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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.

We reported in December 2021 that China’s State Tobacco Monopoly Administration (STMA) published on its website the draft Management Rules for E-cigarettes and the updated national standard (GB) on e-cigarettes for public comment. Working with important industry members, including industry associations and manufacturers, Keller and Heckman filed comments to STMA to address and seek clarification on various issues that resulted from these publications.

On March 11, 2022, STMA announced the publication of the final Management Rules for E-cigarettes, which will take effect starting May 1, 2022. At the same time, the second draft GB standard on e-cigarettes also was published for comment by March 17. We summarize below some notable changes in the final Management Rules.

The final version deletes the definition for “e-cigarettes,” which was “an electronic delivery product that produces nicotine-containing aerosol for human inhalation.” Since the Management Rules state that e-cigarettes must comply with the mandatory national standard, one should now refer to the GB standard on e-cigarettes for the definition of e-cigarettes. Notably, the second draft GB standard removes “nicotine-containing” from the definition of e-cigarettes but at the same time adds a requirement that e-atomization materials must contain nicotine. Since the GB standard is still under development, we will continue to keep a close eye on how the potential change to the definition for e-cigarettes would impact the application scope of the Management Rules.

The final Management Rules remove product registration requirements. However, e-cigarette products, including imported products, still must pass the technical review by STMA before being marketed in China. It, therefore, appears that there has been a loosening of the regulatory requirements in this regard since a registration process is typically more onerous than a technical review. However, the details of what the technical review process will look like remain unclear. Accordingly, in line with our comments to STMA, e-cigarettes manufactured in China solely for export are not subject to product registration or technical review in China. Still, they must comply with the destination country’s laws (or China law, if the destination country has no relevant law).

Industry also expressed concerns about the prohibition in the draft Management Rules on flavored e-cigarettes. In the final version, the prohibition has been changed to “it is prohibited to sell flavored e-cigarettes other than tobacco flavors.” However, “tobacco flavors” is not clearly defined, while the draft GB standard still permits the use of various flavoring substances in e-cigarettes, like vanillin, lemon oil, etc.

Other than the above, many other requirements for e-cigarettes in China are still retained in the final Management Rules, including production licensing, purchase of leaf tobacco only from authorized companies, trading on a unified platform, etc. 

Since the Management Rules for E-cigarettes will take effect soon, industry should immediately understand all the specifics so that appropriate adjustments can be made in a timely manner. We are also preparing an English translation of the Management Rules, which will be made available upon request. In the meantime, if you need any assistance from us, please do not hesitate to contact David Ettinger (ettinger@khlaw.com), Azim Chowdhury (chowdhury@khlaw.com), Eric Gu (gue@khlaw.com), or your existing contact at Keller and Heckman LLP.

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.

In case you couldn’t attend our recently held “E-Vapor and Tobacco Law Symposium” we recorded it—so you can view it at your leisure. Register today and receive full access to the recorded sessions, along with seminar presentations and other materials.

Keller and Heckman is pleased to provide on-demand access to our two-day comprehensive seminar focused on legal and regulatory issues critical to e-vapor, tobacco, and CBD industries following the aftermath of FDA’s decisions on millions of premarket applications. Topics that were covered include PMTA marketing denial order (MDO) challenges, new requirements for PMTAs and Substantial Equivalence reports, PACT Act and state law compliance, and much more.

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For questions concerning the 2022 E-Vapor and Tobacco Law Symposium, please contact:
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Keller and Heckman Associate Neelam Gill will be a panelist at the Food and Drug Law Institute’s (FDLI) Enforcement, Litigation, and Compliance Conference, to be held virtually on December 9 – 10, 2021. Neelam will be participating in the panel on “Preparing for Tobacco Product Standards and cGMPs,” which will focus on pending Tobacco Product Manufacturing Processes, the US Food and Drug Administration’s marketing orders, and other challenges faced by manufacturers and suppliers of electronic nicotine delivery systems (ENDS). The conference will also feature a variety of officials from government agencies, along with industry professionals.

For more information on this event, including registration, please click here.

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).

 

Two months after the September 9, 2021 PMTA enforcement discretion deadline, the US Food and Drug Administration (FDA) has taken action on well over 90% of timely submitted Premarket Tobacco Product Applications (PMTAs), and has issued over 323 marketing denial orders (MDOs) for more than
1.2 million non-tobacco and non-menthol flavored Electronic Nicotine Delivery Systems (ENDS) products. The basis for the denials was the same across the board – using  a new “fatal flaw” PMTA review standard, Center for Tobacco Products (CTP) reviewers were able to conclude that all the MDO’d PMTAs were missing “key evidence” that the flavored ENDS products provide an “added benefit” to adult smokers (who use the flavored ENDS products to reduce or completely switch from combusted cigarettes) that outweighs the general, known risks to youth of flavored ENDS. According to the agency, this evidence was expected to be presented in the form of randomized controlled trials (RCTs) comparing tobacco-flavored ENDS to flavored ENDS and/or longitudinal cohort studies that, among other things, evaluate the actual use of the new products, demonstrate the relative effect of the flavored products as compared to a tobacco-flavored product, or include outcomes assessing switching or combusted cigarette reduction. See FDA’s sample MDO decision summary.

As summarized in this Vaping360 article, there have been numerous legal challenges to MDOs, arguing that the denials are arbitrary, capricious, an abuse of discretion, and otherwise not in accordance with the law. As described below, a few courts have issued either full or temporary stays (holds) of the MDOs. In addition to the lawsuits, based on FDA’s updated MDO spreadsheet as of November 3, 2021, four companies (Turning Point, Fumizer, ESC Global, and Humble Juice Co.) have had their MDOs completely or partially rescinded by FDA, presumably because FDA has now realized that their PMTAs did, in fact, “contain” RCTs and/or longitudinal cohort studies addressing the added benefit of flavors for adults. Three companies (Bidi Vapor, My Vape Order, and Avail Vapor) have had their MDOs administratively stayed by FDA while the agency reviews their requests to have their MDOs rescinded (presumably because their applications also contain relevant product-specific data).

On the court-ordered side, Triton Distribution (and Vapetasia, which is manufactured by Triton) had their MDO stayed by the 5th Circuit Court of Appeals. In granting the stay and holding that Triton is likely to succeed on the merits of its case arguing that its MDO is unlawful, the Court held that FDA “changed its regulatory requirements” and that this “switcheroo” to now require a randomized controlled trial and/or a longitudinal cohort study – which the Agency previously stated on numerous occasions would not be required – was arbitrary and capricious under the Administrative Procedure Act (“APA”). Accordingly, the 5th Circuit held that Triton has shown a strong likelihood of success on the merits because FDA failed to “reasonably consider the relevant issues and reasonably explain” the MDO. The Court further noted that FDA failed to consider Triton’s marketing plan, surveys, and evidence of potential benefits of flavored e-cigarettes. FDA also failed to consider the company’s legitimate reliance interests, as Triton relied on FDA’s statements made in numerous public meetings, guidance documents, and rulemakings that it did not expect applicants would need to conduct long-term studies to support their PMTAs. Even FDA’s recently finalized PMTA final rule continues to emphasize this.

In addition to Triton, the 7th Circuit granted a full stay for Gripum LLC on November 4, 2021. My Vape Order (which has an FDA administrative stay in place) had its request for a judicial stay denied by the
9th Circuit, and Breeze Smoke recently had its stay request denied by the 6th Circuit.

FDA Spreadsheet (Updated 11/8/21) – Summary of Rescinded and Stayed MDOs

Bidi Vapor 9/7/2021 FDA is reviewing this MDO pursuant to 21 C.F.R. § 10.75.  On October 22, 2021, the Agency issued a stay for this MDO pending its review.
Gripum LLC 9/8/2021 On November 4, 2021, the United States Court of Appeals for the Seventh Circuit issued a stay of Gripum’s MDO pending resolution of Gripum’s petition for review.
My Vape Order Inc. 9/8/2021 FDA is reviewing this MDO pursuant to 21 C.F.R. § 10.75.  On October 18, 2021, the Agency issued a stay for this MDO pending its review.
Fumizer LLC 9/9/2021 On October 22, 2021, FDA partially rescinded this denial with respect to certain products.
ECS Global 9/10/2021 On October 26, 2021, FDA partially rescinded this denial with respect to certain products.
Turning Point Brands (TPB International LLC) 9/14/2021 This order was rescinded on October 7, 2021.
Wages & White Lion Investments dba Triton Distribution 9/14/2021 On October 26, 2021, the United States Court of Appeals for the Fifth Circuit issued a stay of Triton’s MDO pending resolution of Triton’s petition for review.
Humble Juice Co., LLC 9/15/2021 This order was rescinded on November 2, 2021.
Avail Vapor LLC 9/15/2021 FDA is reviewing this MDO pursuant to 21 C.F.R. § 10.75.  On November 1, 2021, the Agency issued a stay for this MDO pending its review
Vapetasia LLC 9/16/2021 On October 26, 2021, the United States Court of Appeals for the Fifth Circuit issued a stay of Vapetasia’s MDO pending resolution of Vapetasia’s petition for review.

 

Vuse and Verve PMTA Authorizations

In the middle of FDA’s flurry of MDOs last month, on October 12, the Agency authorized the first set of ENDS products through the PMTA pathway: R.J. Reynolds (RJR) Vuse Solo closed ENDS device and accompanying tobacco-flavored e-liquid pods. (At the same time, however, FDA also issued 10 MDOs for RJR’s non-tobacco flavored Vuse Solo ENDS products, so we are still facing an uphill battle for flavors.) One of the key factors influencing a positive appropriate for the protection of the public health (APPH) determination by FDA was that study findings showed subjects using Vuse Solo were exposed to fewer harmful and potentially harmful constituents (HPHCs) from aerosols compared to users of combusted cigarettes. The toxicological assessment concluded that the authorized products’ aerosols are significantly less toxic than combusted cigarettes based on available data comparisons and results of nonclinical studies. Despite 2021 National Youth Tobacco Survey (NYTS) data that found that approximately 10 percent of high school students who currently used e-cigarettes named Vuse as their usual brand, FDA found risks to youth mitigated based on its conclusion that tobacco-flavored products are less appealing to youth. Based on these and other data, FDA concluded that authorizing these products may be beneficial for adult combusted cigarette smokers who completely switch to ENDS or significantly reduce their cigarette consumption. As with other recent PMTA marketing orders, FDA stipulated a number of strict marketing restrictions and comprehensive post-marketing reporting requirements to RJR to reduce the potential for youth exposure to tobacco advertising for these products and to provide information on ongoing and completed consumer research studies, advertising, marketing plans, sales data, information on current and new users, manufacturing changes and adverse experiences.

The following week, on October 19, FDA authorized the marketing of four Verve oral tobacco products (Verve Discs Blue Mint, Verve Discs Green Mint, Verve Chews Blue Mint, and Verve Chews Green Mint) manufactured by US Smokeless Tobacco Company LLC, a subsidiary of Altria. The Verve products are oral tobacco discs and chews with tobacco-derived nicotine that are chewed and discarded after use. Key findings that influenced FDA’s decision include research showing a low likelihood that youth, nonsmokers, or former smokers would initiate or reinitiate tobacco use with the Verve products. As with Vuse, exposure to fewer harmful and potentially harmful constituents (HPHCs) for the Verve products compared to cigarettes and other smokeless tobacco products factored heavily into FDA’s APPH determination. FDA again imposed strict marketing restrictions and wide-ranging post-marketing reporting requirements as a condition of continued marketing. The Ageny’s decision summary further describes the basis for issuing marketing orders for these four products.

FDLI Annual Tobacco Conference

The annual Food and Drug Law Institute (FDLI) Tobacco and Nicotine Products Regulation and Policy Conference was held last month and included FDA programmatic and PMTA review updates by CTP Director Mitch Zeller and CTP Office of Science Director Matt Holman. We provide below some key points from the FDA presentations, along with a description of a potential, streamlined “resubmission” application option for ENDS products subject to MDOs, and what this could look like for companies looking to resubmit their PMTAs. We also provide below some key points from the discussions (their presentations are attached).

Director Zeller Presentation (see presentation slides here)

  • Director Zeller’s presentation opened with the latest data on youth e-cigarette use. In September 2021, FDA and the Centers for Disease Control and Prevention (CDC) released findings from the 2021 National Youth Tobacco Survey (NYTS). Zeller emphasized that youth
    e-cigarette use remains an ongoing concern as the 2021 NYTS found that more than 2 million US middle school and high school cigarette users used e-cigarettes in 2021, and almost 85 percent of youths using e-cigarettes used flavored products. Disposables were found to be the most commonly used e-cigarette device type. Due to special methodological considerations owing in part to COVID-19 and the survey’s online administration, the 2021 NYTS on e-cigarette use among middle and high school results cannot be directly compared to findings from NYTS surveys from previous years. FDA plans to publish additional findings on youth use of all tobacco products within the next few months.
  • FDA has issued marketing granted orders for 3 new tobacco products and issued marketing denial orders (MDOs) for more than 1 million non-tobacco flavored ENDS products. As for current review of menthol-flavored ENDS products, Director Zeller stated that, while the same review standard applies to menthol products, CTP is taking additional time to ensure it “gets the science right.” Roughly 80K tobacco and menthol flavored ENDS products are still pending under PMTA scientific review.
  • Approximately 45 different lawsuits have been filed challenging the recent MDOs for non-tobacco flavored ENDS. This is in addition to the dozens of requests for supervisory review. When asked whether the litigation challenges can result in FDA having to overturn MDOs en masse, Director Zeller stated that each of the filed cases are fact-specific but deferred to litigators to address this question.

FDA PMTA Update Presentation by Matthew Holman, Director, CTP Office of Science (see presentation slides here)

  • Holman restated CTP’s emphasis on youth initiation concerns and added that, in the marketing granted orders that CTP has issued so far, the Office of Science is not yet convinced about the effectiveness of current youth marketing and access restrictions.
  • Holman clarified that the PMTA Final Rule will apply to PMTAs received by FDA on or after November 4, 2021. The changes in filing requirements include requiring substantive information for key health risk topics, including health risks and comparative health risks; likelihood of initiation and other changes in tobacco product use behavior; product perceptions and use intentions; abuse liability; and human factors. Substantive information for each of these disciplines will be required for filing after November 4, 2021.
  • One key point was whether, after receiving an MDO, applicants can submit a streamlined “resubmission” that directly responds to the deficiencies, as opposed to requiring applicants to resubmit the entire application along with any “missing” information or information that corrects deficiencies. After Dr. Holman raised this as a viable pathway, questions from the audience expressed concern that this instruction appears to contradict with the language in the “template” MDOs, which states that applicants may not cross-reference any information submitted in the PMTAs that are subject to an MDO. Dr. Holman stated he was aware of this language but could not recall the purpose but instructed applicants to contact their regulatory health project managers with any questions or concerns. Dr. Holman did seem to take the position, however, that applicants can submit streamlined PMTAs and cross-reference original PMTA submissions and amendments. Given the confusion and substantial difference in workload and resources, both for applicants and FDA, between a resubmission that cross-references existing filed applications and targets identified deficiencies, and a submission of an entirely new application, companies should consider reaching out to their CTP Regulatory Health Project Managers for clarity.

Save the Date: Registration now open for 2022 E-Vapor and Tobacco Law Symposium

Keller and Heckman’s Annual E-Vapor and Tobacco Law Symposium returns in 2022! Join us virtually on February 2-3, 2022 for a two-day comprehensive seminar focused on legal and regulatory issues critical to e-vapor, tobacco, and CBD industries following the aftermath of FDA’s decisions on millions of premarket applications. Topics that will be covered include PMTA marketing denial order (MDO) challenges, new requirements for PMTAs and Substantial Equivalence reports, PACT Act and state law compliance, and much more. The final seminar agenda will be released soon. Register here.

As we have previously reported, on December 27, 2020, Congress amended the Prevent All Cigarette Trafficking (PACT) Act to apply to e-cigarettes and all vaping products (referred to in the legislation collectively as “Electronic Nicotine Delivery Systems” or “ENDS”).  Under the amended PACT Act, these products are subject to the same federal and state registration, reporting requirements, and delivery restrictions as traditional cigarettes, including the prohibition on the use of the United States Postal Service (USPS) to deliver products directly to consumers.

The USPS has historically maintained an exception to this ban for tobacco products “mailed only … for business purposes between legally operating businesses that have all applicable State and Federal Government licenses or permits and are engaged in tobacco product manufacturing, distribution, wholesale, export, import, testing, investigation, or research …” (the “B2B Exception”) See 18 U.S.C. § 1716E(b)(3)(A)(i). In a proposed rule published on February 19, 2021, the USPS stated its intention to maintain this “business purposes exception” for ENDS.  Over 16,000 comments were received during the comment period.

  • In advance of the final rule, on April 19, 2021, the USPS published guidance detailing the information required in an application for exception from the non-mailability provisions of the PACT Act for ENDS products. The guidance indicates that the final rule is still expected to be published, and become immediately effective, on or about April 26, 2021 (i.e., 120 days after the amendment was enacted).
  • Although the guidance leaves it for the final rule to confirm whether, and under what circumstances, the B2B Exception will actually apply to ENDS, it provides details about the scope of information that may be required in B2B Exception applications. The guidance does state, however, that “[w]hether any ENDS mailers may ultimately be allowed to use the exceptions remains to be determined.”
  • Although the guidance states that the Agency will not accept applications prior to the publication of the final rule, the Agency did include prospective recommendations for what to include in an application. The guidance recommends including electronic copies of all relevant license and permit documentation for the applicant and for each addressee that they intend to ship to. The guidance also recommends companies start gathering relevant information now, and suggests preparing a spreadsheet that contains the following information with respect to each sender and each recipient:
    • Address
    • The Postal Service retail or business mail acceptance office(s) where each intended sender would tender shipments
    • The Postal Service retail office(s) where each intended recipient would retrieve shipments
    • A description of the business or governmental entity (e.g., battery manufacturer, retail store, wholesale distributor, testing laboratory)
    • For each permit or license, the issuing jurisdiction; the permit or license number; the expiration date (if any); and the activity covered by each current permit or license (e.g., general business operations; sale or manufacture of tobacco products or ENDS)
    • The brand name and a description of each product intended to be shipped by each sender or to each addressee
    • Whether any identified products or other intended shipments from each sender or to each addressee contain lithium batteries, nicotine, CBD, or tetrahydrocannabinol (‘‘THC’’)
    • For products containing nicotine or THC, the intended quantity of the product per shipment and the concentration of nicotine or THC
    • For products containing CBD with a THC concentration not exceeding 0.3 percent, whether the CBD derives from hemp
  • The guidance also includes recommendations applicable to entities that engage in testing, investigation, or research, as well as non-PACT Act prohibitions on the use of the U.S. mail applicable to CBD products, hazardous materials, and controlled substances and drug paraphernalia.
  • In anticipation of the flood of any applicable exception applications that can be expected upon the publication of the final rule, the USPS recognized the need to contemplate changes to its application process in the event that the exceptions are extended to ENDS. Ultimately, the Agency cautions that applicants should expect review of their applications to require substantial processing time, as the review requirements for ENDS sellers are likely to be far more complex than for traditional cigarette and smokeless tobacco sellers.

It would behoove ENDS manufacturers and distributors relying on the mail (or DHL, FedEx or UPS) to deliver products to their business partners to seek out alternative delivery options.

If you have any questions regarding PACT Act compliance for ENDS, contact Azim Chowdhury (chowdhury@khlaw.com). For more information about our Tobacco and E-Vapor Practice visit https://www.khlaw.com/evapor.

Background on the PACT Act

As part of the “Consolidated Appropriations Act, 2021,” in the most recent COVID-19 relief bill signed into law on December 27, 2020, Congress amended the Prevent All Cigarette Trafficking (“PACT”) Act to apply to e-cigarettes and all vaping products. Originally passed in 2009, the PACT Act amended the existing Jenkins Act of 1949, which required interstate shippers to report cigarette sales to state tobacco tax administrators in order to combat illicit sales and tax avoidance. When it became law 60 years later – the same year the Tobacco Control Act gave FDA authority over tobacco products – the PACT Act, among other things, prohibited the use of the U.S. Postal Service (“USPS”) to deliver cigarettes and smokeless tobacco products directly to consumers.

  • In addition to the non-mailing provisions, the PACT Act requires anyone who sells cigarettes or smokeless tobacco to register with the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) and the tobacco tax administrators of the states into which a shipment is made or in which an advertisement or offer is disseminated. Delivery sellers who ship cigarettes or smokeless tobacco to consumers are further required to label packages as containing tobacco, verify the age and identity of the customer at purchase, use a delivery method (other than USPS) that checks ID and obtains adult customer signature at delivery, and maintain records of delivery sales for a period of four years after the date of sale, among other things.
  • The PACT Act also requires sellers to file a monthly report with the state tobacco tax administrator and any other local or tribal entity that taxes the sale of cigarettes. Such reports must include the name and address of the persons delivering and receiving the shipment and the brand and quantity of the “cigarettes” that were shipped. These requirements apply to all sales of cigarettes and smokeless tobacco, including sales to consumers and sales between businesses.
  • The PACT Act mandates that the ATF maintain a non-compliant list of persons who fail to comply with the Act. Placement on the list bars common carriers and other persons from delivering products sold by the listed company. ATF distributes the list to common carriers, USPS, credit card companies, and others to help enforce the list.

PACT Act Amendment: Preventing Online Sales of E-Cigarettes to Children Act

  • The 2020 PACT Act amendment, the “Preventing Online Sales of E-Cigarettes to Children Act,” modifies the original definition of “cigarette” in the PACT Act to include Electronic Nicotine Delivery Systems (ENDS). The term “ENDS” is defined very broadly to essentially include all vaping products, liquids, components, and accessories, whether they contain nicotine or not. Specifically, an ENDS product is defined as “any electronic device that, through an aerosolized solution, delivers nicotine, flavor, or any other substance to the user inhaling from the device,” including “an e-cigarette; an e-hookah; an e-cigar; a vape pen; an advanced refillable personal vaporizer; an electronic pipe; and any component, liquid, part, or accessory of a device described [above], without regard to whether the component, liquid, part, or accessory is sold separately from the device.” (Emphasis added.) Based on this definition of ENDS, zero-nicotine e-liquids, synthetic “tobacco-free” nicotine e-cigarettes, and CBD/THC/hemp vape pens, among other things, would all appear to be captured.
  • The PACT Act requirements summarized above apply to ENDS effective 90 days from the date of enactment, or on or about March 28, 2021. Certain requirements (e.g., labeling, weight restrictions, and 21+ age verification on delivery) only apply to direct-to-consumer sales (made through common carriers or private delivery services). The registration and reporting requirements apply to all sales, including business-to-business sales. Companies should plan well in advance of the effective date to ensure they are fully compliant with existing state sales and excise taxes, licenses, and registrations. Currently, 28 states plus various localities impose a tax on vapor products, so sellers should plan accordingly. Sellers should also review their system capabilities to ensure excise taxes are being collected from consumers where required and data is properly being captured for required reporting.

USPS Ban on Consumer Sales; Third-Party Common Carriers Refusing to Deliver Vapor Products

  • As noted, the amended PACT Act now prohibits the use of the USPS to deliver “ENDS” directly to consumers. In terms of the mail ban’s effective date, the Act states that the prohibition on the mailing of cigarettes shall apply to ENDS on and after the date on which the Postal Service promulgates regulations clarifying the applicability of the mail ban on ENDS, which it is required to do within 120 days of the enactment (i.e., by April 27, 2021). The Postal Service has not yet published any clarifying regulations in this regard, but companies should anticipate the mail ban going into effect on or about April 27, 2021.
  • The PACT Act has historically exempted businesses-to-business deliveries from the USPS ban. Specifically, the USPS ban does not extend to tobacco products “mailed only … for business purposes between legally operating businesses that have all applicable State and Federal Government licenses or permits and are engaged in tobacco product manufacturing, distribution, wholesale, export, import, testing, investigation, or research….” See 18 U.S.C. § 1716E(b)(3)(A). Companies seeking to use USPS for business-to-business deliveries must first submit an application to the USPS Pricing and Classification Service Center and comply with several other shipping, labeling, and delivery requirements. The Postal Service’s yet-to-be-published clarifying regulations could address whether business-to-business deliveries will remain permitted for ENDS.
  • Critically for the vapor industry, the most commonly used carriers, Federal Express and United Parcel Service (UPS), have recently announced that they would cease all deliveries of vapor products. According to Vaping360, as of March 1, 2021, FedEx will begin prohibiting “electronic cigarettes, vaping liquids, and other vaping products in the FedEx global network.” A UPS spokesperson also told Vaping360 that, effective April 5, 2021, “UPS will not transport vaping products to, from, or within the United States due to the increased complexity to ship those products.”
  • Without effective delivery options, PACT Act compliance becomes moot. Many vapor businesses are exploring arrangements with private logistics and transportation companies, as well as expensive software solutions to help comply with the PACT Act requirements, but the outlook for many small vapor companies and online retailers looks bleak.

To learn more about PACT Act compliance, enforcement and penalties, be sure to register now for Keller and Heckman’s virtual E-Vapor and Tobacco Law Symposium on February 9-11, 2021.

Keller and Heckman is pleased to announce the agenda for our 5th Annual E-Vapor and Tobacco Law Symposium.

This year’s virtual program will feature new, timely topics specifically designed to help vapor and deemed tobacco product manufacturers stay in compliance with rapidly evolving laws and policies. Topics that will be discussed include:

  • FDA’s new guidance and proposed rulemakings
  • Premarket Tobacco Product Application (PMTA) and Substantial Equivalence (SE) Report strategies for small businesses
  • Completing environmental assessments
  • New state laws (local flavor bans, licensing requirements, and state enforcement actions)
  • Updates on CBD and cannabis regulation
  • …and much more!

In addition to Keller and Heckman’s regulatory attorneys and scientists, this year’s program features numerous expert guest speakers, including from Cardno ChemRisk, Labstat International, the American Vaping Association, FiscalNote Markets, the Tax Foundation, and more.

Seminar Details

Dates:
Tuesday, February 9 – Thursday, February 11, 2021

Registration Fees:
$649, if registered by January 15
$849, if registered after January 15

Group Discounts:
Register three or more people from the same company and receive 10% off the total registration fee. Contact Sara Woldai at woldai@khlaw.com for instructions on how to receive the discount.

Continuing Legal Education (CLE):
CLE credits are available, pending state approval.

Certificate of Attendance:
All seminar attendees will be eligible to receive a certificate of attendance upon completion of the course.

Cancellation Policy:
Cancellations are accepted and registration fees are refunded if notice is received by January 15, 2021. If notice is received after January 15, no refunds will be granted; however, substitutions are welcome.

Will you be attending?
Please respond by clicking “Yes” if you plan to attend.