claims, such as enforcing the TCA’s misbranding and adulteration provisions, requiring manufacturers to maintain records substantiating such claims, requiring the use of disclaimers, and conducting post-market surveillance.

Free Sample Ban & PMTA Tailoring

Appellants also argued that under the Supreme Court’s decision in Tex. v. Johnson free samples are protected under the First Amendment. [4] Under that case, whether conduct is “sufficiently imbued with elements of communication” to warrant First Amendment protection depends on whether there is “an intent to convey a particularized message” and “the likelihood [is] great that the message [will] be understood by those who view it.”[5] Here, vapor companies intend to send a message to consumers through their distribution of free samples; thus sampling is a form of protected speech. Appellants argued that it is not enough for vapor companies to simply state that their e-liquid tastes better than a conventional cigarette, for example, but instead the only way to convey this information – the personalized experience of vaping a particular flavor – is through providing a sample. This is expressive conduct. Appellants also maintained that the ban on free samples violates the third and fourth prongs of Central Hudson. For instance, neither Congress nor FDA produced any evidence that minors are, in fact, obtaining access to vapor products through free samples, and there are ample non-speech restrictions that could limit access by youth, such as enhanced enforcement initiatives and minimum age verification at retailers.

In addition, Appellants argued that the PMTA requirements were insufficiently tailored to ensure the continued availability of vapor products. Specifically, given that FDA determined that the vast majority of manufacturers will exit the market before filing PMTAs due to the high cost of long-term, product-specific studies (for more on this see here), Appellants maintained that FDA should have considered accepting for scientific review PMTAs for vapor products that do not contain such studies but otherwise comply with the PMTA informational requirements. FDA could still do a complete review of those PMTAs, which would include a scientific literature review of the population effects of vapor products as such evidence exists in 2022, when PMTAs are expected to be filed under FDA’s current compliance policy for products on the market as of August 8, 2016.

Post-Argument Activity

One day after the oral argument, FDA submitted a letter to the D.C. Circuit Clerk of the Court, informing the court that, on September 12, 2018, FDA announced significant new actions, including enforcement initiatives, to address an alleged “epidemic of e-cigarette use among teenagers.”[6] We previously blogged about FDA’s enforcement “blitz” here.  The letter notes that “FDA is reconsidering the extended compliance dates for the submission of new product applications when it is apparent that there is widespread youth use of the product, and is also considering a policy change that would lead to the immediate removal of flavored e-cigarette products from the market.”

Indeed, in letters to several large manufacturers of cartridge-based e-cigarettes, FDA threatened to revisit the August 8, 2022 PMTA compliance date (for those companies’ and potentially similar products), if the targeted companies failed to submit within 60 days comprehensive plans to address sales of their products to minors.

On September 17, 2018, Appellants submitted a response to the FDA’s letter, arguing that it “provides no new authorities [as required by Federal Rule 28(j)] and instead describes enforcement actions that have nothing to do with appellants and target a portion of the e-cigarette industry.”[7] Appellants point out that FDA’s enforcement actions, which ostensibly target 97 percent of the e-cigarette market – actually only address the “cartridge-based” e-cigarette market, which is only a portion of the overall vapor products market. Indeed, FDA Commissioner Dr. Scott Gottlieb pointed out that sales of open-tank vaping products, which Appellants primarily market, do not appear to be driving the government’s claimed increase in underage use. Regardless, Appellants maintained that FDA’s recent enforcement actions prove their point: if FDA is concerned about purchases by or marketing of vapor products to youth, it can and should advance that interest through actions targeted at that problem (e.g., warning letters to retailers), not through a blanket prohibition on all truthful, non-misleading speech by manufacturers to adults.[8]

Next Steps

While it is impossible to state with certainty when the D.C. Circuit will rule on the case, we believe it is reasonable to expect a decision sometime in early 2019. We will keep readers of this blog updated on the outcome of the case.

______________________________________

[1] At the hearing, Miguel Estrada of Gibson, Dunn & Crutcher represented Nicopure Labs, and Eric Gotting of Keller and Heckman represented both Nicopure Labs and the Right to be Smoke-Free Coalition.

[2] Oral argument, Nicopure Labs et al. v. FDA, Case No. 15-5196 (D.C. Cir. Sept. 12, 2018), recording available at https://tinyurl.com/y8xzmsr4.

[3] Lorillard Tobacco Co. v. Reilly, 533 U.S. 525, 554-55 (2001) (summarizing test outlined in Cent. Hudson Gas & Elec. Corp. v. Pub. Serv. Comm’n of N.Y., 447 U.S. 557 (1980)).

[4] See Tex. v. Johnson, 491 U.S. 397 (1989).

[5] Id. at 404 (citations and internal quotations omitted).

[6] See Letter from Tyce R. Walters to Mr. Mark Langer, Clerk of the Court re: Nicopure Labs, LLC v. FDA, No. 17-5196 (oral argument heard Sept. 11, 2018);  See also U.S. Food & Drug Admin., FDA News Release, FDA Takes New Steps to Address Epidemic of Youth E-Cigarette Use, Including a Historic Action Against More Than 1,300 Retailers and 5 Major Manufacturers for Their Roles Perpetuating Youth Access (Sept. 12, 2018), https://tinyurl.com/y9gh3dyg; U.S. Food & Drug Admin., FDA Statement, Statement From FDA Commissioner Scott Gottlieb, M.D., on New Steps to Address Epidemic of Youth E-Cigarette Use (Sept. 12, 2018), https://www.fda.gov/NewsEvents/Newsroom/PressAnnouncements/ucm620185.htm.

[7] See September 17, 2018 letter from Miguel A. Estrada and Eric P. Gotting to Mr. Mark Langer, Clerk of the Court re: Nicopure Labs, LLC v. FDA, No. 17-5196 (oral argument heard Sept. 11, 2018).

[8] Id.; See also Thompson v. W. States Med. Ctr., 535 U.S. 357, 371 (2002) (“[I]f the Government could achieve its interests in a manner that does not restrict speech, or that restricts less speech, the Government must do so.”) (emphasis added).

Photo of Azim ChowdhuryPhoto of Benjamin Wolf

On Tuesday October 2, at 2PM EST, Azim Chowdhury and Ben Wolf will present a webinar, “Ingredients Listing: Walk Through” sponsored by the Smoke-Free Alternatives Trade Association (SFATA). Ingredient listing reports for small-scale tobacco product manufacturers are due by November 8, 2018. This program is recommended for manufacturers of deemed tobacco products, including e-liquids, their management, and staff who are responsible for regulatory compliance. Participants will learn how to prepare and submit ingredient listing reports to FDA. The floor will also open for questions regarding FDA compliance. For more information and to register, click here.

 

Photo of Azim ChowdhuryPhoto of Adam Susser

On September 12, 2018, in a self-described “blitz”, FDA announced a deluge of enforcement actions, including more than 1,300 warning letters and fines to retailers aimed at addressing youth use of e-cigarettes, which FDA asserts has reached “epidemic” proportions, based on new, not-yet-released survey data.[1]  FDA also requested manufacturers of five “national brands,” whose cartridge (pod) based e-cigarettes the Agency claimed make up 97% of the “current e-cigarette market” (but apparently excluding the open-system vapor products market), and allegedly represent the majority of e-cigarettes sold to minors, to provide detailed plans to curtail youth use of their products.  FDA also threatened drastic action that could impact the entire vapor industry, and millions of former smokers that rely on a variety of vapor products, if adequate responses are not received.

Addressing Increase in Underage E-Cigarette Use; Stopping Access at the Retail Level

In its press release, FDA clarified that these enforcement actions were part of a “large-scale, undercover nationwide” crack down on the sale of e-cigarettes to minors at both brick-and-mortar and online retailers.  FDA Commissioner Dr. Scott Gottlieb further stated that FDA had failed “to predict what [he] now believe[s] is an epidemic of e-cigarette use among teenagers.”  While he reiterated that FDA is “fully committed to the concept that products that deliver nicotine exist on a continuum of risk, with combustible products representing the highest risk, and [e-cigarettes] perhaps presenting an alternative for adult smokers who still seek access to satisfying levels of nicotine, but without all of the harmful effects that come from combustion,” he was unequivocal with respect to underage use, emphasizing FDA’s Youth Tobacco Prevention Plan launched earlier this year, and stating that he “won’t tolerate a whole generation of young people becoming addicted to nicotine as a tradeoff for enabling adults to have unfettered access to these same products.”  On September 18, 2018, FDA issued another press release announcing that it would be advancing “The Real Cost” Youth E-Cigarette Prevention Campaign to educate teens about the dangers of using e-cigarettes.

Notably, all of the cartridge-based e-cigarettes now being targeted by FDA (and the Big Tobacco brands in particular) are sold primarily in convenience stores, gas stations and similar outlets (along with cigarettes and other tobacco products), and appear to be the main source of youth access, as well as the focus of FDA’s retailer enforcement efforts.  Indeed, the vast majority of the 1,300 warning letters and civil monetary penalties were sent to these types of retailers, rather than to vape shops dedicated to open-system vapor products.  While dozens of vape shops and online vape retailers have also been cited by FDA for selling products to minors, those instances appear to represent just a fraction of the millions of transactions that occur annually in the 10,000+ dedicated vape shops across the country.[2]

FDA Focuses on JUUL and JUUL-Like E-Cigarettes; Distinguishes Youth Concerns Between Closed and Open System Vapor Products

Although FDA’s recent announcement refers simply to the “e-cigarette market”, the vapor industry is actually very diverse and complex. Closed-system and cartridge-based e-cigarettes (like JUUL), the adolescent use of which FDA has made clear is its primary public health concern, is only a portion of the overall U.S. vapor products market, along with open-system vapor products (e.g., tanks, mods, e-liquids, etc.).

Indeed, FDA has been focusing on youth-use of cartridge-based e-cigarettes, and JUUL in particular, for several months, as stories about rampant teenage use have been heavily reported in the media, and the focus of Congressional inquiries.

Back on April 24, 2018, FDA announced its first set of 40 warning letters to retailers for underage sales of JUUL e-cigarettes and that it was examining the youth appeal of these products in an effort to end their sale to minors.  FDA used its authority under Section 904(b) of the Family Smoking Prevention and Tobacco Control Act (TCA) to request JUUL Labs submit information regarding its marketing and research studies, and any other information it had on how certain product features might appeal to different age groups.  Subsequently, in May 2018 FDA sent a second set of requests to several manufacturers seeking information on their JUUL-like products, including information on product marketing and design (as it may relate to the appeal or addictive potential for youth and youth-related adverse experiences), and consumer complaints, among other things.[3]

FDA has now announced that it is targeting five national brands that dominate the closed-system e-cigarette market –  JUUL and four other cartridge-based e-cigarettes, all of which are marketed by large tobacco companies: Vuse (Reynolds American), MarkTen XL (Altria), blu e-cigs (Fontem Ventures), and Logic (Japan Tobacco International, USA).  Importantly, Gottlieb indicated that these specific e-cigarettes make up “the majority of products sold to minors,” while noting that “the biggest youth use seems to be among cartridge-based e-cigarettes, and not open-tank vaping products.” (Emphasis added.)

The Agency has requested these five manufacturers submit within 60 days detailed plans describing how they will address and mitigate widespread youth use of their products.  For example, the FDA stated that such a plan may include:

  • Discontinuing sales to retail establishments that have been subject to an FDA civil monetary penalty for sale of tobacco products to minors within the prior 12 months;
  • Developing or strengthening any internal program in place to check on retailers, and reporting to FDA the name and address of retailers that have sold products to minors;
  • Eliminating online sales, whether through Internet storefronts controlled by the company or other retailers, or providing evidence to demonstrate that the company’s online sales practices do not contribute to youth use of e-cigarette products;
  • Revising current marketing practices to help prevent use by minors; and
  • Removing flavored products from the market until those products can be reviewed by FDA as part of a PMTA.

The requests that the companies eliminate all online sales and remove flavored products from the market are extremely onerous and effectively require the companies to cease sales of legal products.  FDA further noted that these actions are only examples of things the manufacturers might do to demonstrate FDA should continue to defer enforcement of the premarket review requirement with respect to their products, as discussed below, and encouraged the companies to “provide additional youth use prevention tools” for the Agency’s consideration.

Warning Letters to E-Liquid Manufacturers

Beyond illegal underage sales at the retail level, open-system vapor products have not been free from FDA scrutiny.  In May 2018, FDA and the Federal Trade Commission (FTC) issued 17 warning letters to e-liquid manufacturers for marketing products the agencies claimed were both misbranded under Sections 903(a)(1) and 903(a)(7) of the FDCA and false and misleading under Section 5 of the FTC Act, for being packaged and/or labeled in a manner that imitated “kid-friendly” foods such as apple juice, candy, whipped cream and cereal.  On August 23, 2018, FDA announced that all 17 companies that were warned have cooperated and have ceased all sales of the offending products.  FDA has now issued 12 additional warning letters to retailers for continuing to sell those e-liquids, making clear that any existing inventory of the misbranded products must be removed from commerce.

Drastic Action by FDA Could Destroy the Vapor Industry

a. Premarket Compliance Policy

Commissioner Gottlieb has made clear that the recent increase in youth use may force FDA to revisit its premarket review compliance policy, pursuant to which manufacturers of deemed noncombustible tobacco products (such as vapor products) that were on the market as of August 8, 2016, when the Deeming Rule went into effect, have until August 8, 2022 to submit PMTAs, and can remain on the market through that date.[4]  Moreover, under this compliance policy, if an application is timely submitted and accepted for scientific review, the subject product is permitted to remain on the market pending FDA review.  This compliance policy was first announced in July 2017 as part of the Agency’s comprehensive plan for tobacco and nicotine regulation, and extended the original compliance policy in the Deeming Rule, which only gave e-cigarette manufacturers until August 8, 2018 to submit PMTAs for their existing products.[5]

As noted, FDA’s letter to JUUL and the other large manufacturers indicates that it is seriously reconsidering its compliance policy, at least for cartridge-based e-cigarettes, due to widespread youth use (emphasis added):

To fulfill our public health mandate to address youth addiction to nicotine, FDA is reconsidering its compliance policy for submission of PMTAs for [the JUUL e-cigarette] and other similar products that were illegally sold by retailers during this blitz, including whether earlier enforcement of the premarket review provision might be warranted.

FDA further noted it is “seriously considering a policy change that would lead to the immediate removal of these flavored products from the market.”

Critically, Commissioner Gottlieb stated that if the five companies referenced above do not submit plans to combat youth use of their products, or if those plans are insufficient to address the problem, the companies “face a potential decision by FDA to reconsider extending the compliance dates for submission of premarket applications.”

If FDA does decide to modify the compliance policy for cartridge-based e-cigarettes because of their apparent unique impact on youth compared to other types of vapor products, such action does have precedent.  In its comprehensive plan, for example, FDA required deemed combustible products, such as cigars and hookah, on the market as of August 8, 2016 to submit premarket review applications by August 8, 2021, because of the known-health risks of combustible tobacco.

However, open-system vapor product manufacturers should be aware that Gottlieb did note in his statement that FDA’s “policy reconsiderations apply to the entire category” and that FDA is “also re-examining the enforcement discretion we currently exercise for other e-cig products currently on the market without authorization.”

While it remains unclear what, if anything, FDA might do with respect to its current compliance policy, any move to shorten the PMTA grace period for the vapor industry at-large will have devastating consequences not only for thousands of small businesses that would effectively be banned, but also for the public health.  These impacts were recently summarized in an amicus brief submitted by the Right to be Smoke-Free Coalition in the federal lawsuit filed by the public health groups challenging FDA’s compliance policy.  You can read about that lawsuit and the amicus brief, which makes clear that the vapor industry needs at least until August 2022 to prepare applications given the need for long-term clinical data, on our previous blog post here.

b. Flavored Products

Also of concern for the vapor industry is the potential targeting of flavored products, which the industry has argued are, in fact, appropriate for the protection of the public health (see here). It is important to first recognize that there is no such thing as an unflavored e-cigarette or vapor product. Unlike combustible cigarettes or other tobacco-containing products, there is simply no “natural” tobacco or other flavors inherent to e-liquids.  Rather, all flavors for these products are chemically synthesized and added to the base propylene glycol/vegetable glycerin solution.  Thus, unlike cigarettes, a ban on characterizing flavors would effectively result in a ban of all vapor products.

Moreover, numerous published studies demonstrate, and FDA has acknowledged, that flavored vapor products and e-liquids can help adult smokers reduce their cigarette use and/or switch completely to vapor products.  For example, a recently-released survey of almost 70,000 U.S. vapers found that 87.3% of respondents who quit smoking with e-cigarettes said that flavors were “extremely” or “very” important to their quit attempts.[6]

Remaining Compliant in a Rapidly Changing Regulatory Landscape

The new FDA enforcement actions and broader threats against the industry raise the possibility of dramatically altering the regulatory landscape for e-cigarettes and other vapor products.  FDA’s September 12 letters to the large manufacturers of cartridge-based e-cigarettes threaten to potentially end the premarket review compliance policy for those types of products, but it is not clear if FDA would extend this to all vapor product manufacturers.  Indeed, the stock market appears to have recognized this possibility, as legacy tobacco stocks rallied after FDA’s announcement.  Apparently, the markets have concluded that if adults are not going to be permitted to vape, they could return to traditional combustible tobacco cigarettes – the most harmful nicotine delivery system.  From our vantage point, and to the detriment of public health, it is hard to argue with this conclusion.

Accordingly, in view of FDA’s enforcement blitz and the Agency’s current focus on manufacturer advertising, marketing, and manufacturing practices, we recommend vapor product companies:

  • Start preparing premarket applications (including PMTAs) sooner rather than later (and attend FDA’s public hearing on October 22-23, 2018).
  • Work with retailers (both brick-and-mortar and online) that have age and photo-ID verification procedures that comply with requirements applicable to tobacco retailers, including requirements that:
    • the retailer checks the photo ID of everyone under age 27 who attempts to purchase any tobacco product;
    • the retailer only sells tobacco products to customers age 18 or older (consider whether age-gating may be appropriate for online retailers); and
    • the retailer does not sell tobacco products in vending machines unless in an adult-only facility.
  • Work with legal counsel to ensure that your product labeling and marketing would not cause the product to be misbranded or misleading (i.e., by imitating potentially “kid-appealing” foods).
  • Make sure your advertising and product labeling fully comply with the nicotine addiction warning (and other labeling requirements).
  • Comply with TCA requirements, including registration and listing for U.S. establishments, ingredient listing, and health document disclosures.
  • Do not introduce new products after August 8, 2016 without receiving FDA premarket authorization.
  • Comply with all sales and marketing restrictions, including use of any modified risk claims and the ban on free samples.
  • Prepare to be inspected by FDA and other authorities (sign up for our audit and inspection program here).
  • Consider developing an internal audit program to evaluate the procedures used by retail partners to avoid youth-access to your products.

If you have any questions about FDA’s announcements contact Azim Chowdhury (202.434.4230, chowdhury@khlaw.com). For more information on our Tobacco and E-vapor Practice in general, visit www.khlaw.com/evapor. Follow Keller and Heckman Tobacco and E-Vapor Partner Azim Chowdhury on Twitter.

[1]              See U.S. Food & Drug Admin., FDA News Release, FDA Takes New Steps to Address Epidemic of Youth E-Cigarette Use, Including a Historic Action Against More Than 1,300 Retailers and 5 Major Manufacturers for Their Roles Perpetuating Youth Access (Sept. 12, 2018).

[2]              Christopher Groskopf, What Yelp Data Reveal About the Sudden Rise of Vape Shops in America, Quartz, (Feb. 10, 2016), https://qz.com/608469/what-yelp-data-tells-us-about-vaping/.

[3]              The first set of letters were sent on May 17, 2018 to J Well, of Paris, France, for Bo Starter Kit; YGT Investment LLC and 7 Daze LLC, of Baldwin Park, California, for Zoor Kit; Liquid Filling Solutions LLC, of King of Prussia, Pennsylvania, for Myle Products; and SVR Inc., of Las Vegas, for SMPO Kit. Subsequently, in late May additional letters were sent to Myle Vape Inc. regarding Myle Products, and to MMS ECVD LLC regarding the Bo Starter Kit, to reflect additional relevant companies in the manufacturing and distribution chain.

[4]           Guidance for Industry: Extension of Certain Tobacco Product Compliance Deadlines Related to the Final Deeming Rule (Revised) (August 2017), available at: https://www.fda.gov/downloads/TobaccoProducts/Labeling/RulesRegulationsGuidance/UCM557716.pdf.

[5]              The original Deeming Rule compliance policy also had a sunset period that only permitted manufacturers who submitted timely PMTAs to continue to market those products for an additional year, i.e., until August 8, 2019. Unless an application was authorized during that year, it would have to be removed from the market at that time, and could only be re-introduced if it received FDA authorization.

[6]              Konstantinos F., M.D., MPH, et al., Patterns of flavored e-cigarette use among adult vapers in the United States: an internet survey (2018), at 6, 20.

Photo of Azim ChowdhuryPhoto of Daniel RubensteinPhoto of Benjamin Wolf

In a widely anticipated move, FDA has significantly increased the frequency of inspections of vapor manufacturing and retail facilities over the past few weeks, with some inspections spanning two days. We have received reports from vapor businesses across the country that they are receiving unannounced visits from FDA investigators conducting biannual inspections pursuant to Sections 704 and 905 of the Food, Drug, and Cosmetic Act as amended by the Tobacco Control Act. Under the Act, FDA is required to inspect every tobacco manufacturing facility at least once every two years. FDA uses a broad definition of manufacturing – repacking and relabeling are considered manufacturing acts and retailers that mix e-liquids for consumer sale are considered manufacturers.

During the course of their inspection, FDA investigators have requested product samples, labeling and invoices for raw materials, and labeling and invoices for finished goods. We understand that inspections have included both production (cleanroom) and non-production areas and have made use of photography and recordings. FDA appears also to be doing a lot of “fact finding” – learning as much as they can about the industry and how these products are manufactured and distributed, potentially for use in the development of future guidance documents and rulemakings.

We have also received reports of inspectors visiting vapor businesses from other agencies, including the Federal Aviation Administration (FAA), federal and state Environmental Protection Agencies (EPA), as well as state inspectors (e.g., California Department of Tax and Fee Administration).

As FDA continues to visit facilities across the country, it is critical that manufacturers, including retailer-manufacturers, understand the types of information that they are required to provide to the Agency upon request, as well as the type of that information that can or should be withheld. Similarly, Companies should understand the scope of authority that an FDA Investigator has in asking for specific product details. Vapor product manufacturers should fully prepare for their impending inspection now, so that they can demonstrate a high-degree of confidence when FDA arrives. Critically, and as third-party consultants begin to enter the Good Manufacturing Practice (GMP) space, manufacturers and retailer-manufacturers should ensure that the guidance they receive from outside counsel is accurate and based on experience in sound science and law and is protected from disclosure to FDA by attorney-client privilege.

Audit and Inspection Program Completes Coast-to-Coast Site Visits in First Half of 2018

Keller and Heckman’s Audit and Inspection Program (AIP) provides companies that are involved in any aspect of the tobacco or vapor product supply chain with assurance that their facilities are operating in accordance with FDA requirements. AIP Program attorneys have completed audits from Florida to California since the Program first began in early 2018, and feedback has been overwhelmingly positive:

Having your team run a thorough inspection was extremely helpful in preparing us for a “real” FDA inspection. The knowledge and insight you guys were able to provide my “Team Awesome” will certainly help us navigate through the regulations and future inspections. During this interesting time for the industry, and as a responsible manufacturer, we must do everything possible to ensure we are going above and beyond what potential GMP’s may be down the road to keep consumers and the industry’s reputation safe.

As “cool” as some people think it is to be a manufacturer in the vape industry, it’s not to be taken lightly. We try to do everything possible to provide our consumers and retailers with top quality products that are manufactured in a clean and safe environment. Having your team come in to review our facility and manufacturing practices gives us confidence that we are doing exactly what we have set out to accomplish!

The AIP Program includes both audit and training components from attorneys experienced in tobacco and vapor law, inspections, and good manufacturing practices, and addresses a broad range of inspection activities, including: recordkeeping, product labeling, product samples, requests for video/audio/photographic recordings, standard operating procedures, cleanliness and sanitation, inventory control, and personnel interviews.

Audits by the AIP Program staff are covered by attorney-client privilege and attorney work-product privilege.

Pre-registration for the AIP is available immediately by filling out the form available here:

Tobacco and Vapor Product Manufacturing Establishment Audit and Mock Inspection Program Pre-Registration Form

The completed pre-registration form can be E-mailed to chowdhury@khlaw.com, faxed to (202) 434-4646, or mailed to:

Keller and Heckman LLP
Attn: Azim Chowdhury
1001 G Street NW, Suite 500 West
Washington, D.C. 20001

Space is limited, and scheduling is generally available on a first-come, first-serve basis.

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Defendant U.S. Food and Drug Administration (FDA) and the Right to Be Smoke-Free Coalition (RSF) recently submitted briefs to the federal district court of Maryland opposing a motion for summary judgment filed by various public health NGOs in American Academy of Pediatrics v. FDA.[1] The NGOs are challenging various extensions to premarket application compliance deadlines for deemed tobacco products that were announced as part of FDA’s new comprehensive tobacco and nicotine regulatory plan, and finalized in its August 2017 Guidance Document, Extension of Certain Tobacco Product Compliance Deadlines Related to the Final Deeming Rule (the “Guidance”). This includes the August 8, 2022 compliance deadline for filing vapor product Premarket Tobacco Applications (PMTAs), which was extended from the original August 8, 2018 cutoff for products on the market on August 8, 2016, as initially set forth in the Deeming Rule. RSF is not a party to the lawsuit, but filed an amicus (or “friend of the court”) brief defending the compliance period so that vapor product manufacturers have adequate time to prepare compliant applications. We provide background on the case and the NGOs’ opening positions in our August 2, 2018 post, linked here, and highlight below key points from FDA’s and RSF’s briefs.

FDA Argues that the Court Lacks Jurisdiction to Hear the Case or, In the Alternative, the NGOs’ Motion for Summary Judgment Fails on the Merits

In its opposition brief (available here), FDA begins by arguing that the Court does not have jurisdiction to even hear the dispute.

First, FDA maintains that the NGOs lack “standing” – i.e., that the NGOs do not have a sufficient connection to the PMTA issue to bring the lawsuit.[2] In essence, FDA claims that the NGOs will not suffer a concrete and redressable injury if the August 8, 2022 compliance date is upheld. The NGOs complain that if PMTAs are not filed until that date then they will not be able to educate the public in the near-term about information that would otherwise be contained in the PMTAs. But as FDA points out, this argument was soundly rejected by another federal court in Cigar Ass’n of Am. v. FDA after the NGOs tried to intervene in that lawsuit challenging aspects of the Deeming Rule filed by the cigar and pipe tobacco industries.[3] In that case, it was not enough for the NGOs – who are not subject to the PMTA requirements themselves – to rely on generalized and speculative allegations that it might somehow be more difficult or costly to disseminate information to the public in the absence of PMTAs. According to FDA, the same holds true here. Moreover, FDA argues that the NGOs fail to cite any authority that gives them a legal right to the type of information, whether now or at a later date, contained in a PMTA.

Second, FDA claims that the Court lacks jurisdiction because the agency was simply exercising its enforcement discretion not to require PMTAs for a specified period of time, the type of decision that typically is not subject to review by federal courts. Not only is the revised compliance period limited in duration, it is also part of a broader comprehensive policy to address tobacco-related issues and ensure that high-quality applications are filed, which will include upcoming efforts by FDA to further delineate through guidance and rulemaking what information must be included in PMTAs. For support, the agency cites to Supreme Court case law that reserves to agencies the discretion to prioritize their activities, allocate resources, and adopt overall policies – including those involving enforcement – in the absence of statutory mandates to the contrary.[4] FDA concludes that the Tobacco Control Act (TCA)[5] does not prohibit the agency from establishing reasonable compliance deadlines.

Finally, the agency relies on long-standing law that guidance documents are typically not subject to review by federal courts under the Administrative Procedure Act (APA).[6] Unlike a formal rule, guidance does not impose obligations on the agency or legal duties on regulated entities; rather, guidance only represents an agency’s current thinking, which in this case is that FDA does not intend to enforce the PMTA requirements until August 8, 2022 for products that were already on the market when the Deeming Rule went into effect on August 8, 2016. In other words, the Guidance does not have the finality of a regulation – it merely summarizes FDA’s exercise of discretion – that would lend itself to judicial review.

FDA further maintains that, even if the Court has jurisdiction to hear the case, the NGOs’ motion should be denied on the merits. The agency first argues that the Guidance does not conflict with the TCA’s PMTA provisions[7] because it does not modify any statutory requirements.[8] Manufacturers are still required to submit PMTAs. The Guidance merely describes FDA’s intention not to enforce the PMTA requirements for a limited period of time, which is a discretionary determination reserved to the agency. In fact, FDA notes that the NGOs submitted comments during the rulemaking acknowledging that the agency has discretion to establish a compliance period for new tobacco products. Moreover, FDA points to more practical reasons for setting an August 8, 2022 filing deadline, all of which are consistent with the TCA, including the agency’s need to more efficiently manage those PMTAs that are eventually filed and to ensure high-quality submissions.

Second, FDA rebuts the NGOs’ claim that the agency, before it extended the compliance period, failed under the APA to provide notice to the public, and solicit and accept comments on the Guidance.[9] Underpinning the NGOs’ argument, however, is the premise that the Guidance is a formal rule and thus subject to the APA’s notice and comment requirements. But a rule has the force of law and imposes legal rights and obligations, which contrasts with a guidance document that merely advises the public on how the agency intends to assert its discretionary power.[10] As FDA points out, the Guidance does nothing more than simply indicate when it will exercise its enforcement discretion as to the filing of premarket applications for deemed tobacco products.

Finally, FDA maintains that it sufficiently justified the extension, contrary to the NGOs’ claims.  Under the APA, agencies must explain their actions and engage in reasoned decision-making.[11] In support, FDA explicitly cited to arguments made by RSF in Nicopure, et al. v. FDA – that the original August 8, 2018 deadline was not sufficient and that the judge in that case indicated that other filing deadlines may have been reasonable.[12] The agency then noted that the new compliance period is part of an overarching comprehensive plan to regulate nicotine and tobacco, and that the extension will allow the agency to provide further direction to industry through guidance and rulemaking on how the PMTA process will work.[13] As characterized by the agency, the plan is intended “to make certain that the FDA is striking an appropriate balance between regulation and encouraging the development of innovative tobacco products that may be less dangerous than cigarettes,” such as vapor products.[14]

RSF Argues that the Original PMTA Deadlines in the Deeming Rule Were Unattainable and that Vacating the Guidance Would Virtually Ban the Industry and Deprive the Public of the Health Benefits Provided by Vapor Products 

To provide the vapor industry perspective, RSF filed an amicus brief in support of the extended compliance deadline (available here). RSF makes two arguments in favor of the new PMTA filing date: (1) that no vapor company could have met the initial two-year deadline because industry would not have had sufficient time to complete the burdensome applications, including the long-term, product-specific clinical/epidemiological studies that FDA will likely require; and (2) that the two-year deadline, were it reinstated by setting aside the Guidance and granting the NGOs’ motion, would effectively ban vapor products, which provide an important public health benefit to transitioning smokers.

Vapor product manufacturers could not have met the original August 8, 2018 deadline because of the tremendous expectations set forth by FDA in its 2016 draft guidance for PMTA submissions for Electronic Nicotine Delivery Systems (PMTA draft guidance).[15] Among other things, the PMTA draft guidance states that:

  • Manufacturers should file a separate PMTA for each “finished tobacco product”;
  • Components should be tested for each device in which they could reasonably be used;
  • The relative health risks of each new e-liquid or device should be compared to the anticipated risks of other tobacco products on the market;
  • Literature relevant to each product should be thoroughly reviewed and the findings included in any PMTA submission; and
  • Manufacturers should test each product for a broad range of characteristics, including chemical identity, constituent composition, aerosol emissions under a range of operating conditions, toxicological and pharmacological profiles, storage and stability profiles, environmental effects, and use patterns at different nicotine levels.

The most significant concern, however, is that under the PMTA draft guidance manufacturers will likely be expected to conduct exceedingly expensive and long-term clinical/epidemiological studies. In its brief, RSF presents publicly available evidence from long-term studies recently funded by the federal government showing that this type of research, on average, takes at least two years, and in many circumstances far longer. In fact, RSF points out that FDA’s own long-term epidemiological study (called the Population Assessment of Tobacco and Health or “PATH” study) on tobacco products, including e-liquids and devices, has already taken seven years and is still on-going. As such, it was completely unrealistic for FDA to expect that industry would have been able to file compliant applications by the original August 2018 deadline[16] and, as a consequence, the vast majority of manufacturers would have had to leave the marketplace after that compliance period expired.

In its brief, RSF also notes that such a large-scale market exit could have a significant adverse impact on the public health. RSF demonstrates, in particular, that having access to a large variety of products and e-liquid flavors is often a key component in any individual’s attempt to switch away from cigarettes and transition to less risky vapor products. As Julie T. Woessner, National Policy Director for the Consumer Advocates for Smoke-free Alternatives Association (CASAA), explains in an accompanying affidavit filed with the court, “a significant number of our members use more than one flavor or brand of e-liquid . . . we find those making a complete transition from smoking to vaping most often report that finding a non-tobacco flavor was instrumental in helping them distance themselves from their smoking habit, and sampling a variety of different flavors actually served to make vaping more enjoyable than smoking.”

Ms. Woessner then articulates the public health benefit that could be lost: “[I]f consumers do not have access to these products, there is a substantial risk that they will return to their old smoking habits or feel forced to rely on do-it-yourself (“DIY”) activities or an unregulated black market for e-liquids and devices. This is not merely a theoretical concern. . . [w]hen asked what they would do in response to a total ban on all vapor products – the entire product category – 93% of the CASAA [Member] Survey respondents indicated that they would continue to use the products they enjoy by either purchasing them from overseas or a domestic black market, or by engaging in DIY activities.”

The Right to be Smoke-Free Coalition is represented by Keller and Heckman Partners Azim Chowdhury and Eric Gotting. We will continue to monitor the progress of this lawsuit and will provide a summary of the court’s decision on the NGOs’ motion for summary judgment.

_________________________________________

[1] Case No. 8:18-cv-00883 (D. Md.)  It bears noting that an amicus brief in support of Plaintiff NGOs was filed on July 17, 2018 on behalf of the American Thoracic Society and other public health organizations. The brief, which is available here, addresses the health effects of all products newly-deemed by the Deeming Rule, including combustible tobacco products, like cigars. The brief does not address legal arguments in the case, nor does it address the potential public health benefits of newly available, non-combustible products for longtime smokers.

[2] See, e.g., Lujan v. Defenders of Wildlife, 504 U.S. 555, 560 (1992).

[3] Cigar Ass’n of America v. FDA, 323 F.R.D. 54 (D.D.C 2017).

[4] Heckler v. Chaney, 480 U.S. 821 (1985).

[5] 21 U.S.C. §§ 387 et seq.

[6] Bennett v. Spear, 520 U.S. 154, 177–79 (1997); Am. Tort Reform Ass’n v. Occupational Safety & Health Admin., 738 F.3d 387, 395 (D.C. Cir. 2013).

[7] 21 U.S.C. §§ 387j(a)(2), (c)(1)(A)(i).

[8]  As detailed in the Nicopure v. FDA litigation (Case No. 17-5196) (D.C. Cir.), RSF maintains that FDA had a statutory obligation to tailor the PMTA process to less risky vapor products and allow the vapor industry to submit PMTAs that do not include product-specific long-term clinical/epidemiological studies; instead, industry could rely on an existing scientific literature review showing that vapor products present substantially less risk than cigarettes on the whole and are thus appropriate for the public health.  Indeed, Congress gave FDA such authority within the PMTA provision itself, only requiring clinical studies “when appropriate” and permitting use of other “valid scientific evidence.”  21 U.S.C. § 387j(c)(5).  Unfortunately, FDA rejected this approach during the rulemaking.  See 81 Fed. Reg. at 28,997.

[9] 5 U.S.C. § 551 et seq.; 5 U.S.C. § 553.

[10] See Bennett, 520 U.S. at 178.

[11] FCC v. Fox Television Stations, Inc., 556 U.S. 502, 515 (2009).

[12] Nicopure Labs, LLC v. FDA, 266 F. Supp. 3d 360, 399–400 (D.D.C. 2017).  That case is now on appeal before the U.S. Court of Appeals for the District of Columbia Circuit, with oral arguments scheduled for September 11, 2018.  See Update on Deeming Rule Appeal available at https://www.thecontinuumofrisk.com/2018/07/fda-commissioner-dr-scott-gottliebs-recent-remarks-vapor-products-continuum-risk-update-deeming-rule-appeal/.

[13] FDA News Release, “Protecting American Families: Comprehensive Approach to Nicotine and Tobacco,” https://www.fda.gov/NewsEvents/Speeches/ucm569024.htm (July 18, 2017) (last accessed: 08/21/18).

[14] Id.

[15] FDA, Premarket Tobacco Product Applications for Electronic Nicotine Delivery Systems: Guidance for Industry (Draft Guidance) (May 2016).

[16] Indeed, as summarized previously on this blog here, on August 2, 2018, just before the initial PMTA deadline would have expired, FDA announced it would soon be issuing additional guidance, holding a public hearing and begin a new rulemaking regarding the PMTA process.  See FDA, Advancing Tobacco Regulation to Protect Children and Families: Updates and New Initiatives, https://tinyurl.com/y8wked2z.  As such, it is not clear how manufacturers would have been able to submit complete applications by the original cutoff if FDA itself is still in the process of finalizing the PMTA framework.

Photo of Azim ChowdhuryPhoto of Adam Susser

On August 2, 2018, just over one year since FDA announced its “Comprehensive Plan for Tobacco and Nicotine Regulation”[1] (hereinafter, the “Comprehensive Plan”), FDA Commissioner, Scott Gottlieb, M.D., and Center for Tobacco Products (CTP) Director, Mitch Zeller, J.D., authored a post on the Agency’s FDA Voice blog, which reviewed the progress made to date and outlined several new initiatives related to the Comprehensive Plan.[2]  Among other things, these initiatives included a potential e-cigarette product standard and also proposed foundational rules on various topics related to premarket applications.  The authors note that the Comprehensive Plan is a multi-year roadmap for the future of tobacco regulation and “provides a framework for regulating nicotine and tobacco.”[3]

Recent Actions Implementing FDA’s Comprehensive Plan

The FDA Voice blog post recounts the FDA’s actions over the first year of the Comprehensive Plan.  For instance, the authors note that FDA recently issued three advanced notices of proposed rulemaking (ANPRMs) that have the “potential to reframe the tobacco landscape.”[4]  These ANRPMs focus on: (i) the potential development of a product standard to lower nicotine in cigarettes to minimally or no-addictive levels; (ii) the role that flavors – including menthol – play in initiation, use and cessation of tobacco products; (iii) the patterns of use and resulting public health impacts from “premium” cigars.  While the comment period for each of these ANPRMs has closed, FDA is currently in the process of reviewing the comments that the Agency has received.  In addition, the authors note the Agency’s efforts to re-evaluate and modernize its approach to the development of nicotine replacement therapy products, including, among other things, by establishing a Nicotine Steering Committee and issuing a draft guidance related to the nonclinical testing of orally inhaled nicotine-containing drug products.[5]

Establishing a Rigorous, Science-Based Framework for Premarket Review of Tobacco Products

The FDA also announced that a key part of its Comprehensive Plan involves issuing foundational rules and guidance to help industry better understand what is required to submit premarket applications.  Indeed, “[e]stablishing a rigorous, predictable, science-based framework for the premarket review of tobacco products is a key element of [FDA’s] program.”[6] With that in mind, the FDA announced several steps to achieve these goals.  First, the Agency announced that it plans to propose new rules in the coming months to aid industry on topics including Substantial Equivalence, Premarket Tobacco Product Applications, Modified Risk Tobacco Product Applications, and Tobacco Product Manufacturing Practices.  Second, FDA plans to hold a public meeting on the premarket application and review process on October 22-33, 2018.[7]  Third, FDA plans to explore opportunities for premarket review efficiencies through rulemaking and guidance as well as new administrative steps to modernize and improve the review process.

FDA did not mention whether it might consider further extending its compliance policy deadlines, which are currently being challenged by several public health groups, that permit deemed tobacco products on the market as of August 8, 2016 (the effective date of the Deeming Rule) to remain on the market until applications are due by August 8, 2021 (for combustible products) or August 8, 2022 (for non-combustibles). Considering that FDA is only now, exactly two years after the Deeming Rule went into effect, announcing potential new guidance documents, rulemakings and public hearings “within the coming months,” additional time for industry to comply would seem warranted.

New Initiatives to Address Youth Use of Tobacco Products

The FDA Voice blog post elucidates a bedrock principle: No kids should be using any tobacco or nicotine-containing products, including e-cigarettes.[8]  With that in mind, the authors summarize FDA’s recent actions aimed at addressing youth use of nicotine, and e-cigarettes specifically.  Among other things, the FDA has recently sent warning letters to companies for selling e-liquids resembling juice boxes, candies, and cookies[9]; sent warning letters to retailers for selling JUUL e-cigarettes to youth[10]; and worked with eBay to remove internet listings for JUUL.[11]

However, the blog post also outlines three additional new initiatives to address these concerns.  Among other things, the FDA Voice blog post announced that FDA has “begun exploring a product standard for e-cigarettes.”[12]  As part of this standard, the FDA plans to consider, among other things, levels of toxicants and impurities in propylene glycol, glycerin, and nicotine in e-liquids.[13]  Additionally, FDA announced that it plans to expedite the Agency’s review and analysis of comments on the flavors ANPRM so that the Agency can pursue policy solutions, should the science support further action.  Lastly, the FDA explained that it is exploring ways that FDA can act more efficiently when the Agency becomes aware of violations affecting youth use of e-cigarettes, such as illegal product marketing to youth.[14]

Enforcement of New Products Without Premarket Authorization

While deemed tobacco products on the market as of August 8, 2016 can take advantage of the premarket application compliance policy noted above, new products intended to be introduced for the first time after August 8, 2016 must first obtain FDA premarket authorization. Regarding new products that have allegedly been introduced without such authorization, the blog authors note:  “We’ve also become aware of reports that some companies may be marketing new products that were introduced after the FDA’s compliance period and have not gone through premarket review. These products are being marketed both in violation of the law and outside of the FDA’s announced compliance policies. We take these reports very seriously. Companies should know that the FDA is watching and we will take swift action wherever appropriate.”

Potential Impact on Vapor Industry

While the FDA Voice blog post largely outlines previously known regulatory initiatives, the Agency’s discussion of FDA initiatives to address youth use of tobacco products outlines several new proposals of interest to the vapor industry.  Indeed, an e-cigarette product standard could dramatically impact the design and production of future e-cigarettes.  Likewise, any action regulating the marketing of flavored tobacco products, including flavored e-cigarettes and e-liquids, could shape the vapor industry for years to come.  From an administrative perspective, the FDA’s initiatives to propose foundational rules, hold a public meeting on premarket review, and explore opportunities for premarket review efficiencies, offer the potential to greatly improve the premarket review process, if companies are given enough time to comply.

Looking back, the FDA’s Comprehensive Plan brought a much-needed revamp to the Agency’s approach to tobacco and nicotine regulation.  Only time will tell whether the Agency is able to translate its regulatory plan into effective regulatory policy.

[1] FDA News Release, FDA Announces Comprehensive Regulatory Plan to Shift Trajectory of Tobacco-Related Disease and Death (July 28, 2017),

https://www.fda.gov/NewsEvents/Newsroom/PressAnnouncements/ucm568923.htm.

[2] FDA Voice Blog, Advancing Tobacco Regulation to Protect Children and Families: Updates and New Initiatives from the FDA on the Anniversary of the Tobacco Control Act and FDA’s Comprehensive Plan for Nicotine (Aug. 2, 2018), https://blogs.fda.gov/fdavoice/index.php/2018/08/advancing-tobacco-regulation-to-protect-children-and-families-updates-and-new-initiatives-from-the-fda-on-the-anniversary-of-the-tobacco-control-act-and-fdas-comprehensive-plan-for-nicotine/.

[3] Id.

[4] Id.

[5] FDA Statement, Statement from FDA Commissioner Scott Gottlieb, M.D., on New Steps the Agency is Taking to Support the Development of Novel Nicotine Replacement Drug Therapies to Help Smokers Quit Cigarettes (Aug. 3, 2018), https://www.fda.gov/NewsEvents/Newsroom/PressAnnouncements/ucm615740.htm?

utm_campaign=08032018_Statement_FDA%20statement%20on%20developing%20new%20nicotine%20replacement%20drug%20therapies&utm_medium=email&utm_source=Eloqua.

[6] Id.

[7] FDA Website, Tobacco Product Application Review – A Public Meeting (Oct. 22-23, 2018), https://www.fda.gov/TobaccoProducts/NewsEvents/ucm615443.htm.

[8] FDA Voice Blog, Advancing Tobacco Regulation to Protect Children and Families: Updates and New Initiatives from the FDA on the Anniversary of the Tobacco Control Act and FDA’s Comprehensive Plan for Nicotine (Aug. 2, 2018).

[9] FDA News Release, FDA, FTC Take Action Against Companies Misleading Kids with E-Liquids That Resemble Children’s Juice Boxes, Candies, and Cookies (May 1, 2018), https://www.fda.gov/NewsEvents/Newsroom/PressAnnouncements/ucm605507.htm.

[10] FDA Statement, Statement from FDA Commissioner Scott Gottlieb, M.D., on New Enforcement Actions and a Youth Tobacco Prevention Plan to Stop Youth Use of, and Access to, JUUL and Other E-Cigarettes (Apr. 24, 2018), https://www.fda.gov/NewsEvents/Newsroom/PressAnnouncements/ucm605432.htm.

[11] FDA Voice Blog, Advancing Tobacco Regulation to Protect Children and Families: Updates and New Initiatives from the FDA on the Anniversary of the Tobacco Control Act and FDA’s Comprehensive Plan for Nicotine (Aug. 2, 2018).

[12] Id.  

[13] Id.

[14] Id.

Photo of Azim ChowdhuryPhoto of Eric GottingPhoto of John Gustafson

On March 27, 2018, a coalition of public health organizations including the Campaign for Tobacco-Free Kids, the Truth Initiative, the American Cancer Society and the American Academy of Pediatrics, among others, as well as several individual physicians (collectively the “NGOs”) filed a lawsuit in the United States District Court for the District of Maryland challenging the Food and Drug Administration’s (“FDA’s”) ability to extend the compliance policy deadlines for premarket authorization applications for deemed tobacco products (Case No. 8:18-cv-00883). On July 10, 2018, the NGOs filed a motion for summary judgment, available here.

The case challenges FDA’s August 2017 Guidance Document, Extension of Certain Tobacco Product Compliance Deadlines Related to the Final Deeming Rule (the “Guidance”) which, among other things: (1) extended the deadlines for premarket applications for deemed tobacco products, such as e-liquids and vapor products, as well as cigars, hookah, and pipe tobacco; and (2) ended the one-year “sunset provision” in the initial compliance policy, permitting manufacturers to continue marketing deemed products that are the subject of timely filed premarket applications that have been accepted by FDA for scientific review.

The NGOs make three main arguments: (1) the Guidance unlawfully authorizes manufacturers to continue marketing newly-deemed tobacco products without obtaining the required FDA marketing order, contrary to the requirements of the Family Smoking Prevention and Tobacco Control Act (“TCA”); (2) the Guidance is an administrative “rule” and FDA issued it without providing the public notice and an opportunity to comment in violation of the Administrative Procedure Act (“APA”);[1] and (3) the Guidance is arbitrary and capricious because it provided inadequate justification for suspending premarket review and did not account for the public health cost of the continued marketing of unreviewed new tobacco products. The NGOs seek to have the Guidance vacated, which could prove disastrous for the vapor industry.

We summarize the NGO’s motion in more detail below.

Background on Premarket Authorization and FDA Compliance Policy for Deemed Tobacco Products

When the “Deeming Rule” became effective on August 8, 2016, the FDA extended its tobacco product authority to previously unregulated categories of products including, but not limited to, e-liquids and vapor products, as well as cigars, hookah, pipe tobacco and heat-not-burn products.[2] Deemed tobacco products are now subject to the Federal Food, Drug and Cosmetic Act (“FDCA”), as amended by the TCA, including, most critically, the requirement that all new tobacco products obtain FDA premarket authorization. A new tobacco product is any product introduced or modified after the February 15, 2007 “grandfather date”. Because there are no known grandfathered e-liquids or vapor products, all such products, including those that have been on the market for years, are required to obtain FDA marketing authorization through the onerous Premarket Tobacco Product Application (“PMTA”) process, which is separately being challenged by the vapor industry.[3]

In the preamble to the Deeming Rule, although it chose not to amend the grandfather date for deemed products, FDA included a “compliance policy” which effectively created marketing grace periods for newly deemed, finished tobacco products that do not have FDA premarket authorization.[4] Pursuant to the compliance policy, manufacturers were permitted to continue marketing e-liquids and vapor products in the U.S. that were on the market on August 8, 2016 until the end of the compliance period, at which time a PMTA would be due. Initially, this compliance period was only 24 months after the effective date of the rule, meaning PMTAs would have been due by August 8, 2018 for all vapor products.[5]

Further, the initial compliance policy created a marketing sunset period that permitted manufacturers of products for which premarket applications were submitted to continue sales for only an additional 12 months, pending FDA review of the applications. After that, if FDA had not yet ruled on an application, it would “consider, on a case-by-case basis, whether to defer enforcement of the premarket authorization requirements for a reasonable time period.”[6]  In other words, companies that submitted PMTAs for vapor products by August 8, 2018 would only be permitted to continue marketing the subject products until August 8, 2019, after which they would have to remove the products from the market while FDA reviewed the applications, no matter how long that would take, unless the Agency granted an exception.

However, in July 2017, FDA announced a new “comprehensive regulatory plan to shift the trajectory of tobacco-related disease, death” that, among other things, extended the premarket application compliance period for non-combustibles, including e-liquids and vapor products, until August 8, 2022. In other words, those products on the market as of August 8, 2016 can now remain on the market at least until August 8, 2022; after that date, only products that are the subject of PMTAs that have been accepted for review can remain on the market. FDA also eliminated the 12-month sunset period, allowing companies to continue marketing products while FDA reviews the PMTAs. FDA formalized the new deadlines in its August 2017 Guidance.

Argument No. 1: The Guidance’s authorization to continue marketing newly-deemed tobacco products without the required FDA marketing order is contrary to the requirements of the TCA.

The NGOs argue first that the Guidance is contrary to the mandates of the TCA.  They emphasize that the TCA directs that an FDA order authorizing a manufacturer to sell a new tobacco product “is required” before that product “may be introduced or delivered for introduction into interstate commerce.”[7] Therefore, the NGOs argue, both the Guidance’s extension of PMTA deadlines and its compliance policy effectively grant permission to market new tobacco products before FDA authorizes their sale, contrary to the TCA’s requirements.

The NGOs further note that the TCA requires that, “as promptly as possible, but in no event later than 180 days after receipt of a PMTA,” FDA “shall” issue an order that the new product may or may not be introduced.[8] The NGOs argue that this requirement renders the Guidance’s revised compliance policy unlawful because the policy permits the indefinite sale of new tobacco products without FDA ever having to complete premarket review.

The NGOs also address a defense likely to be invoked by FDA—that of “enforcement discretion,” the principle that, in the absence of statutory text to the contrary, executive agencies prioritize their own obligations, thereby reserving to their discretion the ability to effectively delay enforcement. The NGOs argue that the TCA does not grant FDA discretion to delay and that publishing a new policy that authorizes conduct Congress made unlawful is not within an agency’s enforcement discretion as the term is understood by courts.

Argument No. 2: The Guidance is a “rule” and FDA issued it without providing the public notice and an opportunity to comment in violation of the APA. 

Second, the NGOs contend that the Guidance is effectively a final rule and thus must undergo the procedural requirements of a rule, including the obligation to give the public notice of the proposed rule and an opportunity to make comments.[9]

The NGOs argue that the Guidance is a “rule” within the meaning of the APA because it affects the “rights and obligations” of stakeholders and “constrains the agency’s discretion.”[10] According to the NGOs, the Guidance creates a “right” to market products for several years without a marketing order from FDA and constrains FDA to engage in a premarket review or to bring enforcement actions against manufacturers marketing new products without first obtaining an order. The NGOs dismiss the Guidance’s disclaimer language that it is not “binding” by citing to case law stating that courts look at the “actual function and effect” of guidance over how it labels itself.

Argument No. 3: The Guidance is arbitrary and capricious because it provided inadequate justification for suspending premarket review and did not account for the public health cost of the continued marketing of unreviewed new tobacco products.

Continuing under the premise that the Guidance is a “rule” and thus a “final agency action” as those terms are defined by APA case law, the NGOs argue that the Guidance must be struck down because it is “arbitrary and capricious.”[11] An agency action is arbitrary and capricious under the APA if it is not the product of reasoned agency decision-making.

The NGOs maintain that FDA did not advance an explanation for the Guidance. Agencies must consider factors considered important by Congress when passing the law and other important aspects of the problem addressed by the statute (the TCA in this case).[12] Further, an agency must show that there are good reasons for a change in policy.[13] FDA published a press release before the Guidance explaining industry’s need for more time to comply with PMTA deadlines,[14] but the NGOs allege that the press release’s reasoning is vague and insufficient and therefore not persuasive.

Finally, the NGOs argue that the Guidance’s effect ultimately has a detrimental impact on public health, particularly youth. The NGOs assert that the detrimental effect to public health outweighs any advantage gained by the Guidance’s effects.

Potential Impact on the Vapor Industry

If successful, the NGO’s lawsuit, which paints an unfavorable, and inaccurate, portrait of a vapor industry bent on targeting and addicting minors could have a devasting impact for vapor companies. If the Guidance is vacated, for example, and the original compliance policy reinstated, vapor products without grandfathered status or premarket authorization, of which there are none, may have to be immediately removed from the market. This would not only be potentially devasting to the public health, as millions of vapers may go back to smoking cigarettes, but it would also put thousands of small companies out of business.

The case has been assigned to Judge Paul Grimm of the United States District Court for the District of Maryland. FDA’s response to the motion is due August 7, 2018. We will continue to monitor the progress of this lawsuit and will provide a summary of FDA’s response.

____________________________________________________________________

[1] 5 U.S.C. § 551 et seq.; 5 U.S.C. § 553.

[2] Deeming Tobacco Products to be Subject to the Federal Food, Drug, and Cosmetic Act, as Amended by the Family Smoking Prevention and Tobacco Control Act; Restrictions on the Sale and Distribution of Tobacco Products and Required Warning Statements for Tobacco Products, 81 Fed. Reg. 28,974 (May 10, 2016).

[3] Alternative premarket authorization pathways exist through submission of Substantial Equivalence (“SE”) Reports and SE Exemption Requests, but those pathways require reference to a grandfathered or predicate tobacco product, and thus are not available for the e-liquids and vapor products.

[4] 81 Fed. Reg. at 28,978.

[5] 81 Fed. Reg. at 28,978.

[6] 81 Fed. Reg. at 28,978.

[7] 21 U.S.C. §§ 387j(a)(2), (c)(1)(A)(i).

[8] 21 U.S.C. § 387j(c)(1)(A).

[9] N.C. Growers’ Ass’n, Inc. v. UFW, 702 F.3d 755, 764 (4th Cir. 2012).

[10] Chrysler Corp. v. Brown, 441 U.S. 281, 302 (1979) (internal quotation omitted); McLouth Steel Prods. Corp. v. Thomas, 838 F.2d 1317, 1320 (D.C. Cir. 1988).

[11] 5 U.S.C. § 706(2)(A).

[12] Motor Vehicle Mfrs. Ass’n of US., Inc. v. State Farm Mut. Auto Ins. Co., 463 U.S. 29, 43 (1983).

[13] FCC v. Fox Television Stations, Inc., 556 U.S. 502, 515 (2009).

[14] FDA News Release, “Protecting American Families: Comprehensive Approach to Nicotine and Tobacco,” https://www.fda.gov/NewsEvents/Speeches/ucm569024.htm (July 18, 2017) (last accessed: 08/02/18).

Photo of Azim Chowdhury

On June 18, 2018, U.S. Food and Drug Administration (FDA) Commissioner Dr. Scott Gottlieb delivered remarks on “FDA’s Nicotine and Tobacco Regulation and the Key Role of Regulatory Science” at the Tobacco Regulatory Science Program Meeting.[1] While addressing the importance of regulatory science to inform FDA’s Center for Tobacco Products (CTP) regulatory efforts, Commissioner Gottlieb focused a portion of his remarks on the use of Electronic Nicotine Delivery Systems (ENDS) as tobacco harm reduction or smoking cessation tools and FDA’s role in their regulation.

“Preservation of E-Cigarettes”

According to Commissioner Gottlieb, utilizing scientific evidence and supporting new research to inform tobacco regulatory actions that protect public health is one of the primary missions of FDA’s CTP. Utilizing regulatory science to better understand e-cigarettes, Commissioner Gottlieb confirmed again that not all tobacco products are equally harmful, but that a “continuum of risk” exists, stating, “[w]e believe in the concept of a continuum of risk related to tobacco products, and we believe there is a role for modified risk products. Further, we want to preserve e-cigs as one among a number of possible options for adult smokers and believe that fully transitioning smokers to ENDS can reduce the morbidity and mortality associated with tobacco use.” Preservation of e-cigs as a possible option for adult smokers entails better understanding “the potential benefits of electronic nicotine products as smoking cessation tools.”

In his remarks, the Commissioner highlighted a recent report by the National Academies of Sciences (NAS), entitled “Public Health Consequences of E-Cigarettes.” You can read a summary of that report in a previous blog post here. Commissioned by FDA, the report makes clear, among other things, the reduced harm of e-cigarettes compared to smoking cigarettes and that completely switching from regular use of combustible cigarettes to e-cigarettes results in reduced short-term adverse health outcomes in several organ systems.[2]

Acknowledging those findings, Commissioner Gottlieb noted, “[p]otentially less harmful products – including the wide diversity of ENDS and other novel tobacco products – must be put through an appropriate series of regulatory gates to fully evaluate their risks and maximize their potential benefits.”

The Commissioner’s praise of vapor products as a potential reduced harm alternative for smokers, however, apparently does not apply to adolescents, for whom FDA maintains there is never a good reason to use any tobacco product, reduced harm or not – a position that has been criticized in some public health circles.

“Appropriate Series of Regulatory Gates” in the Context of the Deeming Rule Appeal

The Commissioner’s remarks on e-cigarettes were delivered in the midst of a lawsuit filed by Nicopure Labs, LLC and the Right to be Smoke-Free Coalition (appellants) challenging aspects of the Tobacco Control Act (TCA) and FDA’s Deeming Rule now pending before the U.S. Court of Appeals for the D.C. Circuit. This blog has been closely following the litigation, previously summarizing Appellants’ opening brief, as well as FDA’s brief and appellants reply brief. A list of all briefs can be found at the end of this blog post.

The Commissioner’s June 18 remarks, acknowledging the benefits of e-cigarettes as tools for adult smoking cessation, follow previous statements by Commissioner Gottlieb, the agency itself, the American Cancer Society (ACS), and an FDA-commissioned report acknowledging the lower risk associated with e-cigarettes in comparison to combustible tobacco and e-cigarettes’ potential public health benefits. As set forth at the outset of appellants’ final reply brief in the Deeming Rule appeal, those statements and findings include:

  • FDA stated numerous times during the rulemaking that vapor products are less harmful than traditional cigarettes.[3]
  • In announcing its Comprehensive Plan for regulating tobacco and nicotine, FDA recognized it must “strik[e] an appropriate balance between regulation and encouraging development of innovative tobacco products that may be less dangerous than cigarettes.”[4]
  • FDA Commissioner Gottlieb and Mitch Zeller, Director of FDA’s Center for Tobacco Products, wrote in the New England Journal of Medicine that vapor products, when combined with measures to reduce nicotine levels in cigarettes, “represent[] a promising foundation for a comprehensive approach to tobacco harm reduction.”[5]
  • One of FDA’s supporting amici, the ACS, recently determined, “[b]ased on currently available evidence, using current generation e-cigarettes is less harmful than smoking cigarettes,” and concluded “switching to the exclusive use of e-cigarettes is preferable to continuing to smoke combustible products.”[6]
  • A recent NAS report commissioned by FDA, which the Commissioner mentioned in his June 18 remarks, confirms vaping is less risky than smoking.  The report, which is based on a review of over 800 articles, found: (i) conclusive evidence that completely substituting vaping with smoking reduces exposure to numerous toxicants and carcinogens; (ii) current evidence shows vapor products are less harmful than cigarettes; (iii) substituting vaping for smoking significantly reduces levels of biomarkers of exposure to toxicants; and (iv) vaping exclusively might be useful as a cessation aid in smokers.”[7]

Despite these recent statements, FDA continues to take a hard line in the pending appeal, where the agency argues: (1) the Modified Risk Tobacco Product (MRTP) provision in Section 911 of the TCA does not violate the First Amendment of the U.S. Constitution; (2) the free sample ban is a “price regulation,” so it is not subject to First Amendment protections; and (3) the Premarket Tobacco Application (PMTA) process was statutorily required and did not authorize nor require FDA to modify those requirements for vapor products. Each of these positions, as explained by appellants in the appeal, work against promoting continuum of risk and achieving risk reduction:

  1. Modified Risk Tobacco Product (MRTP) Claims: FDA’s defense of the MRTP provision will ultimately prevent vapor companies from making truthful statements and conveying information that would help adult consumers make informed decisions regarding vaping. As set out in appellants’ briefs, the incredibly onerous and expensive MRTP authorization process, which no company has been able to achieve yet, is ultimately a restriction on the First Amendment rights of consumers in the marketplace to obtain product-related information so they can make educated decisions.
  2. Free Sample Ban: Similarly, FDA downplays free samples as a mere “price regulation,” which are not subject to First Amendment challenge. To the contrary, and as demonstrated by appellants in their briefs, free samples allow manufacturers to pass on product information that adult consumers demand when contemplating a switch from more harmful cigarettes, and are thus protected under the First Amendment.
  3. The Premarket Tobacco Application (PMTA): FDA’s one-size-fits-all PMTA process for vapor products, which involves satisfying all pre-market review requirements for less risky vapor products, will also force the vast majority of vapor companies and less harmful vapor products out of the market absent some tailoring of certain requirements.

Oral arguments in the Deeming Rule appeal have been scheduled for September 11, 2018 before the U.S. Court of Appeals for the D.C. Circuit.

Links to all appeal briefs:

  • February 12, 2018: Appellants Nicopure and Right to be Smoke-Free file opening brief
  • February 20, 2018: Amicus briefs in support of appellants filed by: Washington Legal Foundation, NJOY, State of Iowa and CASAA
  • May 2, 2018: Appellee FDA’s brief filed
  • May 9, 2018: Amicus briefs in support of FDA filed by: Public Citizen, Yale Law School Scholars, Public Health Law Center, and various public health groups (American Academy of Pediatrics, American Cancer Society Cancer Action Network, American Heart Association, American Lung Association, American Thoracic Society, Campaign for Tobacco-Free Kids, and Truth Initiative)
  • May 16, 2018: Appellants Nicopure and Right to be Smoke-Free file reply brief
  • June 5, 2018: Appellee FDA files a final copy of its opening brief with updated citations to the administrative record
  • June 6, 2018: Appellants Nicopure and Right to Smoke-Free file final copies of their opening and reply briefs with updated citations to the administrative record

The Right to be Smoke-Free Coalition and Nicopure Labs are represented in the appeal by Keller and Heckman LLP Partners Eric Gotting and Azim Chowdhury. For more information on the lawsuit and to contribute to the appeal efforts, visit www.r2bsmokefree.org.

[1] Gottlieb, S. (2018, June 18). FDA’s Nicotine and Tobacco Regulation and the Key Role of Regulatory Science. Speech presented at Tobacco Regulatory Science Program Meeting, White Oak, MD. Available at https://www.fda.gov/NewsEvents/Speeches/ucm611033.htm.

[2] National Academies of Science, Engineering and Medicine: Committee on the Review of the Health Effects of Electronic Nicotine Delivery Systems, The Public Health Consequences of E-Cigarettes (eds. Kathleen Stratton et al., 2018), available at https://tinyurl.com/ya4w37kb.

[3] Opening brief of appellants at 7. Available at Gottlieb, S. (2018, June 18). FDA’s Nicotine and Tobacco Regulation and the Key Role of Regulatory Science. Speech presented at Tobacco Regulatory Science Program Meeting, White Oak, MD. Retrieved from https://www.fda.gov/NewsEvents/Speeches/ucm611033.htm.

[4] FDA News Release, FDA Announces Comprehensive Regulatory Plan to Shift Trajectory of Tobacco-Related Disease, Death (July 28, 2017), https://tinyurl.com/y7bybf6c.

[5] Scott Gottlieb, et al., Perspective: A Nicotine-Focused Framework for Public Health, New Eng. J. Med. (Sept. 21, 2017), https://tinyurl.com/yatrpq68.

[6] ACS, Position Statement on Electronic Cigarettes (Feb. 15, 2018),  https://tinyurl.com/ybadn9cl; see also a summary of ACS’s most recent position statement in a previous blog post, available at https://www.thecontinuumofrisk.com/2018/06/american-cancer-society-acknowledges-reduced-harm-electronic-nicotine-delivery-systems-warns-dangers-misleading-consumers/.

[7] NAS, PUBLIC HEALTH CONSEQUENCES OF E-CIGARETTES, at S-9, 18-2, 18-13, 1823, https://tinyurl.com/ycxlymgf.