FDA “regulation” of e-cigarettes would not actually be regulation

by Carl V Phillips

A recent news poll asked people, “Do you believe e-cigarettes should be regulated by the FDA like tobacco products?”, and 57% said “yes”. The main lesson from that is that people who are clueless about survey research should not be allowed to do survey research. Any moderately competent researcher would realize that answers to that question are meaningless when the respondents have no idea what they are being asked. If forced to field such a question, an honest researcher would have also asked one or more questions about how FDA regulates tobacco products and, after discovering that not a single respondent was anywhere close to right (I am pretty confident that would be the result), would dismiss the responses to the first question as meaningless.

An honest and skilled researcher only asks questions such that the respondent actually knows what they are answering: “Do you believe that FDA should ban all e-cigarette products, followed by allowing a few of the largest companies to spend $20 million per product to beg permission to allow a product or two onto the market, applications which FDA would then grant or deny based not on any rules but on their political whim or political connections, with the result being less than 20 expensive and low-efficiency products remaining on the market?” That is the question the respondents were answering, they just did not know it. No doubt some respondents still would have said “yes” — haters gonna hate — but not nearly as many.

FDA does not regulate cigarettes and smokeless tobacco now, and would not regulate e-cigarettes under the deeming — not in any normal sense of the word “regulate”. Well, I suppose you can call any government restriction on commerce “regulation” if you define it broadly enough. But few would call alcohol Prohibition, the criminalization of heroin and prostitution, or the 14th Amendment “regulation”. What FDA does with tobacco products is much closer to those examples than it is to what we normally think of as regulation, and it would be closer still for e-cigarettes (and also for premium cigars, which are included in the “deeming regulation” alongside e-cigarettes).

Any normal use of the word in the context of products refers to rules for product characteristics, performance standards, manufacturing standards, labeling, and the like, such that a product in the category must meet the rules to be allowed on the market. FDA’s tobacco “regulation” includes almost none of that. There are some packaging and labeling rules, a ban on characteristic flavoring for cigarettes, and a prohibition against selling to minors (which is redundant with state laws). There is constant chatter about some day imposing some real regulations, like limiting quantities of particular chemicals that some believe to be independent sources of health risks, but there is nothing like that now. And there may never be, because the real effect of FDA “regulation” is simply to make it nearly impossible for manufacturers to introduce a new product or even make changes to existing products. I would guess that about 99% of people who profess to have an opinion about tobacco policies do not know these basic facts (and it rises to about 100% of randomly selected survey respondents).

In the previous post, I pointed out that the US government in general, and the FDA in particular, has a consistent track record of attacking smokeless tobacco with the same vehemence that they attack cigarettes. They have tricked people into believing smokeless tobacco causes measurable disease risk and have aggressively restricted these products, successfully preventing a great deal of THR. One implication of that is that there is no reason for a rational observer to expect “moderation” in FDA regulation of e-cigarettes. If this is what they have done to a well-studied THR product that almost certainly poses lower risk than e-cigarettes, why would we expect better for e-cigarettes?

But prospects are even worse for e-cigarettes, and as a result there is not only no realistic hope for moderation, but also no realistic room for establishing a meaningful compromise. The FDA is prevented from just banning an existing smokeless tobacco product from the market except via actual product regulations (and there is no evidence that they are seriously pursuing any such). But they can ban all e-cigarette products from the market. Indeed, the proposed deeming will ban all e-cigarette products. It does not matter what details are contained in the proposed rule. It does not matter what else FDA says they are going to do with their new authority. A real regulation, one that imposes actual rules on a product, has room for compromise (“we could live with it if you changed this from 10.2 to 8.4 and allowed exceptions for…”). But in this case, the payload is basically all in the mere act of deeming, imposing the rules contained in the Tobacco Control Act (TCA) on e-cigarettes.

Allow me to unpack that a bit, though most interested readers will already be familiar: The TCA bans the sale of any tobacco product that was not on the US market as of 2007, though it theoretically grants introductions of new products via supplication through the PMTA process (which is usually spelled out as “premarket tobacco application”). Since nothing even resembling any current product meets that 2007 cutoff (called the “grandfather date”), this means that all current products would be banned. Many commentators (including us) use a shorthand along the lines of “this would ban 99% of all products on the market” (though really, 99.99% is the right order of magnitude), but it is more accurate to say that it would ban 100% of products and then, perhaps, allow 0.01% as many products as currently exist — which would be officially new — to be introduced or reintroduced through PMTA.

More on PMTA and the “perhaps” below, but the key point here is that this is not a real regulation. A real regulation would say “all of the products in the sector will have to meet the following list of standards in order to stay on the market after a grace period of X months.” But the deeming would ban all existing products unconditionally. There is no opportunity to meet regulatory standards. There is no room for negotiation or compromise.

There has been a great deal of discussion about changing the grandfather date, perhaps moving it forward to the date the TCA is applied to e-cigarettes. In addition to the obvious practical benefits, which include buying some time to try to get rational policy changes, this eliminates a Kafkaesque absurdity from the whole process (“you should have known this was coming in 2007, before your company or products even existed, and thus should have made sure to get your products on the market by then”). The grandfather date is one specific point that allows room for a sort-of-compromise. Changing it to the present would basically put e-cigarettes on the same footing as smokeless tobacco: Incumbent manufacturers cannot continue to improve their products, and no innovators can enter the market, but so long as incumbents keep the products just the same they can keep selling them.

As bad as such a compromise seems, it is not even quite as good as it might sound: It is likely that many smaller manufacturers would not be able to demonstrate that a particular product was on the market before the grandfather date or would otherwise fail to properly jump through all the hoops; they would probably keep selling it, but technically it would be illegal and eventually subject to FDA enforcement action. Many small manufacturers would just exit the market rather than even try. Moreover, FDA would undoubtedly move to impose standards (the real regulations they will not bother with if they can just ban everything) and any product that did not meet them would have to be adjusted and then (more Kafka) have to get permission for the change through the expensive, arbitrary, and usually-denied “substantial equivalence” (SE) process. In the previous post I gave an example of FDA arbitrarily denying an SE application for something that is clearly a THR product.

And note that these SE issues apply only to technical specifications, the kind that appear in real regulations. Actual prohibition efforts would also be likely, such as banning most flavor profiles. Without further policy changes, the market under a later grandfather date will converge to being quite similar to the market under the 2007 date, within only a few years, though a later date would buy some time for those policy changes.

In any case, FDA has insisted that there is no room for a sort-of-compromise on the grandfather date. The absolute date is written into the enabling legislation and FDA contends that an executive agency cannot change it. They have a reasonable constitutional argument there, which is one of several reasons why we said, in our comments on the draft rule last year, that if FDA really wanted to do what they say they want to do — lowering the average risk of tobacco products, and such — they would ask Congress for new legislation before acting on e-cigarettes. Indeed, new legislation about all low risk products would be a good idea. There is a movement to get Congress to change the e-cigarette grandfather date despite FDA’s lack of support for doing so (you can voice your support for that to your legislators here).

But the constitutional issue is really a rationalization for FDA’s real reasons for absolutely not wanting to compromise on this. They have clearly indicated that they do not want to really regulate e-cigarettes. More details can be found via the links in the above link to our comments, but basically the problem is that e-cigarettes are complicated, unlike the tobacco products FDA currently regulates. FDA is flustered and floundering on the subject. They tried to educate themselves via workshops, which involved the presentation of “information” that was about 66% already common knowledge among real experts, 33% wrong, and 1% genuinely educational. There is limited science about the category in general, much of which is crap, and specific research about approximately 0% of the individual products. Really regulating e-cigarettes would be a lot of hard work, upsetting the rather cushy job of “regulating” tobacco products. On top of that, moving the grandfather date much would increase the number of individual tobacco products that FDA must deal with by an order of magnitude. They could not even handle the resulting registration paperwork. And they know it.

Much easier, then, is to ban all e-cigarette products and then hand-pick a few individual products to enter the market. No real regulation is needed because the exact product has to be pre-approved and no changes are allowed. As an added bonus, no research effort is needed because FDA can just tell the PMTA applicants to proactively provide every bit of research FDA might want, and then make them go back for more if so desired. And that, in turn, has the delightful effect of making every application cost millions of dollars, which will keep the total number FDA has to deal with down to 10 or 20 (their estimate, which seems about right). It is truly elegant bureaucracy — in the derogatory sense of the term, a la the cartoon version of trying to renew your driver’s license c.1980. Indeed, departments of motor vehicles could only dream of so effectively offloading the job they were supposed to be doing onto the customers they were supposed to be serving.

So what would FDA then do with those massive research-dense filings? Whatever they wanted to do.

I used the words “supplication” and “hand-pick” to describe the approval process. That is because there are no clear rules about what any tobacco product application needs to achieve to be accepted. Indeed, the “guidance” documents that FDA has produced call for inclusion of several pieces of evidence that are literally impossible to generate. This makes it rather easy for FDA to reject any application they want to reject. Oh, but they can still accept it, because FDA explicitly states that these are just guidance and are not binding on either FDA or the applicant. In other words, the instructions for PMTA applications are “do all this — or not, your choice — and we will then accept the application or bounce it back for more information — our choice — and if we accept it we will make a final decision based on something.” I have heard from industry that for something in the range of 80% of serious SE applications that FDA bounced or rejected, FDA’s stated reasons for doing so were something that FDA had never before communicated was required of the applicant.

Granted, any regulatory process that involves complicated science is going to have some fuzzy edges. The FDA drug approval process, which the FDA tobacco regulators are inappropriately trying to ape, inherently includes the necessarily subjective step of deciding whether the imperfect body of available evidence is convincing. But at least there are pretty good rules, and a consistent pattern of constructive engagement with the regulated companies to try to deal with the fuzziness in ways that (mostly) serve the public interest. The major tobacco companies can afford to maintain constructive engagement with FDA, but no more than a handful of other companies in the e-cigarette sector have that capacity (and there is no concern whatsoever for consumers’ interest). Even with that engagement, though, given the expense and vagueness of the PMTA process, it is easy to believe that even the big companies with individual products whose sales could justify the PMTA application expense (which would only be mass-market closed-system cigalikes) might not want to bother with it.

Well, that is not entirely true. Because FDA probably wants a few e-cigarettes approvals, to demonstrate that they are not really banning the category, and also to be able to gather data (they are curious human beings, after all). So if it is looking like they will not get enough applications to hand-pick from, they will lean on the companies they regulate in other tobacco product sectors to file them. Thus there probably will be a few closed-system cigalikes on the market when the dust clears, though perhaps not, depending on the political winds. (There will also be thriving shadow markets for open system products, some of which will be full on black markets, and some of which will be technically legal depending on exactly which bits of open systems FDA asserts authority over. Needless to say, this market shift would benefit no one other than the criminally inclined.)

What is critical to understand here is that every FDA action on a PMTA application, as with their actions on SE and MRTP applications, is purely a policy decision. A small cabal of unelected government officials have a free hand to make whatever choices they think will make the tobacco product market more like they want. There is no process, just policy. This is bad governance at its worst. There are steps that resemble a process, and can be used to pretend there is a process, but fulfilling those steps is really just the price of admission. Once that price is paid, it is purely a matter of supplication. We are talking about something akin to licensing authorities in a command economy (and if that brought to mind phrases like “political connections” and “crony capitalism”, you are thinking down the right path).

So, surveys show that a majority of the population — people who have no stake in this — thinks e-cigarettes should be regulated. What really matters is that most actual consumers — I would guess easily 90% — would like some real regulation of what they are putting in their bodies. Reputable merchants benefit from real regulation too. But none of them will actually get what they want under the current FDA regime. The only ones getting what they want will be the tobacco controllers who want all tobacco users to be smokers and the hand-picked PMTA grantees who will enjoy their new oligopoly profits.


27 responses to “FDA “regulation” of e-cigarettes would not actually be regulation

  1. Carl how much of this is subject to the approval of your Congress?

    And “basically the problem is that e-cigarettes are[too] complicated [for us]” sounds true , jeez , We all struggle with profit shifting to tax havens, IP ‘piracy’ etc the real world is complicated.

    Where would devices for inhaling cannabinoids etc fall in this scheme, in or outside ‘tobacco’ ?

    • Carl V Phillips

      Congress: None. They could change things, of course, as with the grandfather date. But no approval is needed to do what I describe — it is already law.

      Complicated: I agree. It is lame beyond belief.

      Devices: That is a bit up in the air. I cover it some at that link about the black market.

      • Carl Thanks!
        Your piece on the Shadow market is very good.
        An other possible risk of it going gray-black is that at the moment, the profit margins for most Chinese component makers supplying to the US are quite healthy , if they were to be restricted to supping only a few near monopoly big retail operations , it is almost inevitable that their profit margins would be squeezed down, hard. And therefore incentives to substitute dangerous but, marginally cheaper, components so as to make a tad more profit, could come into play. (it has happened in the past re things like toothpaste and toys).

        Funny thing is it seems that at least some of those working in the FDA system must surely know that their proposed regulations will not work in the real world. Sound like they are more concerned about protecting themselves from seeing things that upset them.
        ( For some reason, the FDA, on this, reminds me of The Ravenous Bugblatter Beast of Traal- “a animal known for its never-ending hunger and its mind-boggling stupidity. …” ).

        Trying to regulate-ban something whose components – rechargeable batteries, small heating coils, vegetable glycerine, nicotine and so on- are all individually legal and can be used for many other purposes, looks like a very large project.
        Do you think your congress understands that the proposed regulations-ban, if really policed, could be rather costly to the budget etc?

        Back in 2010 the then federal government of Australia did briefly consider banning the import of nicotine for personal use, however the policy was quietly rescinded before it really got of the ground. Do not know the why of that decision. However gut feeling is that our customs border protection services were even then, flatout dealing with the enormous amount of stuff that individual Australians buy OS , via the web and import. Are flatout policing things like Ice and excise evasion re tobacco etc. In short they simply do not have the resources to police the importation of a basically harmless recreational drug , that is quite legal to buy in gums etc in the corner supermarket anyway.
        As it stands buying the liquid from China (there are a few companies that check out as reliable) or NZ is not hard .

        • Carl V Phillips

          There is no doubt that black market product would be worse in many ways, including safety. As I noted in that paper, there is very little brand equity in the black market, and so little reason to provide decent quality. The remaining legal market would undoubtedly use in-house manufacturing entirely, probably onshore, so that would presumably be as clean as possible (as those same producers presumably already are).

          I have no idea if anyone has gotten the message through to Congress or Customs about what I mess this would be. Strangely, I seem to be the only one writing about the black market, even though I have no particularly unique skills or knowledge in that area and others pay a lot of attention to it. (If anyone reading this knows of any other good writing on the topic, let me know.) I suppose I should spruce up that paper a bit and put it into a journal. It would be worth extra “I told you so” points, at the very least.

        • Carl I asked around about economics research and papers etc on the Black Market – have not had the time to read it myself, but the source is good:

          The key phrases are ‘grey economy’ and ‘underground economy’. One of the authorities in the field is Friedrich Schneider who has written several books and articles on it, such as



          This is mainly on the size and composition of the grey economy. The notion of tax evasion and the economics of crime are other related literatures.
          Best of luck!

        • Carl V Phillips

          Thanks. I really hope I can get a chance to work on that.

  2. Well yes, it’s looking rather bleak. The only point I would argue with is changing the grandfather date. I know you support it, but there may be a bit more to it then your post implied.

    With the rate electronic cigarettes are growing it might well reach the point of no return in the not to distant future. With millions more people using them, and I would guess better evidence that they are actually helping people quit smoking and are much less harmful, it simply becomes more difficult to impose draconian regulations. Not saying it won’t be tried, but as time moves on it becomes more difficult.

    I alway thought the push by the tobacco control industry to speed up the deeming was because they knew time was working against them. In a real sense it already has. There would have been much less resistance 2 or 3 years ago then there is now.

    It would be the end of innovation and it would restrict the market as many would drop out, but the big players would stay. Without the change in the grandfather date electronic cigarettes, outside of the shadow markets, are dead in the water.

    • Carl V Phillips

      There is no disagreement there. The extra time (for some subset of products to remain on the legal market) offers opportunities, and those opportunities are much greater now than a few years ago, and every quarter improves them more still. I did not go into this, but in the draft, there was a two year grace period before anything takes effect — that alone is a lot of time.

      As much as anything, I was trying to dissuade some naive pro-ecig people who think that changing the grandfather date changes everything. As I noted, if that were the only change, and then some massive policy disruption did not occur, in a few years it would be pretty much moot.

      • Carl I think that one of the few products that was definitely on the market in 2006-7 was the range made by Ruyan (now Dragonite international). Interestingly its product , uniquely ,uses some sort of ultrasonic piezoelectric atomizer – not a heating element, and it has IP on that. The firm and its IP was acquired by one of the BT companies a few years ago.
        And they have been trying the IP routine http://www.economist.com/blogs/schumpeter/2014/03/e-cigarette-patent-wars
        Their obvious problem is that the only IP that is not ‘prior art’ is their atomizer .

        It is obvious that the FDA’s 2007 date could suit them rather well,no?

        • Carl V Phillips

          Imperial bought them. I am not aware of a non-heat-based atomizer. Trying to defend the basic idea as IP seems doomed anywhere with reasonable laws. It is not as if ecigs were the first product to use an atomizer. The tech already had that name, after all. It is not as if their’s were the first ecgis.

          I remember visiting their US headquarters c2007 (yes, I am pretty sure I first saw and tried an e-cigarette before 99% of the ecig mavens and 99.9% of my readers). Highly non-similar to current products — definitely not SE.

        • They claim it is ultrasonic , have never actually seen one.

  3. Carl
    A question about the ‘style ‘ of your judiciary.
    From memory one of your courts in about 2010 ?, ruled that the import of e-cigs could not be banned by the FDA under its powers over drugs, but they could be regulated as a “Tobacco” product. (And its obvious that the FDA then set out on a long single minded march to banning by regulation.)

    Question is : How do you think your courts would view the application of tobacco regulations to the importing of products that contain not even a skerrick of tobacco or nicotine- are your courts inclined to ‘spirit of’ or ‘letter of’, the law interpretations?

    • Carl V Phillips

      Yes, good question. So the court prevented FDA from declaring that ecigs were subject to pharmaceutical rules (which they did not meet, and so would be banned) because they were not being marketed as medicine. If they are marketed as medicine (e.g., claims about health benefits are made) then FDA can treat them as such. The court also noted that as of 2009, FDA had authority to regulate them as tobacco products under the TCA. Note that this is often misinterpreted as the court ruling caused ecigs to fall under that law, which is not true. The law is very clear that anything with nicotine that does not go down the path to get pharmaceutical regulation is a tobacco product.

      Now bringing it to the present, what happens if FDA insists they have authority over open-system hardware bits or zero-nic refill liquid? The letter of the law says they have no such authority. A rationally designed policy would give the same agency authority over all ecig components, but the TCA is about as far from good policy as you can get. Courts obviously get activist all the time, so it is hard to be sure. But there is no apparent “obvious intention of the law” justification for allowing that here: If Congress had wanted to grant that power, they could have included language about products whose primary purpose is to facilitate use of regulated products. Now there are some ambiguous bits surrounding concepts of “components” of the tobacco product (which are included) versus “accessories” and FDA could seek refuge there. But I expect it will fail for the reasons I explained in that paper.

  4. Carl’s analysis in this posting is spot on (and what I’ve been saying since 2011 about the TCA, deeming regulation, and policies of Obama’s appointees at DHHS).

    The only way FDA could politically get away with banning 100,000+ vapor products and shutting down 10,000 vapor product manufacturers in 2018 (24 months after final rule issuance) is if the agency first approves at least one, two or several PMTAs for cigalikes. But’d I’d be surprised if more than a dozen PMTAs would be approved by FDA before the agency (in the next administration) is stuck with implementing the 2018 nationwide vapor product ban.

    After reading the PMTA draft guidance that FDA leaked to TVECA, I’ll be surprised if more than 25 PMTAs are even submitted to FDA in 2017 for vapor products (which is the what FDA’s proposed reg estimated), as it would cost at least $20 million to submit a PMTA that FDA accepts for review. Note that FDA has refused to accept the 4 PMTAs that have been submitted for tobacco products already regulated by Chapter IX).

    By leaking the final rule last week, FDA has prevented lots of news stories (that would have been generated when the final rule is issued) describing the deeming regulation’s disastrous ramifications for public health and the vapor industry (as the leaked regulation generated very little news coverage), while also giving PMTA applicants 3 or 4 months of advanced notice for developing PMTAs to be submitted in 2017.

    Regardless, under the deeming regulation, DHHS and FDA appointees and bureaucrats would get to determine (in 2017 and 2018) which cigalike products are suddenly worth billions of dollars (while all other vapor products become contraband in the US) as they create a new FDA approved vapor industry cartel (while all other vapor companies either become suppliers for PMTA lottery winners, go out of business, go black market and/or move abroad).

    Also expect lots of political pressure (from CTFK, ACS, AHA, ALA, AAP, Glantz, left wing Senate Democrats, NY Times editorial board, etc.) to be applied on the next DHHS Secretary, FDA Cmsnr and CTP Director in 2017 to reject any/all PMTAs submitted by tobacco companies.

    Although the TCA requires FDA (technically the DHHS Secretary) to consider the black market potential when proposing new tobacco regulations, the proposed deeming regulation never did so (which should be further exposed the news media, members of Congress and in future litigation against FDA). Since 2008, more than a dozen countries have created rapidly growing black and gray markets for vapor products (evidence that FDA’s ban would do the same). This issue deserves far more attention than has occurred so far.

    I’ll be telling this (and a lot more about vapor products and the deeming regulation) to the White House OMB/OIRA once again in several weeks (just as I did two years ago when I urged them to reject FDA’s proposed deeming regulation).

    • $20 million to apply, good chance of failure (or resubmit: the ‘color ‘is not approved).
      And if you are BT and have the money, then also cop all the usual stuff from the ‘loose morals’.
      All in order to to sell into a market that will almost certainly have lots of gray to black unregulated competition.

      Is it conceivable that nobody will think it worth it?

  5. Pingback: IN MY VIEW: In Reality, FDA Deeming Regulations are Thinly Veiled Prohibition

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  7. Given that anyone with reasonable mechanical and electronic skills can build an E cig that will function adequately (not as good as the commercial units, but adequately) out of commonly available, non-specialized components, and further, that anyone with some knowledge of chemistry can extract nicotine from tobacco — E cigarettes are never truly going to go away. Ever. Unless, of course, they make possession of the devices and liquids themselves a crime!

    • Carl V Phillips

      I go into depth about this in the post about predicting the black market from last year. I would predict there would be a lot more market and a lot less DIY than you suggest. Criminalization of use or possession is extremely unlikely, but it would not change things all that much — we have heard that song before.

      • Carl
        i think there will be a lot of Gray ,ambiguous,and ‘assemble it yourself ‘market (as well as a lot of cross border trade). For example “Mechanical Mods” are a tube, a off the shelf mechanical switch and a off the shelf rechargeable battery. Could be used to power many things ( including but not just, cannabis related purposes), hard to see how they in themselves could be banned under a tobacco regulatory act. So on.

        • Carl V Phillips

          My prediction is actually that hardware bits for open systems will still be sold openly. FDA may not even try to exert jurisdiction over it (no tobacco in the hardware, after all). If they do try, they will quickly lose in court since it can be used for zero-nic liquid (which they may or may not try to assert jurisdiction over, but if they do they will lose that too) and various legal substances. A simple label of “not for use with…” or “only for use with…” kept sellers of cannabis smoking equipment in business throughout the prohibition of that drug, after all. Also, the installed base of those products (those already out there) is enough to supply every vaper for quite a while.

  8. Won’t the OMB (Office of Management and Budget) analyze the regulations before they can be implemented?

    I seem the recall that they have the right to reject such regulations if they decide the cost far exceeds any benefit to be gained.

  9. Pingback: FDA and e-cigarettes: the dangers of radical policy action | Anti-THR Lies and related topics

  10. Would having the government decline to classify e-cigs as tobacco products and allow their continued marketing, with the states establishing reasonable over sight, be a viable compromise, to allowing the FDA to regulate e-cigs?

    • Carl V Phillips

      CTP cannot regulate them unless it declares them to be a tobacco product. There are other reasonable ways for FDA to regulate them (e.g., as a food, as Sweden does with snus), but I am not aware of any serious attempt to work out that pathway. The U.S. government is basically all-in on CTP doing it.

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