By Patricia Kovacevic
The entire vaping industry is painfully aware by now that the Food and Drug Administration (FDA) Final Rule, deeming tobacco products to be subject to the Federal Food, Drug and Cosmetic Act, went into effect on August 8.
What are some of the rule’s implications for manufacturers, importers, retailers and consumers? As the industry feels that the rule is vastly inadequate and disproportionately onerous on manufacturers of vaping products, given the tobacco harm reduction potential of these products, what can still be done to redress this situation?
In brief, the rule will enable the FDA to review new tobacco products not yet on the market (and, one must add, review and possibly take off the market many of the current, newly regulated products); help prevent misleading claims by tobacco product manufacturers, evaluate the ingredients and manufacturing of tobacco products, and communicate the potential risks of tobacco products, according to the FDA.
Notably, the rule does not meet societal expectations to impose product standards. Those must be issued pursuant to separate rulemaking, and the rule does not impose an obligation on the FDA to communicate relative risks of the newly regulated products versus conventional combustible cigarettes.
Additionally, the rule fails to distinguish among finished products, spare parts and other elements, imposing the same very onerous pre-market review requirements on practically anything and everything sold to consumers. This includes items that can be bundled or used with, or as a replacement part, or enhancement of, a newly regulated product.
What Can Retailers Expect to See After August 8?
The first type of activity the FDA will engage in will be retailer inspections, typically through subcontracted state authorities. As of August 8, age verification becomes mandatory, and automated self-service units may only be placed in age-verified, adult-only venues. Thus, retailers will be inspected openly or anonymously to ensure age verification is conducted at the point of sale, and that minors do not manage to buy products. Online retailers are required to have suitable age verification in place—though the FDA will not suggest any particular provider or age verification scheme, and thus can expect that FDA agents will attempt to make purchases on behalf of underage individuals.
Retailer violations will typically be noted in warning letters. Numerous examples of warning letters to retailers of conventional cigarette products may be found at http://www.fda.gov/ICECI/
If a retailer receives a warning letter, the retailer may contact the Center for Tobacco Products (CTP) if he or she would like more information—though more information will not necessarily be provided.
The FDA requires that the retailer respond to the warning letter within 15 working days, in writing, by mail or email, and include an explanation of the steps the retailer will take to correct the violation(s) and prevent future violations. For example, the retailer could submit that he or she would retrain employees and remove the problematic items, etc. The retailer must also provide their current contact information, and the FDA may also recommend training. While retailer training is not mandatory, the FDA provides a few resources for retailers wishing to train their sales staff.
It is expected that the FDA will conduct a flurry of retailer inspection activities on an ongoing basis, as this is the most visible and easiest type of enforcement the FDA can undertake promptly.
With respect to manufacturing activities at the retail level, it may be an objective of retailer inspections as well, though personally I suspect more senior CTP staff might become involved with such inspections. This is due to the level of detail and documentation that might be required to conclude a manufacturing violation has actually taken place.
What Can Manufacturers Expect to See After August 8?
The FDA may inspect manufacturers at any time after August 8, however, the deadline for manufacturers and importers (which fall within the definition of a manufacturer) to file a facility registration and product listing is December 31, and therefore, the FDA is not likely to have the necessary information as to where and what to inspect before that date.
Our view is that manufacturer inspections might start early in 2017. There is still considerable confusion as to whether foreign based manufacturers will be inspected. The FDA surely has that authority and at an industry conference call in May, their CTP director suggested all is fair game in the industry.
Foreign manufacturers should require clarifications from the FDA on this topic. The FDA routinely inspects Chinese and Indian facilities engaged in manufacturing of other FDA regulated products, such as drugs and devices.
In any event, a robust inspection preparation plan and possibly mock inspections will help manufacturers navigate
the very first FDA inspections with less disruption. Initial FDA visits may only seek to establish a benchmark for future inspection, however, do expect extensive requests for document production during those early inspections.
Deeming Rule Deadlines and the Future
There are various compliance deadlines for manufacturers, retailers, importers, and distributors. The FDA captured those in a rather comprehensive document available on their website at: http://www.fda.gov/TobaccoProducts/GuidanceComplianceRegulatoryInformation
Notably, the next deadline refers to the most onerous requirement, which is submitting a pre-market tobacco product application (PMTA). This may very well signal the beginning of the end for many in our industry.
As we all know, when the FDA issued the Deeming Rule, it also published a draft guidance entitled, Premarket Tobacco Product Applications for Electronic Nicotine Delivery Systems (ENDS), and therein lies the rub. While the guidance is supposedly “non-binding”, we all know the FDA always follows its own guidance and allows itself to request, in fact, much more information than what is listed in the guidance.
Those of us with a long history of engagement with the FDA, and having successfully navigated similar requirements, understand the complexity of the information and studies required in support of a PMTA and find that time, availability of research facilities, and cost might render the PMTA pathway available to only a few.
It is also blatantly unfair that the FDA will take products off the market as of August 8, 2019 if they fail to review the respective PMTA applications duly filed by August 2018 because of the FDA’s own speed of review. Namely, a leading official at the CTP clearly stated in a recent webinar that, if FDA does not get around to reviewing a PMTA application by August 8, 2019, it will order the respective product off the market and continue reviewing the PMTA at its leisure—while the manufacturer presumably shuts down its operation and goes home, waiting indefinitely for some sort of resurrection.
Given the expected enormous number of potential PMTA applications (our estimate, not the FDA’s), there are likely not enough scientists in the entire FDA to review them before the extended compliance deadline of August 8, 2019.
It’s not all doom and gloom, though. Given sufficient resources and more time, a good faith PMTA may be submitted, but few companies will have the know-how, resources, and willingness to engage in such multi-million dollar undertakings that can ultimately lend themselves to improbable outcomes.
So what has been done, and can be done, to ensure the industry’s survival, give hope to smokers who want less risky products, and avert a tobacco-harm-reduction catastrophe?
Promptly and upon publication of the Deeming Rule, Nicopure Labs filed the first and to this day, the fastest moving lawsuit against FDA in Washington, D.C. Circuit Court.
A coalition of companies joined that lawsuit within a matter of weeks, and the respective plaintiffs’ motions for summary judgment have been filed already. The complaint challenges the rule in its entirety and also selected provisions of the rule. Several interested entities have moved to file amicus briefs in support of the plaintiffs and at least one in support of the defendant. Several other separate lawsuits were filed by other newly regulated manufacturers, and one even on behalf of consumers.
We believe Nicopure et al. v FDA et al. will provide the earliest resolution and clarity to our industry, one way or another, which was our goal all along. I am as curious as you, the reader, to find out whether our hard work and sacrifice will pay off in this case, but predictions are never appropriate in litigation. Let’s just say that we have faith in the justice system as our last resort.
In addition to litigation, which might provide complete or partial relief to the industry as early as 2017, various advocacy and industry groups are working towards the goal of having certain elements of the rule changed, to ensure that products on the market as of August 8, 2016, do not need to undergo any form of pre-market review by the FDA, while preserving FDA’s ability to inspect, receive ingredient information, require pre-market review of future new products and generally monitor the industry.
Those efforts are underway and may yield results in early 2017 as well. These two types of initiatives, litigation and legislative changes, are at present what we all need to focus on.
Until one, or both initiatives bear fruit, please make sure you comply with all applicable provisions of the Deeming Rule and be cooperative with the FDA as much as practicable.
We will regroup in the first part of 2017 to assess outcomes. Stay focused and positive in the meantime. Also, to quote Longfellow, “Perseverance is a great element of success. If you only knock long enough and loud enough at the gate, you are sure to wake up somebody.”
Patricia Kovacevic is the general counsel and chief compliance officer at Nicopure Labs, the leading e-liquid manufacturer of brands Halo and eVo, and the first company to challenge the FDA Deeming Rule.