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I.      Reagan-Udall Report

In July 2022, the Food and Drug Administration (FDA) Commissioner, Dr. Robert Califf, released a public statement saying the agency “has confronted a series of challenges that have tested our regulatory frameworks and stressed the agency’s operations.” As such, Commissioner Califf was “prompt[ed] . . . to take a closer look at how [FDA does] business.” To this end, Commissioner Califf commissioned external agency experts to conduct a comprehensive evaluation of the Agency’s Center for Tobacco Products (CTP), given the growing concerns from a chorus of industry and public health stakeholders about CTP’s approach to the regulation and enforcement of tobacco products. In Commissioner Califf’s statement, he noted that CTP has “greater challenges . . . ahead as we . . . navigate complex policy issues and determine enforcement activities for an increasing number of novel products that could potentially have significant consequences for public health.” The external agency experts selected to conduct the comprehensive evaluation of CTP was The Reagan-Udall Foundation (Reagan-Udall or the Foundation)[1]. Reagan-Udall formally began its operational evaluation of CTP in September 2022.

A.      The Report

In December 2022, Reagan-Udall published their final operational evaluation (Reagan-Udall Report or Report) of CTP, titled, Operational Evaluation Of Certain Components Of FDA’s Tobacco Program (hereinafter the “Report”). The Report includes fifteen recommendations across four program areas: Regulations and Guidance, Application Review, Compliance and Enforcement, and Communication with the Public and Other Stakeholders. Id. at 2. The Foundation’s recommendations for each program area are detailed in the following sections.

1.      Regulations and Guidance

The Report notes that CTP has been active since its creation, “issuing numerous advance notices of proposed rulemaking, proposed rules, final rules, and guidance documents.” However, the Foundation heard from stakeholders that they felt that “certain foundational requirements are still lacking.” Id. at 17. The two primary concerns among the stakeholders were the “lack of clarity regarding how the Agency is applying the [Appropriate for the Protection of the Public Health] standard” and the need for “more specific guidance on the factors CTP weighs while evaluating applications.” Id. Stakeholders provided a laundry list of areas where they would like “more specific guidance,” including modified risk tobacco products; standards for the maximum yields of specific toxicants; testing, reporting, and possible disclosure of tobacco product constituents, ingredients, and additives; nicotine levels in combustible tobacco products; and science needed to support product applications. Id.  

The Report particularly notes that “regulations and product standards [are] time-consuming and resource-intensive,” while guidance documents take less time to craft and can be used to “convey FDA’s expectations for matters where a binding regulation may not be needed or where the Agency’s thinking is evolving and is not yet ripe for inclusion in a binding regulation.” Id. However, the Report goes on to warn that CTP’s process for regulations and guidance development and publication is, at “the outset,” insufficiently informed, “about the needs of CTP staff and various stakeholders.” Id. As such, CTP needs to “strengthen the quality and usefulness of its policy development function by gathering more input from staff and the public at the front end of the process.” Id.

To this end, the Report made one recommendation—albeit with several additional caveats. The Report recommends that CTP “should evaluate and redesign the current policy development program to create a more effective approach to achieving the regulatory review and enforcement goals that the Center establishes.” Id. In particular, the policy development program should:

  • Collaboratively develop, publish, and maintain a comprehensive policy agenda listing foundational and other regulations and guidances needed to implement the Tobacco Control Act, including timeframes for development.
  • Create an elevated CTP Office of Policy, incorporating the current Office of Regulations functions, with broader responsibility and authority to provide strategic policy leadership and direction across all Center functions.
  • Use regulations strategically to prescribe categorical principles and standards to reduce the need for case-by-case determinations in application reviews and compliance and enforcement matters.
  • Review and expand the use of existing guidance to provide clarity, predictability, and transparency concerning scientific standards for application review, and update the guidance as the science and CTP’s application of that science evolves. Id. at 17-18.

2.      Application Review

The Report Panel heard from stakeholders that the Agency’s review process needed a “new approach.” Id. at 18. The Report goes on to note that some application processes are “perceived” as working well, such as the SE pathways, while others, such as the PMTAs, are generally perceived by stakeholders to be “ineffective and problematic.” Id. Concerns among stakeholders ranged from discontent with inadequate guidance and the “unsustainable” need for PMTA filings on every new product, especially considering that “thousands of product variations exist” and stakeholders’ belief that applications are handled inconsistently. Id. at 18-19. The Report specifically noted that the Panel did not receive “significant feedback concerning the SE or EX REQ pathways.” Id. at 19.

The Report continues by describing that because of the litigation surrounding the Deeming Rule’s finalization in 2016 —discussed in earlier chapters—CTP was “unable to issue PMTA regulations describing the requirements for submissions in advance of the deadline for application submission.” Id. As a consequence, CTP’s ability to review applications was compromised. Id.

To address these concerns, the Report made two sweeping recommendations that advance the general goal of “accelerat[ing], intensif[ing] and expand[ing] [CTP’s] efforts to establish regulatory policies and scientific standards for application review.” Id. at 20.

First, CTP “should develop a more clear and predictable framework for high-quality PMTA and MRTP application submission and reviews…” Id. at 19:

  • Prioritizing timely development and completion of policies and scientific standards necessary for high-quality submissions.
  • Simplifying, standardizing, documenting, and publicly disseminating review procedures.
  • Further developing operations management capabilities.
  • Clarifying supervisory roles and responsibilities for ensuring review quality and developing a process for the review team to timely identify novel or complex scientific issues that merit senior management attention or consultation with specialized subject matter experts.
  • Providing more details in public summaries of Marketing Granted Orders and summaries at regular intervals of deidentified reasons why Marketing Denial Orders were issued to provide applicants more insight into CTP’s regulatory decision-making process. Id.

Secondly, CTP should “[c]onsider clarifying in formal policy the Center’s plans for triaging its substantive reviews to conserve resources when there are certain critical sections of the application that can be indicative of whether all sections of the application merit review.” Id.

3.      Compliance and Enforcement

The Report spent a considerable length discussing and offered a number of recommendations concerning the current regulatory and enforcement environment. Id. at 21-22. The Report details that while the FDA has been busy addressing individuals who do not comply with the requirements of the TCA, “millions of [tobacco] products have entered the market without pre-market authorization and remain on the market today.” Id. at 21.

The Report continues to say that while companies have and continue to evade enforcement via a number of practices, CTP’s current inability to independently bring injunction or seizure cases[2] creates an ultimately cumbersome and disjointed process. Id. at 22. While CTP can impose civil money penalties for TCA violations, the Report notes that this process is “cumbersome,” and the penalties may be “insufficiently low.” Id.

The Report’s final observations regarding CTP’s compliance and enforcement actions were critical of the Agency’s lack of transparent communication “regarding the reasons it has failed to clear the market of illegal products” and the seeming misalignment of CTP’s Office of Compliance and Enforcement’s actions with CTP’s largest enforcement priority— “illegal products on the market.” Id. at 23.

The Report makes five recommendations:

  • FDA should seek higher-level Administration involvement to establish an interagency task force to make enforcement of the tobacco laws a government-wide priority, particularly to address the marketing of illegal products and the risks of youth use.
  • The Agency should consider whether statutory changes to provide streamlined processes for tobacco enforcement, including increased consequences for TCA violations, should be pursued.
  • In addition to pursuing formal enforcement through DOJ, FDA should explore alternative approaches to achieving compliance.
  • CTP should enhance its use of public communications to provide greater transparency about the Agency’s approach to compliance and enforcement, including prominently posting and maintaining a list of legally marketed products to facilitate voluntary compliance and discourage the sale of illegal products by manufacturers, distributors, wholesalers, and retailers.
  • The Center should ensure that the workplan and goals for the Office of Compliance reflect any new priorities that the Center adopts as a result of its evaluation of additional enforcement approaches. Id.

4.      Communication with the Public and Other Stakeholders

A significant theme of the Report is the need for CTP to engage with the public and stakeholders. The Report notes that CTP’s role is not only protection via regulation but also via educating the public, “especially young people.”[3] The Foundation heard from many stakeholders who wanted clarifying communication from CTP regarding vaping, harm reduction, and the relative risk of tobacco products, particularly as it pertains to “help[ing] adult consumers make informed decisions.”[4] Stakeholders also expressed discontent regarding CTP’s lack of “clear communication about its plans to address products marketed without the required PMTA.” Id. at 26.

To advance CTP’s communication with the public and stakeholders, the Report made three recommendations:

  • CTP should obtain public input during the development of the Strategic Plan and communicate with stakeholders and the public about the Center’s strategic objectives as well as key messages, and metrics for measuring plan effectiveness.
  • The Center should solicit broad public input as it continues to develop its tobacco public education campaigns, which are critical to the public health mission.
  • CTP should improve the overall transparency of the tobacco program, particularly with respect to the regulatory process and its scientific underpinnings. Id. at 26-27.

B.      CTP’s Response to the Reagan-Udall Foundation Evaluation Report

On February 24, 2023, Brian King, the Director of FDA’s Center for Tobacco Products, released a press release titled, An All-Center Approach: CTP’s Response to the Reagan-Udall Foundation Evaluation Report (the “CTP Response”). CTP’s response broadly summarizes the center’s review of the Report’s recommendations and details CTP’s responses and next steps. In conjunction with the press release, CTP also launched a new website titled, Actions to Address Recommendations from the Reagan-Udall Evaluation of CTP, which provides more details about CTP’s plans for addressing the recommendations.

1.      Cross-Cutting Responses

Effective as of the press release’s publication, CTP is initiating the development of a comprehensive 5-year strategic plan. A central tenet of the plan will be a focus on advancing health equity as a means of addressing “tobacco-related disparities across CTP’s programmatic portfolio.”

Additionally, taking a cue from stakeholder comments, CTP plans on being “transparent about . . . key activities” by appointing “internal transparency liaisons within each CTP Office” and sharing routine updates on the strategic plan’s development. CTP anticipates issuing interim strategic goals by Summer 2023 and a final strategic plan to the public by December 2023.

2.      Responses to Science and Application Review Recommendations 

According to the press release, CTP has started developing a more efficient framework for high-quality tobacco product application reviews in response to the Report’s observation and recommendation. Part of this effort will include posting scientific policy memos and reviewer guides and holding more frequent meetings of the Tobacco Products Scientific Advisory Committee (TPSAC)[5]. CTP also recently announced that the Office of Science has appointed a new Director, Dr. Matthew Farrelly.  

3.      Responses to Regulations and Guidance Recommendations

CTP announced that effective immediately, CTP was initiating a new hiring process to create a new policy unit within the Office of the Center Director. This new unit would “be responsible for providing overall policy coordination across CTP.” Additionally, in a node to the Report’s heavy focus on transparency, CTP plans to “develop, publish, and maintain a comprehensive policy agenda of rules and guidances that are in development or planned for development at the center.” CTP noted that an initial policy agenda was expected by the end of 2023, with reports made annually thereinafter.

4.      Responses to Compliance and Enforcement Recommendations

In the release, CTP touted the number of warning letters, permanent injunction filings, and the Center’s first-ever civil money penalty complaints. However, drawing on the Report’s observation that FDA does not have independent litigation authority, the release notes that FDA will be convening a summit of officials from the Department of Health and Human Services (HHS), FDA, and DOJ. Moreover, CTP plans to consider if statutory changes are needed for CTP to enforce the law fully and if alternative approaches to achieve compliance (i.e., outside DOJ assistance) are possible.

CTP also plans to create a new website that will contain all “enforcement activities for products that are illegally marketed without FDA authorization,” as well as create a searchable database for tobacco products that have an FDA marketing order. Additionally, CTP plans to be in contact with trade groups and other industry stakeholders in order to “keep them apprised of the development of new enforcement priorities and updates, and enhance FDA’s Tobacco Product Marketing Order webpage.”

5.      Responses to Public Education Campaigns Recommendations

While in their response, CTP draws attention to current public education campaigns they are conducting, they do recognize that “there are always opportunities for continued improvement.” Without describing specifics, CTP plans to “explore new ways for soliciting and considering public input on our campaign program” and will “develop, publish, and promote resources that describe the mechanisms we currently use to solicit and consider public input on our campaigns to ensure relevant stakeholders are aware.”[6]

[1] The Reagan-Udall Foundation, formally known at the Reagan-Udall Foundation for the Food and Drug Administration, is an independent 501(c)(3) organization created by Congress “to advance the mission of the FDA to modernize medical, veterinary, food, food ingredient, and cosmetic product development, accelerate innovation, and enhance product safety.” About Us, Reagan-Udall Found. for the Food & Drug Admin., https://reaganudall.org/about-us (last visited Mar. 8, 2023).

[2] The Report states, “[t]he U.S. Department of Justice (DOJ) is charged with bringing injunction or seizure cases on behalf of FDA.” Id. at 22.

[3] The Report stresses that the CTP “could use its communications function more strategically to achieve its overall public health goals.” Id. at 26.

[4] In the additional discussion regarding the recommendations, the Report noted that stakeholders’ “[v]iews on CTP’s public education campaigns varied.” Id. at 26-27.

[5] The Tobacco Products Scientific Advisory Committee (TPSAC) advises the Agency’s Commissioner on responsibilities as they relate to the regulating tobacco products. See Tobacco Products Scientific Advisory Committee, U.S. Food & Drug Admin. (Sept. 26, 2022), https://www.fda.gov/advisory-committees/committees-and-meeting-materials/tobacco-products-scientific-advisory-committee.

[6] CTP Response.

On March 10, 2023, the U.S. Food and Drug Administration (FDA) published a long-awaited proposed rule on Requirements for Tobacco Product Manufacturing Practice (TPMP),[1] which sets forth proposed requirements for the manufacture, design, packing, and storage of tobacco products[2]. The proposed requirements are essentially “good manufacturing practices” for tobacco products and are intended to minimize and prevent additional risks associated with such products and apply to both domestic and foreign manufacturers of finished and bulk tobacco products.

A finished tobacco product is defined as a tobacco product, including any component or part, sealed in packaging, such as a pack of cigarettes, intended for consumers, while a bulk tobacco product is defined as a tobacco product that is not sealed in final packaging but is otherwise suitable for consumer use[3]. A tobacco product manufacturer is defined as any person(s), including a repacker or relabler, who manufactures, fabricates, assembles, processes, or labels a tobacco product, or imports a finished or bulk tobacco product for sale or distribution in the United States[4]. Of note, under the proposed rule, small tobacco product manufacturers, defined as a manufacturer that employs fewer than 350 employees[5], would not need to comply with the TPMP requirements until four (4) years after the effective date of the final rule. FDA notes that this is consistent with Section 906(e)(1)(B)(v) of the Food, Drug and Cosmetic (FD&C) Act, as amended by the Family Smoking Prevention and Tobacco Control Act (TCA), and would provide small businesses with sufficient time to implement the proposed requirements[6]. Moreover, manufacturers would only be required to comply with requirements applicable to its finished and bulk tobacco product manufacturing operations. Thus, smaller tobacco product manufacturers (such as vape shops that engage in some but not all of the activities described in the proposed rule) would be able to tailor their procedures to suit their smaller operations while still complying with the TPMP requirements[7].

With respect to vape shops in particular, the proposed rule clarifies that such establishments that only sell ENDS products and components and parts would not be considered manufacturers and would not be subject to the requirements in the proposed TPMP rule unless they also engage in the manufacture, preproduction design validation, packing, and storage of finished or bulk tobacco products within the meaning of the rule[8]. While vape shop owners will certainly appreciate the compliance extension, it is not clear how many vape shop e-liquid manufacturers will survive the next four years, given the nearly insurmountable PMTA process and FDA’s continued enforcement focus on these small U.S. businesses with de minimis market share.

In addition, while the proposed rule clearly states that TPMPs will apply to foreign manufacturers to ensure that imported tobacco products comply with the TCA and applicable tobacco product standards, it is important to note that the rule does not require foreign manufacturing establishments, including China-based manufacturers largely responsible for producing counterfeit and otherwise illegal disposable ENDS, to register their establishments with or provide a product list to FDA. Section 905(b) of the TCA made this a requirement for domestic manufacturing establishments, but left it up to FDA to extend to foreign manufacturing establishments through the rulemaking process[9]. In other words, FDA is not using the proposed TPMP rule to execute its authority provided by Congress under Section 905(h) of the TCA to promulgate a regulation to extend the registration and product listing requirement to foreign establishments. This also means that foreign manufacturers will not be subject to regular, biennial inspections required for domestic establishments, although the agency has broad authority and ability to inspect foreign manufacturers pursuant to Sections 704 and 905 of the FD&C Act, and as part of the Premarket Tobacco Product Application (PMTA) review process under 21 C.F.R. § 1114.27.  

Summary of Proposed Rule

The proposed rule, which is expected to be codified at 21 C.F.R. Part 1120, establishes a framework of requirements that tobacco product manufacturers to follow, including:

  • Establishing tobacco product design and development controls to prevent or minimize certain risks;
  • Ensuring that finished and bulk tobacco products are manufactured in conformance with established specifications;
  • Minimizing the likelihood of the manufacture and distribution of nonconforming tobacco products;
  • Requiring investigation and identification of nonconforming tobacco products, including those that have been distributed, in order to institute appropriate corrective actions, such as conducting a recall as needed;
  • Taking appropriate measures to prevent contamination of tobacco products; and
  • Establishing traceability to account for all components or parts, ingredients, additives, and materials, as well as each batch of finished or bulk tobacco product, to aid in the investigation and identification of nonconforming tobacco products. 

Specifically, the proposed rule is divided into ten subparts, as follows:

1) Subpart A – General Provisions

Subpart A describes the purpose and scope of the proposed rule. As noted above, the proposed rule applies to both domestic and foreign manufacturers of finished and bulk tobacco products, requiring such manufacturers to adhere to the framework of requirements. 

2) Subpart B – Management System Requirements

Subpart B has three sections, as follows:

  • Organization and personnel, which requires establishing and maintaining an organizational structure with sufficient personnel and designated responsibilities, including management personnel with executive responsibility;
  • Tobacco product complaints, which requires establishing and maintaining procedures for handling the receipt, evaluation, and documentation of any complaints; and
  • Corrective and preventive actions (CAPA) are necessary to protect public health, which requires establishing and maintaining procedures for implementing such actions. 

3) Subpart C – Buildings, Facilities, and Equipment

Subpart C has four sections, as follows:

  • Personnel practices, which requires establishing and maintaining procedures related to personnel practices to reduce the risk of contamination with filth biological materials, chemical hazards, or other deleterious substances;
  • Buildings, facilities, and grounds, which requires ensuring that buildings and facilities are of suitable construction, design, and location to facilitate cleaning and sanitation, maintenance, and proper operation, as well as ensuring that grounds are maintained in a condition to prevent contamination;
  • Equipment, which provides requirements for the design, construction, and maintenance of equipment used in the manufacturing process, as well as requirements for testing, monitoring, and measuring such equipment; and
  • Environmental controls, which requires that systems be maintained and monitored to verify that environmental controls are adequate and functional. 

4) Subpart D – Design and Development Controls

Subpart D has two sections, as follows:

  • Design and development activities, which requires establishing and maintaining procedures to control the design and development of tobacco products, including the control of risks associated with the product, the manufacturing process, packaging, and storage, as well as procedures for design verification and validation, and requires developing a process for identifying, analyzing, and evaluating known and reasonably foreseeable risks associated with the tobacco product and its packaging and taking appropriate measures to reduce or eliminate risks; and
  • Master manufacturing record (MMR), which requires establishing and maintaining an MMR for each finished and bulk tobacco product manufactured for distribution, including tobacco product specifications, manufacturing methods and production process procedures, and all packaging, labeling, and labels approved for use with the product. 

5) Subpart E – Process Controls

Subpart E contains nine sections, as follows:

  • Purchasing controls, which requires establishing and maintaining procedures for ensuring that purchased or otherwise received products and services related to the manufacture of finished or bulk tobacco products are from qualified suppliers and conform to established specifications;
  • Acceptance activities, which requires establishing and maintaining procedures for incoming, in-process, and/or final acceptance activities, including acceptance criteria, to ensure that products meet established specifications;
  • Production processes and controls, which requires establishing and maintaining procedures for production processes, including process specifications and process controls, process validation, and manual methods and manufacturing material;
  • Laboratory controls, which requires demonstrating laboratory competency to perform laboratory activities associated with the manufacture of finished and bulk tobacco products and establishing and maintaining appropriate laboratory control procedures;
  • Production records, which requires establishing and maintaining procedures for ensuring that a production record is prepared for each batch of finished or bulk tobacco product to demonstrate conformity with the requirements established under the MMR;
  • Sampling, which requires establishing and maintaining an adequate sampling plan that uses representative samples based on a valid scientific rationale;
  • Nonconforming tobacco products, which requires establishing and maintaining procedures for the control and disposition of nonconforming tobacco products, including specific requirements for identification and segregation, investigation, and disposition and follow-up
  • Returned tobacco products, which requires establishing and maintaining procedures for the control and disposition of returned tobacco products, including specific requirements for identification, segregation, evaluation, and disposition; and
  • Reprocessing and rework, which provides specific requirements for the evaluation of the tobacco product to determine that it is appropriate for reprocessing or rework, authorization of the reprocessing or rework, and production processes, including process controls, to ensure that reprocessed and reworked tobacco product conforms to MMR specifications. 

6) Subpart F – Packaging and Labeling Controls

Subpart F contains four sections, as follows:

  • Packaging and labeling controls, which requires establishing and maintaining procedures for ensuring that the correct packaging and labeling are used to prevent mix-ups, ensuring that all packaging and labeling are approved for use by the manufacturer and comply with all requirements of the MMR as well as other applicable requirements promulgated by FDA, ensuring that packaging and labeling control procedures to ensure that labels are indelibly printed on or permanently affixed to finished and bulk tobacco product packages, and ensuring that the packaging, labeling, storage, and shipping cases do not contaminate or otherwise render the tobacco product adulterated or misbranded;
  • Repackaging and relabeling, which requires establishing and maintaining procedures for repackaging and relabeling operations;
  • Manufacturing code, which requires applying a manufacturing code that contains the manufacturing date and batch number to the packaging or label of all finished and bulk tobacco products; and
  • Warning plans, which requires establishing and maintaining procedures for implementing the requirements of such plans. 

7) Subpart G – Handling, Storage, and Distribution

Subpart G contains two sections, as follows:

  • Handling and storage, which requires establishing and maintaining procedures to ensure that tobacco products are handled and stored under appropriate conditions to prevent nonconforming products as well as mix-ups, deterioration, contamination, adulteration, and misbranding of tobacco products; and
  • Distribution, which requires establishing and maintaining procedures to ensure that tobacco products are distributed to the initial consignee under appropriate conditions and that only those finished and bulk tobacco products approved for release are distributed. 

8) Subpart H – Recordkeeping and Document Controls

Subpart H requires that all documents and records be maintained at the manufacturing establishment or another location that is readily accessible to responsible individuals of the manufacturer and to FDA and that they be written in English, or an English translation be made available upon request. Additionally, documents and records associated with a batch of finished or bulk tobacco product must be retained for a period of at least four years from the date of distribution of the batch or until the product reaches its expiration date, if one exists, whichever is later, while documents and records that are not associated with a batch of finished or bulk tobacco product must be retained for a period of at least four years from the date they were last in effect. 

9) Subpart I – Small Tobacco Product Manufacturers

Subpart I provides that small tobacco product manufacturers, defined as tobacco product manufacturers that employ fewer than 350 employees, are not required to comply with the proposed rule until four years after the effective date of the Final Rule. 

10) Subpart J – Exemptions and Variances

Finally, Subpart J contains five sections that set forth procedures and requirements for petitioning for a permanent or temporary exemption or variance from any of the proposed requirements. 

Next Steps

The proposed rule is open to public comments for 180 days, until 11:59 PM (Eastern) on September 6, 2023. As part of the rulemaking process, FDA will review all comments received, conduct a comment analysis, and decide whether to (i) proceed with the proposed rule; (ii) issue a modified proposed rule based on the comments received; or (iii) withdraw the proposed rule. Depending on how many comments are received, we anticipate it will take FDA at least two years to finalize the TPMP rule.

FDA will host a public hearing on April 12, 2023, to gather comments from stakeholders, including industry, the scientific community, advocacy groups, and the public. FDA will also hold a meeting of the Tobacco Products Scientific Advisory Committee (TPSAC) on May 18, 2023, to seek recommendations from FDA’s outside panel of experts on the requirements laid out in the proposed rule. As part of the TPSAC meeting, the public will have an opportunity to make oral presentations.

[1] 88 Fed. Reg. 15174 (March 10, 2023), available at: https://www.federalregister.gov/documents/2023/03/10/2023-04591/requirements-for-tobacco-product-manufacturing-practice. 

[2] See United States Food and Drug Administration, “FDA Proposes New Requirements for Tobacco Product Manufacturing Practices” (March 8, 2023), available at: https://www.fda.gov/news-events/press-announcements/fda-proposes-new-requirements-tobacco-product-manufacturing-practices. 

[3] 88 Fed. Reg. 15174, 15253 (March 10, 2023). 

[4] Id. at 15174, 15254. 

[5] The proposed rule indicates that, for purposes of this definition, the number of employees of a manufacturer includes those employees and personnel of each entity that controls, is controlled by, or is under common control with such manufacturer. Id. 

[6] Id. at 15174, 15237. 

[7] Id. at 15174, 15186. 

[8] Id.

[9] See United States Food and Drug Administration, “Registration and Product Listing for Owners and Operators of Domestic Tobacco Product Establishments: Guidance for Industry” (December 2017), available at: https://www.fda.gov/regulatory-information/search-fda-guidance-documents/registration-and-product-listing-owners-and-operators-domestic-tobacco-product-establishments. 

To be placed on the European Union market, tobacco and related products must comply with specific requirements and procedures, harmonized at the European level by Directive 2014/40/EU concerning the manufacture, presentation, and sale of tobacco and related products (hereinafter the “Tobacco Products Directive” or the “Directive”). This article provides a general overview of the requirements and procedures necessary to comply with the Tobacco Products Directive. This is the first of a series of articles that we will publish on marketing tobacco and related products in the EU. Future articles will address specific insights on (i) ingredients requirements and flavor bans, (ii) notification and reporting obligations under the Directive, (iii) labeling and packaging of tobacco products, and (iv) implementation of the Directive by the European Member States.

I. Scope of the Directive: Heated Tobacco Products Now Included

The Directive applies to electronic cigarettes, herbal products for smoking, and tobacco products. Under the Directive, “tobacco products” include pipe tobacco, roll-your-own tobacco, smokeless tobacco, cigarettes, cigars, cigarillos, waterpipe tobacco, and novel tobacco products. ‘Novel tobacco products’ is a new and open category introduced by the Directive, which encompasses all tobacco products not falling under the one previously mentioned and that are placed on the market after May 19, 2014. Following the Commission Delegated Directive (EU) 2022/2100, which became effective on November 23, 2022, novel tobacco products include ‘Heated Tobacco Products,’ which are defined as a product  “that is heated to produce an emission containing nicotine and other chemicals, which is then inhaled by user(s), and that, depending on its characteristics, is a smokeless tobacco product or a tobacco product for smoking.”

II. Notification and Reporting Obligations

Under the Tobacco Products Directive, prior to placing a product on the market, manufacturers and importers of tobacco products and e-cigarettes must submit to the Member State authorities specific information containing details on (i) ingredients, accompanied by relevant toxicological data, (ii) emissions resulting from the use of the products, (iii) studies and market research on smokers, ingredients and emissions, and (iv) on a yearly basis, information on the sales volumes of the products. Enhanced reporting obligations apply to cigarettes and roll-your-own tobacco products only if they contain additives on a priority list[1]. For electronic cigarettes, additional information includes components of the product, a description of the production process, and the nicotine doses and the nicotine uptake (i.e., the body absorption). The above information must be submitted through an electronic entry gate, common for all Member States of the European Union (also known as “the EU Common Entry Gate”).

III. Product Requirements

Emission levels and ingredients

The Tobacco Products Directive sets forth requirements on maximum emission levels, measurement methods, and standards (the latter for cigarettes only) and prohibits the use of ingredients that (i) are listed in the Directive,[2] (ii) have carcinogenic, mutagenic, or reprotoxic (CMR) properties, or (iii) pose a risk to human health (for tobacco products and electronic cigarettes). The use of flavorings is banned in cigarettes and roll-your-own tobacco. Importantly, the flavor ban will apply (as of October 23, 2023) to heated tobacco products as well, pursuant to recent Directive (EU) 2022/2100. Further to the above, the Directive also provides specific product requirements for electronic cigarettes, such as maximum nicotine levels (20 mg/mL), volume requirements for refill containers and cartridges, and mechanical requirements for electronic cigarettes and refill containers.

Labeling and packaging

The Directive also regulates certain aspects of the labeling, packaging, and presentation of tobacco products, electronic cigarettes, and herbal products for smoking. For each of these product categories, the mandatory health warnings required to be placed on the product packaging are provided in the Directive.

Traceability requirements

For tobacco products only, the Directive sets out a traceability system in order to address the issue of illicit trade[3]. Under the traceability system, (i) all unit packets of tobacco products must be marked with a unique identifier and a tamper-proof security feature enabling authorities and consumers to verify their authenticity, and (ii) economic operators in the supply chain must maintain records of the traceability of the products and transmit the related information to an independent provider of a repository, approved by the EU Commission, that stores therein the data transmitted. The competent authorities of the Member States and the Commission have access to the data stored in the repositories to ensure compliance with the tobacco products legislation.

Cross-border distance sales of tobacco products

Specific requirements (i.e., registration and verification obligations) apply to cross-border distance sales of tobacco products and electronic cigarettes. Cross-border distance sales may also be prohibited by Member States[4]. 

IV. Implementation of the Directive by the EU Member States

In general, EU Directives only set forth the objectives that all EU countries must achieve. However, it is up to the individual Member States to devise their own laws on how to achieve the objectives within the Directive. It follows that (i) Directives need to be implemented in each EU Member State to be enforceable and that (ii) the Directives may be, in practice, implemented differently in each Member State[5]. In this regard, we note that pursuant to the Tobacco Products Directive:

  • Member States may maintain or introduce further requirements in relation to the standardization of the packaging of tobacco products when justified on the grounds of public health;
  • Member States may also prohibit a certain category of tobacco or related products, provided again, the provisions are justified by the need to protect public health

V. Revision of the Tobacco Products Directive

The European Commission is currently reviewing the Tobacco Products Directive, aiming to address issues such as further enforcement of the current regime for cross-border distance sales, emerging novel tobacco products, regulatory challenges posed by heated tobacco products and electronic cigarettes, new herbal products entering the market, and options to increase tobacco manufacturers’ liability[6].  According to the European Commission’s Implementation Roadmap[7] of Europe’s Beating Cancer Plan, the Commission is expected to adopt a proposal for the revision of the Tobacco Products Directive in 2024.

VI. Conclusion

In summary, the Tobacco Products Directive establishes numerous and detailed provisions that manufacturers must take into consideration when placing electronic cigarettes and tobacco products on the European Union market. Given the numerous requirements, differences in Member State implementation of the Directive, upcoming flavor bans, and anticipated revisions to the Directive, companies must take a careful approach and monitor developments closely to ensure compliance and avoid enforcement.  

We will be covering EU regulation of tobacco products in detail at Keller and Heckman’s Annual E-Vapor and Tobacco Law Symposium on February 15 – 16, 2023, in Irvine, California. Details and registration information can be found here.

[1] Decision (EU) 2016/787 laying down a priority list of additives contained in cigarettes and roll-your-own tobacco subject to enhanced reporting obligations. This is a list containing the most commonly used additives, for which there are indications that they:  a) contribute to/increase the toxicity or addictiveness of the products, or b) result in a characterizing flavor, or c) facilitate inhalation or nicotine uptake, or d) leads to the formation/increase of CMR substances/their quantities.

[2] The list is provided by Article 7.6 of the Tobacco Products Directive.

[3] See Par. 5 (Traceability and security features) of the Report from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions on the application of Directive 2014/40/EU concerning the manufacture, presentation and sale of tobacco and related products of May 20, 2021 (the “2021 Commission Report”).

[4] According to the 2021 Commission Report, more than half of the Member States banned cross-border distance sales of tobacco and/or related products to consumers in their countries (Par. 6 Cross-border distance sales).

[5] We note that aspects not harmonized by the Directive may be regulated autonomously by the Member States. For example, the Directive (recital 47) mentions that it does not harmonize all aspects of electronic cigarettes or refill containers and that the responsibility for adopting rules on flavors remains with the Member States.

[6] See the 2021 Commission Report.

[7] Europe’s Beating Cancer Plan: Implementation Roadmap was published in November 2021 and is available here: https://health.ec.europa.eu/latest-updates/europes-beating-cancer-plan-implementation-roadmap-2021-11-17_en.

Yesterday, Janet Woodcock, M.D., the Principle Deputy Commissioner for the Office of the FDA Commissioner, released a statement regarding the Agency’s approach towards cannabidiol (CBD) and its application in the food and drug industry.

The statement provided that FDA convened a high-level internal working group to explore potential regulatory pathways for CBD products.  The working group examined studies related to the CBD-based drug Epidiolex, as well as published scientific literature and information submitted to a public docket. Following review, the working group concluded that a new regulatory pathway for CBD is needed that balances individuals’ desire for access to CBD products with the regulatory oversight needed to manage potential long-term risks from frequent exposure. FDA is expecting to collaborate with Congress on this matter; however, the timeline for action remains unknown.

Woodcock, on behalf of FDA, stated: “[s]ome risk management tools could include clear labels, prevention of contaminants, CBD content limits, and measures, such as minimum purchase age, to mitigate the risk of ingestion by children. In addition, a new pathway could provide access and oversight for certain CBD-containing products for animals.”

FDA also denied three citizen petitions that had asked the agency to conduct rulemaking to allow the marketing of CBD products as dietary supplements.

Keller and Heckman will continue to monitor and report on matters impacting the CBD industry.

We will be covering this topic in detail at Keller and Heckman’s Annual E-Vapor and Tobacco Law Symposium on February 15 – 16, 2023, in Irvine, California. Details and registration information can be found here. To learn more about Keller and Heckman’s Cannabis, Hemp, and Cannabinoids (CBD) practice, see here.

From December 5-7, 2022, Keller and Heckman hosted a private conference with the China State Tobacco Monopoly Administration (STMA) on the topic of U.S. and global e-cigarette and tobacco product regulation. The event was approved by China’s Ministry of Science and Technology (MOST) and was attended by over 700 officials from STMA and its local subsidiaries across China. The event was co-sponsored by Gladen (Shanghai) International Trading Co., Ltd., a leading tobacco ingredient supplier in China.

China amended its tobacco monopoly law in 2021 to regulate e-cigarettes, officially placing e-cigarettes and raw materials (i.e., e-liquids as well as nicotine for use in e-cigarettes) under the “monopoly management” of STMA. Since then, STMA has issued dozens of regulations applicable to e-cigarettes intended for domestic sale as well as for export to overseas markets. Over 95% of all the world’s e-cigarette hardware is made in Shenzhen, China.

During the three-day intensive online training, which included several hours of live Q&A, Keller and Heckman attorneys provided detailed guidance on the regulation of e-cigarettes and tobacco products in the United States, European Union, and some Asia Pacific jurisdictions, particularly focusing on the U.S. regulatory framework for premarket authorization, good manufacturing practices, import and export requirements, state laws, as well as global market trends. Keller and Heckman attorneys Azim Chowdhury, David Ettinger, Eric Gu, Neelam Gill, and presented at the event, along with guest speaker Tim Phillips, Managing Director of ECigIntelligence.

David Ettinger, Managing Partner of Keller and Heckman’s Shanghai Office, and Eric Gu, will be discussing the situation in China at Keller and Heckman’s upcoming E-Vapor and Tobacco Law Symposium on February 15-16, 2023. Register for the seminar here.

Since it became effective in 2016, the cigar industry has mounted several challenges to the U.S. Food and Drug Administration’s (FDA) “Deeming Rule,” which extended the Agency’s tobacco product authority beyond cigarettes, cigarette tobacco, smokeless tobacco, and roll-your-own tobacco, to all products that meet the “tobacco product” definition in the Food, Drug and Cosmetic Act, as amended by the Family Smoking Prevention and Tobacco Control Act.[1]

In 2020, the United States District Court for the District of Columbia (the “Court”) issued an order vacating the health warning requirements for cigars and pipe tobacco set forth in 21 CFR §§ 1143.3 and 1143.5, and remanding the final Deeming Rule’s warning requirements for cigars and pipe tobacco back to the Agency.[2] On August 19, 2020, the Court issued a ruling, in part, to prohibit FDA enforcement of the Tobacco Control Act’s premarket authorization requirement for premium cigars until after the Agency considers developing a streamlined substantial equivalence process specifically for premium cigars.

Now, the Court has addressed the central issue of whether FDA should have ever deemed premium cigars to be subject to the Tobacco Control Act in the first place – ruling that doing so was arbitrary and capricious in violation of the Administrative Procedure Act (APA). The ruling does not apply to little cigars or cigarillos.[3]

By way of background, in 2014, the FDA promulgated the notice of proposed rulemaking (NPRM) for the long-awaited Deeming Rule. In the NPRM, FDA proposed two options defining the scope of the rule. Under “Option 1,” FDA would deem all products meeting the statutory definition of “tobacco product,” including premium cigars, to be subject to its regulatory authority, while under “Option 2,” FDA would exclude premium cigars from its regulatory authority.[4] FDA sought comments on these options, to “determine whether all cigars should be subject to deeming and what provisions of the proposed rule may be appropriate or not appropriate for different kinds of cigars.”[5]

Of note, the Cigar Rights of America (CRA) in conjunction with the Cigar Association of America and the Premium Cigar Association, submitted comments to the NPRM regarding the usage patterns of premium cigar consumers, asserting the majority of premium cigar consumers are adults over 40 years old and only occasionally smoke the products, indicating that premium cigars do not pose the same type of public health concerns, including youth usage, as other tobacco products. The groups noted that the vast majority of premium cigar smokers are adults who rarely use premium cigars (71.2%), that only 3.3% reported ‘every day’ use, and 25.6% reported ‘someday’ use.

Notwithstanding such comments, FDA issued the final Deeming Rule, which became effective on August 8, 2016, and immediately deemed all products meeting the statutory definition of “tobacco product,” including premium cigars, to be subject to its regulatory authority (i.e., Option 1).[6] Specifically, FDA concluded that “there were no data provided to support the premise that there are different patterns of use of premium cigars and that these patterns result in lower health risks.”[7]

Following the publication of the final rule, the Cigar Association of America, the Premium Cigar Association, and the CRA (the Plaintiffs) collectively challenged the final rule, arguing that FDA’s decision to deem premium cigars and thereby subject them to the Tobacco Control Act requirements, including premarket authorization for new products, was arbitrary and capricious. The groups asserted:

  • FDA erroneously decided to deem premium cigars, based on an alleged lack of evidence in the administrative record of different usage patterns for premium cigar consumers, when in fact there was such evidence submitted by the CRA;
  • FDA erroneously concluded that there was significant youth usage of premium cigars further justifying regulation, based on a misinterpretation of one particular study; and
  • FDA failed to adequately conduct a cost-benefit analysis under the Regulatory Flexibility Act (RFA) of how regulating premium cigars would promote public health.[8]

In a Memorandum Opinion and Order issued on July 5, 2022, Judge Amit P. Mehta of the U.S. District Court of the District of Columbia ruled that FDA’s decision to deem premium cigars was indeed arbitrary and capricious.[9] Specifically, the Court found that there was pertinent record evidence on premium cigar usage, but that FDA failed to adequately consider the submitted comments and data, despite signaling during rulemaking (i.e., the presentation of the two options) that evidence of different usage patterns and public health impacts would be a central consideration in deciding whether to exclude premium cigars from the scope of the final rule.[10] In short, Judge Mehta found FDA ignored relevant data about the population health risks of premium cigar use.

Before issuing a final ruling vacating the Deeming Rule for premium cigars, or remanding the rule back to FDA for further consideration, for example, the Court has asked the parties to submit briefs proposing potential remedies by July 26, 2022. We will continue to monitor this case, so stay tuned for updates.

[1] See Proposed Rule 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; Regulations on the Sale and Distribution of Tobacco Products and Required Warning Statements for Tobacco Products, 79 Federal Register 23,141 (Apr. 25, 2014).

[2] See Order, Cigar Ass’n of Am. v. U.S. Food & Drug Admin., No. 1:16-cv-01460 (D.D.C. September 11, 2020).

[3] One issue for the Court to confirm in a final decision is how to define “premium cigar.” For the purposes of the August 2020 decision on premarket authorization requirements, for example, a premium cigar was defined as a cigar that meets all of the following eight criteria: (1) is wrapped in whole tobacco leaf; (2) contains a 100 percent leaf tobacco binder; (3) contains at least 50 percent (of the filler by weight) long filler tobacco (i.e., whole tobacco leaves that run the length of the cigar); (4) is handmade or hand rolled (i.e., no machinery was used apart from simple tools, such as scissors to cut the tobacco prior to rolling); (5) has no filter, nontobacco tip, or nontobacco mouthpiece; (6) does not have a characterizing flavor other than tobacco; (7) contains only tobacco, water, and vegetable gum with no other ingredients or additives; and (8) weighs more than 6 pounds per 1,000 units.

[4] Id. at 23,143–23,145.

[5] Id. at 23,143.

[6] See final rule 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 Federal Register 28,973 (May 10, 2016) (codified at 21 C.F.R. §§ 1100, 1140, 1143).

[7] Id. at 29,020.

[8] See Cigar Association of America et al. v. United States Food and Drug Administration et al., Case No. 1:16-cv-01460-APM (D.D.C.) (July 5, 2022), 4–5.

[9] Id. at 1.

[10] Id. at 5–6, 14–15.

[11] Id. at 15–16.

[12] Id. at 18.

FDA Premarket Tobacco Product Application (PMTA) Pathway

Under FDA’s premarket tobacco product application (PMTA) pathway, manufacturers or importers of tobacco products must demonstrate to the U.S. Food and Drug Administration (FDA) that the marketing of a new tobacco product would be appropriate for the protection of the public health (APPH). See Section 910(c)(2)(A) of the Federal Food, Drug, and Cosmetic Act (FD&C Act), as amended by the Family Smoking Prevention and Tobacco Control Act (TCA). This statutory threshold standard requires that FDA consider the risks and benefits of the product to the population as a whole, including users and non-users of tobacco products. The Agency’s risk-benefit analysis includes evaluating the impact of the product, both the likelihood that existing users will stop using such products and the likelihood that non-users, particularly youth and vulnerable populations, will start using such products. In its evaluation of whether a product is appropriate for the protection of the public health, the Agency reviews a product’s components, ingredients, additives, constituents, health risks, the manufacturing process, and the product’s packaging and labeling. If FDA concludes that the benefits outweigh the risks, it may authorize the product for marketing, which the Agency notes is different from the approvals that it issues for drugs or medical device products. Under the provisions of Section 910 of the FD&C Act, an issuance of a marketing granted order allows the introduction into interstate commerce of the tobacco products.

As of March 24, 2022, FDA announced that it has now taken action on approximately 99% of the almost 6.7 million electronic nicotine delivery system (ENDS) products submitted for premarket authorization. As previously reported, the vast majority of these applications for non-tobacco flavored ENDS have either been refused filing or have been denied. As to its next order of business, FDA has signaled that it will be issuing decisions on applications for popular ENDS products, noting that these products have the potential to substantially impact public health, positive or negative, given their large market share.

FDA Issues Marketing Granted Orders to Logic Technology Development LLC

On March 24, 2022, FDA authorized several tobacco-flavored electronic nicotine delivery system (ENDS) products from Logic Technology Development LLC (Logic), including various e-cigarette devices and tobacco-flavored cartridges/capsules. The Agency noted that several other products from Logic were issued marketing denial orders and must be removed from the market or be subject to enforcement action. Further, additional PMTAs remain under review (e.g., menthol products).

Last October, FDA issued its first authorization for an e-cigarette device and tobacco-flavored cartridges produced by the R.J. Reynolds Vapor Company under the brand name Vuse. The Agency notes that its authorization for the sale of such products (e.g., Logic or Vuse ENDS products that received marketing granted orders) does not mean that these products are safe, nor are they considered “FDA approved.” Instead, FDA has concluded after its review that the likely benefit for adult smokers who use such products and significantly reduce their cigarette use outweighs the risk to youth. The company must follow post-market requirements to reduce youth access and youth exposure to their marketing.

Logic PMTAs

The Agency issued premarket tobacco product marketing granted orders[1] for the following Logic products:

  • Logic Vapeleaf Regular Cartridge/Capsule Package – a blister pack of 5 capsules
  • Logic Vapeleaf Cartridge/Capsule Package – a closed e-liquid cartridge containing an atomizer and U-plugs on either end of the cartridge
  • Logic Vapeleaf Tobacco Vapor System – a closed e-cigarette device
  • Logic Pro Tobacco e-Liquid Package – a tobacco flavored closed e-liquid product
  • Logic Pro Capsule Tank System – a closed e-cigarette device
  • Log Pro Capsule Tank System – a closed e-cigarette system battery unit/USB charger
  • Logic Power Tobacco e-Liquid Package – a closed e-liquid cartridge containing tobacco flavored e-liquid
  • Logic Power Rechargeable Kit – a closed e-cigarette with battery unit/USB charger

The Vapeleaf sub-brand products are electronic cigarette products, while the Logic Pro sub-brand products are rechargeable ENDS devices with a traditional screw-in atomizer supplement.

In its decision summaries[2] and order letters, FDA has noted that in making the APPH assessment for noncombustible tobacco products such as ENDS products, the Agency weighs the negative public health impact (i.e., youth initiation and use of the product) against the potential positive public health impact (i.e., decrease of adult traditional combustible cigarette users). The Agency explained that Logic’s products were authorized only after the Agency concluded that Logic had demonstrated that the products were appropriate for the protection of public health. FDA based its conclusions on the following:

  • Data demonstrating that the marketing of Logic products may help addicted smokers transition from combustible cigarette use. Specifically, current smokers were more likely to decrease their use of traditional combustible cigarettes, from an average of 13–16 cigarettes per day (Day 1) to 1–2 cigarettes per day (by Day 59).
  • Data showing that, in comparison to traditional combustible cigarettes, ENDS products produced fewer or lower levels of toxins (e.g., carbon monoxide).
  • Data demonstrating that non-smokers, particularly youth, were unlikely to start using ENDs products. However, FDA noted that Logic is still subject to strict post-marketing requirements and must comply with the applicable statutory or regulatory requirements to minimize the potential for youth access and exposure. In addition, Logic is still subject to the Agency’s enforcement discretion (i.e., if Logic fails to comply with any applicable requirements or if there is a notable increase in the number of non-smokers who begin to use the authorized products, the Agency may suspend or withdraw the marketing order).
  • Logic’s PMTA marketing materials indicated that to decrease the potential for youth use of its products, Logic (1) eliminated all social media accounts as of September 28, 2020; (2) does not pay social media or other influencers to market or promote Logic’s products; (3) does not employ social media bots to market products; (4) only uses models over the age of 30 in its marketing materials; (5) does not use characterizing words that appeal to youth (e.g., sweet, fruity, candy, juicy, etc.); (6) does not use cartoon imagery or images of foods marketed to youth; (7) requires adult consumers to confirm that they are current tobacco or vapor users; and (8) requires mandatory age verification when purchasing Logic products.
  • Microbial stability data supporting the stability of the products over 12 months.

The Agency highlighted that the risk for the use of tobacco-flavored ENDS products by youth is lower than for flavored ENDS products. Accordingly, a PMTA applicant has a higher burden to establish that the product meets the APPH standard. Notably, the above products which have received a marketing granted order are tobacco-flavored ENDS products.

As regulated tobacco products, Logic’s authorized ENDS products are subject to the requirements of the FD&C Act, which include submission of annual registrations, ingredient and product listing requirements, reporting of harmful and potentially harmful constituents, packaging, labeling, and advertisement requirements. Should any information submitted in the PMTAs (e.g., marketing and advertising of products) change and have an effect (e.g., expanding opportunities to reach youth), those changes may, in turn, affect FDA’s APPH analysis of the products and the marketing granted order.

FDA Issues Marketing Denial Orders to Fontem US, LLC

On April 8, 2022, the Agency issued marketing denial orders (MDOs) to Fontem US, LLC (Fontem) for several of the company’s ENDS products under the ‘myblu’ brand. In reviewing Fontem’s PMTAs, FDA determined that the applications lacked sufficient evidence to show that permitting the marketing of the myblu products would meet the Agency’s APPH standard.

The Agency has noted that it is not typical practice to disclose whether a company has submitted a PMTA or its intent to commercially market a new product that has never been marketed. However, FDA has indicated that the Fontem products listed below are confirmed by the manufacturer to currently be on the U.S. commercial market. In addition, the products subject to the April 8, 2022 MDOs are listed on the publicly available ‘Deemed New Tobacco Product Applications Lists,’ which indicate products for which PMTAs were timely submitted by September 9, 2021. The following Fontem ENDs products are subject to an MDO:[3]

  • myblu Device Kit
  • myblu Intense Tobacco Chill 2.5%
  • myblu Intense Tobacco Chill 4.0%
  • myblu Intense Tobacco 2.4%
  • myblu Intense Tobacco 3.6%
  • myblu Gold Leaf 1.2%
  • myblu Gold Leaf 2.4%

FDA has also indicated that it issued several MDOs for Fontem products that were not on the publicly available Deemed New Tobacco Product Applications Lists; thus, FDA cannot release those product names. Tobacco products subject to an MDO (or negative action regarding its PMTA submission such as a Refuse to Accept or Refuse to File) may not be offered for sale, distributed, or marketed in the U.S., and if already on the market, they must be removed.

Notably, the Agency has noted in its announcement of Fontem’s MDOs, that its “highest enforcement priorities are ENDS products for which no application is pending, including, for example, those with an MDO or those for which no application [has been]… submitted.”

[1] See Logic Technology Development LLC’s marketing granted orders; available at: https://www.fda.gov/media/157143/download.

[2] See FDA’s decision summaries for Logic Technology Development LLC’s marketing granted orders; available at: https://www.fda.gov/media/157144/download.

[3] See FDA, Center for Tobacco Products April 8, 2022 press release re the Agency’s issuance of marketing denial orders to Fontem US, LLC for several of the company’s ENDS products; available at: https://www.fda.gov/tobacco-products/ctp-newsroom/fda-issues-marketing-denial-orders-fontem-us-myblu-products?utm_campaign=ctp-pmta&utm_content=CTPStatement&utm_medium=email&utm_source=govdelivery&utm_term=stratcomms.

On March 15, President Joe Biden signed a $1.5 trillion omnibus spending bill to fund the federal government through September. The bill, as passed, includes a provision amending the definition of “tobacco product” in Section 201(rr) of the Federal Food, Drug, and Cosmetic Act (“FDCA”) as “any product made or derived from tobacco, or containing nicotine from any source, that is intended for human consumption.” 21 U.S.C. 321(rr). Now that it is law, this provision closes the synthetic nicotine “loophole” and puts synthetic nicotine products under the U.S. Food and Drug Administration’s (FDA) tobacco regulatory authority.

The law will become effective 30 days after the bill’s enactment, i.e., on April 14, 2022 (“Effective Date”). Any synthetic nicotine product currently on the U.S. market as of April 14, 2022, can remain on the market for an additional 30 days until May 14, 2022 (the “Synthetic Nicotine PMTA Submission Deadline”). Manufacturers of synthetic nicotine products wishing to take advantage of FDA’s compliance policy and enforcement discretion after that date must submit a premarket tobacco product application (PMTA) to FDA by that date (i.e., May 14, 2022). Since that date is a Saturday, companies that are not planning to use the CTP Portal, but are planning to physically deliver PMTAs to FDA, should do so by 4:00 pm ET on Friday, May 13, 2022 (but note that any non-electronic PMTA submissions require a waiver from FDA). If a PMTA is submitted in a timely manner, the product(s) may remain on the market for an additional 90 days after the effective date, i.e., until July 13, 2022. After July 13, 2022, any synthetic nicotine product not authorized by FDA must come off the market.

EVENT DATE NOTES
Bill Enactment March 15, 2022 Bill signed into law by President Biden.
Effective Date April 14, 2022

Deadline for synthetic nicotine products to enter the market without PMTA authorization. PMTAs for such newly introduced products are due by May 14, 2022.

However, a synthetic nicotine version of a previously marketed tobacco-derived nicotine product whose PMTA was refused or denied may not be marketed beyond this date, and is not permitted to submit a new PMTA.
Synthetic Nicotine PMTA Submission Deadline May 14, 2022 (Saturday) Deadline for submitting PMTAs for all synthetic nicotine products on the U.S. market as of the Effective Date. Since the deadline falls on a Saturday, companies that are not planning to use the CTP Portal, but are planning to physically deliver PMTAs to FDA, should do so by 4:00 pm ET on Friday, May 13, 2022 (but note that any non-electronic PMTA submissions require an advance waiver from FDA).
Final date July 13, 2022 (Wednesday)

Any synthetic nicotine product whose PMTA has not been authorized by FDA will be in violation of the premarket authorization requirements (Section 910) of the Tobacco Control Act after this date. While FDA maintains enforcement discretion, it will be illegal to continue to market and distribute synthetic nicotine products after this date (there is no sell-through period for existing inventory).

We do not anticipate that any synthetic nicotine PMTAs will be authorized by this date (or even accepted/filed), and expect that all of these PMTAs will be placed at the “back of the line” behind the thousands of PMTAs for tobacco-derived products still pending.

Notably, under the provision, a synthetic version of an existing nicotine product that went through the PMTA process and is now subject to a Refuse-to-Accept (RTA), Refuse-to-File (RTF), Marketing Denial Order (MDO), or withdrawal of a marketing order may not be marketed beyond the effective date, i.e., April 14, 2022. In other words, products originally formulated with tobacco-derived nicotine that were refused or denied authorization by FDA, then modified to use synthetic nicotine instead (and that is the only modification), will effectively be banned on April 13, 2022. Manufacturers of these products will not be given an opportunity to submit a new PMTA. This appears to be Congress’s way of doubling down on products that, in Congress’ view, switched to synthetic nicotine to get around the PMTA process.

Beyond the PMTA submission requirement, manufacturers of synthetic nicotine products will be subject to all requirements of regulations for tobacco products. This likely includes all other Tobacco Control Act requirements, including tobacco product establishment registration and product listing; ingredient listing; label compliance; and health document submissions, among others. We anticipate that FDA will provide guidance on deadlines for these requirements in the near future.

On January 1, 2022, two new state laws will become effective in Illinois and Oregon and could cause significant disruption to the vapor industry. We provide background on the legislation and discuss the potential implications for the sales of vapor products in the respective states.

Illinois
On January 1, 2022, SB 0512, The Preventing Youth Vaping Act, will take effect in Illinois.

Under this new law, an electronic cigarette is broadly defined as

  1. any device that employs a battery or other mechanism to heat a solution or substance to produce a vapor or aerosol intended for inhalation;
  2. any cartridge or container of a solution or substance intended to be used with or in the device or to refill the device; or
  3. any solution or substance, whether or not it contains nicotine, intended for use in the device

Critically, SB 0512 considers an electronic cigarette to be adulterated (and prohibited for sale) if, “it is required by 21 U.S.C. 387j(a) to have premarket review and does not have an order in effect under 21 U.S.C. 387j(c)(1)(A)(i) or is in violation of an order under 21 U.S.C. 387j(c)(1)(A).” In other words, if an e-cigarette is required by the federal Family Smoking Prevention and Tobacco Control Act (21 U.S.C. 387j(a)) to have premarket authorization from the U.S. Food and Drug Administration and does not have a Premarket Tobacco Product Application (PMTA) order in effect (or is in violation of such an order), it would be considered adulterated under the Illinois law.[1]

Although the law exempts e-cigarettes “first sold prior to August 8, 2016 and for which a premarket tobacco product application was submitted to the U.S. Food and Drug Administration by September 9, 2020” from the adulteration definition, products that are subject to timely submitted PMTAs that FDA has either refused-to-accept, refused-to-file, or have received marketing denial orders from FDA would likely still be considered adulterated by the state (as well as FDA).

However, because this part of the state adulteration provision only applies to e-cigarettes that are required to have PMTA authorization, it would appear not to apply to e-cigarettes that are not “tobacco products” under the federal Food, Drug and Cosmetic Act – i.e., e-cigarettes that do not contain tobacco-derived ingredients and that do not fall within the meaning of “components and parts” of tobacco products. In other words, e-cigarettes that utilize synthetic (tobacco-free) nicotine or CBD-containing e-cigarettes, for example, that arguably are not tobacco products under federal law, would not be considered adulterated in Illinois for not having authorized PMTAs.

Any distributor, secondary distributor, retailer, or person who violates the Illinois law shall be guilty of a Class 4 felony, which carries a 1-to-3-year prison sentence and fines of up to $25,000 if convicted.

Oregon
On January 1, 2022, HB 2261, will take effect in Oregon.

The legislation prohibits the shipment of “inhalant delivery systems” to any person in Oregon other than a distributor or a retailer (ORS 180.441(1)(A)). Thus, the legislation effectively prohibits direct-to-consumer (DTC) sales (including online sales) of the vast majority of vapor products in Oregon.

“Inhalant delivery systems” are defined in the legislation as “a device that can be used to deliver nicotine in the form of a vapor or aerosol to a person inhaling from the device; or a component of a device described in this paragraph or a substance in any form sold for the purpose of being vaporized or aerosolized by a device described in this paragraph, whether the component or substance is sold separately or is not sold separately.”

As such, the legislation would appear to prohibit the DTC sale of most types of vapor products, but likely would not cover non-nicotine closed-system products:

Type of Vapor Product Subject to Oregon HB 2261 shipment ban?
Bottled e-liquid (with or without nicotine) Yes – language covers “a substance in any form sold for the purpose of being vaporized or aerosolized by a [inhalant delivery system] device”
Open-system/Open-tank ENDS Device Yes – language covers “a device that can be used to deliver nicotine in the form of a vapor or aerosol to a person inhaling from the device”
Open-system ENDS components (e.g., tanks, coils, atomizers, batteries, etc.) Yes – language cover “or a component of a [inhalant delivery system] device”
Closed-system ENDS (e.g.., pod/cartridge or disposables) pre-filled with nicotine-containing e-liquid Yes – language covers “a substance in any form sold for the purpose of being vaporized or aerosolized by a [inhalant delivery system] device”
Closed-system ENDS (e.g.., pod/cartridge or disposables) pre-filled with non-nicotine containing e-liquid No – this type of product (i.e., a pre-filled CBD or THC vapor device) would not fall within meaning of a inhalant delivery system

For additional information and assistance in understanding this legislation and the impact it could have on your business, please contact Azim Chowdhury (chowdhury@khlaw.com). Azim will discuss these and other state vapor laws at Keller and Heckman’s upcoming E-Vapor and Tobacco Law Symposium on February 2-3, 2022. Register for the virtual seminar here.

[1] An e-cigarette is also considered adulterated if (A) it consists in whole or in part of any filthy, putrid, or decomposed substance, or is otherwise contaminated by any added poisonous or deleterious substance that may render the product injurious to health; or (B) it is held or packaged in containers composed, in whole or in part, of any poisonous or deleterious substance that may render the contents injurious to health. See section 15(a)(4) of SB 0512.

The tobacco industry in China, which is home to more than 300 million cigarette smokers, is controlled by the largest tobacco company in the world – the China National Tobacco Corporation (CNTC). The CNTC’s dominant global market share is almost entirely the result of its monopoly of the domestic Chinese tobacco industry. When fulfilling its regulatory role, CNTC is also referred to as the State Tobacco Monopoly Administration (STMA), which is a government-granted monopoly established by China’s Tobacco Monopoly Law. Under the Tobacco Monopoly Law, STMA maintains control over virtually all stages of the production, sales, import, export, and distribution of tobacco products in China. The Tobacco Monopoly Law (Article 2) historically extended STMA’s monopoly control to the following traditional tobacco and tobacco-related products: cigarettes, cigars, cut tobacco, redried leaf tobacco, leaf tobacco, cigarette paper, filter rods, filter tows, and equipment exclusively for use in the manufacture of tobacco products.

Finally, after years of speculation, on November 26, 2021, China’s State Council published online its final decision to amend the Implementing Regulation of the Tobacco Monopoly Law, which makes e-cigarettes subject to the same monopoly requirements as traditional, combustible cigarettes. The STMA and China’s Ministry of Industry and Information Technology (MIIT) first proposed the amendment in March 2021, highlighting their belief that “e-cigarettes and traditional cigarettes are homogeneous in terms of core ingredients, product functions, and consumption methods.”

Specifically, a new Article 65 is added to the Implementing Regulation as follows: “(The management of) Novel tobacco products such as e-cigarettes are implemented with reference to the relevant requirements for cigarettes in this Regulation.” This new article essentially puts all “novel” tobacco products, including e-cigarettes, under the same monopoly as cigarettes with respect to the manufacture, sales, import and export, etc. However, this single-sentence amendment does not provide any details as to how exactly the existing monopoly system on cigarettes in China will apply to
e-cigarettes.

In furtherance of the amended Implementing Regulation, on December 2, 2021, the STMA published on its website the draft Management Rules for E-cigarettes for public comment. [Please contact us if you are interested in obtaining an English translation of the draft Management Rules.]

The draft Management Rules define “e-cigarette” as an electronic delivery product that produces nicotine-containing aerosol for human inhalation. The definition does not include “heated cigarettes” (i.e., heat-not-burn tobacco products) that are already regulated as cigarettes and subject to the Tobacco Monopoly Law. The draft Management Rules make clear that e-cigarettes should be regulated like tobacco products by STMA and its local agencies and provide that e-cigarettes must comply with the e-cigarette National Standard (see more details below). Notably, pre-market registration of e-cigarettes is required upon a safety review by STMA. In addition to pre-market registration requirements, the production and sales of e-cigarettes in China will be subject to the same tobacco monopoly licensing as traditional cigarettes.

According to the draft Management Rules, a unified national e-cigarette trading platform will be set up by STMA, and the producers and sellers must trade on that platform, including imported e-cigarettes. The draft Management Rules also contain various requirements designed to protect minors such as age-restrictions and generally require that relevant warning and labeling requirements must be met.

Registration and Production Licensing Requirements for Chinese Manufacturers

The regulation of e-cigarettes in China is of critical importance to the global e-cigarette industry, as the vast majority (over 95%) of e-cigarette hardware, including devices and components and parts, are manufactured in Shenzhen. Many of these companies operate solely for the purpose of original equipment manufacturers (OEMs) manufacturing products for sale not in China, but around the world. Under the draft Management Rules, however, all Chinese e-cigarette manufacturing facilities are subject to the registration and production licensing requirements, even if the products produced are ultimately for export only.

GB Standard on E-Cigarettes

As we previously reported, in 2019, China notified the World Trade Organization (WTO) about the first draft national Guobiao (GB) Standard on e-cigarettes. On November 30, 2021, STMA published the updated draft GB Standard for comment.

Compared with the previous version, the draft GB Standard, entitled “Electronic Cigarette,” is shortened from 68 pages to 26 pages. The structure of the draft GB Standard and a brief description of the content are as follows:

  • Section 1 – Scope
  • Section 2 – Referenced standards
  • Section 3 – Definitions. This section provides the definition for electronic cigarettes which is basically the same as the draft Management Rules. E-vapor matters, e-liquids, e-cigarette devices, e-cigarette modules, cartridges, etc., also are defined.
  • Section 4 – Design and raw materials. This section focuses on the general safety of the device and raw materials. For example, materials in contact with the mouth, e-vapor matters, and e-cigarette emissions must meet the requirements of food contact materials, nicotine must be extracted from tobacco with a purity of no less than 99%, etc.
  • Section 5 – Technical requirements. This section provides technical requirements for the key risk points of e-cigarettes, e-vapor matters, etc. For example, the concentration of nicotine in e-vapor matters must not exceed 20 mg/g. Limitations on 2,3-butanedione, heavy metals (as Pb) and arsenic (as As) in e-vapor matters, as well as limitations on carbonyl compounds in e-cigarette emissions, are also provided in this section.
  • Section 6 – Testing methods
  • Section 7 – Labeling and accompanying documents
  • Appendix A – List of exceptions to the restricted substances in e-cigarette materials
  • Appendix B – Substances temporarily permitted for use as additives in e-vapor matters
  • Appendices C through F – Determination methods, etc.

Transition Period

In view of the new regulations and the GB Standard, on December 2, 2021, STMA announced a transition period from now until the finalization and implementation of the Management Rules and the GB Standard. It is not clear now when they will be finalized and implemented, but STMA indicated in the announcement for the draft GB Standard that the plan is to implement the GB Standard “three to five months after its publication.”

Specifically, during the transition period, the existing e-cigarette production and operation enterprises can continue to carry out production and operation activities. However, investors are not allowed to invest in newly established e-cigarette production and operation enterprises; existing e-cigarette production and operation entities are not allowed to build or expand production capacity, establish new e-cigarette retail outlets, and market new products. “New import of e-cigarettes” will also be suspended during this period.

STMA also publicizes a “e-cigarette information reporting system” on its website and urges e-cigarette production and operation enterprises to report information about the enterprise and the products from December 6 to December 21, 2021.

Comment Periods Closing Soon

The public comment period for the draft Management Rules closes on December 17, 2021, fifteen days after its publication, and the public comment period for the draft Standard closes on January 29, 2022. If you are interested in submitting comments on either the draft Management Rules or the GB Standard, please let us know.

David Ettinger, Managing Partner of Keller and Heckman’s Shanghai Office, and Eric Gu, will be discussing the situation in China at Keller and Heckman’s upcoming E-Vapor and Tobacco Law Symposium on February 2-3, 2022. Register for the virtual seminar here. In the meantime, if you are interested in receiving updates on the Management Rules and the GB Standard, please do not hesitate to contact David Ettinger (ettinger@khlaw.com), Azim Chowdhury (chowdhury@khlaw.com), or Eric Gu (gue@khlaw.com).