Lessons to Be Learned from America’s War on Vaping

1. Lessons to Be Learned from America’s War on Vaping Gregory Conley, J.D., M.BA. President – American Vaping Association (609) 947 – 8059 / gconley@vaping.info Twitter: @GregTHR / @AVABoard

2. My Story • Smoker for 8 years • Had previously tried the nicotine gum, patch, lozenge, cold turkey, & e-cigs • August 2010 -- bought an “open” vapor product and finally quit successfully • 2009 – 2011 • FDA tries to enact a de facto ban on vapor products • Numerous states try and fail to pass bills banning sales to adults • 2011 – 2014 • Served as volunteer legislative director for U.S.’ largest consumer advocacy group • 2014 – Formed the American Vaping Association

3. Disruptive Technology • The Tobacco Companies -obvious role, sell their product, make money, protect themselves from competition • The Government - biggest player in the tobacco market. (2000 received around $40 billion annually from tobacco, against less than $9 billion in profits received by the tobacco industry itself) • Pharmaceutical companies – profit from repeat sales of largely ineffective smoking cessation products. (NRT, Zyban, Chantix) • Tobacco Control – works closely with pharmaand gov. selling policy advice to gov., agitating for taxes, bans which benefit both, (includes NGO’s, Charities, and many scientists in universities and in government funded knowledge institutes worldwide.) 60% Ad-Valorem tax on the sale of each pack of cigarettes. Threatens entire established Tobacco Industry

4. Money • Ideology • Fear of the unknown • Prestige

5. Public Is Getting Mixed Messages About Vaping Risks • The same 2013 survey found that among the general public, just 51% believe vaping to be less hazardous than smoking. • 2015 survey found situation is worsening -- 44% of general public believe e-cigs are safer • The U.S.’ largest health orgs should be trying to correct this misconception, but instead many are actively endeavoring to further confuse and mislead adult smokers Tan ASL, Bigman CA. E-cigarette awareness and perceived harmfulness: prevalence and associations with smoking-cessation outcomes. Am J Prev Med 2014; 47: 141-9

6. U.S. Minor Bans • 47 states • Who’s left? • District of Columbia • Maine • Pennsylvania • Michigan • Most do not define us as ‘tobacco’ • But states like Rhode Island, Arkansas, etc. are setting up similar regulatory systems

7. Taxation

8. Child-Resistant Packaging

9. Vaping Bans

10. State Legislation: Vapers & Retailers React

11. Federal Regulation – The Tobacco Control Act (TCA) • Signed into law in 2009 • 10 year effort launched by Philip Morris (PM) (“Marlboro Protection Act”) • Result of agreement between Campaign for Tobacco Free Kids & PM • Gives FDA explicit authority to regulate the content, marketing, and sale of • (1) cigarettes; (2) cigarette tobacco; (3) RYO; and (4) smokeless tobacco • TCA gives FDA additional power to regulate ‘tobacco products,’ defined as “any product made or derived from tobacco that is intended for human consumption, including any component, part, or accessory of a tobacco product.”

12. “Marlboro Protection Act” Explained • Nickname given to the bill by Sen. Mike Enzi (R-WY) • Under the TCA, established brands and products could continue to be marketed without any significant new restrictions, but those looking to compete with new products have to comply with… • Expensive & burdensome to requirements to bring products to the market • Two relevant application types: • Substantial equivalence (SE) • Premarket review of new tobacco products (PMTAs)

13. Substantial Equivalence (SE) • Virtually ANY change requires an SE application • Must show that the new / modified product does not raise different questions of public health than raised by a “predicate product.” • February 15, 2007 & the “predicate product” • Any product that was commercially available ON this date can qualify as a predicate product when applying for SE • Arbitrary date – means nothing, but a huge impact for vapor

14. Premarket Review of New Tobacco Products (PMTAs) • If your product change or new product does not meet SE requirements, you must file a PMTA. • Population-level health standard • Product must be “appropriate for the protection of the public health” of the population as a whole – both users and nonusers. • Extremely complex and burdensome • Intentionally so – designed to keep new products off the market • With the exception of allowing minor changes to Swedish Match’s General Snus products, FDA has yet to accept a single PMTA for the products it currently regulates • 4 have been rejected • 2 have been refused • 1 withdrawn by the manufacturer

15. The Deeming Regulation • TCA gives CTP the authority to propose new regulations • IF “such regulation would be appropriate for the protection of public health.” • BUT “public health” must be measured at the population level • April 25, 2011 • FDA announces in Stakeholder Letter that it intends to issue a regulation “deeming” e-cigarettes to be “tobacco products” under the TCA • April 24, 2014 • Proposed deeming regulation released

16. The Deeming Regulation – In Short

17. The Deeming Regulation -- Detailed • FDA proposes to treat vapor products the same as tobacco • Some aspects are perfectly reasonable • Ban on sales to minors • Ban on sales in vending machines • Adulterated and misbranded product provisions • Others would decimate most companies in these industries • Two BIG Problems for vapor • (1) Inability to file Substantial Equivalence (SE) applications • (2) Costs associated with Premarket Tobacco Applications (PMTAs)

18. SE Applications – The Problem • E-cigarettes were barely available in 2007 • Those products that did exist are technologically inferior • FDA recognizes this: • “[F]or some products, there may not be predicate products that were on the markets as of February 15, 2007, to which to claim [SE]. This may be particularly true for e-cigarettes and similar novel products.” • FDA’s solution: “For this reason, we are proposing that these manufacturers who cannot use the SE pathway submit PMTAs to FDA no later than 24 months following the effective date of the final rule.” • For many companies, this is merely a delay in their execution

19. PMTAs – The Problem • A PMTA will be required for every single covered vaping product on the market today and in the future • Bare minimum: $1 - $1.5 million per product • But evidence is pointing to true cost being $5-$20 million • Many e-liquid companies have hundreds or thousands of SKUs • FDA estimate: 5,000 man hours per application • Including 4,800 hours of clinical and nonclinical studies • Even for those who can afford to file a PMTA, their fate is uncertain • FDA is sending strong signals that it believes any non-tobacco, non-menthol product must be kept off the market. • FDA’s position: Congress gave us the statute and we must follow it • Position of much of the industry: Several examples of FDA exercising regulatory flexibility in tobacco and medicine regulations.

20. The Grim Future Post-Deeming • FDA knows this regulation will ban 99.9% of vapor products • Agency only expects 25 PMTA applications per year • FDA: “Products that do not have sufficient sales to justify incurring the costs of complying with the proposed rule would exit.” • FDA also expects less products to be offered from those that stay in the market. • Who benefits if no significant changes are made? • Big Tobacco • A select couple Wall Street-backed e-cigarette companies • Not small- and medium-sized businesses or consumers • Some may move to nicotine-free market, but that will come with challenges. • Not public health • Smokers need more options to quit, not less

21. Achilles Heel of FDA Deeming Regulation Hands Vapor Industry to Big Tobacco

22. How to Win … Or At Least Survive • Create advocates • Form national and local trade organizations • Cooperation is key • Engage with the government now, not later • Don’t endorse anti-competitive regulations • Know your enemy

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