Regulatory Update: Week of 9/17/2018

September 17, 2018


On Wednesday, September 12, 2018 the FDA issued it’s most ominous statement to the e-cig industry yet. The agency gave an ultimatum to five of the largest electronic cigarette brands on the market: “convincingly address” the problem of underage use of electronic cigarettes or else.  Or else what?  Or else the FDA is going to take flavored e-liquids away from everybody.


"E-cigs have become an almost ubiquitous — and dangerous — trend among teenagers," FDA Commissioner Scott Gottlieb said in a statement. "The disturbing and accelerating trajectory of use we're seeing in youth, and the resulting path to addiction, must end. The FDA cannot tolerate a whole generation of young people becoming addicted to nicotine as a trade off for enabling adults to access these products,” said Gottlieb.  Ouch.


The FDA’s warnings were aimed at five specific brands: Juul, Vuse, Mark Ten, Blu and Japan Tobacco’s brand Logic.  These five behemoths, the brands you see advertised at gas stations and convenience stores, represent 97% of the electronic cigarette market.  Citing an “epidemic” of teen vaping, the FDA has given these companies 60 days to respond with a detailed plan to prevent teens from using their products.


“We see clear signs that youth use of electronic cigarettes has reached an epidemic proportion, and we must adjust certain aspects of our comprehensive strategy to stem this clear and present danger,” FDA commissioner Scott Gottlieb stated.


Predictably, the companies responded with the usual “corporate speak,” noting how much they “welcomed the opportunity” to work with the FDA on this “important issue” and similar platitudes.  With so much at stake for so many of us, we can but hope that these five companies, who now hold the life of our industry in their hands, will get their butts in gear and come up with a rock solid plan.


The sudden wrath of the FDA was brought on in part by undercover operations over the summer that found major chain retailers like Walgreens, 7-Eleven and Shell gas stations were illegally selling e-cigarettes from all five of these top e-cigarette makers to minors. The agency sent out 1,100 warning letters to retailers and issued fines in 131 cases with amounts ranging from $279 up to $11,182.


On the one hand, it’s easy to see why the FDA is so concerned. Huge strides have been made in the reduction of smoking. Center for Disease Control and Prevention (CDC) data shows smoking is down to 15.5% of the population in 2016 from 20.9% in 2005, a hugely significant reduction. The CDC also notes that tobacco use among high school age teens has been fully cut in half from 15.8% in 2011 down to 7.6% in 2017. These numbers represent enormous improvements to public health and it’s understandable that the FDA would not want to lose these hard won gains.


On the other hand, one must question whether flavors really are at the root of the problem. While there’s no doubt that yummy flavors are more appealing to young people (and to many of us adults!) than flavors that taste like a cigarette, the truth is that there are plenty of things that teens and young people want to get their hands on and are generally prevented from doing so. Bailey’s Irish Cream, rum and cokes, even beer are all items high on the wish list of teenagers on the hunt for trouble or a good time. It would be sad if our entire industry was gutted just because some retailers were too lazy or greedy to check I.D.’s.


There’s another issue with the FDA’s stance toward retailers. A 2014 survey conducted by the FDA itself called the Population Assessment of Tobacco and Health (PATH) survey found that out of 770,000 teen e-cigarette users, only 9.9% had bought their own devices.  The rest obtained theirs from friends, family and, ahem, "other means," a category which we suspect could mean taking advantage of a five finger discount. As one professor pointed out, the fact that “over 90% of teens obtained e-cigarettes from social sources, such as friends or family,” makes going after e-cigarette retailers pretty much illogical.  But maybe that's exactly why the FDA is going after the manufacturers themselves and tasking them directly with making their products less appealing.


Another study that contradicts the FDA's concerns, the 2016 Monitoring the Future (MTF) annual survey, showed that vaping rates among adolescents are actually dropping not rising. Rates dropped for a second year in a row, from 16.2% to 12.5% among 12th graders and from 12% down to 11% among 10th graders. In addition, for FDA’s stance to be logical, those teens trying e-cigs have to actually translate to new smokers otherwise they are just numbers showing a passing moment in many young people’s lives where they rebelliously try out everything they shouldn’t before settling down and leaving their wild times behind them. Again, the numbers do not support that conclusion since smoking rates continue to decline and the so-called "gateway" argument from vaping to smoking has not held up to scientific scrutiny.


"We know that the flavors play an important role in driving the youth appeal, and in view of the trends underway, we may take steps to curtail the marketing and selling of flavored products,” Gottlieb continued on, contradicting the evidence from the MTF survey. “We are actively evaluating how we would implement such a policy."


This brings us to another point. “Implementing such a policy” at this point in the game would be difficult if not impossible. At the risk of making our jobs sound totally irrelevant, the fact is that it’s not difficult to add flavorings to e-liquid. Flavorings will always be available and any enterprising or rebellious teen or adult want-to-be vaper will always be able to make his or her own concoction. Flavors are here to stay one way or the other and banning them will, in our opinion, only create a black market and an increase in hobby e-liquid manufacturing with the potential for lack of proper sanitation, safe nicotine handling and product safety.


Pulling flavors off the shelves could also send vapers back to cigarettes. Ominously, if Wall Street knows anything, the smart money is betting that is exactly what will happen. On the news of the FDA’s threat to ban e-liquid flavors, shares in big tobacco surged. Philip Morris was up 3%, British American Tobacco was also up almost 6% and shares in Altria rose by more than 6%. Interestingly, Altria is also the owner of one of the electronic cigarette brands, Mark Ten, whose youth-temping practices are now threatening the entire electronic cigarette industry. Apparently they make money both coming and going.

 


“We’re also fully committed to the concept that products that deliver nicotine exist on a continuum of risk, with combustible products representing the highest risk, and electronic nicotine delivery systems perhaps presenting an alternative for adult smokers who still seek access to satisfying levels of nicotine, but without all of the harmful effects that come from combustion,” Gottlieb said. “But in enabling a path for e-cigarettes to offer a potentially lower risk alternative for adult smokers, we won’t allow the current trends in youth access and use to continue, even if it means putting limits in place that reduce adult uptake of these products.”


At Kai’s Virgin Vapor, the last thing we want is for young people to be vaping our product. Many of us are mothers and fathers with children of our own.  Moreover, we see vaping as a lifeline, a savior, that enabled us to get out of the grip cigarettes had on our lives when nothing else helped. The last thing we want is for our children to get sucked into that destructive habit. We’ve kept our packaging simple, clean and decidedly not kid friendly for a reason. Our flavor names, flavor profiles and our product descriptions are all tailored to more sophisticated and grown up tastes and that’s how we like it. We’ll be watching this closely and keeping you up to date with continued, in-depth coverage as things move forward.



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