Tag: Fatal Flaw

  • Look Back: Vapor in 2021

    Look Back: Vapor in 2021

    Last year was a difficult one for vapor companies as regulation, taxation and flavor bans made their impact on the industry.

    By VV staff

    On Sept. 9, 2020, e-cigarette manufacturers needed to have submitted premarket tobacco product applications (PMTAs) to the U.S. Food and Drug Administration to keep their electronic nicotine-delivery system (ENDS) products on the market. Going into 2021, many applicants hoped to receive marketing approval orders. That didn’t work out. Instead, the FDA rejected the vast majority of applications—many of them for excluding studies that the agency didn’t appear to require at the start of the process.

    By Dec. 31, 2021, the FDA had issued marketing denial orders (MDOs) for most of the more than 6.5 million PMTAs submitted by 500 companies. Only an estimated 80,000 products remain under review and, as of press time, only the Vuse Solo and two tobacco-flavored Solo pods have received a marketing approval order. Many of the applications still under review are “ones submitted by the companies with the largest market shares because they tend to be the largest and most complex applications,” according to Mitch Zeller, head of the FDA’s Center for Tobacco Products (CTP).

    The U.S. Postal Service (USPS) banned the mailing of vapor products in 2021, and Congress started debating a federal nicotine tax, which at press time had been removed from the legislation. Last year, many MDO recipients had those orders stayed by a court or rescinded by the FDA. Withdrawn products returned to market, leaving retailers confused. Misinformation about vaping was widespread throughout the year. Synthetic nicotine and disposable vape pens began to dominate sales and several new cannabinoids came to market. Let’s look back at the top stories of 2021.

    January

    Beverly Hills and Manhattan Beach, both in the Los Angeles area, began to enforce a ban on vapor products, the strictest vaping rules in the U.S.

    Shares in Chinese e-cigarette maker RLX Technology, parent to the RELX brand, jumped 146 percent in their trading debut after raising $1.4 billion in its U.S. initial public offering.

    Following the enactment of smoke-free laws in Paraguay, every South American country banned vaping and smoking in most public places.

    The FDA sent its first warning letters to manufacturers of ENDS products that did not submit PMTAs by the Sept. 9, 2020, deadline.

    Credit: TPB

    February

    Turning Point Brands announced a proposed private offering of $250 million aggregate principal amount of its senior secured notes due 2026.

    The public comment period began for the U.S. Postal Service’s ENDS mailing rules. R.J. Reynolds Vapor Co.’s (RJRV) Vuse Alto began selling nationally in the U.S.

    Utah Senator Mitt Romney pushed for flavored vaping products to be pulled from shelves across the United States.

    March

    The World Health Organization study group on Tobacco Product Regulations recommended prohibiting open systems.

    The litigants in two lawsuits challenging the constitutionality of the FDA’s Deeming Rule for vapor products, Big Time Vapes and Moose Jooce, asked the Supreme Court of the United States (SCOTUS) to take up their cases.

    The Preventing Online Sales of E-Cigarettes to Children (PACT) Act forced many companies to end online sales to U.S. customers. Many went out of business altogether because of the new rules.

    China announced its intent to overhaul rules governing the ENDS market. The news caused a steep drop in the value of RLX Technology shares, from which the company has yet to recover.

    Kate Wang / Credit: RELX

    April

    Virginia became the 16th state and first southern U.S. state to legalize the possession of small amounts of marijuana.

    Charlie’s Holdings, parent to the Charlie’s Chalk Dust and Pacha Mama brands, raised $3 million in a private stock sale.

    American TV personality Phillip Calvin McGraw, also known as Dr. Phil, wrongly blamed the e-cigarette or vaping use-associated lung injury (EVALI) lung illness outbreak on vaping nicotine products. The USPS published its guidance for mailing vaping products in the Federal Register.

    The FDA stated its intent to ban menthol as a characterizing flavor in cigarettes, saying it would exclude e-liquids.

    May

    An estimated 3,000 people visited the Tobacco Plus Expo (TPE) on the opening day of the three-day event, the first vapor trade show since the pandemic began.

    The WHO reasserted its abstinence-only approach to nicotine. The U.S. International Trade Commission (ITC) ruled that Philip Morris International’s IQOS device infringes on two patents owned by BAT subsidiary Reynolds American Inc.

    Meanwhile, a judge ruled that RJRV’s Vuse Solo and Ciro e-cigarettes infringe patents owned by Fuma International. Joining a growing number of U.S. states, New York expressly prohibited Delta-8 THC and other THC isomers derived from hemp.

    The FDA published a list of ENDS products that could be legally marketed in the U.S.

    June

    Poda Holdings launched its “zero cleaning” heat-not-burn (HnB) product after six years of development. SCOTUS denied Big Time Vapes and Moose Joose a request for a writ of certiorari. The German Bundestag signed off on a bill to raise taxes on combustible cigarettes, e-cigarettes and HnB tobacco products.

    An investor filed a class action suit against RLX Technology, claiming the manufacturer overstated its financials and misrepresented potential regulatory risks when it filed its IPO. San Francisco, Connecticut, Washington, D.C., Los Angeles and Canada proposed or enacted flavor bans.

    A study in the U.K. gave homeless people free e-cigarette starter packs. North Carolina settled its lawsuit with Juul Labs for $40 million.

    July

    Vaporesso and FEELM parent, Smoore International Holdings, was the only vaping technology company to make the Forbes 2021 Global 2000 list.

    Australia set maximum fines of up to aus11 million ($8.2 million) for businesses caught selling illegal nicotine vaping products.

    The FDA was accused of issuing unwarranted warning letters and leaving companies off of its list of accepted PMTAs. The agency was also criticized for using poorly functioning PMTA filing software.

    Juul Labs paid $51,000 to buy an entire issue of the American Journal of Health Behavior to publish its own vapor studies and make it publicly available. The town of Brookline, Massachusetts, prohibited the sale of all tobacco-related products to anybody born after Jan. 1, 2000. The Chinese vaping company Aspire Global announced terms for its U.S. IPO—which didn’t happen.

    The Federal Bureau of Investigation and the Drug Enforcement Administration raided the cannabis culture and accessories trade show, CHAMPS, because vendors were giving unauthorized Delta-8 THC product samples. Bidi Vapor parent, Kaival Brands, began trading on the NASDAQ.

    August

    The FDA issued a Refuse to File letter to the JD Nova Group for its estimated 4.5 million PMTAs, which accounted for approximately two-thirds of the total number of PMTA submissions.

    Smok Parent, IVP Technology, considered a Hong Kong IPO—which didn’t happen. The FDA issued the first MDOs covering more than 55,000 products.

    A study found that, contrary to what earlier studies suggested, vaping products are not associated with increased heart attack incidence among people without a history of smoking combustible cigarettes.

    September

    As the PMTA deadline approached, the FDA asked for more time before deciding whether some “e-cigarettes from market leader Juul Labs” and others are appropriate for the protection of public health. Numerous companies received MDOs from the FDA the night before the deadline.

    Vuse became the No. 1 global vaping brand by value share. No product got marketing orders on the court-imposed Sept. 9 deadline; instead, the FDA issued MDOs to more than 130 small companies, including Turning Point Brands, requiring companies to pull an estimated 946,000 products from the market.

    Congress proposed the U.S. Tobacco Tax Equity (TTE) Act, which would tax vaping products the same as combustible cigarettes. The legislation later gets attached to the Build Back Better (BBB) Act. The FDA released its annual National Youth Tobacco Survey (NYTS) showing that youth use of e-cigarettes fell sharply in 2021, the second consecutive year of major declines.

    The FDA said the 2021 NYTS can’t be compared to previous years because Covid-19 caused schools to close and altered testing procedures.  

    October

    Zanoprima Lifesciences announced the commercial production of its SyNic brand of synthetic (S)-nicotine. Turning Point Brands had its MDO rescinded by the FDA because the company did in fact submit newly required studies.

    The FDA’s Fatal Flaw review process was revealed after court documents were released. After more than six months, the USPS finally posted for public inspection its rules for mailing e-cigarettes in the Federal Register.

    The FDA gave the first ENDS marketing approval to RJRV’s Vuse Solo device and two tobacco-flavored pods, which are widely regarded as antique products compared to current vaping offerings.

    The FDA authorized the marketing of four oral tobacco products that are no longer on the market. Ten MDOs were rescinded or stayed by the FDA or in court.

    November

    More details surfaced surrounding the Fatal Flaw review, a simple review in which the reviewer examines the submission to identify whether it contains the necessary types of studies. “The Fatal Flaw review will be limited to determining presence or absence of such studies; it will not evaluate the merits of the studies,” an FDA memorandum states.

    Previously proposed nicotine/vapor tax increases were removed from the BBB Act.

    The Conference of the Parties to the WHO Framework Convention for Tobacco Control held its ninth session, this time virtually.

    The nicotine tax resurfaced in the BBB Act. RJRV settled its Fuma lawsuit two days before the trial was set to start.

    Biden nominated former FDA chief Robert Califf to again lead agency.

    December

    Draft rules governing e-cigarettes and vapor products were issued by China’s tobacco regulator.

    The nicotine tax was again removed from the BBB Act.

    The U.S. Trade Representative upheld the ITC’s finding that Philip Morris International’s IQOS infringes on BAT patents and Altria ended all U.S. sales.

    The Spanish government took control the country’s sales and distribution of vaping products.

    CTP Director Mitch Zeller announced plans to retire from the CTP in April.

    Once the largest chain of vape shops, Avail Vapor sold the majority of its retail locations and closed its remaining stores.

    Turning Point Brands received a USPS exemption for its VaporBeast subsidiary’s vape mail.

    The FDA authorized the marketing of 22nd Century Group’s low-nicotine, combustible filtered cigarettes as modified-risk tobacco products.

    Looking ahead

    The outlook for 2022 is vague at best for vapor. The FDA has a new director, and Zeller is retiring from the CTP, and things can change quickly under new leadership. It’s expected that the FDA will make decisions on the major ENDS brands at some point in the year, and there are still an estimated 44 lawsuits pending over the issuing of MDOs. The industry has already seen numerous vapor-related businesses close, consolidate or be bought out by larger competitors. Experts say that much of the same can be expected in 2022.

    “With the announcement of Zeller stepping down, I think we will continue to see vastly extended approval times for the majority of vapor products still being evaluated by the FDA, especially with open litigation covering many of these products,” said Josh Church, managing director of Roots Holding. “The products that do make it through the approval process will be high-value SKUs to large tobacco product manufacturers and will likely either be bought outright or there will be some agreement in equity share to utilize tobacco’s historic distribution network.”

    Last year left a lot of questions that the industry still needs answers to in 2022. There also probably won’t be many major changes in the vapor market other than continued sales growth in 2022, according to Church. “I think we can all agree that 2021 was a rough year. I believe that this year, we will observe the run out of the mail ban—effects of the PACT Act—on ecommerce,” he said. “That will come alongside continued brick-and-mortar business closures for those who don’t diversify their product offerings. I wouldn’t say 2022 is going to be worse than 2021, but I don’t expect it to change very much either.”

  • Triton Unleashes its Opening Argument in FDA Lawsuit

    Triton Unleashes its Opening Argument in FDA Lawsuit

    In a highly anticipated case for the vapor industry, Triton Distribution made its opening arguments Monday in its battle with the U.S. Food and Drug Administration over how the regulatory agency conducted it premarket tobacco product application (PMTA) reviews. Triton’s lawyer urged a three-judge panel of the 5th U.S. Circuit Court of Appeals in Houston to conclude the FDA could not force manufacturers to provide studies that the agency had previously stated would not be required.

    “The question before the court concerns how exactly the FDA ended up denying Triton’s PMTA—with potential implications for comparable applications by many other denied companies,” said Triton’s attorney Eric Heyer, a partner at Thompson Hine.

    Credit: Sergign

    In August, the FDA rejected applications to market 55,000 flavored e-cigarettes, including Triton’s, and said applicants would likely need to conduct long-term studies establishing their products’ benefits to win approval, according to Reuters. The new requirement for long-term studies differed from earlier FDA guidance and was a “surprise switcheroo,” a 5th Circuit panel concluded in October when it allowed Triton to keep selling e-cigarettes until another panel could hear its appeal.

    In recently released internal FDA correspondence, the agency’s scientific staff conducted “fatal flaw” reviews that only looked for the presence of the newly required long-term studies, and if those studies were not present the agency issued a marketing denial order (MDO). During oral arguments, Heyer said the FDA’s new requirement was “arbitrary and capricious, a position conservative U.S. Circuit Judge Edith Jones appeared to agree with.

    “It seems to me that’s the height of arbitrariness and capriciousness, to say we are the FDA, trust us, which I might say some of us are becoming skeptical about in light of recent vaccine experiences,” she said, alluding to COVID-19 vaccines.

    Heyer argued that the process the FDA established set Triton up for failure because the new requirements were only conveyed after the deadline for when PMTAs needed to be submitted (Sept.9, 2020) had passed. It was only then that the FDA indicated that applicants would likely need randomized controlled trials (RCTs) and longitudinal cohort studies to demonstrate “comparative efficacy.”

    The other two judges questioned Triton’s case. U.S. Circuit Judge Gregg Costa asked whether Triton’s products, such as one called Jimmy the Juiceman Strawberry Astronaut, were really targeted to adults. “That’s supposed to be appealing to a 40-year-old?” he asked.

    U.S. Circuit Judge Catharina Haynes questioned why companies like Triton did not have enough time to develop such support for their products’ health benefits for adults given the years they have had to prepare for FDA regulation. The FDA in 2016 deemed e-cigarettes to be tobacco products like traditional cigarettes subject to agency review under the Tobacco Control Act. Manufacturers were ultimately given until 2020 to seek approval to market them.

    If the court disagrees with Triton’s argument, Heyer has requested that the judges “enjoin FDA from taking further adverse action on the Petitioners’ PMTAs for 18 months to allow Petitioners to conduct the necessary studies to prove comparative efficacy,” according to legal documents.

    There is no timeline for a decision in the Triton lawsuit. Judges are expected to take at a minimum weeks, if not months, to make a decision. 

  • Lawsuits Focus on FDA’s ‘Fatal Flaw’ Review for PMTAs

    Lawsuits Focus on FDA’s ‘Fatal Flaw’ Review for PMTAs

    Credit: Good Ideas

    Court records show the FDA failed at reviewing submitted PMTA data as required and only looked for specific studies.

    By Timothy S. Donahue

    The term “fatal flaw” was used by the U.S. Food and Drug Administration for premarket tobacco product application (PMTA) submissions that didn’t have specific studies. The term has been at the center of nearly all lawsuits filed against the FDA for its handling of the PMTA process.

    In court records reviewed by Voice Voice submitted in the Triton Distribution v. U.S. FDA case requesting a stay of the marketing denial order (MDO) the e-liquid manufacturer received from the FDA, the regulatory agency submitted an administrative record for the review of Triton’s PMTA that shows the agency did not fully review all PMTA data submitted, as required by law, but instead only looked for specific studies relating to flavors and youth use.

    A memo dated July 9, 2021, written by Anne Radway, the associate director of the FDA’s Center for Tobacco Products’ Office of Science, states that “based on the information available to date, FDA has determined this evaluation requires evidence that can demonstrate whether an applicant’s new non-tobacco flavored product(s) will provide an incremental benefit to adult smokers relative to the applicant’s tobacco-flavored product(s). In particular, the evidence necessary for this evaluation would be provided by either a randomized controlled trial (RCT) or a longitudinal cohort study. The absence of these types of studies is considered a fatal flaw, meaning any application lacking this evidence will likely receive a marketing denial order.”

    Radway goes onto explain that due to the large number of PMTAs received, the agency would only conduct a Fatal Flaw review of PMTAs for non-tobacco flavored ENDS products.

    “The Fatal Flaw review is a simple review in which the reviewer examines the submission to identify whether or not it contains the necessary type of studies. The Fatal Flaw review will be limited to determining presence or absence of such studies; it will not evaluate the merits of the studies,” Radway states. “To decrease the number of PMTAs without final action by September 9, 2021, [Office of Science] used a database query to identify the top twelve manufacturers with the largest number of pending PMTAs [in the substantive review stage of the process] … Following completion of filing those applications that are filed will immediately initiate Fatal Flaw review.”

    Radway also states that for the remaining PMTAs not in [substantive review] for non-tobacco flavored e-liquid products, FDA will send a “General Correspondence letter requesting the applicant to confirm if their PMTA contains such evidence and, if so, to direct FDA to the location in the application where the studies can be found.”

    During the first day of TMA’s “From Chance to Change” webinar on Nov. 17, panelists were disturbed by the findings that the agency, rather than reviewing a submission on its merits, simply searched for the presence or absence of certain studies.

    Brittany Cushman

    Brittani Cushman, senior vice president, general counsel and secretary at Turning Point Brands said that the “idea that so many of the applications were reviewed with an eye toward this so-called fatal flaw analysis” didn’t “feel like the right direction” for the PMTA review process.

    The FDA admitted it made an error in TPB’s PMTA review and TPB did in fact submit studies that the agency decided during the PMTA process were needed, after saying for years the studies were not required. The FDA then rescinded TPB’s MDO and placed its applications back into substantive review. The agency has since rescinded or a court has stayed MDO’s for 10 companies and the agency is currently facing at least 45 lawsuits for it handling of the PMTA process. This is in addition to the dozens of requests for supervisory review.

    “The way the review process has played out this far, really, feels like the incentive structure in the nicotine industry has been placed on its head,” explained Cushman. “It seems that the lower-risk products are receiving heightened scrutiny, kind of an opaque direction as to what’s sufficient. And it just doesn’t feel like these products are getting a kind of equitable treatment in the space.“

    Triton Distribution had their MDO stayed by the 5th Circuit Court of Appeals with the court holding that Triton is likely to succeed on the merits of its case because the FDA “changed its regulatory requirements” and that this “switcheroo” to now require a randomized controlled trial and/or a longitudinal cohort study – which the Agency previously stated on numerous occasions would not be required – was arbitrary and capricious under the Administrative Procedure Act.

    The court stated that the FDA failed to “reasonably consider the relevant issues and reasonably explain” the MDO.
    The Court further noted that FDA failed to consider Triton’s marketing plan, surveys, and evidence of potential benefits of flavored e-cigarettes. FDA also “failed to consider the company’s legitimate reliance interests, as Triton relied on FDA’s statements made in numerous public meetings, guidance documents and rulemakings” that it did not expect applicants would need to conduct long-term studies to support their PMTAs.

    Cushman told webinar watchers that, at the end of the day, the FDA’s regulatory treatment of the various product categories is to the detriment of the adult smoker.

    “We’re all down in the weeds of this. But it’s difficult to see how we ended up at this point. And it certainly can’t be where anyone wanted this process to play out,” she said. “I think this has led to a lot of detrimental outcomes. You have adults seeing a large number of vapor products being deemed as not appropriate for the protection of public health while seeing no change in [combustible] cigarette offerings in their local C-store … This is being celebrated not only by those who are ignorant to the science, but more perversely, those [who understand the science and should] know better.”

    For more on this session from TMA 2021 read the next issue of Vapor Voice coming in mid-December.