Author: Staff Writer

  • States of Confusion

    States of Confusion

    Following the PMTA deadline, vape shops are unsure what vapor products are legal to sell in the U.S.

    By Timothy S. Donahue

    On Sept. 10, vape shop owners in the United States faced a dilemma. Numerous hardware and e-liquid manufacturers in the electronic nicotine-delivery system (ENDS) industry were required to pull their products from store shelves. Any product for which the manufacturer failed to file a premarket tobacco product application (PMTA) to the U.S. Food and Drug Administration (FDA) by Sept. 9 is now illegal to market in the U.S.

    Tim Scarborough, general manager for Tennessee Vapor Factory, with several stores in Tennessee, said that after talking with distributors, he removed thousands of dollars in product from his store shelves. “It was a straight-up loss. We estimate it to be probably upwards of $10,000,” he said. “We haven’t gotten final figures, but it was [a] large sum.”

    As for ordering new products, Scarborough says that many manufacturers and distributors have lists of products for which they have filed PMTAs. Those are the products Scarborough’s shop is trying to keep in stock. “It’s getting harder. We are having to do research to figure out if some of these products filed as well,” he says. “The selection, variety of product, is really minimal right now. We don’t even know for sure the FDA is going to approve a product. I think that, in the long run, this will push people back toward cigarettes.”

    During the Global Tobacco & Nicotine Forum (GTNF) held virtually in September, a representative of a large vapor industry distributor told Vapor Voice that his retailers had no way of knowing exactly what products are legal, so they have been selling off the product currently on shelves but have been weary of ordering new product. The distributor did not want to be named due to fears of potential FDA reprisal.

    “I’ve had retailers call and say they have lost 50 percent of their juice wall because of the companies they know didn’t file PMTAs. Shop owners have been asking for a letter of acceptance and maybe even a list with all the SKUs for the files we have submitted,” he said. “Retailers don’t want to incur fines for selling illegal products, but how can we even as a distributor know if a company has filed a PMTA? How many products have even been filed? I saw something the other day where the FDA was expecting 2 million PMTAs. A vape shop in Texas had 333 submissions. Beard e-liquids had 72. We submitted 105, but its more than that if you break it down into the different flavors and nicotine strengths. If we broke down our submission like that, it’s about 7,000 PMTAs. It’s really hard to know what exactly the FDA is doing.”

    Many manufacturers and retailers have closed their businesses due to the cost of submitting a PMTA and the uncertainty surrounding the industry. NicVape, BlueDot Vapor and Stash E-liquids did not submit PMTAs, for example. A note on Illinois-based e-liquid manufacturer Level Up Vapor’s website reads only, “Closed; We are no longer accepting orders.” In a letter to its customers, VapeWild, explained it would not be submitting PMTAs and was shutting down. The company had been in business for six years and was a favorite of vapers worldwide.

    “The PMTA deadline is finally upon us … It’s been a long road, and we did our best, but in the end, we just aren’t able to pull it off,” VapeWild wrote. “These are crazy times we’re living in, and they just keep getting crazier,” the letter states. “Our sincerest hope, though, is that we have somehow made a difference in the world for the better.”

    Only a small number of the thousands of vapor companies in the U.S. have announced that they filed PMTAs by the deadline. Complicating matters, most of those companies have not released what devices or e-liquid flavors they have filed. So far, based on Reddit posts, press releases and media reports, just over 100 companies stated they have filed a PMTA or had the intent to file before the deadline. Just over 50 companies announced they had filed an application before the deadline. Even fewer revealed that the PMTA had been accepted by the regulatory agency. All the major tobacco companies in the U.S. have a PMTA currently accepted, filed and under review for a vapor product.

    Credit: Smoque Vapor

    Once an application is sent to the FDA, manufacturers are permitted to sell their products for a year unless the agency acts. So far, Philip Morris’ heated-tobacco device IQOS and Swedish Match’s General snus are the only two tobacco brands to have survived the PMTA process.

    And the process does not end with marketing authorization. After receiving a PMTA, a company must continue to conduct postmarket surveillance and studies to determine the impact the orders have on consumer perception, behavior and health and to enable the FDA to review the accuracy of the determinations upon which the orders were based. These postmarket requirements also include a rigorous toxicity study using computer models to help predict potential adverse effects in users, according to the FDA. The orders also require the company to monitor youth awareness and use of the products to help ensure that the marketing of the products does not have unintended consequences for youth use.

    In July, the director of the FDA’s Center for Tobacco Products, Mitch Zeller, said the agency would prioritize policing vapor products aimed at youth. However, the Covid-19 pandemic has put vape shop inspections on hold, according to Zeller, adding that no date has been announced for when in-person inspections would begin again.

    “All the entities that we have contracts with have state level for activities like compliance checks and vape shop inspections,” Zeller said in July. “With that stop-work order, we’ve temporarily postponed all in-person inspections of tobacco retail establishments, but we continue to do all of our monitoring and surveillance and websites and publications and social media because we can do that remotely and have always done that, if you will, remotely from offices.”

    Speaking at the virtual GTNF in September, Alex Clark, CEO of the Consumer Advocates for Smoke-Free Alternatives Association (CASAA), said there is a lot of uncertainty right now not just in what types of products will get acceptance letters but also how quickly the FDA will be able to bolster enforcement. This, at a minimum, gives retailers a little leeway. If regulators can’t inspect stores, then retailers can still sell products if the FDA hasn’t previously stated that a product is illegal.

    “Because there is this lag in enforcement, there [are] still [illegal] products on store shelves,” said Clark. “[The regulatory environment in the U.S.] is bad … we are concerned that [the U.S. is] exporting our bad policy ideas and our bad science and bad campaigns. In New York, for example, bad science … helped change people’s minds and vote to advance the flavor ban language.”

    In a press note on Aug. 31, Zeller wrote that the FDA plans to make publicly available a list of the deemed new tobacco products that are subject to the Sept. 9 deadline and that were on the market as of Aug. 8, 2016 (it had not been released as of this writing). “However, before doing so, we will need to ensure that the publishing of any such information complies with federal disclosure laws and regulations as only certain types of product information from applications can be lawfully disclosed,” Zeller wrote.

    This has left retailers in limbo. Shop owners don’t know if a product they are selling could make them a criminal. Zeller stated that the agency knows of more than 400 million deemed products. To date, the FDA has received applications for around 2,000 products, he said, adding that the agency has processed 40 percent of those. Zeller did not specify how many of those applications were for vapor products. Zeller acknowledged that the FDA was unlikely to be able to review that many applications in the year timeline set for their review.

    “Even if applications are submitted for only a portion of those products, the likelihood of [the] FDA reviewing all of these applications during the one-year review period is low given that this would be an unprecedented number of applications and several orders of magnitude greater than anything the agency has experienced,” Zeller wrote. “Depending on the number of new applications we receive by the deadline—which could be anywhere from a few hundreds of thousands to millions—as a matter of practicality, we may not be able to fully complete review of all tobacco product applications that we receive by Sept. 9, 2020, within the year.” The FDA has not announced how many products filed PMTAs.

    Zeller also stated that the agency was willing to work with manufacturers. The FDA has said it could allow some smaller manufacturers to submit a “deficient” PMTA and keep marketing products until the necessary data is collected. He said the FDA would accept several justifications for such applications, such as the Covid-19 pandemic and a limited amount of lab space for testing. “Although we expect high quality and complete applications to come in by Sept. 9, if we do find deficiencies, it is likely [the] FDA will issue a deficiency letter with a 90-day deadline for companies to respond,” Zeller wrote.

    Orion Saith, with Smoque Vapours Electronic Cigarettes in Chicago, says that her store had already destroyed most of their disposable products because of Chicago’s ban on flavored vapor products. The company is still selling mix-in flavors for e-liquids and has its own line of e-juices as well. “We haven’t taken any juices off the shelves yet. We have our own juice line, and those PMTAs were submitted to the FDA, so we are doing OK for now,” said Saith.

    Finding hardware, however, has been extremely challenging. Saith says that knowing what products are legal to sell while PMTA submissions go through the process is getting more difficult by the day. “It is very difficult. We have been getting whatever we can that is still in stock from wholesalers who say that the devices are legal,” she said. “It involves a lot of trust. We have been asking to see submission letters from the FDA too. What’s concerning is that as some of these large major brands leave shelves, the consumers are the ones who suffer. If you can’t get a quality device, you probably end up going back to cigarettes. That’s just a horrible thing to force on someone.”

    Credit: Thorn Yang

    The FDA has been sending notices to companies selling illegal products. In late April, the FDA issued 10 warning letters to retailers and manufacturers who were selling, manufacturing or importing unauthorized ENDS products that “were clearly targeting use, or likely to promote the use, of these products by young people.” The agency sent three more notices on Sept. 9, the same day PMTAs were due. Zeller said the agency will continue to send warnings.

    “All told, since our compliance and enforcement program began in 2010, we have completed over 1.2 million retailer inspections. This has resulted in over 97,000 warning letters, over 11,000 of which were for illegal products,” said Zeller. Many experts predicted the vapor industry would come to end after the PMTA deadline. For now, at least, it will continue.

  • Gay: Tax Vapor Lower Than Cigarettes for Public Health

    Gay: Tax Vapor Lower Than Cigarettes for Public Health

    Credit: Phong Nguyen

    Encourage smokers to switch to vapor products by taxing them lower than traditional cigarettes.

    By George Gay

    Recently, I was intrigued by the following heading that appeared above the abstract of a scientific paper: “Flavors enhance nicotine vapor self-administration in male mice.” I guess that, as a nonscientist used to reading general stories, I was drawn to the fact that there seems to be no human agency in the activities described. The flavors seem to operate of their own accord and the male mice “self-administer” those flavors.

    Notice, too, how the flavors not only increase the uptake of nicotine vapor in male mice, they also “enhance” that uptake, presumably introducing some sort of measurable qualitative increase to the process. And what about this self-administering business? It seems to suggest that the male mice in question have personalities or egos, which I would be happy to accept but which raises the question of whether it was morally acceptable that these mice should have been used as a means to an end. I would say no.

    Of course, if the mice did display signs of selfhood, I hope the researchers took care in interpreting their reactions. There is a danger of significant error in drawing human-centric conclusions about the behaviors of nonhuman animals being made to take part in human-designed experiments since those behaviors might be driven by the ways in which nonhuman animals uniquely experience their lives and that we do not understand.

    Such experiments on nonhuman animals seem to me to be simply preposterous. Professor Sir George Pickering was apparently once quoted in the British Medical Journal as saying, “The idea, as I understand it, is that fundamental truths are revealed in laboratory experiments on lower animals and are then applied to the problem of a sick patient … It is plain nonsense.”

    In the abstract, the researchers sidestep this problem by dropping any mention of the male mice from their “Conclusions and Implications.” The final sentence of the implications states, “This suggests that flavors in electronic nicotine-delivery systems significantly increase the risk of addiction-related behaviors among users of vaping products.” Obviously, the researchers have moved from male mice to humans because mice cannot be seen to be “users of vaping products.” And this move cannot, to my mind, be justified.

    I have two other gripes with this research as it was described in the abstract. One is that it cannot be morally acceptable to conduct experiments on nonhuman animals so that human animals can pretend to learn a little more about the silly—pleasurable, but nevertheless silly—habit they have invented called vaping. If they want to learn about the effects of vaping on themselves, they should gird up their loins and carry out the experiments on themselves. And, of course, ditto all the other silly things that humans like to get up to.

    The second gripe is that the research is pointless. Basically, it ends up suggesting that flavors are attractive—at least to some, I presume. I mean, doh! And despite this, the researchers have the cheek to mention as part of their conclusion “the need [my emphasis] to continue investigating the role electronic nicotine-delivery system (ENDS) flavors play in vaping-related behaviors.” I don’t think so. I think the researchers are confusing “desire” with “need,” which is a little worrying if the object of the exercise is to study addiction.

    But let’s leave the scientific world behind because, while I was intrigued by the heading quoted at the start of the abstract, I was astonished by one introducing a recent general story: “Illicit cigarette smuggling could be key to fighting PPE fraud.”The heading seems to imply there is a form of cigarette smuggling that is not illicit, that is licit, an idea I firstly dismissed as daft. But the heading kept nagging at my brain and I started to wonder whether the headline writer had a point.

    My confusion arose, I think, because I realized that whereas licit can mean lawful, it can have a softer meaning—something like “allowable.” So, if I were entering a country with 1,000 cigarettes on which I had no intention of paying duty even though the country in question required local duty to be paid on personal imports of cigarettes greater than 100, I would be smuggling or attempting to smuggle 900 cigarettes.

    I would be committing an unlawful act and liable to the penalties imposed by that country for such breaches of the law. But, as I understand things, I would be in the clear if I were a diplomat from another country and those cigarettes were in my bags, and in this case, I think that it would be arguable that I was smuggling in a licit or allowable way.

    And perhaps we could take this further. It might be stretching a point, but let’s extend the meaning of “licit” through “allowable” to “reasonable.” In fact, it’s not that much of a stretch; after all, the U.S. Food and Drug Administration uses the word “adulterated” as a synonym for illicit, and therefore, I presume, uses the word “unadulterated” as a synonym for licit, so, as I understand it, a cigarette is licit if it is unadulterated—if it contains nothing not declared in its list of ingredients—even though consumption of that cigarette will have you inhaling no end of toxins—unadulterated toxins presumably.

    In any case, let’s say my status has fallen on hard times and I’m no longer a diplomat but a gig worker being paid starvation wages so as to keep the multibillionaire owner of the company I work for in the luxury to which she has become accustomed. And let’s say that despite my lowly financial status, the government—with the help of the World Health Organization and its track-and-trace system (property, not people)—requires that I pay the same taxes on a pack of cigarettes as does the owner of the company. Might it be reasonable or licit in these circumstances for me to say, “you can stick your tax-paid cigarettes where the sun doesn’t shine” and take advantage of the services of my local smuggler?

    After all, it cannot be reasonable—dare I say licit—that each of us pays the same level of tax on our cigarettes, and here’s why. Cigarette taxes are there, we are told, to discourage people from smoking, but it would be absurd to suggest that the same level of taxes would discourage me, the gig worker picking up $10,000 a year, and the multibillionaire, picking up $100 million a year.

    If the powers that be reckon that taxes of $5 per pack of cigarettes are going to deter me, they should make the multibillionaire pay $50,000 per pack in taxes. Anything less would not be fair on the multibillionaire because she would not be discouraged from smoking and her health would be endangered. And I care deeply about the well-being of multibillionaires.

    To my mind, not only is the heading odd, but the story is too. At one point, we are told that the same networks developed to smuggle cigarettes and tobacco are now being used to perpetuate medical and personal protective equipment (PPE) fraud. This seems to imply that existing cigarette smuggling networks reach into the places where PPE is used: hospitals and care homes, for instance, and, frankly, I find this implausible. Surely, the networks that would be used, at least those at the sharp end of the supply chain, would be those that reach naturally into those facilities—perhaps those providing counterfeit drugs.

    Once again, we seem to have a story that attempts to blame smokers for the evils of the world. And to me, this makes no sense because it allows us to ignore, and therefore not address, the real causes of PPE fraud: the inappropriate and often cruel interactions of human animals with nonhuman animals that give rise to zoonotic diseases; globalization and the free flow of goods and people from centers of such interactions to the rest of the world, which ensures the “efficient” spread of these diseases; the overreliance on the market economy that in the case of the current coronavirus pandemic meant that not enough PPE was available or obtainable at quick notice; and the poor or nonexistent due diligence performed by governments left exposed, by their own policies, to such shortages.

    Address these issues and you are on your way to preventing PPE fraud. Approach the problem by trying to eliminate tobacco smuggling and you are at best going to put a dent in such trade, but you will leave yourself open to PPE fraud—and much else.

    What has this got to do with you, a reader interested in issues about vaping? Well, the story seems to imply that not only are some smokers indirectly responsible for PPE fraud but that their actions could lead to a spike in the U.S. in the illegal trade in electronic and heat-not-burn cigarettes. I’m not sure, but I think the argument goes something like this: Tobacco regulation is causing more people to quit smoking, and some of these quitters are turning to vaping, which is the subject of a crackdown in the U.S. that will make licit vapor devices harder to obtain. Hence the predicted spike in the illegal trade in such devices.

    Overall, the message seems to be that smokers should keep smoking but only tax-paid cigarettes because the illegal tobacco trade funds groups such as ISIS, the Irish Republican Army, Hezbollah and al-Qaeda. Once again, the smoker gets it in the neck for events that are so far out of her control that she might as well be blamed for sunspots.

    There is not even an aside to suggest that the actions of ISIS, the Irish Republican Army, Hezbollah and al-Qaeda might be down to politics, ideology and the desire by governments, companies and shareholders to promote the sale of arms. There is no question raised about how much of the tax paid on a pack of cigarettes goes toward governments promoting arms sales. And there’s not even a whisper that religions might be playing a part in the activities of these groups. It’s all down to smokers who buy illicit cigarettes.

    Is it? Of course not. Smokers are the victims. Many smokers are paid starvation wages in the gig economy and, we are told, are addicted to tobacco, so they are forced into the arms of smugglers when they can no longer afford the unreasonable tax and increased pricing demands made of them by governments and manufacturers. It is deeply unfair, or illicit, for manufacturers making billion-dollar annual profits to introduce several cigarette price increases in a year and then blame impoverished, addicted smokers for turning to the illegal trade and thereby supporting ISIS, or whatever. They need to examine their own actions.

    In a fair or licit world, the solution would be clear. We don’t have to drag ISIS and the Irish Republican Army into the fight. And we don’t have to send researchers out with a brief to prove that sunspot activity is particularly prevalent directly above where smokers congregate outside pubs. We just have to charge a fair, or licit, price for cigarettes.

    Of course, if your moral compass is able to lead you around experiments on nonhuman animals but runs you into a brick wall when it comes to allowing others to enjoy a cigarette, there is another answer—apart from trying to reset your moral compass, that is.

    Encourage smokers to switch to vaping and other low-risk nicotine consumption, and definitely don’t discourage them from making the switch. And don’t get into the same fix with vaping as you did with smoking by piling on high levels of tax and creating a highly monopolized industry that is able to increase prices without due regard for the consequences of such actions.

    What are the chances that things will change? Poor, I would say. I go along with whoever said that the one thing we learn from history is that we learn nothing from history.

  • Clear Consideration

    Clear Consideration

    Credit: Scott Graham

    Aquila Solutions helps vapor companies format their PMTA submissions to FDA requirements.

    By Timothy S. Donahue

    The deadline has passed. Now, for a vapor product to be sold in the United States, it must gain marketing approval in advance from the U.S. Food and Drug Administration (FDA). As technology for vapor products continues to improve, companies will continue to submit premarket tobacco product applications (PMTAs). The regulatory process is arduous, and experts say many of the FDA’s expectations remain vague.

    One of the most challenging aspects of preparing a PMTA for submission is structuring and formatting the publication to meet the FDA’s guidelines. While the FDA has provided a format, the regulatory agency doesn’t quite explain how it wants that formatting to come together, according to Josh Boutwell, founder and CEO of Aquila Solutions, a regulatory submission consultation and electronic publishing firm.

    “The format, especially for vapor and tobacco products, is extremely questionable. The FDA doesn’t seem to know what they want or know how it should work, primarily because they were rushed into the format,” explains Boutwell. “What that means is that, yes, there is technically a format, but that doesn’t mean that the FDA or any company really knows where things are supposed to go or how they fit together. Do you need to present things, and what order do you put them in? Do you need to duplicate work, duplicate documents? These are important factors in a regulatory submission.”

    Boutwell founded Aquila Solutions in 2010. He had previously worked at major pharma and biotech companies as well as international contract research organizations. In addition to his work in regulatory affairs, Boutwell has worked for the U.S. Centers for Disease Control and Prevention (CDC) in Atlanta, Georgia, as well as conducted research at Emory University.

    Since founding Aquila Solutions, Boutwell has managed thousands of projects, including numerous initial regulatory applications. He began Aquila with William McDonald, currently Aquila’s program manager, and the company has slowly grown over the last decade. The past few years, Aquila’s growth has accelerated from 50 percent to more than 150 percent annually. “From last year to this year, we have roughly tripled our production,” says Boutwell.  

    Aquila Solutions specializes in regulatory publications. For the vapor industry, the company takes data and documents provided by a client and puts them together in a way that “tells a story” to the FDA that is centered on why the submitted application is a product that is beneficial for public health. “The data is meaningless if the FDA can’t find it,” Boutwell explains. Aquila Solutions became involved in publishing PMTAs for next-generation tobacco product clients through word of mouth, according to Business Development Manager Robert “Buddy” Abercrombie. Even though Aquila at the time had not done work for the vapor sector, it had considerable experience dealing with the FDA. When a customer disappointed with the service of its existing publishing company inquired about Aquila’s services, Aquila set up a meeting and researched the PMTA process. “We got the job,” says Abercrombie.

    Josh Boutwell

    The PMTA process is challenging. Many filers are former traditional tobacco employees, and technology has changed since most tobacco companies made submissions. PMTAs for traditional tobacco products were often submitted in paper form. While paper submissions may still be tendered, the FDA now prefers to receive electronic submissions. “The electronic nature of the Electronic Tobacco Technical Document for PMTAs means that the way a paper is volumized and just having all the documents all together doesn’t match well with electronic submission,” says Boutwell. “We had clients that really wanted to write documents that are hundreds of pages long, explaining everything all in one document, and then having a limited number of appendices. It is better to break the documents down into smaller components that are easier for the FDA to track electronically. Doing things this way also makes it easier for the sponsor to update a submission in the future.”

    Many companies that have filed PMTAs were unprepared for the length of time it takes to collect the required data and the physical size of the applications. Submissions have been reported to be anywhere from 40,000 pages to 1 million pages long (one known submission is more than 3 million pages). All that data needs to be organized in a way that best shows the FDA what the data has concluded. Not properly organizing a submission can have catastrophic results.

    “The biggest issue is that the FDA requires things to be broken up in specific ways. And if the PMTA hasn’t been compiled properly, the FDA may kick everything back to have it recompiled by the sponsor,” advises Boutwell. “This could essentially cost a company weeks or months of work. The company may even have to do a lot of duplicate work in order to be able to resubmit it.”

    Boutwell says a typical PMTA submission is often between 50,000 pages to 100,000 pages unless there are specific or unusual additions. The first step in the process for Aquila Solutions is setting up standard meetings so everyone involved in the project is “on the same page” and understands what is needed.

    Robert Abercrombie

    “We would discuss the schedule for when documents will come in and make sure we have enough time for checking everything at the end. When documents start coming in, we’ll start figuring out the final structure of the application. Where does it need to go, what does it need to say and how does it interact with everything else?” explains Boutwell. “Then as we actually receive the documents, we process them, make sure they’re usable by the FDA and then create the internal and external links.”

    Internal links connect to sections in the same document. External links connect anywhere else. The FDA expects the links to be in the document where they are referenced and only used when necessary.

    “The links are necessary, and they must go to where they’re supposed to so that the FDA reviewers can easily analyze your application,” says Boutwell. “Our No. 1 priority is making sure a client’s submission gets through to the substantive review phase. The FDA’s computer servers do their own analysis, and that is followed by an administrative review to make sure that the PMTA is complete enough for a full review.”

    Next, the substantive review process can begin. The FDA goes through its scientific process, and before a PMTA is authorized, it goes before the Tobacco Products Scientific Advisory Committee (TPSAC) where it’s decided whether an application meets the standard for the betterment of public health, according to Boutwell.

    “Getting the marketing order is the final goal. For Aquila, getting an application accepted is the easy part. The harder part is trying to make the review process as easy as possible for the FDA reviewers. Our experience has been that if you make it too difficult to find things, reviewers will throw up their hands and say, ‘I can’t find it,’” says Boutwell. “Then it’s either outright rejected or the FDA sends you a huge list of questions that they could probably find on their own, but the application was too complicated and time consuming in their view. The point of a PMTA submission is not to make the reviewers miserable. You don’t want a decision-maker annoyed with an application because nothing is where it should be.”

    If a PMTA is poorly designed and/or poorly published, the FDA will have more questions than if the PMTA is submitted properly. An application may still get approved because it is technically sound and scientifically sound, but it will be much harder and much more expensive in the long run if you don’t make the effort to make it as user-friendly as possible, explains Abercrombie. “They start off having one question. Then, suddenly, they have 50 [questions]. And then they’ll need more data,” he says. “You set them on that path by handing in an application that just didn’t have it presented in the proper way.”

    Vapor industry representatives have repeatedly complained about the vague guidelines provided by the FDA for PMTA submissions and publications. According to them, “They really didn’t give us any guidance on what they wanted, and the only way you can know what they want is after you submit it,” says Abercrombie. “Historically, the FDA uses a five-[year] to six-year rollout process where they propose standards and formats and trial periods and then have it be optional before moving on to it being required. There was none of that for electronic nicotine-delivery system [ENDS] products.”

    What’s more, even though ENDS differ substantially from traditional tobacco products, the FDA requires the same data, which is problematic. “We can take tests for [harmful and potentially harmful chemicals] HPHCs, but a cigarette has 5,000 chemical components to it. An e-cigarette has about three,” says Abercrombie. “It’s completely different, and yet they want all this other data.”

    Cost is an important consideration in the decision of whether to hire an outside agency for help with a PMTA publication. Boutwell says that submissions due before the Sept. 9 deadline were new projects, so the amount of data was large. Moving forward, the volume of data required—and by extension, the cost—should go down, in part because companies will increasingly be able to reference tobacco product master files in their applications. Boutwell says that, in general, the publishing of PMTA updates costs about $750 and $3 per page for the next 5,000 pages and becomes progressively lower as the number of pages grows. Turnaround could be anywhere from a day to a few months, depending on the size of the submission.

    Aquila Solutions has submitted 13 major PMTA applications, including quite a few for leading vapor industry companies. The company has done a variety of e-liquids, hardware and even some nicotine lozenges. Several of its applications have already been accepted and filed by the FDA while others are in their administrative review phase.

    “We’ve been able to manage the large projects with clients who have never done this before. I mean, at the time, we hadn’t done it before either, but we had background on how the FDA operates with these types of applications,” says Boutwell. “We were able to help guide our clients to get all their documents in place, written acceptably well, and put together and submitted on the client’s timeframe.”

    Looking ahead, Boutwell expects to see a lot of consolidation in the vapor industry. Yet he also can see a scenario where new companies start up after products begin to gain marketing approval.

    “There’s going to be a continual influx of new companies to the market. There’s going to be some, I suspect, relatively rapid turnover as well. It’s such a big potential market,” he says. “There will always be someone willing to step up. And then, after some of these applications are approved, there will be a lot of the follow-up products that in many ways will rebuild the market. But that’ll take a couple of years.”

    If Boutwell could offer the FDA one bit of advice, he’d suggest the agency pay close attention to the ways its system processes incoming files. Some of the applications Aquila sent to the FDA wouldn’t go through the regulatory agency’s Center for Tobacco Products (CTP) portal. It turns out that the server behind the CTP portal had trouble processing files with “.sas” extensions.

    “When you have programs that go with your databases, you need to make sure that they don’t cause issues when you upload data,” says Boutwell. He recommends CTP rename all “.TXT” extensions on SAS files.

    Customer reviews for Aquila Solutions have been positive. Many clients say that they appreciate Aquila’s flexibility in getting the job done, according to Boutwell. “The first thing they do is compare us to their previous experience of going through a nightmare to having someone hold their hand and working with them, helping guide them through the maze,” he says. “We are here to support anyone who has an application or wants to submit one.”

  • Forecasting Growth

    Forecasting Growth

    Market research suggests the global vapor market could exceed $59 billion by 2027.

    By VV Staff

    Even amidst regulatory concerns, the vapor industry is poised for growth. The latest research suggests that the global market could see a more than 300 percent increase in value in just seven years. Currently, the 2020 global vapor market is estimated at $16.9 billion, according to a July 2020 report from Global Industry Analysts (GIA). The report also projects a 19.6 percent compound annual growth rate (CAGR), reaching $59.3 billion by 2027.

    Globally, GIA’s report, E-cigarettes—Global Market Trajectory & Analytics Report, projects double-digit growth in all the major electronic nicotine-delivery system (ENDS) markets, including the United States, China, Japan, Canada and Germany. In the U.S., the world’s largest vapor market, GIA estimates the market’s 2020 value to be $5 billion, growing to more than $20 billion by 2027. Other market analysts have estimated that the U.S. surpassed $8 billion in 2019 and is poised to grow at an estimated 2 percent CAGR between 2020 and 2026.

    Credit: Austin Distel

    China, the world’s second largest economy, is forecast to reach a projected market size of $10.1 billion by the year 2027 “trailing a CAGR of 18.7 percent” over the analysis period 2020 to 2027, according to GIA. China is expected to be one of the fastest-growing vapor markets over the next seven years, according to GIA. The entire Asia-Pacific region is also forecast to rapidly grow in their vapor markets. “Led by countries such as Australia, India and South Korea, the market in Asia-Pacific is forecast to reach $7.1 billion by the year 2027,” the report states.

    Among the other noteworthy geographic markets are Japan and Canada, each forecast to grow at 17.9 percent and 16.6 percent respectively over the 2020 to 2027 period, according to the GIA report. “Within Europe, Germany is forecast to grow at approximately 14.1 percent CAGR,” it states.

    Reports on how much the vapor market will grow over the next several years vary, but all reports show growth. According to a recent Arizton Research and Intelligence report, Vape Market—Global Outlook and Forecast 2020–2025, their research shows the e-cigarette industry will grow globally at a CAGR of approximately 15 percent during the period 2019 to 2025.

    “The global vape market would realize an absolute growth of 590 percent—a phenomenal leap of over $49 billion revenue between 2015 and 2025,” researchers wrote. “Buoyed by a growing shift in preferences for next-generation smoking products and the demand for HnB [heat-not-burn] tobacco [products] among [the] smoking population, the overall revenue of vape products will reach over $57 billion by 2025.” The Arizton report also predicted that HnB products are set to displace vapor products by 2022, but no other analysts could be found that agreed with that assertion.

    An August 2020 report from Mordor Intelligence, Europe E-Cigarettes Market—Growth, Trends and Forecasts (2020–2025), states that the U.K. is the largest market for e-cigarettes in Europe and the second-largest market in the world. Mordor estimates that the European e-cigarettes market could witness a CAGR of 12.98 percent during the forecast period. The U.K. e-cigarette market is growing rapidly because the country’s health authorities promote ENDS products over combustible cigarettes, according to the Mordor report.

    Europe captures more than a 33 percent market share of global vapor market revenues, according to the Mordor report, and Poland, Germany, Italy, Russia and the Czech Republic are the major contributors to the European market. Poland has been witnessing tremendous growth, with the revenue increasing from $130 million in 2014 to $542.6 million in 2016, according to Mordor. The growth can be attributed to heavy taxation on traditional tobacco cigarettes and the presence of low-cost vapor products in the country.

    “Unlike the U.S. where e-cigarettes have not yet been approved as a cessation device, authorities in the U.K. believe these devices to be a means for people to transition from the much harmful habit of using conventional/combustible cigarettes,” the report states. “On the distribution front, it has been observed that the online retail [segment] accounts for a significant share of the market and, the fastest growing channel [is predicted] to be” specialty vape shops.

    An earlier report’s analysis had even higher expectations for the global vapor market. The February 2020 report E-cigarette and Vape Market Size, Share & Trends from Grand View Research estimated the worldwide e-cigarette and vapor market to be valued at $12.41 billion in 2019. That report states the market is expected to expand at a revenue-based CAGR of 23.8 percent from 2020 to 2027. “The market is expected to gain traction over the forecast period, owing to increasing product demand from millennials,” researchers wrote. “The availability of a variety of e-cigarette options is anticipated to further fuel product adoption.”

    According to the World Health Organization, there has been a small but steady decrease in the estimated number of cigarette smokers globally to just over 1 billion. The number of vapers, however, has been increasing rapidly—from about 7 million in 2011 to 41 million in 2018, according to market research group Euromonitor. That research estimates that the number of adults who vape globally will reach almost 55 million by 2021.

    The Grand View report also found that harsh regulatory environments implemented by local authorities across several countries, including the U.S., India and Germany, have restricted market growth. “Multiple countries have banned the distribution and sale of vapor products, which in turn has led to lower sales,” researchers wrote. “Furthermore, stringent trading laws have made it difficult to import vaping devices for personal consumption.”

    Every major tobacco company doing business in the U.S. has filed a premarket tobacco product application (PMTA) with the U.S. Food and Drug Administration (FDA). This allows products to be on the market for a year unless the FDA takes earlier action. Many of the major Chinese vapor hardware manufacturers have also announced PMTA submissions for a small number of products.

    According to Arizton, major tobacco companies used their “decades-old established distribution networks” of tobacco products to help gain an upper hand over pure-play companies. “However, small vape and tobacco shops continue to dominate with about 34 percent share of the retail markets worldwide,” say Arizton researchers.

    Both the Grand View and GIA reports suggest that the market in the U.S. is especially challenging to predict due to the unknowns surrounding the FDA and the PMTA process. The Grand View report states that “large tobacco companies have flourished by introducing [ENDS] devices through various brands that cater to different requirements, thereby enhancing the product quality and level of customization.”

    Grand View researchers state that innovation will continue to be a driving force in market growth across all segments of the industry. “The market is driven by the growing awareness … owing to various medical studies that term e-cigarettes as a safer alternative to traditional cigarettes,” the report notes. “Moreover, the customization options offered by vendors and continuous improvement toward new product development is expected to drive the market growth over the forecast period.”

    Both the Grand View and GIA reports state that mod (open system) devices are anticipated to emerge as the fastest-growing product segment over the forecast period. GIA predicts a record 22.1 percent CAGR and reaching a value of $37.4 billion by the end of the analysis period.

    One reason all three reports are forecasting a massive rise in open system sales is that when the FDA announced its enforcement priorities in January of this year, the agency did not mention prioritizing open systems. The three urgencies that earned a bullet point were:

    • Any flavored cartridge-based ENDS product (other than a tobacco-flavored or menthol-flavored ENDS product)
    • All other ENDS products for which the manufacturer has failed to take (or is failing to take) adequate measures to prevent minors’ access
    • Any ENDS product that is targeted to minors or whose marketing is likely to promote use of ENDS by minors.

    The Grand View report states that the market for smaller rechargeable pod-style devices, such as Juul, generated the highest revenue globally in 2019. “These devices cost fairly less, which is expected to increase their adoption,” the report states. The GIA reports that “after an early analysis of the business implications of the pandemic and its induced economic crisis, growth in the rechargeable e-cigarette segment is readjusted to a revised 15.6 percent CAGR for the next 7-year period.”

    The disposable device market is expected to be the second-fastest growing market in the vapor industry through to 2027. According to GIA, the U.S., Canada, Japan, China and Europe “will drive the 16.9 percent CAGR estimated for this segment. These regional markets accounting for a combined market size of $2.3 billion in the year 2020 will reach a projected size of $6.8 billion by the close of the analysis period.”

    Credit: Sabrina-Rohwer

    The regulatory environment is the biggest unknown in trying to predict the vapor market, according to several financial experts. Regulation is sure to have an impact both short term, such as the PMTAs in the U.S., and long term through flavor bans and taxation globally. At a panel on investing at the Global Tobacco & Nicotine Forum (GTNF) held in September, several industry analysts spoke about the future of the electronic nicotine-delivery systems (ENDS) market and the impact of regulations both in the U.S. and globally.

    The panelists agreed that in the European market and in other developed countries that allow vaping, market regulation is more predictable than in the United States and excise taxes in those countries will probably continue to increase (maybe higher than predicted because of Covid-19 economic hardships).

    Erika Karp, founder and CEO of Cornerstone Capital, believes that growth will depend on how individual countries approach reduced-risk tobacco products (RRPs), such as snus and vaping. “For instance, South Africa. They are obviously quite anti-tobacco as we’ve recently seen with them during Covid-19 [and banning tobacco products],” she said. “But they are also one of the few emerging markets with a vapor product that BAT [British American Tobacco] recently bought and owns there. So, they’re an example of a market where the government may be a bit more aggressive in wanting to be accommodating towards RRPs and a bit tougher on tobacco.”

    Moderated by Erik Bloomquist, a global nicotine and tobacco investment consultant, the panelists said that the FDA had received hundreds, perhaps even thousands, of PMTA submissions. Given the FDA’s track record, however, it is unclear how quickly those applications will be reviewed and decided upon, according to Bloomquist.

    “And then it’s unclear how many will actually come through with a successful application.”

    Rupert Wilson, owner and managing director of Strategic Business Consulting, said that the recent National Youth Tobacco Survey, released by the U.S. Centers for Disease Control and Prevention (CDC), showed that youth vaping, a major issue with regulators and anti-vapor groups in the U.S., is down significantly from 2019 and 2018. He predicts the U.S. will see an ever-greater drop in youth use over the next two years.

    “I don’t think that those numbers (2019) really reflected the impact of Tobacco 21, the removal of flavors, and certainly, then I would expect quite a significant decline again when we get to the 2021 survey coming out in September of next year,” he said. Wilson expects the vapor segment—especially the open and refillable pod systems—to start growing. “That’s already been happening over the last 12 months,” he said. “I would say that the vaping category is going to grow [rapidly], especially as we move into the second half of next year and into 2022.”

    Jonathan Fell, partner and co-founder of Ash Park Capital, said the overall ENDS market “remains extremely volatile and impossible to predict.” He says a major factor in the volatility is misconceptions surrounding the use of nicotine. “The debate about whether nicotine use is safe longer term is still a live one. It’s not nicotine that’s the problem. It’s inhaling combusted tobacco smoke,” said Fell. “Companies need to get consumers to reduce overall nicotine intake … Now, that’s what will make the big public health difference.”

  • Individual Success

    Individual Success

    The Vapor Technology Association has launched a program for individual memberships.

    By VV Staff

    The vapor industry’s fight for survival has only just begun. While the deadline for premarket tobacco product applications (PMTAs) has passed, the U.S. Food and Drug Administration (FDA) has not yet approved an e-liquid-based electronic nicotine-delivery system (ENDS).

    Several states have passed flavor bans and many more are considering the action even as studies show youth use declining. On the federal level, several lawmakers have proposed flavor bans as well as outright bans on all vapor products. Vapor industry experts say they expect these regulatory actions to continue to burden the marketplace for some time.

    For the voices of the industry to be heard by lawmakers, the vapor industry depends on several advocacy groups. One of the largest groups—which has also effectively lobbied at the federal and state levels—is the Vapor Technology Association (VTA). Traditionally, however, the VTA has only allowed business owners to serve as members. That rule has now changed. Just moments after the PMTA deadline passed, the VTA launched its first-ever individual membership program.

    “By welcoming Individual members, VTA’s board has recognized the critical importance of amplifying the millions of voices for vaping—former smokers who have turned to vapor products on their journey to quit smoking—as well as for the business owners who serve them,” says VTA Executive Director Tony Abboud. “This new membership will take our unified fight to defend vapor to the next level by combining the power of consumers and businesses into the largest vapor advocacy force in the country.”

    The individual membership program is designed to engage more vapers and vape advocates in the VTA’s mission to save the vapor industry, according to Abboud. The program is part of the organization’s “Voices for Vaping” initiative that VTA launched in 2018 to amplify the voices for vaping in defense of vapor products.

    “Now, VTA is taking the fight to the next level by combining the power of businesses and consumers into the strongest vapor advocacy association defending your right to vape and sell vapor products,” says Abboud. “This membership will elevate the voices of vapers and those individuals who believe in vaping and engage them in the fight with access to cutting-edge advocacy tools.”

    Consumers have always been a part of vapor advocacy. It’s the customer’s lives that are saved when they switch to vapor products from combustible tobacco. “We’ve always lauded the collective power of the vapor community,” says Abboud. “Our most successful battles have been fought hand in hand with consumers, and now we want to bring together the multitude of voices that use vapor products to maximize our impact, especially as highly coordinated critics continue their offensive against vapers and the industry.”

    The cost of a VTA individual membership is $25 a year. Upon joining VTA, a recent press release states that individual members will benefit by joining “sophisticated and established lobbying efforts to protect their right to vape. “VTA has lobbied in Washington, D.C., for the past five years and, in the past two years, VTA lobbied in 40 state capitals defending vapor,” the release states. “The impact of businesses and individual consumers fighting side by side guided by professional lobbying teams cannot be overstated.”

    Members will also receive up-to-date information on all things vapor, participate in successful vapor advocacy campaigns, access advanced technology to engage with legislators and local media and receive discounts on vapor products at participating stores across the country. “VTA believes that consumers—the actual Voices for Vaping—will make all the difference in the ongoing fight to save vapor. Knowing that ‘all politics is local,’ VTA has invested in new technology that will link your voice directly with media in your community,” according to the release.

    Credit: Vaporesso

    To help in this effort, the VTA offers online advocacy software that makes it easy for consumers to connect with their legislators by signing petitions, sending emails and getting their message to them on Twitter and Facebook. “More importantly, because all politics is local, VTA now has software that makes it easier for individual consumers to tell their personalized stories in the form of letters to editor so that they can be submitted to all the local news outlets of their choosing in one shot,” explains Abboud. “This tool will allow coordinated letter-to-the-editor campaigns rivaling those of the highly funded opponents of vaping.”

    Flavors have long been important to retailers, distributors and consumers. After joining the VTA online, new members will receive a welcome email that states, “The commitment of our board of directors to defending flavors is unmatched. We are dedicated to preserving a diverse industry filled with small businesses selling a variety of the flavors that are being demanded by adults like you.”

    When President Donald Trump announced he would be banning flavors in all vapor products last year, the VTA responded by crafting and funding a successful advocacy campaign, according to Abboud. The campaign involved a discrete digital campaign, two national television advertisements defending flavors and the industry, and the polling of individual vaping consumers.

    “[The campaign] framed the issue clearly for the president that vapers overwhelmingly opposed flavor bans and overwhelmingly support raising the age to smoke and vape. As a result of this campaign, [the] VTA was invited to the White House to share with President Trump the important role flavored e-cigarettes played in helping adults quit and stay away from combustible cigarettes,” says Abboud. “Without [the] VTA’s campaign, it is safe to say [that] the White House would not have reversed course and preserved the open-system flavored e-liquids relied on by vapers throughout the U.S.”

    Credit: Echo Grid

    Abboud told Vapor Voice that, earlier this month, the VTA and its members (including new individual members) successfully obtained the first gubernatorial veto of a flavor ban in Florida. “Immediately after the bill passed the state legislature in March, the VTA began a multimedia veto campaign strategy that involved the VapersSayVeto call to action site, a television advertisement directed at the governor, a social media drumbeat, and professional economic analysis from economist John Dunham & Associates,” says Abboud. “[The] VTA’s vapers and vapor businesses, along with the Florida Smoke Free Association’s vapers and vapor businesses, presented an unrelenting united front against the ban, educating Governor DeSantis on its impacts and ultimately influencing his decision to veto.”

    The VTA has a large variety of industry players as members. These include numerous state associations, manufacturers, distributors and retail stores. Those members have played an active role in spreading the word about the new program. “[They are] encouraging the consumers they interact with on a regular basis to defend their right to vape by becoming Individual members,” Abboud says. “Already, we’re seeing high levels of engagement and a growing VTA community that will render us stronger for whatever challenges lie ahead.”

    Abboud says that as a bonus to individual consumers who join the VTA, some retail stores are offering discounts. “Over 200 stores across the country have signed up to participate and offer discounts to VTA individual members. Check with your local shops or check out our website for shops near you to see who is participating,” he says. “VTA has the largest network of vape shop members, but any store can sign up to participate.”

  • Health Group Wants Irish Leaders to Impose E-Cig Tax

    Health Group Wants Irish Leaders to Impose E-Cig Tax

    Credit: Diogo Palhais

    The Irish Heart Foundation (IHF) wants the Irish government to impose an excise tax of $.06 per millilitre of e-liquid. It is expected to add a possible 10-25 percent to the consumer’s price.

    The IHF is also asking that the budget increase the price of the most popular price category of cigarettes from €13.70 to €20 through a series of annual tax increases. Chris Macey, head of advocacy at the IHF, said that a larger tax increase on tobacco would help deter vapers from switching back to smoking.

    Macey argued that branding that features cartoon characters, flavors such as cotton candy and bubblegum, paired with aggressive marketing tactics on social media platforms used by teenagers, show this claim is “preposterous.”

    Macey added that studies showed that tax increases on e-cigarettes had proven to be effective in reducing youth use.

  • Humble Juice Co. Receives Filing Letter for PMTA

    Humble Juice Co. Receives Filing Letter for PMTA

    The Humble Juice Co. is moving on to the scientific review stage of its premarket tobacco product application (PMTA). The leading e-liquid company with a humble beginning, announced that it had received a filing letter from the U.S. Food and Drug Administration (FDA). The letter indicates the FDA has completed its preliminary review of Humble’s PMTA, advancing the brand’s application forward in the review process.

    Humble submitted its PMTA to the FDA on Sept. 3.

    “We were excited to receive a filing letter from the FDA just days after being notified of our PMTA’s acceptance,” said Humble CEO Daniel Clark. “To my knowledge, there are a limited number of e-liquid companies that have moved forward to this phase of the PMTA process thus far. We hope our application continues to advance in a timely manner and we remain committed to working with the FDA in order to achieve this.”

    A filing letter from the FDA is a result of a preliminary scientific review of a PMTA. This review ensures an application includes the necessary components and scientific analyses. FDA will now conduct a Substantive Review of Humble’s application to evaluate the scientific information and data submitted within its PMTA. If successful, this phase will result in the FDA granting marketing orders, authorizing the continued marketing and sale of Humble’s products.”

  • Bantam E-Liquids Garners Acceptance Letter for PMTA

    Bantam E-Liquids Garners Acceptance Letter for PMTA

    The legal e-liquid market continues to grow. Bantam Vape announced yesterday that it had received an acceptance letter for its premarket tobacco product application (PMTA) from the U.S. Food and Drug Administration (FDA). The brand’s application now moves to the next step in the PMTA process—a preliminary scientific review to ensure the application contains all required items to permit a substantive review by the FDA.

    Bantam submitted its application to the FDA on Sept. 2.

    “Bantam has been anticipating and planning for these regulations since entering the e-liquids category,” said Bantam spokesperson Anthony Dillon. “The receipt of this acceptance letter is a significant milestone for Bantam. It reiterates a commitment to providing adult-use consumers with high-quality, science-based and compliant e-liquid products that can be enjoyed for years to come.”

    In preparation for its submission, Bantam worked with highly-qualified labs to conduct the in-depth product-specific and non-product specific testing needed for its PMTA, including: storage and stability testing; toxicity testing; and pharmacokinetic and topography studies. Bantam also submitted an extensive review of available literature on electronic nicotine delivery systems (ENDS) products.

    “Bantam has always supported the need for science-based regulation for the e-liquids industry. And while the PMTA process is complex and resource intensive, it is necessary to establish much needed standards and oversight across the board,” said Dillon. “Bantam is confident in the content and quality of materials prepared by its hardworking team of experts, and remains committed to working with the FDA throughout the PMTA process.”

  • Wales Teens Vape Less, Smoke More Cigarettes

    Wales Teens Vape Less, Smoke More Cigarettes

    E-cigarette use among young people has fallen for the first time in Wales, according to research by Cardiff University.

    But the decline in 11 to 16-year-olds smoking has stalled, the study found.

    The 2019 Student Health and Wellbeing Survey asked more than 100,000 pupils from 198 secondary schools across Wales about their smoking habits. The findings show 22 percent of young people had tried an e-cigarette, down from 25 percent in 2017, according to the BBC.

    Those vaping weekly or more often had also declined from 3.3 percent to 2.5 percent over the same period. Experimenting with vaping is still more popular than trying tobacco (11 percent), according to the data.

    But the long-term decline in those regularly smoking had stalled, with 4 percent of those surveyed smoking at least weekly in 2019, the same level as in 2013. Young people from poorer backgrounds were still more likely to start smoking than those from richer families, according to the findings.

  • Bulgarian MEPs Ban Sale of E-Cigarettes for Under 18

    Bulgarian MEPs Ban Sale of E-Cigarettes for Under 18

    Credit: Alexandr Bormotin

    MEPs in Bulgaria have banned the sale of hookahs, e-cigarettes and other non-tobacco products for people under 18 years of age.

    The amendments to the Child Protection Act, introduced by the VOLIA party, were supported at first reading by 98 votes to 2, with 1 abstention, according to Novinite.com.

    According to the petitioners, the legislative initiative meets the need to protect the health of children under 18 years of age.

    The Republic of Bulgaria is a country in Southeast Europe. It is bordered by Romania to the north, Serbia and North Macedonia to the west, Greece and Turkey to the south, and the Black Sea to the east. The capital and largest city is Sofia; other major cities are Plovdiv, Varna and Burgas, according to wikipedia.