And the Lawsuits Begin... - Kai's Virgin Vapor

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And the Lawsuits Begin...

August 30, 2021

The cigar manufacturer, Swisher International, just hit the FDA with a lawsuit that could have major implications for vape products.

First, a little background.

While many people are aware of the September 9th deadline last year, the infamous date by which all vape companies had to submit a PMTA application to the FDA in order to remain on the market, few people realize that the one year anniversary of that date has the potential to be another Vapocalypse.

The PMTA process, whereby companies must go through a thorough FDA scientific review and prove that their products are "appropriate for the protection of the public health", was drastically sped up as the result of a lawsuit. The lawsuit, led by the American Academy of Pediatrics, claimed that the original PMTA timeline was too short and demanded that the FDA fast track the process.

The judge in that case sided with the pediatrician group and the PMTA application deadline was moved up to September of last year. However, the lawsuit also succeeded in forcing the FDA to fast track the PMTA review process. All PMTA's must be reviewed and either accepted or rejected by the FDA by September 9th of this year. That deadline is now only weeks away, yet the FDA hasn't granted a marketing authorization to a single product, leaving hundreds of vape companies in regulatory limbo.

The court did give the FDA leeway to issue extensions on the September 9th, 2021 date on a "case by case basis." It's assumed that, for those companies that have shown substantial progress on their PMTA applications and have continued to submit additional test results, the FDA would likely grant extensions but the fact is, no one knows for sure.

The cold, hard fact is that FDA has not yet granted a single extension which leaves companies in the untenable position of being unsure whether their products are about to be yanked from the market a month from now.

It is extremely difficult to conduct business under these conditions. For example, Kai's Virgin Vapor just completed a move to a new facility but, given the current regulatory uncertainty, we were faced with having to negotiate a shorter term lease at less favorable terms and signing a contract without knowing if we are about to lose our ability to sell our products.

That uncertainty is exactly the crux of the Swisher lawsuit. Swisher argues that it submitted a PMTA to the FDA in a timely manner. However, the FDA has yet to respond to the company's application and, meanwhile, the September 9th deadline is looming. This places the company in an untenable position and threatens its ability to conduct business.

Swisher is seeking an emergency preliminary injunction, a legal maneuver that would immediately halt FDA's ability to yank Swisher products from the market, until the FDA completes its review of the Swisher PMTA. If the Swisher lawsuit succeeds, it could open the door for the approximately 500 vape companies that are in the same position to follow, however, it's doubtful that many of them have the money to sue to obtain the same relief.

The PMTA is a costly, time consuming process for both the FDA and for the companies it regulates. The only successful PMTA's submitted so far have been brought through by large companies like Philip Morris--and they took two to three years of FDA review after submission before a final marketing order was granted. Contrast that with the short end of the stick being handed to small vape companies who have been given a year to complete the same process.

Moreover, Philip Morris was given the luxury of 180 days to prepare responses to FDA deficiency letters along with several rounds of back and forth with the FDA after that if there were further deficiencies that the FDA wanted addressed. Small vape companies are being given only 90 days to respond and are being told by the FDA that they will receive only one chance. If the initial response to the deficiency letter, prepared in just 90 days, leaves questions still unanswered, tough luck.

The entire PMTA process is fraught with peril for vape companies, forcing the owners of small businesses to make decisions that may threaten the financial future of their families without being given a level playing field. We expect to see more lawsuits in the coming year.




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