Cutting through the regulatory noise…
The FDA Regulations for e-cigarettes – cutting through the regulatory noise.
In this post we are going to do our best to give you two things:
• What happens as from the 8th of August 2016 when the FDA e-cigarette regulations come in to force.
• What will/could happen over the next two to three years.
From the 8th of August not too much changes – essentially the changes will be, on a Federal level:
• NO more flavor testing at your local Vape Store – You will still be able to try before you buy, but will be charged a nominal fee.
• NO new innovation – Under the regulations, vaping products become “newly deemed tobacco products” and all new “tobacco products” will require very time consuming and expensive pre-market tobacco applications; this includes e-liquids, tanks, batteries, e-cig kits, mixing ingredients, kanthal wire, etc. This also applies to any changes/modifications of existing products.
• Age verification by photo ID for anyone under the age of 27. NO sale to anyone under the age of 18/21 depending upon State.
Remember your State may already have other e-cigarette regulations in place.
The next two to three years then…
E-cigarettes are now subject to the Tobacco Control Act, which means they are now under the authority of the FDA.
The FDA has essentially taken a product that is not a tobacco product, (it contains no tobacco), regulate it under tobacco laws, but using a pharmaceutical model to do so.
The FDA had a fantastic opportunity to create regulations that would improve the vaping industry by creating standards of excellence and encouraging research, however, they have decided to try and beat it to death with bureaucracy. The regulations are 500 pages long, some are very vague and it is clear that no impact assessment has been done.
The FDA has decided upon a Grandfather date for the regulations – or ‘predicate date’ and you may have heard about this. The verb ‘predicate’ means to require something as a condition of something else. The FDA has stated that they will allow e-cigarettes to be unregulated, on the market, if they were on the market prior to Feb 15th 2007 and are exactly the same as they were then.
According to rumors, the FDA has one e-cigarette from that date.
Any e-cigarette designed and manufactured after the predicate date, will need to have been through the Pre Market Tobacco Application Process or PMTA.
From Dec 31st 2016, if you sell e-cigarettes, you have to register as a vendor and pay a fee, and you must produce an updated product list for the FDA every six months.
Other regulations will become mandatory, such as listing ingredients, provisions for recall, manufacturers to be inspected, no modified risk claims i.e. quoting the Royal College of Physicians from the UK, health warnings will be mandatory, manufacturers will have to warn that the product contains nicotine, and that nicotine is highly addictive. Retailers that mix their own e-liquid in store will become ‘manufacturers’ under FDA law.
These regulations are achievable, many are sensible, some are not, it is the PMTA that is the real issue.
The Pre Market Tobacco Application process has been designed to ensure that any tobacco product – which e-cigarettes are now seen to be – will have to jump through a series of very tough and burdensome pharmaceutical hoops before the FDA decide if it can be sold, or not.
This has been made even more burdensome for e-cigarettes, because manufacturers have to show that their products are not a risk to public health, are not attractive to youth, and this will mean looking down the path of clinical trials. Clinical trials take years to complete and cost millions of dollars.
No comparison is allowed to be made between tobacco cigarettes and e-cigarettes. This flies in the face of science and truth, and within this is the regulation that you are not allowed to say what e-cigarettes are free from, for example the thousands of chemicals that are added to tobacco cigarettes.
The FDA has decided that e-cigarettes and tobacco cigarettes are one and the same.
On top of that, any component part of an e-cigarette that can become a part of a completed device needs to have its own PMTA. Hence, we have the utterly bizarre situation where a normal flashlight battery can be designated a tobacco product if it is used to create power for your e-cigarette, and, as such be forced to go through a costly PMTA.
The FDA has allowed manufacturers two years to achieve PMTA’s, so by August 8th 2018. (We will be doing a much more in depth post about the nuts and bolts of PMTA’s as regards to e-cigarettes soon.) Currently the guesstimate for applying for one SKU – that means one ‘item’ – i.e. an atomizer or one e-liquid flavor in one strength, is anywhere from 500 to 1700 man hours and $300,000 to $1 million US. This will mean that parts of the e-cigarette that are relatively cheap to make will become non-viable. Who is going to spend $300,000 plus on a part that costs cents to produce?
Think how much of that product you would have to sell simply to break even.
Then, going through the PMTA process does not mean it will be granted. It is discretionary.
Are you going to spend millions on the chance that you might get approved?
Several sources are quoting that the FDA has only passed one PMTA in the last six or so years. This was granted to Swedish Match after 20 years of research. This does not bode well if companies are going to be submitting many PMTA’s, but then one has to question how many will be submitted if the cost is going to be so prohibitive?
The FDA expects companies to comply with their PMTA process during the next two years. They are then giving themselves another year after that – until August 8th 2019 to respond to the applications – so at present it appears that if a company puts in a PMTA, it will possibly have two to three years of business, until it is either granted permission to continue, or permission will be denied and the product will have to be removed from the market.
Looking at this purely from a business perspective and cost analysis, many will not see this as viable.
Due to this, the next two years of vaping in the USA will not see innovation of any kind in the stores or from US based online stores. The products we have now are the products we are stuck with, as anything new from the 8th August 2016 has to have been through the PMTA process.
The only new designs will be lanyards! They have somehow escaped unscathed from all this and are not by association a tobacco product. Phew…
Earlier on we mentioned that the FDA is trying to kill the Industry, but this is the USA, and as expected there are, at time of writing, 5 lawsuits against these regulations.
There is also the Cole/ Bishop Amendment and HR 2058 that are challenging the predicate date in the Congress. HR 2058 simply calls for the predicate date to be changed to August 8th 2016. The Cole/Bishop amendment calls for a change in the predicate date and for sensible, proportionate regulations such as battery safety.
So to recap, not too much of a change after August 8th 2016, but then a gradual squeeze on the Industry as manufacturers decide if it is worth going through the PMTA’s, while the lawyers get to earn big buck slugging this out in court, and we all rally to support Cole/Bishop and HR 2058.