In a sudden change of policy, Google will allow the advertising of hemp and topical CBD products in California, Colorado and Puerto Rico under an update to its policies on “Dangerous Products and Services and Healthcare and Medicines.”
Google did not make clear why it is restricting the advertising to the three distinct markets, according to Hemp Today.
Advertising for CBD for internal human consumption remains off limits, the company said, including those for “supplements, food additives, and inhalants.” Also, masthead advertising on YouTube (owned by Google), which appears at the top of the page in the main feed across all devices, is not available to hemp and CBD products, under the policy revisions.
Google also said pharmaceuticals approved by under the Food and Drug Administration (FDA) may now also be advertised in those jurisdictions. That part of the rule change will benefit only one producer, Jazz Pharmaceuticals, whose high-CBD Epidiolex is the lone such product approved by the agency to date. Epidiolex is prescribed for severe seizure disorders in children. It was approved by the FDA in 2020.
The changes take effect Jan. 20. Advertisers can request certification with Google starting on that date, when an application form will be published.
Google said it has contracted with LegitScript, a Portland, Oregon-based internet and payments compliance company that provides certification in high-risk industries, as a clearinghouse to determine products’ advertising eligibility. Only products that pass muster with LegitScript can be promoted on Google platforms.
Those seeking certification to advertise on Google must provide samples of their products or THC testing and provide LegitScript with third-party certificates of analysis, according to Google.
In a new op-ed published in the HPHR Journal, The U.S. Food and Drug Administration’s Center for Tobacco Products (CTP) Director Brian King writes about what the FDA is calling “health equity.” However, missing from the editorial is any response to either the recent Reagan-Udall Review or the findings of a recent investigation into the CTP by the U.S. Office of Special Counsel (OSC).
In the editorial, King writes that “there is no safe tobacco product; however, products do exist on a continuum of risk, with combustible products being responsible for the overwhelming burden of disease and death from tobacco use.”
He also states that “science is central to informing tobacco regulatory decision making,” noting that he is “a scientist by training” and is “particularly attuned to the vital importance of ensuring we gather and use the best scientific evidence available.”
In writing about his “vision” for the CTP, King does not address memos recently submitted to the U.S. Court of Appeals for the Third Circuit that show King reversed a recommended marketing approval of Logic Technology’s menthol vaping products, ignoring the advice of FDA scientists, according to Logic’s lawyers.
King also failed to address the conclusion a recent investigation conducted by the OSC that found the CTP had relaxed its standards of review for certain tobacco products and stifled attempts by its scientists to raise concerns. The OSC sent a letter to the U.S. President and Congress outlining the findings.
In the op-ed, King claims that the CTP “strive[s] to engage with a wide array of stakeholders, including those that work with and represent individuals and communities who are disproportionately impacted by tobacco use, to facilitate an open exchange of opinion from diverse groups.”
However, when the Reagan-Udall Foundation submitted its recommendations to Robert Califf , commissioner of the FDA, in December, the report concluded that vaping industry stakeholders observed a lack of “consistent implementation” of what the industry understood to be the policies of the CTP, particularly with respect to tobacco harm reduction and the requirements needed to navigate the premarket tobacco product application (PMTA) process.
King then goes on to state that in the 13 years since the landmark Tobacco Control Act (TCA) was signed into law, CTP has done “significant work to effectively research, regulate, and educate in a complex and rapidly changing tobacco product landscape.”
However, the Reagan-Udall report stated that the CTP needs to make “process improvements and identify and address the policy and scientific questions” that underpin its regulatory framework. The review concluded that CTP’s implementation of its PMTA program also has been affected by “changes in leadership and administrations.”
Since the implementation of the TCA, CTP has operated under seven different commissioners in three different administrations, and recently hired its third CTP director, King. In October, numerous comments from staffers of the CTP for the Reagan-Udall assessment of the performance of the FDA’s tobacco center claimed the regulatory agency is in a state of disarray and being influenced by outside forces, not scientific research.
One comment stated that reviewers of PMTAs in the CTP’s Office of Science (OS) lack the autonomy to exercise “best scientific practices” in their reviews of PMTAs.
“Scientific disagreement is frowned upon, if not entirely suppressed, and punished through various backhanded methods (e.g., lack of assignments, projects, and other opportunities that are needed for career development/promotion),” the comment states. “In some divisions (e.g., Division of Nonclinical Science [DNCS]), leadership pushes a ‘gotta get em’ mentality onto staff, which is unsupportive of a reviewer’s fundamental duty to provide an unbiased review using the best available science.”
It was more adversity for the vapor industry as many companies are still waiting on PMTA results.
By VV Staff
The year 2022 was tough on the vaping industry. While several countries banned or began heavily regulating vaping products, the United States banning most premarket tobacco product applications (PMTAs) probably had the greatest impact on the industry. Industry analysts estimate that 50 percent to 60 percent of vaping-related businesses in the U.S. had closed by late 2022 after the Food and Drug Administration began issuing mass marketing denial orders (MDOs) for nearly all the 6.5 million PMTAs submitted by 500 companies in 2021.
Companies had until May 14 to submit a PMTA to the FDA to keep their synthetic nicotine products on the market. Companies that failed to secure authorization were supposed to pull their products from the market by July 13. However, the regulatory agency has been using some discretion in its enforcement of synthetic nicotine products as it continues to review both tobacco and nontobacco PMTAs.
One of the biggest stories of the year is the rise of R.J. Reynolds Vapor Co.’s Vuse e-cigarettes, which took over as U.S. market leader from Juul in 2022. Juul’s fall came after the FDA issued an MDO for Juul Labs’ PMTAs on June 23. On July 5, the FDA stayed the MDO, announcing that it would review the decision after determining “there are scientific issues unique to this application that warrant additional review.” By October, Vuse had expanded its market share lead over Juul to 12 percent in the Nielsen analysis of convenience store data.
January
Credit: Selen Geren
Thirty U.S. states plus the District of Columbia kick off the new year on Jan. 1 with taxes on vaping products. Filipino vapers appeal to Duterte to sign a bill that would legalize vaping. The U.S. Congress begins review the Clarifying Authority Over Nicotine Act of 2021—a bipartisan bill designed to give the FDA the authority to regulate synthetic nicotine products just as it regulates nicotine products made or derived from tobacco. South Africa begins considering taxes on hardware and e-liquids, with high-nicotine products getting higher rates. Malaysia postpones implementing a tax that would have more than doubled the retail prices of e-liquid bottles for open systems. FEELM Air launches in the U.K.
February
Credit: Timon
Triton Distribution makes opening arguments in its battle with the FDA over how the regulatory agency conducted its PMTA reviews. A court of appeals stays Bidi Vapor’s MDO. Judges grant stays to Diamond Vapor, Johnny Copper and Vapor Unlimited in MDO lawsuits. The U.S. Senate confirms FDA Commissioner Robert Califf. Philip Morris International announces its plans to bypass an import ban by manufacturing IQOS in U.S. The FDA posts its first warning letter for vaping hardware products. The letter is issued to China-based Sigelei Vapor for two coil brands. The U.S. International Trade Commission (ITC) issues a general exclusion order that bans the importation of any unauthorized cartridges compatible with the Juul vaping system that infringe Juul Labs’ patents. The FDA submits its proposal to ban menthol to the Office of Management and Budget for review.
March
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The Swedish government proposes a ban on nontobacco-flavored vaping devices, including menthol. The National Youth Tobacco Survey (NYTS) 2021 finds youth cigarette smoking rates in the U.S. at historically low levels, with just 1.9 percent of high school students reporting current use of cigarettes. U.S. President Joe Biden signs a bill giving the FDA power over synthetic nicotine. Companies have 60 days to file PMTAs. China announces e-cigarette regulations, including flavor bans and compliance of all products produced for export with the regulations and laws in the destination country. If a country does not regulate e-cigarettes, China’s rules for vaping products would apply to those exports, including bans on flavors and synthetic nicotine. Myth of a gateway from vaping to smoking is debunked … again. FDA issues marketing orders to eight Logic brand vaping products.
April
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Mitch Zeller retires as director of the FDA’s Center for Tobacco Products (CTP). Vuse surpassed Juul to become the No. 1 e-cigarette brand in the U.S., according to Nielsen. Smoore International, the largest vaping company in the world, reports 2021 annual revenue of $2.16 billion. Canada proposes the first federal nicotine-only vape tax. China releases its rules listing the requirements for design, chemical compounds and the mechanics for manufacturing e-cigarettes. New York Stock Exchange rules force RLX Technology co-founder Kate Wang to resign from RLX committees. Fontem Ventures, a subsidiary of Imperial Brands, receives an MDO for its MyBlu products. Judge orders the FDA to give PMTA updates every 90 days for products with at least a 2 percent market share. Juul begins settling marketing lawsuits with several states. Hong Kong’s ban on vaping products makes it illegal to use or carry an activated vaping device in no-smoking areas. The FDA publishes rules for the menthol ban. Several Njoy vaping products receive marketing orders.
May
For the first time, the FDA issues warning letters for marketing products containing delta-8 THC. Several R.J. Reynolds Vapor Co. Vuse branded e-cigarette products receive marketing orders, including six new tobacco products, through the PMTA pathway. The San Diego City Council passes an ordinance for the second time banning vape flavors, and it’s effective Jan. 1, 2023. In its first status report, the FDA states that it expects to have resolved 63 percent of PMTAs set out in its original priority by June 30. Altria Client Services pays $100.5 million for assets and properties used in Poda Holdings’ business of developing, manufacturing and marketing multi-substrate heated capsule technology. FEELM wins four Red Dot Awards, an international competition for product, communication and concept design. Longtime Centers for Disease Control and Prevention alumnus Brian King succeeds Mitch Zeller at the FDA’s Center for Tobacco Products (CTP).
June
Credit: Premium Collection
Mexico bans all vaping and heated-tobacco products. Mexican President Andres Manuel Lopez Obrador signs a decree that outlaws the sale of e-cigarettes in line with continuing the government’s ongoing anti-vaping policy. Heated-tobacco products are not exempt from the ban as previously reported that they would. Njoy Daily disposables get marketing orders; however, the FDA issued MDOs to Njoy for multiple other flavored Daily e-cigarette products. A study finds e-cigarette or vaping product use-associated lung injury (EVALI) and Covid-19 boosted misinformation on vaping. A federal court jury finds R.J. Reynolds’ Vuse Solo and Alto devices infringe two Philip Morris patents. Zinwi is among the first to get a green light to produce e-liquids under China’s new regulatory framework. Juul receives an MDO, which is subsequently stayed in court. The FDA places Juul’s application back under review. EU lawmakers propose a flavor ban for heated-tobacco products.
July
PMI opens its flagship IQOS store in South Africa. Confronted with rising prices for batteries, engineers in Ukraine begin using power cells from vapes to power drones. A U.S. administrative tribunal invalidates two claims in an R.J. Reynolds vaping patent. Panama bans the sale and import of vapes, joining more than a dozen Latin American and Caribbean countries with such restrictions. Brazil also maintains its ban on vaping products. The FDA issues first warning letters for synthetic products. Juul Labs begins exploring financing options to avoid bankruptcy. Juul quarterly revenues drop 23 percent. FDA Commissioner Robert Califf says the nonprofit Reagan-Udall Foundation—a nongovernmental research group created by Congress to support the FDA’s work—will convene experts to evaluate the CTP within 60 business days. Matt Holman, the director of the CTP’s Office of Science, announces he is stepping down. Altria reduces the value of its investment in Juul Labs to $1.3 billion, a nearly 70 percent loss of its original $12.8 billion evaluation. The Philippine president allows a bill that legalizes e-cigarettes to lapse into law.
August
Credit: Savvapanf Photo
CTP Director Brian King states that the agency is “making significant progress” in reviewing synthetic nicotine applications. Chinese car maker BYD gets a vape production permit and its stock price soars. Monroe County becomes the first in New York state to accept e-cigarettes and e-liquids for safe disposal. VPR Brands receives an FDA warning letter for its nicotine gummies. FEELM, one of the largest and most influential e-cigarette brands, earns its production license in China. The U.S. Court of Appeals for the Eleventh Circuit grants petitions for review filed by Bidi Vapor, Diamond Vapor and four other companies challenging the FDA’s rejection of their e-cigarette applications in a 2-1 decision. Great Britain reports record levels of vaping in a report that found 2.4 million vapers are ex-smokers. Vuse’s market grows from 37.4 percent to 39 percent, with Juul declining from 30.7 percent to 29.4 percent. A U.S. appeals court denies a petition to review the FDA’s marketing denial order to Illinois-based e-liquid manufacturer Gripum.
September
Credit: Kristina Blokhin
Juul Labs agrees to pay nearly $440 million to settle a two-year investigation by 33 U.S. states into the marketing of its vaping products, which critics have blamed for sparking a surge in underage vaping. A jury in the U.S. District Court for the Middle District of North Carolina awards Altria Client Services more than $95 million after finding that Reynolds Vapor Co.’s Vuse Alto e-vapor product infringes three Altria patents. The FDA states it sent more than 44 warning letters to manufacturers and over 300 warning letters to retailers for violations relating to nontobacco nicotine. Alaska’s governor vetoes an age-to-vape bill because it also included the implementation of a tax on e-cigarettes. Nicaragua bans the import of e-cigarette products. Altria Group exercises its option to be released from its noncompete deal with Juul Labs. Maine backs out of a Juul settlement claiming it would cancel out school district suits.
October
Credit: Charlottes Web
The Colorado Supreme Court rules that the Colorado attorney general’s office’s lawsuit against electronic cigarette manufacturer Juul Labs cannot include four of the company’s executives. The FDA announces that as of Oct. 7, it has issued refuse to accept (RTA) letters for more than 889,000 synthetic nicotine product applications that did not meet the criteria for acceptance. Magellan CEO Jon Glauser says the FDA acknowledged in writing that it had “erred in failing to inform the company” about its MDOs before announcing the move publicly. An analysis suggests that over 90 percent of FDA warning letters were sent to small online retailers. For the first time, the U.S. Department of Justice files requests for permanent injunctions in federal district courts against six e-cigarette manufacturers on behalf of the FDA. Charlotte’s Web signs the first CBD licensing deal with Major League Baseball. A health regulatory body for Mexico’s government says its scientists have developed a new methodology to analyze the aerosols in electronic nicotine-delivery systems because “no one else has come up with one.” PMI reaches a deal with Altria Group to pay nearly $2.7 billion for exclusive U.S. commercialization rights to IQOS. FDA staff comments for the Reagan-Udall assessment of the performance of the CTP suggest the regulatory agency is in a state of disarray and being influenced by outside forces not scientific research. The FDA issues its first menthol MDOs for the Logic Pro Menthol E-Liquid Package and the Logic Power Menthol E-Liquid Package.
November
Credit: Vege Fox
China’s Ministry of Finance imposes a consumption tax on e-cigarettes sold in China from Nov. 1. China bans celebrities from endorsing vaping products. Logic is granted a temporary stay of the FDA’s menthol MDO. The EU publishes a directive officially banning flavors in heated-tobacco products throughout the union. Magellan sues the FDA and the U.S. Department of Health and Human Services, claiming the agencies violated the Administrative Procedure Act in the PMTA reviews. Maryland and Missouri become the 20th and 21st states to legalize marijuana for adult recreational use, but cannabis reform efforts meet defeat in Arkansas, North Dakota and South Dakota. Vuse’s market share rises from 40 percent in the previous report to 40.4 percent compared with Juul declining from 28 percent to 27.6 percent in Nielson’s four-week period ending Nov. 5. The European Union proposes a bloc-wide vaping tax policy as part of a shake-up of levies on the tobacco industry.
December
Credit: Sharaf Maksumov
Macau’s blanket ban on vaping products goes into effect. The rules prevent people from carrying e-cigarettes across the border with fines up to mop20,000 ($2,505). The Netherlands bans all e-cigarette flavors except tobacco effective Oct. 1, 2023. U.S. President Joe Biden officially signs the first piece of standalone federal cannabis reform. The Marijuana and Cannabidiol Research Expansion Act is aimed at providing federal support to facilitate research of cannabis and its potential health benefits. Juul Labs settles more than 5,000 lawsuits covering more than 10,000 individual plaintiffs. Financial terms of the deal were not disclosed. Costa Rica for the first time gives a company authorization to grow and process hemp. Canada’s Minister of Mental Health and Addictions and Associate Minister of Health released a report finding that vaping products offer the 3.8 million Canadians who smoke a less harmful source of nicotine than tobacco products, and do help people to stop smoking. The Reagan-Udall Foundation submitted its recommendations to the commissioner of the FDA. The report concludes that vaping industry stakeholders observed a lack of “consistent implementation” of what the industry understood to be the policies of the Center for Tobacco Products (CTP), particularly with respect to tobacco harm reduction and the requirements needed to navigate the PMTA process. A separate investigation, conducted by the U.S. Office of Special Counsel (OSC) after a whistleblower complaint, found the CTP had relaxed its standards of review for certain tobacco products and stifled attempts by its scientists to raise concerns.
Looking ahead
It’s impossible to predict what the vaping industry will look like by the end of 2023. The U.S. will probably see a decline in product variety because the FDA is unlikely to approve many devices. However, globally, especially in the EU and the U.K., the industry should continue to thrive and expand, according to industry analysts. More importantly, innovation should continue to thrive outside the U.S.
Gregory Conley, director of legislative and external affairs for the American Vapor Manufacturers Association, said the global fight for fair and sensible regulation of vaping products will continue throughout 2023. “Regrettably, just like years prior, some battles will be lost, and the end result will be fewer adults who smoke fully switching to vaping,” he said. “However, the silver lining is that—as we see today in Australia and Thailand—even prohibitions with criminal sanctions are not enough to stop illicit markets from popping up. This industry will never be able to stop every attempt at prohibition, but it can continue to document and expose how black markets follow whenever these bans are implemented.”
On the U.S. state level, Conley said his major concern is PMTA registry bills being put forth by the tobacco industry. He explained that these bills would devastate law-abiding vape shops and smoke shops by banning any vaping product that does not have a PMTA granted or explicit enforcement discretion from the FDA. “This means that synthetic nicotine, nicotine-free [products] and CBD/delta products would all become illegal to sell,” said Conley.
Nationally in the U.S., Conley said the FDA’s policy on vaping products in 2023 is likely to still be characterized by regulatory paralysis and the eternal search for the least politically controversial regulatory option. “Despite declines in youth vaping and the admonishment of federal judges, leadership at FDA remains steadfastly committed to having more combustible cigarettes on the market than vaping products,” he said. “On the plus side, the pace of FDA review has been slow to say the least, so we won’t hear rulings on many applications until 2024 or later.”
The U.S. Food and Drug Administration is planning to make recommendations on how to regulate the use of the popular cannabis compound cannabidiol (CBD) in food and supplements, the Wall Street Journal reported, citing agency officials.
After weighing the evidence on the compound’s safety, the FDA will decide within months how to regulate legal cannabis and whether that will require new agency rules or new legislation from Congress, according to the report.
In an interview, Janet Woodcock, the FDA’s Deputy Commissioner and leader of the agency’s cannabis regulation efforts, expressed concern about the safety of CBD and whether current regulatory pathways for food and dietary supplements are suitable for this substance.
However, the agency is interested in determining whether it is safe to consume CBD on a daily basis for extended periods of time or during pregnancy.
Woodcock mentioned concerns about potential effects on fertility in the future, but, at the same time, her comment signaled that the agency is working to establish regulatory frameworks for the legal sale of appropriate cannabis and cannabis-derived products.
CBD is a chemical compound found in cannabis plants. It is one of the main ingredients in cannabis, but unlike THC, it does not cause a high or have psychoactive effects.
The 2018 Farm Bill legalized hemp cultivation in the U.S., which led to significant growth in the market for CBD products. These products, sold as dietary supplements, are believed to have health benefits. As a result, many businesses in the cannabis industry are now selling CBD products across the country.
In recent months, the FDA posted warning letters to at least nine companies for illegally selling products containing CBD. The companies are accused of selling products containing CBD that the FDA states some people may confuse for traditional foods or beverages that do not contain CBD or were making medical claims about their CBD products.
In 2021, The FDA told Charlotte’s Web Holdings Inc., one of the world’s largest CBD companies, that its cannabidiol product cannot be sold as a dietary supplement, signaling that CBD reform may have to wait for congressional action.
The FDA has not approved any CBD-based products for use as dietary supplements. The only CBD-based product the FDA has approved is Epidiolex, a prescription medication used to treat seizures associated with Lennox-Gastaut syndrome and Dravet syndrome in children two years of age and older.
With Republicans in control of the U.S. House, some experts expect the vape industry to thrive.
By Timothy S. Donahue
The next two years should be better than the past two years. That was the overall outlook from vapor industry experts speaking during the Vapor Technology Association’s (VTA) 2022 Post-Election Round-Up webinar in late November. Tony Abboud, executive director of the VTA, told attendees that his organization has been working diligently with two Washington, D.C.-based firms, West Front Strategies, a lobbying group, and FORA Partners, a public affairs agency, to promote the interests of the vaping industry as Republicans take over the U.S. House of Representatives in 2023. “We have a very specific agenda, some of which we’ve discussed (as an overview of what) we are pursuing,” he said. “We’ve done an enormous amount of groundwork.”
Shimmy Stein
Shimmy Stein, a partner with West Front Strategies, said the change in leadership at the House could have a positive impact on the vaping industry until at least the next election cycle. “Anytime you can take over the gavels, take over the control of the messaging, take over control of the chairmanships and the legislation, that is an important piece of governing,” he explained. “And so, while it was not to the extent or to the size which Republicans were hoping for in terms of the majority in the House of Representatives, it’s still pretty significant and will change the manner in which Washington will function.”
Over the next two years, the vaping industry should feel “a little more comfortable, a little more secure” going into a divided Congress (the U.S. Senate leadership did not change), according to Craig Kalkut, a partner with West Front Strategies. However, the vaping industry has always faced threats from both Democrats and Republicans due to their concerns over teen vaping. “We still need to work with both parties. We still could face issues and threats of overregulation and poorly conceived legislation. But the bottom line is that we will have a more comfortable environment with Republicans controlling one house of Congress,” said Kalkut.
Craig Kalkut
Reconciliation, a way for Congress to enact legislation on taxes, spending and the debt limit with only a majority vote, is no longer a threat to the vapor industry, according to Kalkut. He said that’s just not something that can happen in a divided Congress. “What that means, ultimately, is that anything that passes will need to have bipartisan support,” said Kalkut. “And because of that, [legislation] will likely be more limited, more moderate, and hopefully, if there’s any legislation passed in our area, that will be something that allows us to thrive, which addresses the concerns that linger over teen vaping but does not overregulate and drive people away from vaping.”
Kalkut also confirmed that gridlock is a concern in a divided Congress; however, gridlock could also provide incentives for both parties to compromise. “They’re both seen as in charge, so they both sometimes want to get something done. And that will bring people to the table and often over issues that are not central to either party’s ideology,” he said. “It’s hard to come to a compromise on taxes, or it’s hard to come to a compromise on healthcare … but something like vaping, perhaps there will be opportunity for common sense provisions to prevail in an area where Democrats and Republicans can come together.”
Max Hamel
Max Hamel, founding partner of FORA, said when Congress is split, the White House typically relies heavily on its executive privilege. There is no known administration agenda on vaping, so a vaping-related rule is unlikely. With Republicans in control of the House, they also head committees. The House oversight committee and its subcommittees could present opportunity for the vaping industry, according to Hamel.
“We do have new personalities on both the majority and the minority side, so they’ll probably have some growing pains,” he said. “The big question is, how does this new authority, especially in the House, get wielded[?] … whether it’s one seat or 40 seats, the authority with the majority is the same, and it is substantial from [an] investigation and oversight standpoint; [that’s] probably not necessarily true from a legislative standpoint … the oversight subcommittee, we do have the opportunity to surface some things, but it’s really an opportunity for us now to not be on defense and [to] put forth an agenda and some messaging that really focuses on the things that are advantageous to us.”
Additionally, with Juul losing its stranglehold on the vaping market, Hamel said the vaping landscape is changing. Juul became the focus to save youth from vaping, and today, Juul isn’t the focus. The market is made up of a more diverse group of companies with different technologies dedicated to harm reduction. Hamel said this is the message that should be projected. “I think our priority will be focusing on the messages that really emphasize the harm reduction aspects,” he said.
Kalkut then added that the vaping industry has an opportunity now to change the conversation, particularly with Democrats but also Republican critics and skeptics of vaping through the ever-expanding body of science that shows the relative safety and incredible potential for harm reduction that next-generation tobacco products have. “That has become more and more clear as time has gone on over the last couple of years,” he said. “I think once we show that, once we demonstrate our commitment as an association in the industry to addressing teen vaping, we have a real chance of changing the narrative.”
Ashley Davis
Ashley Davis, a founding partner at West Front Strategies, told attendees that, looking back on industry challenges, there has been success. However, her concerns going into the last Congress (2020–2022) were that she didn’t really know in what direction or how forcefully Biden would lean on the vapor industry. She says the industry “dodged a bullet.” The industry could have suffered more than it did those first two years in a Biden administration. She also said the issue of youth use will remain at the forefront of any discussion concerning electronic nicotine-delivery system products.
“We do have to still deal with the youth issue. And I think we all realize that any negative press that comes up is around the youth issue … Everyone loves a microphone. It’s a member of Congress. If there’s an issue to discuss, that’s what they’re going to discuss,” explained Davis. “[We are] trying to make sure that any bad legislation is not passed—it’s much more unlikely in this Congress than it was before.”
Taking a question from the audience, Abboud closed the session speculating on the impact of the Reagan-Udall Foundation’s external review of the U.S. Food and Drug Administration’s Center for Tobacco Products, the results of which are expected in mid-December.
Abboud said that numerous comments from staffers of the FDA for the Reagan-Udall assessment suggest the regulatory agency is in a state of disarray and is being influenced by outside forces not scientific research. He said he hopes the foundation will advise the FDA that premarket tobacco product application (PMTA) decisions should be free from any external pressures, especially political pressure.
“[The review should recommend to the FDA that PMTA] decisions must be made based upon the science that is submitted as well as making sure that the agency does, in fact, review all of the science that has been submitted as part of any applications as well as [reviewing] all of the applications that have [been] submitted,” said Abboud. “Because that was another big failing of the current process where applications have been rejected [without a full review].”
Chinese e-cigarette manufacturers are expanding into Indonesia to better serve markets.
By Yutong Song and Alan Zhao
China’s rules for the vaping industry are stringent. They do, however, allow leniency for most exports. There is one rule, though, that can make shipping product to some countries nearly impossible: China’s regulations state that all products produced for export must comply with the regulations and laws in the destination country, according to 2FIRSTS, a vaping industry vertical media firm. If a country does not regulate e-cigarettes, China’s rules for vaping products would apply to those exports, including bans on flavors and synthetic nicotine.
To better serve countries that have not yet created regulations for electronic nicotine-delivery system products, manufacturers are opening factories outside of China. Many of those companies are moving into Indonesia where there are more than 70 million combustible cigarette smokers. The preference of Chinese manufacturers for Indonesia is also evident from a set of recent news headlines:
“Jinjia Group’s manufacturing base in Indonesia to provide integrated e-cigarette services.”
“Smoore Technology Indonesia (STI), a subsidiary of one of the largest e-cigarette manufacturers, has invested $80 million to establish e-cigarette factories in Indonesia.”
“The Indonesian factory of Zhijing Precision, an e-cigarette assembly supplier, is to be operational by 2022.”
The cost factors, such as land and labor, make Indonesia the first choice for e-cigarette companies setting up abroad, but the country has more to offer. Garindra Kartasasmita, secretary general of the Indonesian Vapor Entrepreneurs Association, mentioned in his keynote speech at the IECIE Vape Show that the Indonesian vaping market has been growing since 2013, with an annual rate of 50 percent except for the year 2021, when it shrank by 7 percent due to the Covid-19 pandemic. It is expected to rebound to 50 percent growth in 2022.
Integration of Production and Sales
Indonesia is ripe for helping to grow vaping businesses and boost the harm reduction potential of vaping products. One major advantage of moving e-cigarette production into Indonesia is the ease of integration and sales offered by the country’s large population. With 280 million people, Indonesia is the world’s fourth most populous country, accounting for 40 percent of all people in Southeast Asia. Moreover, Indonesia has 70.2 million smokers, which translates into a smoking rate of 34 percent.
The presence of so many nicotine consumers means e-cigarettes produced in Indonesia could also be sold domestically. Indonesia’s regulatory environment is conducive to the marketing of nicotine products that present lower risks than combustible cigarettes. Indonesia is the only country in Southeast Asia that allows tobacco advertising on television and in the media. It also has a place for e-cigarette bloggers and cross-category blogging, such as beauty and skin care. Indonesia has the second-highest number of posts on Instagram sharing vaping and related devices among all countries.
E-cigarette brands can be imported and sold in Indonesia only if they are recommended by the country’s National Agency of Drug and Food Control (part of the Ministry of Health) and the Ministry of Industry. Additionally, the products must be certified by the Indonesian National Standard. The policies are a positive for Chinese e-cigarette manufacturers.
Commenting on Smoore’s plant in Indonesia, Bahlil Lahadalia, Indonesia’s investment minister and director of the Investment Coordinating Board, publicly stated, “We need cooperation, we need jobs, we need opportunities that will make our brothers owners of our country.” And Clayton Shen, president of Smoore Indonesia, expressed his gratitude for the support of the Indonesian government, including the tariff-free incentives granted by the Ministry of Investment for the company’s much-needed machinery that needed to be imported.
Challenges Ahead
There are some challenges in the Indonesian market, however. Although the Indonesian market represents a large pie for Chinese manufacturers, it is not easy to navigate the market. A well-known Chinese e-cigarette manufacturer intending to build a factory in Indonesia revealed to 2FIRSTS that logistics is a problem for manufacturers, and currently no good solution is available.
For example, if the end products are filled and assembled in China and then sent to Indonesia, the amount of time the products could be held at customs is unpredictable. “I had a batch of goods that arrived at customs the end of last month, but they are still in customs as of the 20th of this month,” the manufacturer said. “If it was assembled in Indonesia and sent from the Indonesian factory, the time difference in delivery is not much different from if it were delivered from China.”
There is also a lack of e-cigarette machinery. Another vaping product manufacturer told 2FIRSTS that “there’s a critical lack of tools and machinery to keep pace with the production lines. Should factories be built here, machinery must be transported from China, which is a critical problem to tackle. It’s a misconception that the only shortage we would face is raw materials.”
Credit: Donvictori0
There is also a “workers’ gap” that can often create staff training and production concerns. In addition to overcoming cultural and geographical challenges when training local workers, it’s difficult to have the workers adapt to the Chinese style of work, which is very dedicated and focused on teamwork. An insider told 2FIRSTS that some workers have a “casual attitude to being late.” He said that he had to create numerous incentives to discourage employees from being late for work and/or going home early. “This is very different from the Chinese work habits,” he said.
Migration or Spillover
Shenzhen is considered the vaping capital of the world. Located just north of Hong Kong, the city designs and manufactures an estimated 90 percent of the world’s vaping and e-cigarette devices. There are more than 1,000 factories and thousands of support companies that form the supply chain throughout Guangdong Province and the rest of China.
A joint report from the E-Cigarette Professional Committee of the China Electronics Chamber of Commerce and 2FIRSTS anticipates the global e-cigarette market to grow by 35 percent in 2022. The total market is expected to exceed $108 billion. In 2021, China’s total e-cigarette exports were $19.8 billion and were expected to reach $26.7 billion in 2022. The expansion of China’s e-cigarette industry from Shenzhen to Indonesia can more accurately be described as “spillover” rather than “migration.”
Just because Shenzhen’s e-cigarette manufacturing hub status is unshakable in the short term does not mean that the global manufacturing layout is cast in stone. In fact, over the past five years, the country’s e-cigarette industry has spilled from the city into China’s Greater Bay Area. We have seen spillover from Shajing of the Bao’an District of Shenzhen to the Dongguan area and in between.
This spillover has not affected the development of China’s electronic cigarette industry, however. During the same time, there was also a period of rapid industrial growth and improvements on the supply chain side of the industry.
In a recent interview, 2FIRSTS co-founder and Chief Operating Officer Echo Guo said that years of development not only granted the Bao’an District of Shenzhen a number of e-cigarette enterprises but also brought together supporting supply chains, including industrial design, molds, batteries and other essential needs for manufacturing vaping products. “Here to there is a ‘two-hour traffic circle’ within the whole e-cigarette industry, with all of its subbranches cooperating closely,” said Guo. “Even when the manufacturers and customers exchange new ideas, it would take less than two hours to get a prototype ready.”
The spillover of China’s e-cigarette industry to Indonesia can also be seen as the absorption and utilization of manufacturing resources by China’s e-cigarette industry, which has broken the boundary of China’s Greater Bay Area and extended to a broader region of the Asia-Pacific. The entire region will now have the opportunity to create greater economic success through the growth of the e-cigarette and vaping industry.
The U.S. Food and Drug Administration’s (FDA) Center for Tobacco Products (CTP) had relaxed its standards of review for certain tobacco products and stifled attempts by its scientists to raise concerns, according to an investigation conducted by the U.S. Office of Special Counsel (OSC). The OSC sent a letter to the President and Congress outlining the findings.
The investigation began after a leading CTP toxicologist-turned-whistleblower disclosed to OSC that a 2019 memorandum issued to CTP’s scientists revised the process for evaluating potentially harmful ingredients in substantial equivalence applications used for certain tobacco products. According to the whistleblower, the memo directed scientists to stop using objective, quantitative data to evaluate applications and to instead use an approach which was more akin to “eyeballing it,” resulting in unclear review standards and less reliable decisions, according to the CTP.
The whistleblower also alleged that flaws in CTP’s internal scientific dispute resolution process effectively prevented the whistleblower and several other concerned scientists from raising these issues within the agency. “This internal dispute process is intended to safeguard the integrity of CTP’s scientific evaluations, including consideration of certain tobacco products to ensure those authorized for market meet the applicable health and safety standards,” CTP stated.
OSC referred the whistleblower’s allegations for investigation. In response, the FDA convened an independent panel of scientific experts to evaluate allegations concerning the allegedly flawed tobacco application review process. The panel largely agreed with the whistleblower’s concerns, finding that the process lacked “quantifiable standards or criteria.” The expert panel made six recommendations, including a new process for resolving scientific discrepancies, which the agency largely adopted.
In response, the whistleblower acknowledged CTP’s progress in giving scientists discretion to consider quantitative data in reviewing potentially harmful chemical compounds in substantial equivalence applications for new tobacco products. CTP also revamped its scientific dispute procedures and created a mandatory training program for all CTP staff involved in scientific decision-making. While supportive of these steps, the whistleblower stated that FDA scientists will still need courage to challenge a system that “discourages dissenting voices.”
“The public depends on the FDA to vigorously implement and enforce our nation’s health and safety laws, especially when new tobacco products are being brought to market,” said Special Counsel Henry J. Kerner. “I am deeply troubled that FDA’s own scientific dispute process failed our whistleblower and fellow concerned scientists, and as a result failed the public. I commend the whistleblower for persevering in the face of these unnecessary obstacles. I also thank the FDA for taking the allegations seriously by convening an independent expert panel, and for taking positive steps to repair its review process.”
Memos recently submitted to the U.S. Court of Appeals for the Third Circuit show that the U.S. Food and Drug Administration’s Center for Tobacco Products (CTP) allowed its director, Brian King, to reverse a recommended marketing approval of Logic Technology’s menthol vaping products, ignoring the advice of FDA scientists, according to Logic’s lawyers. The new documents were made available to Logic after it had filed its motion for a stay of its marketing denial order (MDO) for its menthol vaping products.
Attorneys for Logic, which is represented by Troutman Pepper, stated that the new documents, that Vapor Voice is reviewing, reveal the “extraordinary fact that CTP’s Office of Science (OS) reversed its science-based recommendation to issue marketing granted orders for Logic’s premarket tobacco product applications (PMTAs) for its menthol-flavored electronic nicotine delivery systems (ENDS) after receiving pressure from the new CTP director and his office, the Office of Center Director (OCD).”
Logic attorneys claim the company is entitled to a stay of the agency’s MDO for the Logic menthol products because the OCD overruled OS’s initial recommendations to approve Logic’s products based upon its “science-based evaluation” of Logic’s submission. However, because the OCD said in the memos that menthol as a category would be “treated disfavorably,” Logic is asking the court to recognize that the agency’s actions of “basing product-specific decisions” on “unpromulgated, across-the-board policies” that were never subject to notice-and-comment rulemaking is “arbitrary and capricious.”
In the first memorandum (dated Oct. 25), the OS explains that it evaluated Logic’s PMTAs, including its product-specific evidence, and concluded that authorization of the marketing of Logic’s menthol-flavored ENDS was appropriate for the protection of public health (APPH). However, the memo shows that the OS changed course only after the new CTP director and OCD, to whom OS reports, concluded that menthol-flavored ENDS should be treated as a “disfavored” product category, despite the evidence to the contrary.
“From a policy perspective, OS believed at the time that as long as menthol-flavored cigarettes remain on the market, menthol-flavored ENDS could be a direct substitute for them, providing a less harmful alternative for menthol-flavored cigarette smokers who are less likely to successfully quit smoking than smokers of non-menthol-flavored cigarettes,” the OS memo reads. “OS considered that this suggested potential benefit in the form of increased opportunity for use and transition coupled with product-specific evidence of some benefits to smokers even if not greater than that of tobacco-flavored ENDS products amounted to a likelihood of greater cessation or significant reduction in smoking that would outweigh the known risks to youth from the marketing of the products sufficient to meet the legal standards for authorization.”
OCD then raised questions about OS’s recommendation including questions about “the role and sufficiency of the general scientific literature on adult menthol smokers’ differential preference for menthol ends in demonstrating likely behavioral change” and underscored its concerns about the substantial appeal of menthol to youth. A decision was still pending for the Logic PMTA in July 2022, when CTP transitioned to a new center director, Brian King.
“OS shared its views with the new center director and engaged in an open discussion on topics including the general body of literature, Logic’s clinical studies, risk to use, and potential postmarketing requirements,” the memo states. “After that meeting, the OCD senior science advisor shared OCD’s views with OS, articulating that in light of the substantial risk to youth and the lack of robust evidence of actual differential use to quit or significantly reduce cigarettes per day, the approach to menthol flavored ends should be the same as for other flavored ends, i.e., the products could be found to be APPH only if the evidence showed that the benefits of the menthol flavored ends were greater than tobacco flavored ends, which pose lower risk to youth.” The OS subsequently changed course and its opinion about Logic’s marketing approval.
The second memorandum reiterates the same policy shift and suggests that meetings were held to address the concerns of OS staff regarding the appropriateness of the decision-making process behind the denial of Logic’s menthol PMTAs. The OS also had concerns that the new OCD approach would eliminate all non-tobacco-flavored ENDS products.
“During deliberations, it became clear that there was not agreement with CTP on the approach for evaluating menthol-flavored ends. OCD took steps to consider and address staff use and to ensure that the process for decisions on PMTAs was driven by the science. In July 2022, shortly after becoming CTP center director, Brian King, a doctoral-level scientist, conferred with OS and members of OCD about menthol-flavored ends and the Logic menthol-flavored ends PMTA,” the second memo states. “After that meeting, the OCD senior science advisor conveyed that Dr. King’s position was the same as the previously held OCD position. Articulating in particular that in light of the risk to youth and the lack of robust evidence of actual differential use of menthol-flavored ends to quit or significantly reduced cigarettes per day, the approach to menthol-flavored ends should be the same as with other flavored ends with respect to the evidence of adult benefit. Subsequently, and upon its own initiative, OS reassessed OCD’s approach … .”
In October, numerous comments from staffers of the CTP for the Reagan Udall assessment of the performance of the FDA’s tobacco center claimed the regulatory agency is in a state of disarray and being influenced by outside forces, not scientific research. One comment stated that reviewers of PMTAs in the OS lack the autonomy to exercise “best scientific practices” in their reviews of PMTAs.
“Scientific disagreement is frowned upon, if not entirely suppressed, and punished through various backhanded methods (e.g., lack of assignments, projects, and other opportunities that are needed for career development/promotion),” the comment states. “In some divisions (e.g., Division of Nonclinical Science [DNCS]), leadership pushes a ‘gotta get em’ mentality onto staff, which is unsupportive of a reviewer’s fundamental duty to provide an unbiased review using the best available science.”
Earlier this week, a unanimous panel of the United States Court of Appeals for the Fourth Circuit denied Avail Vapor’s petition to have its MDO invalidated. Avail also argued that the FDAs review process for PMTAs, although not specifically menthol, were arbitrary and capricious.
The U.S. Court of Appeals for the Eleventh Circuit stayed an MDO issued by the FDA to Bidi Vapor earlier this year, which also argued the agency’s rulemaking was arbitrary and capricious.
These two rulings were all made before the release of the Logic documents. Several industry experts have told Vapor Voice that this revelation of FDA memos could be “game changing” for industry lawsuits. Avail is rumored to be taking its case to the Supreme Court of the United States. The FDA does not comment on pending litigation.
The U.S. Food and Drug Administration has failed to follow through after issuing warning letters to online tobacco products and vapor product sellers, according to a report by the Health and Human Services Office of the Inspector General (OIG).
Between 2010 and 2020, the FDA issued warning letters to 899 online retailers but “took no enforcement actions,” according to the report.
The FDA enforcement schedule, as of March 2022, calls for the following actions: first violation—warning letter; second violation within a 12-month period—fine of up to $320; third violation within a 24-month period—fine of up to $638; fourth violation within a 24-month period—fine of up to $2,559; fifth violation within a 36-month period—fine of up to $6,398; sixth violation within a 48-month period—fine of up to $12,794; and five or more repeated violations within 36 months—no-tobacco-sale order of 30 calendar days or six months or permanent.
The OIG report criticizes the FDA’s lack of transparency, which it says makes it hard to track the FDA’s performance. The report suggests that the FDA collaborate with the Bureau of Alcohol, Tobacco, Firearms and Explosives on oversight of online tobacco retailers; complete its rulemaking on non-face-to-face sales of tobacco products as required by the Tobacco Control Act; collect data to support process and outcome measures for its oversight of online tobacco retailers; and publish information and performance data on its oversight of online tobacco retailers.
In a response, the FDA did not dispute a lack of enforcement actions and agreed with the first and fourth suggestions, stating it is in the process of making those changes. The organization was noncommittal regarding the other two suggestions.
A group of public health experts along with the attorney general of Iowa have asked the U.S. Centers for Disease Control and Prevention (CDC) and the U.S. Surgeon General to correct misinformation overstating the dangers of e-cigarettes.
In an editorial published Dec. 12 in Addiction, the authors cite the 2019 outbreak of EVALI and the Surgeon General’s 2016 youth vaping report, which claims that nicotine vaping is a gateway to smoking.
The authors take issue with the CDC’s failure to amend the name EVALI (e-cigarette or vaping product use-associated lung injury) even after it became clear that the health problems were brought about by vitamin E acetate (mixed with cannabis oil by black market sellers) rather than nicotine vapes.
“Smokers are still twice as likely to incorrectly identify e-cigarettes as the cause of a serious lung disease outbreak in 2019 than to correctly identify marijuana vape products contaminated by vitamin E acetate as the cause,” said lead author Michael Pesko of Georgia State University in a press note. “Because many smokers then falsely believe e-cigarettes to be as or more dangerous than cigarettes, the misinformation reduces smoking cessation that would otherwise occur. Population health suffers as a result.”
The Surgeon General’s gateway claim, meanwhile, is simply untrue, according to the authors. “Significant evidence now exists that this association between vaping and smoking is not causal, which is a source of confusion for the lay public and healthcare professionals,” wrote Georgia State University health economist Pesko.
“The lack of causation is underlined by real-life data collected since the SG report’s publication. Even as youth vaping hit its peak in 2019, youth smoking was sinking rapidly, and that decline has continued.”
For the first time, the FDA issues warning letters for marketing products containing delta-8 THC. Several R.J. Reynolds Vapor Co. Vuse branded e-cigarette products receive marketing orders, including six new tobacco products, through the PMTA pathway. The San Diego City Council passes an ordinance for the second time banning vape flavors, and it’s effective Jan. 1, 2023. In its first status report, the FDA states that it expects to have resolved 63 percent of PMTAs set out in its original priority by June 30. Altria Client Services pays $100.5 million for assets and properties used in Poda Holdings’ business of developing, manufacturing and marketing multi-substrate heated capsule technology. FEELM wins four Red Dot Awards, an international competition for product, communication and concept design. Longtime Centers for Disease Control and Prevention alumnus Brian King succeeds Mitch Zeller at the FDA’s Center for Tobacco Products (CTP).
PMI opens its flagship IQOS store in South Africa. Confronted with rising prices for batteries, engineers in Ukraine begin using power cells from vapes to power drones. A U.S. administrative tribunal invalidates two claims in an R.J. Reynolds vaping patent. Panama bans the sale and import of vapes, joining more than a dozen Latin American and Caribbean countries with such restrictions. Brazil also maintains its ban on vaping products. The FDA issues first warning letters for synthetic products. Juul Labs begins exploring financing options to avoid bankruptcy. Juul quarterly revenues drop 23 percent. FDA Commissioner Robert Califf says the nonprofit Reagan-Udall Foundation—a nongovernmental research group created by Congress to support the FDA’s work—will convene experts to evaluate the CTP within 60 business days. Matt Holman, the director of the CTP’s Office of Science, announces he is stepping down. Altria reduces the value of its investment in Juul Labs to $1.3 billion, a nearly 70 percent loss of its original $12.8 billion evaluation. The Philippine president allows a bill that legalizes e-cigarettes to lapse into law.
