On May 5, 2016, more than two years after proposing a regulation to deem e-cigarettes and vapor products (vapor products) to be subject to the Family Smoking Prevention and Tobacco Control Act (Deeming Rule or the Rule), the U.S. Food and Drug Administration (FDA or the Agency) issued its final Deeming Rule. Beyond vapor products, the Rule also subjects to FDA's jurisdiction cigars,1 hookah tobacco, and pipe tobacco, among others (newly deemed products).
As was the case in the proposed deeming rule, under the final Rule, manufacturers of newly deemed products that are "new tobacco products", as defined in section 910(a)(1) of the Federal Food, Drug, and Cosmetic Act (FD&C Act or the Act), will be required to obtain premarket authorization of their products through one of three pathways: substantial equivalence (SE); exemption from SE; or premarket tobacco product applications (PMTAs) (sections 905 and 910 of the FD&C Act). In short, unless a product was on the market as of February 15, 2007 (grandfather date), the product would likely need to undergo PMTA review.
Given that most vapor products came on the market well after February 15, 2007, the Deeming Rule essentially requires virtually all of these products to go through the FDA's most stringent premarket pathway, the PMTA pathway. In light of the rigors and expense associated with the PMTA submission and review processes, the Rule has the potential to eliminate a large portion of the vapor industry. The Rule does address an Agency compliance policy regarding certain regulatory provisions and "small-scale" tobacco product manufacturers. However, the policy would not exempt such entities from eventual compliance with the Rule's requirements.
With regard to identifying potential "predicates" for vapor products, the Agency noted in the Rule's preamble that it has determined that some e-cigarettes and other electronic nicotine delivery systems (ENDS) were manufactured in 2006 and commercially marketed in the United States in early 2007, and in particular, it has identified an ENDS product that may have been on the market on February 15, 2007. While the Agency assessed that this product may possibly be able to serve as a valid predicate for purposes of the SE pathway, FDA noted that the burden of demonstrating that a valid predicate exists rests with the manufacturer submitting an SE report. What FDA did not address in this discussion is whether or not a product that is on the market currently can be demonstrated, to FDA's satisfaction, to be SE to a product that was on the market in February 2007. Given the product differences between early 2007 and today, even if a manufacturer can identify a potential predicate product (which is difficult enough to do), it is unclear how rigorously FDA will review SE reports and whether or not a product on today's market could ever actually be SE to a product on the market in February 2007.
The vapor industry is hoping that a congressional amendment approved by the House Appropriations Committee last month will be adopted by the House and Senate and signed into law, and will move the February 15, 2007 grandfather date, allowing some or all e-cigarettes and vapor products currently on the market to serve as "predicates" for products introduced after the Deeming Rule's effective date. For more information on this amendment, please see our earlier alert here. It remains to be seen whether this provision will stay in the Agriculture Appropriations Bill, let alone whether the House and Senate will even vote on a standalone Agriculture Appropriations Bill during this Congress.
Beyond a legislative fix to the grandfather date, and the impact that would have, it is unclear whether FDA's exercise of its deeming authority will withstand the virtually certain legal challenges to follow.
Below is a high-level overview of some of the nearly 500-page regulation's notable provisions. Beginning on the Rule's effective date (i.e., 90 days after May 10, 2016, or August 8, 2016), newly deemed products will be subject to the following:
- Enforcement action against products determined to be adulterated and misbranded (other than enforcement actions based on lack of a marketing authorization during an applicable compliance period);
- Required submission of ingredient listing and reporting of harmful and potentially harmful constituents (HPHCs) for all tobacco products;
- Required registration of tobacco product manufacturing establishments and product listing;
- Prohibition against sale and distribution of products with modified risk descriptors (e.g., "light", "low", and "mild" descriptors) and claims unless FDA issues an order permitting their use;
- Prohibition on the distribution of free samples;
- Premarket review of products or proof of substantial equivalence to a "predicate product" commercially marketed before February 15, 2007;
- Requirement for a minimum age of purchase (i.e., 18 years of age);
- Requirement for health warnings for product packages and advertisements (which FDA is also applying to cigarette tobacco and roll-your-own tobacco); and
- Prohibition of vending machine sales, unless the vending machine is located in a facility that the retailer ensures individuals under 18 years of age are prohibited from entering at any time.
If the Rule's grandfather date stands, and if the regulatory provisions withstand anticipated legal challenges, it is expected that there will be large scale industry consolidation. FDA Center for Tobacco Products (CTP) Director Mitch Zeller suggested as much during a press conference this morning to discuss the Rule and its impact. Such consolidation is likely to occur with regard to both product manufacturers in the space and product offerings (e.g., flavor choices). Director Zeller also indicated that, given the newness of the vapor product category, a majority of vapor products would need to be considered under the PMTA pathway. To that end, the Agency has released a draft guidance in conjunction with the Rule regarding some of the appropriate means of addressing the premarket authorization requirements for newly deemed ENDS products.
On the topic of vapor flavors, the Rule requires premarket authorization for each flavor prepared. For example, if a firm manufactures e-liquids in five different flavors, the firm would be required to seek premarket authorization from FDA to market each one of the e-liquids (i.e., five premarket authorizations). Moreover, it is worth noting that the preamble to the Rule addresses specifically the question of whether e-cigarette retail stores and vape shops are considered "tobacco product manufacturers" under the FD&C Act. To the extent an establishment mixes or prepares e-liquids, or creates or modifies aerosolizing apparatuses for direct sale to consumers, such a firm would be a tobacco product manufacturer under the Act and would thus be subject to the same legal requirements that apply to other tobacco product manufacturers. The Rule's profound impact on the robust, booming vape industry cannot be overstated.
In recognition of the impact the Rule will have, and the time needed to come into compliance, FDA is establishing staggered compliance dates. More specifically, unless FDA has issued an order denying or refusing to accept the submission, products for which timely premarket submissions have been submitted will be subject to a continued compliance period for 12 months after the initial compliance period. For such products, FDA does not intend to initiate enforcement for failure to have premarket authorization during this continued compliance period, which are as follows:
- SE Exemption Requests: 24 months from the effective date of the Rule (12 months after the compliance period for submission of such requests);
- SE Reports: 30 months from the effective date of the Rule (12 months after the compliance period for submission of such reports); and
- PMTAs: 36 months from the effective date of the Rule (12 months after the compliance period for submission of such applications).
After the close of these compliance periods, products will be subject to FDA enforcement unless they are grandfathered or are the subject of a marketing authorization order. As has been the case with other tobacco products regulated by FDA, this approach will allow products to remain on the market while manufacturers seek review.
Interestingly, in addressing whether the Deeming Rule preempts State and local warning requirements, including California Proposition 65 (Prop 65) requirements, the Agency noted that it had notified State and local jurisdictions about the potential impact the regulations could have on their requirements. Per the Rule's preamble, the Agency indicated that no State or local laws in effect at the close of the comment period on the proposed deeming rule were identified that FDA determined would be preempted by the Final rule.
If you have any questions regarding an issue raised in this alert, please contact one of the authors
[1] The proposed deeming rule presented two options for regulating tobacco products. Under Option 1, all products meeting the definition of a "tobacco product," except accessories of newly deemed tobacco, products, would be deemed. Option 2 was the same as Option 1, except a subset of cigars known as "premium cigars" would be excluded. In the Deeming Rule, FDA selected Option 1, meaning that it is deeming all tobacco products, including premium cigars, except the accessories of the newly deemed products, to be subject to its authority.