Juul and Juul pods will now move into the substantive review phase of the premarket tobacco product application (PMTA) process. Juul Labs has received acceptance and filing letters from the U.S. Food and Drug Administration (FDA) for its battery and nicotine cartridges, the company announced Tuesday.
Juul Labs filed the applications last month and all PMTA applications are due to the FDA by Sept. 9. The company’s submission includes “comprehensive scientific evidence for the Juul Device and Juul pods in Virginia Tobacco and Menthol flavors at nicotine concentrations of 5 percent, 3 percent and information on data-driven measures to address underage use of its products.
“We will continue to follow the PMTA process and look forward to this next step as the FDA commences substantive review of the application,” said Juul Labs Chief Regulatory Officer Joe Murillo in a statement.
The owner of the Prism e-liquid brand, 511 Solutions, announced today that it has filed its first premarket tobacco product application (PMTA) with the U.S. Food and Drug Administration (FDA). The application was accepted by the FDA and has now moved to the substantive scientific review phase.
All Prism e-liquids are manufactured by Blackbriar Regulatory Services (BRS) in an ISO class 6 cleanroom, tested in an ISO 17025 laboratory, according to a press release. In compliance with FDA guidelines, Prism e-liquids will be allowed to remain on the market during the FDA review process while waiting for a marketing order.
“When 511 Solutions created this e-liquid line, their goal was to create something really special and to do it right the first time,” said Don Hashagen, sales agent for Prism e-liquids. “They invested an enormous amount of resources into creating high-quality nicotine products for adult smokers looking for alternatives. And, partnering with BRS was a natural choice. Having the ability to streamline the manufacturing, distribution and regulatory needs all under one roof has been a huge win for 511.”
The PRISM brand represents three unique, high-quality e-liquid lines with a total of 19 flavors going through the PMTA process, according to the release. The flavor profiles range from tobacco, menthol, fruits and bakery in a variety of nicotine strengths.
Philip Morris Products receives the first modified-exposure order for an ENDS product for IQOS.
By Timothy S. Donahue
It’s a major development. It may also serve as a precursor to what action the U.S. Food and Drug Administration (FDA) may take when reviewing premarket tobacco product applications (PMTAs) for vapor products that must be submitted by Sept. 9. On July 7, the FDA issued exposure modification orders to Philip Morris Products’ (PMP) heat-not-burn system, IQOS. The order also included the device’s holder and charger as well as three variants of the Marlboro HeatStick.
“Through the modified-risk tobacco product application (MRTP) process, the FDA aims to ensure that information directed at consumers about reduced risk or reduced exposure from using a tobacco product is supported by scientific evi-dence and understandable,” said Mitch Zeller, director of the FDA’s Center for Tobacco Products (CTP). “Data submit-ted by the company shows that marketing these particular products with the authorized information could help addicted adult smokers transition away from combusted cigarettes and reduce their exposure to harmful chemicals but only if they completely switch.”
IQOS is the first next-generation tobacco product to receive exposure modification orders and only the second product to be authorized as a modified-risk tobacco product. In October 2019, the FDA authorized Swedish Match U.S. division’s amended MRTP applications for eight variet-ies of General snus. IQOS is produced by Philip Morris International (PMI), parent to PMP, and marketed in the U.S. by Philip Morris USA, a subsidiary of Altria Group.
During a recent call with investors, Emmanuel Babeau, PMI’s chief financial officer, said following a review of its extensive scientific evidence package, the FDA found that an exposure modification order for IQOS is appropriate to promote the public health in the United States.
Credit: PMI
“[This dem-onstrates] that IQOS is [a] fundamentally different product from combustible cigarette[s] and a better choice for adults who would otherwise continue to smoke,” he said. “The agency concluded that issuing the order for IQOS is expected to benefit the health of the population as a whole, taking into account both users of tobacco products and persons who do not currently use tobacco products.”
In a press release, Billy Gifford, CEO of Altria Group, stated that the authorization gives its Philip Morris USA subsidiary an “opportunity to communicate additional benefits of switching to IQOS, and this decision is an important step for adult smokers.” In a late July earnings call, Altria announced it would be expanding marketing of IQOS to Charlotte, North Carolina. T
he company said it plans to expand marketing to four more cities over the next 18 months. In April of 2019, the FDA authorized the marketing of IQOS through the PMTA pathway. By granting IQOS an MRTP, the FDA determined that IQOS does not currently meet the standard for marketing with reduced-risk claims but can be marketed with a reduced-exposure claim.
“The FDA’s decision is a historic public health mile-stone,” said Andre Calantzopoulos, CEO of Philip Morris International. “Many of the tens of millions of American men and women who smoke today will quit—but many won’t. Today’s decision makes it possible to inform these adults that switching completely to IQOS is a better choice than continuing to smoke. [The] FDA determined that scientific studies show that switching completely from conventional cigarettes to IQOS reduces exposure to harmful or potentially harmful chemicals.”
According to the FDA website, a reduced-risk claim authorization would generally allow a company to say a product is less harmful than combustible cigarettes. However, according to the FDA, the current reduced-exposure claim authorization only allows PMP to state that IQOS heats, rather than burns, tobacco and significantly reduces the production of harmful and potentially harmful chemicals.
It also allows the company to state that scientific studies have shown that switching completely from conventional cigarettes to the IQOS system significantly reduces the body’s exposure to harmful or potentially harmful chemicals.
Additionally, when granting its modified-exposure order, the FDA found that “testing of actual consumer perception shows that, as the applicant proposes to label and market the product, consumers will not be misled into believing that the product is or has been demonstrated to be less harmful or presents or has been demonstrated to present less of a risk of disease than one or more other commercially marketed tobacco products.”
The FDA’s marketing order requires PMP to conduct post-market surveillance and studies to determine the impact of these orders 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 post-market requirements 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 MRTPs does not have unintended consequences for youth use.
“The FDA decision and subsequent comprehensive post-market controls and monitoring, focusing on use prevention, provide an important example of how government and public health organization around the world can implement an inclusive, science-based approach to help rapidly shift adult smokers who would otherwise continue smoking to better options while simultaneously guarding against unintended consequences,” said Babeau.
GLOBAL GROWTH
In the investor call, Babeau revealed that the first half of 2020 has seen continued momentum for IQOS with an estimated 15.4 million users at the end of the second quarter. “Our commercial model pivoted rapidly to digital and remote engagements while preserving high rates of IQOS’ user acquisition and brand retention,” he said. “With volumes of heated-tobacco units growing 24 percent in [the second quarter] shows that, as the applicant proposes to label and market the product, consumers will not be misled into believing that the product is or has been demonstrated to be less harmful or presents or has been demonstrated to present less of a risk of disease than one or more other commercially marketed tobacco products.”
The FDA’s marketing order requires PMP to conduct post-market surveillance and studies to determine the impact of these orders on consumer perception, behavior and health and to enable the FDA to review the accuracy of the deter-minations upon which the orders were based.
These post-market requirements 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 includes strong growth in Italy, the Czech Republic, Poland and Germany, and in historically slower markets such as the U.K., where HTU [heated-tobacco unit] volumes increased more than five-fold over the prior year quarter, and Spain. National offtake share surpassed 1 percent in both of these latter markets despite limited distribution.”
PMI sees its IQOS products as a “critical enabler” for the future growth of RRPs. The company estimates that there were 15.4 million IQOS users worldwide as of June 30. The product’s steady increase in market share reflects widespread user growth momentum across all key IQOS geographies, including Japan, the EU region and Russia, according to Babeau.
“We further estimate that 72 percent of this total—11.2 million adult smokers—have stopped smoking and switched to IQOS with the balance in various stages of conversion,” said Babeau. “We observe an early indication that the propensity of smokers to switch to RRPs is trending positively since the pandemic began, and we will see how this develops in the coming period. We are also optimistic that the FDA’s granting of the modified-risk tobacco product order for a version of IQOS will contribute over time to a better understanding of the heated-tobacco category and the benefit of switching to IQOS compared to continued smoking.”
In Russia, where IQOS was released in 2015, IQOS’ market share rose by three points to reach 5.9 percent. In Japan, where IQOS was released in 2014, PMI’s total reported share for heated-tobacco units reached 20 percent in the second quarter, according to Babeau. IQOS users grew to an estimated total of 5.8 million, of which an estimated 4.3 million have stopped smoking traditional cigarettes and fully switched to IQOS.
“On an adjusted total tobacco view, including cigarillos and adjusted for trade inventory movement, the share for our HTU brands increased by two points versus the prior year quarter and by 0.7 points sequentially to 18.5 percent,” he said. “[Second quarter] 2020 adjusted in-market sales volume for our HTU brands grew 4.9 percent sequentially. This helped drive growth of the overall heated-tobacco category to [a] second-quarter total tobacco share of over 25 percent.”
In addition to strong RRP growth in existing markets, the geographical expansion of IQOS continues. Despite the pandemic-related restriction, PMI has leveraged its digital capabilities to launch in four new markets: Austria, North Macedonia, Montenegro and Saudi Arabia. This takes the total number of markets where IQOS is available for sale to 57.
Babeau said the company still plans to expand its portfolio of smoke-free offerings in the second half of the year with the launches of IQOS VEEV in the vapor category and a licensed KT&G product in select markets.
“We are on track to reach our 2021 target of 90 billion to 100 billion shipments of heated-tobacco units. RRPs now make up almost 25 percent of our net revenue, and we expect this percentage to grow over time. With digital effi-ciency, operating leverage from scale effect and productivity saving simultaneously driving up the profitability of RRPs, this is a very positive dynamic for our margin outlook,” said Babeau.
“The historic milestone of modified-risk tobacco product authorization for IQOS is a further testament to the integrity of the product and brand proposition and underlying the need for government to implement science-based regulation. In addition, after a difficult April and May, the industry recov-ery has now started, providing better visibility for the rest of the year.”
Toward the end of the call, Bonnie Herzog, an analyst with Goldman Sachs, suggested that PMI has been adding more new users during the pandemic than originally expected. Babeau agreed, saying that this is going to come from the continuation of a “very strong acquisition” of new IQOS users. Herzog then asked if PMI had any intention of pursu-ing a modified-risk authorization. Babeau said a full MRTP is in the plans for IQOS.
“The FDA has left the door open to continue the dialog with them on precisely the next level. We intend to do that in the coming months. I would say the question is whether the reduced-risk authorization for marketing can come through a modified claim or through providing additional study or maybe a combination of both,” said Babeau. “That’s what we intend to discuss with the FDA in the coming months and, of course, we are impatient to have this dialog with them.” V
Authorities should create independent bodies to evaluate the science behind vapor—and base their policies upon the most credible evidence.
By George Gay
June 19, the Australian federal government announced a ban, from July 1, on the import of nicotine for vaping. The ban reportedly amounted to a de facto prohibition on vaping with nicotine because, while it provided for an exemption for imports made on the basis of a doctor’s prescription, the Australian Tobacco Harm Reduction Association (ATHRA) said that using such an exemption would have been complex, time-consuming and ultimately unworkable.
But temporary relief was granted when, on June 26, the government announced that it was suspending the implemen-tation of the ban while it conducted a review and consultation around the classification of nicotine. At the same time, how-ever, it said that a new version of the ban with a “streamlined” [but at the time unspecified] method for people to obtain prescriptions would be brought in from the start of next year.
There might be a good reason why the government is going to conduct this review when it has already decided to reintroduce a modified ban within six months, but it wasn’t immediately obvious to me what that reason might be. Having said that, perhaps there is no good reason. The government seems to have form in putting the cart before the horse.
According to ATHRA, the June 19 announcement of a ban was made before the publication of a report that was based on a scientific inquiry into vaping commissioned, at a cost of aud750,000 ($529,403), by the health minister last year.
I was reminded by all this of the nonsense song: “You put your left arm in / You take your left arm out / You do the hokey cokey / And you shake it all about.” I mean, even if you assume that vaping policy decisions in Australia are made on the basis of “two-up” and therefore might not always make a whole load of sense, that doesn’t explain the change that took place. Unless, that is, Australia is only partway through a best-of-three-throws series. In which case, before I get to the end of this piece, the policy might have changed again.
Despite, like the rest of us, being fully paid-up members of the club of sentient animals, Australian smokers and vapers may be allowed to import nicotine for vaping only if they have a prescription from their doctors, a certificate from their spiritual advisers and a letter signed by their mums. For goodness’ sake, these are adults who are allowed to buy and consume any amounts of cigarettes and alcohol, which are surely the two most toxic consumer products on the market.
I don’t want to trivialize what is a deathly important debate on vaping, but I find it difficult to take seriously such a rapid change of direction, even given that a week is a long time in politics. Of course, an argument can be made that the government acted responsibly in reacting to the opposition that quickly arose in respect of its June 19 nicotine ban—that it listened; that it had an open mind.
But it must be of concern that the government apparently didn’t listen before it made its announcement. And there has to be concern that the government might have suffered the same fate as many of those who attempt to maintain a completely open mind—that is, its brain fell out.
In fairness to the government, however, you have to say that the mess it got itself into was simply built on some fairly strong foundations already established by federal and state governments. For instance, as I understand things, even before the new ban was announced, nicotine for vaping was classified in Australia as a poison, and its import was illegal unless approved by the Therapeutic Goods Administration. Though, depending on the laws of individual states, nicotine could be bought over the internet provided it was for personal use. “You put your right arm in,” etc., etc .…
There are many arguments to be made against a ban on the import of nicotine for vaping, most of which will be familiar to the people who read this magazine, and those arguments are being well made in Australia by individuals, organizations such as ATHRA and politicians, even some within the ranks of the ruling coalition.
But one of the major problems for those opposing the ban is that it is irrational and, as has often been stated in the past, it is pretty well impossible to reason somebody out of a position that they didn’t reason themselves into.
And there could be significant negative consequences if the government persists with its policy of banning nicotine for vaping. Despite the best efforts of the World Health Organization (WHO) to ensure that smokers continue to smoke rather than switch to vaping, the smokers of Australia, who, unlike the WHO, don’t exist in a bubble that protects them from unauthorized ideas, know that vaping might be their best route to harm reduction. And some of them will continue, despite the ban, to try to remain on that harm reduction route by obtaining nicotine through whatever means possible.
This will inevitably create risks because some of that nico-tine will no doubt be produced in unlicensed premises and all of it will be mixed with other e-liquid ingredients by users with no training in such enterprises. Goodness me, to take another example, surely no government would encourage its untrained citizens to start producing their own alcohol?
And it seems obvious that the Australian government recognizes the risk of homebrewing e-liquids because, as part of its original ban, it set the penalty for infringements at aud220,000. The severity of the penalties set for laws reflect a number of things and, it seems to me, in some cases, one of those is the likelihood that people will break the law because it is unreasonable. And nothing could be more unreasonable than introducing a law that makes it more difficult for an individual to try to improve his or her own health.
URGENCY TO ACT
But there are many people better qualified than I am to make the case against the ban and who will be using the time to the end of this year to do so. I am interested in a more general question that arises out of the shambles that was the ban and its suspension—a question that pops up in other countries, that has global repercussions but that is less often addressed.
Why haven’t countries around the world and even the inter-national community arrived at a working consensus on vaping that leads us down a rational, clearly defined pathway with direction that can be adjusted as new information is received about the best way ahead? Why do we persist with performing the vaping “Hokey Cokey”? After all, you would imagine, I think, that this issue would be viewed by authorities around the world as a matter of the greatest urgency.
We are told by the WHO that tobacco consumption, largely in the form of cigarette smoking, comprises one of the biggest public health threats the world has ever faced, killing more than 8 million people a year worldwide. At the same time, it is indisputable that some cigarette smokers have used vaping to purge themselves of their tobacco smoking habit.
And, according to a timeline published by the Consumer Advocates for Smoke-Free Alternatives Association (CASAA), the idea of electronic cigarettes has been around for about 90 years, and the first commercial unit was pro-duced 17 years ago.
In other words, there is clearly a need for urgency here, and there has been time to act. But as can be seen from the Australian experience—and Australia is by no means alone in this—17 years on, many countries are still at the most basic of consultation stages; or, to put it in the Australian vernacular, we’re still running around like headless chooks when it comes to vaping.
FEAR OF THE NEW
Why is this the case? I don’t know the answer to that question, but there are a number of possibilities that occur, some, unfortunately, that tend toward the sorts of conspiracy theories that tell you Covid-19 is spread by 5G and that you would be better off forswearing a Covid-19 vaccine, should one be developed, and protecting yourself instead by sitting in a darkened room with a mixture of cow dung and honey on your head while listening to recordings of the narwhal daring us to be free.
Credit: Obi Onyeador
But much as I like a truly bonkers conspiracy theory, I think I need to keep this piece on a reasonably even keel and, the more I think about it, the more I tend to the view that the major problem the world has in embracing vaping is that it is different to what we are familiar with—good old smoking. In The Book of Nothing, John D. Burrow quotes Francis Cornford as saying, “Every public action, which is not customary, either is wrong or, if it is right, is a dangerous precedent. It follows that nothing should ever be done for the first time.”
Perhaps because it is not much into irony, the WHO seems to have taken seriously this reasoning in its approach to vaping. While acknowledging that much has been written about the potential of electronic cigarettes to help tobacco users quit, it says the evidence is inconclusive and goes on to advise against e-cigarette use.
OBJECTIVE EXAMINATION
Given the enormous differences between the constituents of tobacco smoke and those of e-cigarette vapor, and given the evidence that points to the ability of vaping to substitute for smoking for a significant number of smokers, the WHO’s position seems to take the precautionary principle to absurd heights. And one of the problems here is that the WHO exerts enormous influence over the health policies of many countries.
But there is no need for governments of the world to slavishly follow the WHO line. There is available to governments a huge amount of information on vaping from which they can make their own judgements and decisions. At the same time, however, there is a problem because while some of the information available is reasonable, some of it is questionable and some of it is unreasonable.
And since this information is being made available in a constant stream, there is probably little wonder that governments announce policies that within a week have to be suspended. To my way of thinking, what is needed, therefore, is for countries to establish taxpayer-funded bodies that are isolated from lobbyists and that are staffed with scientists who can examine objectively any scientific papers produced in respect of vaping and vapor devices.
Such bodies would examine all such papers and exclude any, no matter what side of the debate they supported, that did not meet the required standards of methodologies and results interpretation.
These bodies could then make precis for politicians of the papers that were found to advance the vaping debate. In this way, governments would be able to make decisions on the basis of facts, they would not be continually pulled this way and that by the latest bungled interpreta-tions of the results of biased research, and they would have no excuse for inserting their own biases.
Of course, some would complain that this would be an expensive exercise, but given what we are told are the extremely negative health, economic and social con-sequences of the continuing smoking epidemic/pandemic, such expenditure would surely be repaid many times over.
Others might complain that the U.S., for instance, already has the Food and Drug Administration (FDA) to oversee research in this way, and there is some truth in this. But the FDA also makes and enforces regulations, it interacts with those carrying out research and its decisions are subject to court challenges.
Credit: Vaporesso
The bodies I envisage would act sim-ply as filters that let through to regula-tory bodies only the research results that have passed close scientific scrutiny. They would perform peer reviews as part of a process that was properly funded and fit for purpose. They would not make policy recommendations and, importantly, their decisions would not be open to challenge, though the workings of these bodies would be subject to scrutiny by a suitable organization.
Surely it would be worthwhile putting in place such bodies so that, if vaping has the potential that many people believe it has to prevent a significant number of smoking-related deaths, that potential can be fully realized. And, of course, if it were found that that potential did not exist or could not be realized, it would allow us to move on. Such a process has got to be better than doing the “Hokey Cokey” on a loop. V
The e-cigarette industry continues to shift in the Covid-19 environment.
By Maria Verven
The market for nicotine in all its forms is undergoing seismic shifts. While sales of nicotine products have been up slightly in the first half of 2020, the greatest growth was in the sales of traditional cigarettes. And when traditional cigarettes win, e-cigarettes lose.
A TROUBLING TREND
Despite the fact that vaping is considered a much safer alter-native to smoking by reputable public health organizations, the data is showing a troubling trend: Some vapers are return-ing to traditional cigarettes.
“Over the last several months, we’ve observed an increase in the number of age 50 and older smokers in the ciga-rette category,” said Altria CEO Billy Gifford in an April investor call. “We believe these smokers had previously switched to e-vapor products but recently returned to cigarettes due to negative publicity and regulatory and legislative developments in the e-vapor category.”
These same factors were in evidence during Altria’s July investor call when they credited the U.S. Food and Drug Administration (FDA) flavor ban for “helping the overall cigarette category” and predicted that the FDA’s premarket tobacco product application (PMTA) process will pause the growth in the e-cigarette market for the reasonable future.
“This is really unfortunate and a sign of serious misinfor-mation and misperceptions about the large risk difference between smoking and harm reduction nicotine products,” said Konstantinos Farsalinos, a cardiologist, clinical researcher with the Onassis Cardiac Surgery Center in Athens and an e-cigarette expert.
“Drastic measures are needed so that smokers receive reasonable, unbiased and evidence-based messages to make informed decisions,” Farsalinos said.
“This dramatic change in the market coincides with the concerted attacks on vaping over the past year,” said David Sweanor, an adjunct law professor at the University of Ottawa and the author of several e-cigarette studies. “By undermining the low-risk alternatives to cigarettes, they protected the cigarette business.”
STEADY DECLINE SINCE LAST SUMMER
According to Nielsen data reported in July, traditional ciga-rettes represented 80 percent of all U.S. tobacco sales, with $60 billion in convenience store sales over the past 52 weeks. Meanwhile, U.S. sales of e-cigarettes represented only 5 percent of the market, with sales at $3.8 billion.
In 2019, the global e-cigarette market reached a value of $13 billion and was expected to reach $53 billion by 2024, according to VnyZ Research USA. The U.S. share of the e-cigarette market was predicted to reach $16.5 billion by 2024.
These rosy projections now fly in the face of the steady decline in the growth of e-cigarette sales volume since Nielsen’s August 2019 report when it was up 60 percent year over year. Sales of traditional cigarettes have always eclipsed e-cigarette sales. But overall, e-cigarette sales have been down around 20 percent this year, according to Bonnie Herzog, managing director at Goldman Sachs and research analyst who has followed the tobacco industry for more than 20 years.
Much of the decline in e-cigarette sales may be due to the dramatic decline in Juul’s market, which was down around 33 percent after concerted attacks and bans on popular offerings. However, several other factors have clearly contributed to the impact on the overall market, including the vaping scare last year, media reports of a youth “epidemic” and the FDA’s flavor restrictions on the refill market.
In January 2020, the FDA announced it would enforce its policies banning unauthorized flavored e-cigarette products that it claims might appeal to youth—without regard to the appeal to adults who will otherwise smoke cigarettes—including fruit and mint flavors—indeed, any flavors except for tobacco and menthol.
The agency gave companies 30 days to remove fruit-flavored and dessert-flavored products from their shelves and apply for marketing authorization by Sept. 9. The FDA’s restrictions on the refill market, which repre-sents nearly 90 percent of the total category, had an immedi-ate and dramatic effect on the e-cigarette market, according to Herzog.
FDA THREATS CONTRIBUTE TO MARKET CONTRACTION
For months after the FDA’s announcement, the sales of e-cigarettes continued to trend downward by at least 13 percent in June 2020, with the possible exception of R.J. Reynolds’ Vuse. Vuse swiftly rose in popularity, taking second place only to Juul with nearly 16 percent market share. But Vuse is not without problems of its own.
Altria Group, which owns a 35 percent nonvoting stake in Juul Labs, which the Federal Trade Commission is seeking to scupper, filed a lawsuit in May against R.J. Reynolds Vapor Co. seeking “treble damages” (triple the damage amount) in its claim that Vuse violated nine of Altria’s patents involving heating technology, mouthpieces, batteries and liquid-filled pods. R.J. Reynolds had already filed its own patent infringement lawsuits against both Altria and Philip Morris International over the technology behind Marlboro HeatSticks, a competi-tor of Reynolds’ Eclipse line, that heats rather than burns the tobacco in cigarettes.
While Juul continues to reign supreme in the convenience store market, representing roughly 60 percent of sales, its market share has declined about 10 percent over the past year. Juul has taken much of the heat around the teen vaping “epidemic,” causing the company to stop advertising its prod-ucts in the U.S. and cease production of most of its flavors. In two rounds of layoffs, Juul slashed about 40 percent of its workforce, a direct result of its declining sales.
However, according to market research firm IRI, Juul remains the market leader in convenience stores and simi-lar outlets. Valued at $38 billion at the time of the Altria investment, Juul’s first-quarter sales reportedly reached $394 million. If the trend continues, Juul sales could fall somewhere between the $1.3 billion in sales reported in 2018 but significantly shy of the $2 billion in sales reported last year.
Credit: Haiberliu / Pixabay
Juul’s biggest hurdle may be this fall when the FDA starts reviewing Juul’s PMTA, which the company submitted in late July along with scientific studies showing its products are healthier alternatives for smokers as well as plans to prevent minors from using its products.
DISPOSABLE MARKET GAINS TRACTION
When one nicotine category slows, another tends to gain traction. This rule definitely holds true in the e-cigarette market where the contraction in the refill market allowed the much smaller disposable market to thrive.
Disposable devices openly exploited the loophole in the FDA’s regulations that banned fruit and dessert flavors in refillable cartridge-based e-cigarettes. For example, Puff Bar, one of the market leaders in the disposable category, boasts more than 20 flavors, including pina colada, pink lemonade and watermelon cartridges that are compatible with Juul devices.
Puff Bar, Stig and other small but fast-growing players like Fogg were the biggest winners, said Herzog, due to the fact that the disposable e-cigarette segment fell outside of the FDA’s flavor restrictions.
Based on convenience store data and retailer data but exclusive of online and vape store sales, Puff Bar is reportedly selling over 300,000 sticks a week with weekly sales of over $3 million.
However, pressure is mounting among House lawmakers to ban the fast-growing e-cigarettes that quickly replaced Juul as the most popular vapes among young people. And in July, the FDA sent warning letters to Cool Clouds Distribution (doing business as Puff Bar), HQD Tech USA, Myle Vape, Eleaf USA, Vape Deal, Majestic Vapor, E Cigarette Empire, Ohm City Vapes, Breazy and Hina Singh Enterprises (doing business as Just Eliquids Distro demanding they remove flavored disposable e-cigarettes that appeal to youth from the market because they lack the required premarket authorization.
Credit: Sarah J- Pixabay
The FDA also cited Puff Bar and HQD Tech USA for stating that their products were modified-risk tobacco products without having received FDA permission to make such claims. The FDA also recently blocked imports from EonSmoke and Relx, two Chinese manufacturers of flavored dispos-able e-cigarettes. Over the past several months, the FDA has banned at least 74 entries of disposable electronic nicotine-delivery system (ENDS) products from being sold in the U.S. that were in violation of the Federal Food, Drug and Cosmetic Act.
“The FDA continues to prioritize enforcement against e-cigarette products, specifically those most appealing and accessible to youth,” said FDA Commissioner Stephen M. Hahn. “We want to make clear to all tobacco product manu-facturers and retailers that, even during the ongoing pan-demic, the FDA is keeping a close watch on the marketplace and will hold companies accountable.”
NEGOTIATING THE ROADBLOCKS
Clearly, the vapor market is being held hostage by the FDA as well as local regulatory bodies. Only those that can successfully navigate the regulatory roadblocks will be able to survive. A key deadline is approaching on Sept. 9, the date when manufacturers must submit a PMTA for FDA approval. After that date, the clock starts ticking; manufacturers will have up to a year from that date to secure FDA compliance or they must sell off their vapor products. The biggest hurdle for companies is the requirement that they must prove that their products demonstrate a net ben-efit to public health.
Only those with deep pockets can possibly jump through the FDA’s hoops to demonstrate that their products provide a healthier alternative to smokers who make the switch. Despite the costs, at least 30 applications for FDA approval of vapor products are pending—with no guarantee that these applications will be approved.
It’s a safe bet that the e-cigarette brands associated with the tobacco giants, including Altria with its minority stake in Juul, R.J. Reynolds Vapor Company with its Vuse, and Imperial Brands, which owns Blu, will be among the first in line to seek FDA approval. Sweanor sees the situation in stark terms.
“If we want to see low-risk alternatives destroy the exceedingly lucrative but devastatingly lethal cigarette business, policies that hand the market to Big Tobacco [are] like giving control of the alternative energy market to Exxon,” he said. V
The original “Vaping Vamp,” Maria Verven owns Verve Communications, a PR and marketing firm specializing in the vapor industry.
It seems the vapor industry has a future after all. Several large tobacco companies, such as Vuse, Blu, Logic and Juul, have already filed premarket tobacco product applications (PMTAs) for their vapor products with the U.S. Food and Drug Administration (FDA).
While several smaller companies have said they would file PMTAs, E-Alternative Solutions (EAS) is the only vapor manufacturer to announce that it has received both acceptance and filing letters from the FDA for its submitted vapor products.
EAS’ Leap and Leap Go brands will now move on to the substantive review stage of the PMTA process. During this phase, the FDA will decide whether the EAS products are “appropriate for the protection of public health.”
“This milestone represents an important step forward for EAS as we support our mission of producing high-quality vapor products that serve as an alternative to combustible cigarettes with our Leap and Leap Go vapor products,” said Jacopo D’Alessandris, president and CEO of EAS. “FDA acceptance and filing letters are a testament to the strength and thoroughness of our applications, which we believe will meet [the] FDA’s requirements.”
Leap Vapor is a closed pod system designed for adult smokers. Leap Go is a line of disposable e-cigarettes. The Leap and Leap Go products can now stay on the market past the FDA’s PMTA deadline of Sept. 9. The products will be allowed to remain on the market for one year or until the FDA decides whether the products are a benefit to public health compared to combustible cigarettes.
When asked why EAS publicly announced its accep-tance and filing letters unlike some other companies, Chris Howard, vice president, general counsel and chief compliance officer at EAS, said that many vapor wholesalers and retailers remain uninformed about the potential status for many of the vapor products they are selling. EAS wants to be “open and honest” about the process.
“We’ve taken a different approach by providing informa-tion regarding the PMTA process and what it’s like to work with [the] FDA. This gives retailers an idea of what to look for, especially after Sept. 9,” says Howard. “A lot of retailers want to do the right thing. So, after Sept. 9, they don’t want to be doing something illegal. They definitely don’t want to be confused and unsure. We’re providing retailers with a tool to be certain that they are selling legally compliant products after the deadline.”
Howard said that, unfortunately, he does not see a scenario where the FDA will allow a sell-through period for products already on store shelves. The FDA is most likely going to demand that all products that have not submitted a PMTA be removed. However, the FDA may face challenges in policing the more than 152,000 convenience stores operating in the United States, according to the 2020 NACS/Nielsen Convenience Industry Store Count.
“We know [the FDA is] not staffed adequately to do that, and that’s unreasonable. So, in large part, [the] FDA relies on the people who want to be the good actors, to adhere to the regulations,” said Howard. “I think that most will—75 percent if I had to guess. A lot of them will immediately try to be compliant.”
Many retailers wonder if they will be responsible for the products that can no longer be sold or if distributors will buy back the products. While many distributors will not buy product back, Howard says that EAS has always offered its products with a 100 percent guarantee for the retailers.
“At EAS, we make it clear that our products are 100 percent guaranteed, and we do take product back. We’ve taken back all of the flavored pods that we had on the market and provided people with full refunds or credit in the form of other product,” he explains. “I personally believe that is the right thing to do, especially in an industry where the channel was burned multiple times by various vapor companies, and retailers got stuck with inventory that they couldn’t move. I think that some companies are aligned with my view on that, and they will take it back—but I wouldn’t say it’s the majority.”
RAPID RESPONSE
The FDA does not necessarily have a reputation for moving quickly. However, EAS received its acceptance and filing let-ters just over a week after submitting the application. Howard says that there isn’t necessarily a rational reason for why it was so fast. However, the FDA is committed to its timelines and is trying to move in an expedited manner.
“When you have something that’s organized and it comes in and makes it easy for them, then yes, you’re likely going to get the benefit of a quicker review. Now, I don’t know if that translates into a quicker substance review, or scientific review,” Howard said. “I believe one of [the FDA’s] goals is to clean up this space and get their arms around the problem. One of the ways to do that is to make sure you get those acceptance and filing letters out quickly. And you reject the ones just as quickly that aren’t adequate to meet the standard.”
Howard said that the EAS PMTAs for the Leap and Leap Go products together comprised 109,000 pages. EAS essentially filed two “buckets” of PMTA data with one being the Leap Go (which contained three SKUs) and the other the Leap (which contained 26 SKUs) for a total of 29 SKUs. The data contained more than 25 individual studies. The applications also contained several digital links to data.
“The Leap application had about 45,000 links, and the Leap Go had about 46,000. We covered every discipline. We did behavioral testing. We did an assessment of popula-tion risk. We did clinical studies. You might have heard of PK [pharmacokinetic] studies to see how the body reacts to the products. We did those to show that the products have a lower abuse liability potential relative to cigarettes,” says Howard. “We did all of the required HPHC work to con-firm that our exposures are a lot lower than the combustible cigarette. We did toxicity testing. We did a comprehensive analysis of every ingredient that’s in the products. We did chemistry testing. We evaluated the products for stability and shelf life, and that’s still ongoing for the next two years. We did an environmental assessment.”
Flavors in vapor products have been a controversial subject recently. When asked if EAS had submitted any flavors other than tobacco flavors for its PMTAs, Howard said the company approached the subject carefully and with much consideration of how flavors have been shown to help smok-ers make the decision to seek an alternative to cigarettes. He also acknowledged the open question as to whether flavors may contribute to youth experimentation but noted that companies like EAS, which prioritize compliance and limit-ing access and exposure to adults, are positioned to market flavored products responsibly moving forward.
“For the Leap pods, we currently only sell tobacco and menthol, which were submitted. We also submitted all the flavors we had to remove from the market back in February. There were a handful,” said Howard. “For the Leap Go, which are disposables and flavors are permitted, we submit-ted a mango flavor as well as tobacco and mint. You have to make decisions when you’re spending millions of dollars trying to create some efficiencies, and this was one of the ways we tried to be prudent. It’s not to say that we wouldn’t file more Leap Go flavors later, but if you look at our rela-tive business model, the Leap is a more dominant product, so we had a heavy focus on its PMTA submission.”
Jacopo D’Alessandris
Howard said he could not share the total cost for the PMTA process; however, it was in the tens of millions of dollars for all 29 SKUs combined.
WAITING FOR ANSWERS
Howard says the letters are straightforward. They state that EAS’ application has been accepted and filed, respectively, and the applications are ready to move on to the next stage. This is the stage where the FDA may want a tour of the com-pany’s manufacturing facilities. “I could see this happening,” explains Howard.
The process is now completely in the hands of the FDA, according to Howard. There could also be several different types of situations that present themselves before the FDA issues either a marketing authorization or denies the applica-tion. Howard said the acceptance and filing letters do provide some clarification, but it is still a “wait and see” process.
“I think the next step should be that, if they’re going to do it, they’re going to ask for samples. I believe that is what really starts the 12-month timeline. We haven’t been asked for samples yet. We’ve immediately engaged to make sure we have the samples ready, even the flavored pods, which are not currently on the market,” said Howard. “Now, they’re going to have their hands full come Sept. 9; I’m sure they’re going to get a lot of applications, and that might slow things down.”
Chris Howard
The FDA may also need additional information, accord-ing to Howard. The agency may request additional details regarding studies EAS has already provided, for example. It’s also possible that EAS may have to complete additional stud-ies to be able to answer a specific question.
“What I like to think is going to happen in that stage is a give-and-take and sort of a collaboration about what’s reason-able because, at the end of the day, these products are clearly appropriate for the protection of public health as compared to cigarettes,” Howard said. “Then you have this engagement, and that’s consistent with what [the] FDA has said, and then you’re on your way. Additionally, if you do get a request for additional information, that technically stops the clock, so that could extend your 12-month window. After the FDA receives any additional information it may require, the next phase is receiving the marketing authorization.”
If EAS receives a PMTA, the next step for the company to consider is whether it wants to file for a modified-risk tobacco product (MRTP) application. The only products to have ever received an MRTP are snus products and Philip Morris’ IQOS heat-not-burn device. Howard says that EAS may consider going through the process, but he questions the value of an MRTP.
“We now know it isn’t just some black box that nobody gets. I mean, it’s clearly possible. But we have to wait and see how this vapor category shakes out and whether or not an MRTP claim—whether it’s reduced harm or exposure—does that really add value in the eyes of the consumer?” Howard asks. “I don’t know the answer; so it’s a wait-and-see kind of decision.”
To grant a PMTA, the FDA will have to determine a product is “appropriate for the protection of public health.” It can be interpreted that a tobacco product receiving a PMTA is less risky than a combustible cigarette. However, a company can make that claim only after receiving an MRTP. Even if granted, MRTP claims will still be limited. IQOS, for example, received an MRTP but can only make reduced expo-sure claims. The company cannot make a reduced-risk claim.
“The MRTP is also super expensive. That’s many more millions of dollars on top of what we’ve already spent for the PMTA. We’re looking into the opportunity, but we haven’t decided,” says Howard. As far as advice for companies still preparing their PMTAs, Howard says to remain diligent.
The Covid-19 pandemic has only made collecting the data more complicated. This may lead many companies to be nervous about submitting an incomplete application. Howard says he believes that companies must be open and honest with the regulatory agency.
“If you’re in a position where you can’t do it all, you focus on the statutory requirements and making sure that those are robust and complete. And then areas where you do have gaps, you very clearly explain why you have a gap and what you’re going to do to fix it and when you’re going to be done. Don’t try to do a shortcut version,” says Howard. “I think [the] FDA will be understanding and receptive and ultimately work with you to make sure that all the data is complete. I mean, they don’t want to kick you out for not having finished your human factors testing. However, if you submit without an environmental assessment, they’re going to kick it out.”
After the Sept. 9 deadline, Howard says he expects to see the industry become more streamlined. He says that there’s a strong possibility that numerous companies will go out of business. However, there will still be a sufficient amount of options at retail.
“I think that there’ll probably be multiple variations of e-liquid, so it won’t be as many selections as there are today, but there will be open system options. I think because the products contribute so much to harm reduction that it’s not in [the] FDA’s best interest, or anyone’s best interest, for the cat-egory to be gone,” he says. “So anytime I hear someone say, ‘Oh, the vapor category is going to be gone,’ I completely disagree.” V
Lawmakers have called on the U.S. Food and Drug Administration (FDA) to take e-cigarettes temporarily off the market during the pandemic, citing a new study suggesting that vapers are significantly more likely to contract Covid-19.
“If we reduce the number of vapers in America, we will reduce the unnecessary stress we are putting on our testing system,” Representative Raja Krishnamoorthi wrote in a letter sent to the FDA by the House Committee on Oversight and Reform’s Subcommittee on Economic and Consumer Policy. “People should not have to wait weeks for Covid-19 test results—removing the risk posed by vaping will help.”
Researchers at the Stanford University School of Medicine found that among young people who were tested for the coronavirus, those who vaped were five to seven times more likely to be infected than those who did not use e-cigarettes.
The study, which was published online Aug. 11 in the Journal of Adolescent Health, is the first to examine connections between youth vaping and Covid-19 using U.S. population-based data collected during the pandemic.
“Young people may believe their age protects them from contracting the virus or that they will not experience symptoms of Covid-19, but the data show this isn’t true among those who vape,” said the study’s lead author, Shivani Mathur Gaiha.
“This study tells us pretty clearly that youth who are using vapes or are dual-using are at elevated risk, and it’s not just a small increase in risk; it’s a big one,” Gaiha said.
Remarkably, the researchers did not find a connection between Covid-19 diagnosis and smoking conventional cigarettes alone, perhaps because the prevalent pattern among youth is to use both vaping devices and traditional cigarettes. Other research has shown that nearly all nicotine-using youth vape, and some also smoke cigarettes, but very few use cigarettes only.
In addition to warning teenagers and young adults about the dangers of vaping, the researchers said they hoped their findings will prompt the FDA to further tighten regulations governing how vaping products are sold to young people.
“Now is the time,” said senior author Halpern-Felsher. “We need the FDA to hurry up and regulate these products. And we need to tell everyone: If you are a vaper, you are putting yourself at risk for Covid-19 and other lung disease.”
Vaping advocates expressed concern about the study.
“While we welcome any research which can assist people in staying safe during the Covid-19 pandemic, the UKVIA is disappointed by the Stanford-led study, which appears to dismiss the vital harm-reduction role of vaping for smokers, and draws disproportionate conclusions,” said John Dunne, director at the U.K. Vaping Industry Association (UKVIA).
Insisting there is no scientific evidence linking smoking and vaping with Covid-19, Dunne said the UKVIA was looking forward to seeing the peer review of the Stanford study.
“It is also somewhat reckless in stating that vapers are putting themselves ‘at risk of Covid-19’ by vaping,” he said. “Vaping products are designed only for smokers and ex-smokers to help them quit conventional cigarettes, which is the most positive action someone can take to improve their health.”
Lawmakers have called on the U.S. Food and Drug Administration (FDA) to take e-cigarettes temporarily off the market during the pandemic, citing a new study suggesting that vapers are significantly more likely to contract Covid-19.
Raja Krishnamoorthi
“If we reduce the number of vapers in America, we will reduce the unnecessary stress we are putting on our testing system,” Representative Raja Krishnamoorthi wrote in a letter sent to the FDA by the House Committee on Oversight and Reform’s Subcommittee on Economic and Consumer Policy. “People should not have to wait weeks for Covid-19 test results—removing the risk posed by vaping will help.”
Researchers at the Stanford University School of Medicine found that among young people who were tested for the coronavirus, those who vaped were five times to seven times more likely to be infected than those who did not use e-cigarettes.
The study, which was published online Aug. 11 in the Journal of Adolescent Health, is the first to examine connections between youth vaping and Covid-19 using U.S. population-based data collected during the pandemic.
“Young people may believe their age protects them from contracting the virus or that they will not experience symptoms of Covid-19, but the data show this isn’t true among those who vape,” said the study’s lead author, Shivani Mathur Gaiha.
“This study tells us pretty clearly that youth who are using vapes or are dual-using are at elevated risk, and it’s not just a small increase in risk; it’s a big one,” Gaiha said.
Remarkably, the researchers did not find a connection between Covid-19 diagnosis and smoking conventional cigarettes alone, perhaps because the prevalent pattern among youth is to use both vapor devices and traditional cigarettes. Other research has shown that nearly all nicotine-using youth vape, and some also smoke cigarettes, but very few use cigarettes only.
In addition to warning teenagers and young adults about the dangers of vaping, the researchers said they hoped their findings will prompt the FDA to further tighten regulations governing how vapor products are sold to young people.
“Now is the time,” said senior author Halpern-Felsher. “We need the FDA to hurry up and regulate these products. And we need to tell everyone: If you are a vaper, you are putting yourself at risk for Covid-19 and other lung disease.”
John Dunne
Vaping advocates expressed concern about the study.
“While we welcome any research which can assist people in staying safe during the Covid-19 pandemic, the UKVIA [U.K. Vaping Industry Association] is disappointed by the Stanford-led study, which appears to dismiss the vital harm reduction role of vaping for smokers and draws disproportionate conclusions,” said John Dunne, director at the UKVIA.
Insisting there is no scientific evidence linking smoking and vaping with Covid-19, Dunne said the UKVIA was looking forward to seeing the peer review of the Stanford study.
“It is also somewhat reckless in stating that vapers are putting themselves ‘at risk of Covid-19’ by vaping,” he said. “Vaping products are designed only for smokers and ex-smokers to help them quit conventional cigarettes, which is the most positive action someone can take to improve their health.”
Avail Vapor announced today that it has received its first premarket tobacco product application (PMTA) acceptance letter from the U.S. Food and Drug Administration (FDA) for its e-liquid nicotine products. While the company would not say what flavors or how many flavors, it was confirmed that the mixed-berry flavored Mardi Gras was a submitted flavor.
Blackbriar Regulatory Services led the regulatory process for Avail’s submission. The application now moves to the substantive scientific review where the FDA will determine if Avail has scientifically proven that its nicotine vaping products are appropriate for the protection of public health.
This is one of numerous applications that Avail plans to file prior to the September 9, 2020 deadline which will provide a wide-ranging flavor portfolio to meet the needs of adults seeking alternative choices to combustible tobacco products, according to James Xu, chairman of Avail.
James Xu
“We started mapping out our regulatory framework and PMTAs in 2015, before nicotine vaping products became subject to the FDA’s tobacco authority,” said Xu. “We couldn’t be more pleased that the years of hard work, investment and dedication have gotten us to this point. Our end goal is to seek an FDA marketing order which would allow us to continue to keep our products on the market for those adult smokers looking for alternatives to traditional tobacco products.”
In order for nicotine vaping products to remain on the market after the FDA’s September 9, 2020 PMTA submission deadline, companies must submit a viable PMTA with the intent of seeking an FDA marketing order. A PMTA must provide scientific data that demonstrates a product is appropriate for the protection of public health.
As manufacturers of e-cigarettes and certain other tobacco products face a Sept. 9, 2020, deadline to apply to the U.S. Food and Drug Administration (FDA) to keep their products on the market, six public health and medical organizations are urging the FDA not to authorize the sale of any flavored products.
“The FDA should not authorize the sale of any flavored tobacco product, including e-cigarettes or e-liquids, because of the clear evidence that flavored products appeal to youth and have driven the current epidemic of e-cigarette use among youth and young adults, and the lack of evidence that flavored products help smokers quit,” the groups wrote in a joint statement.
“Research shows that 97 percent of youth e-cigarette users report using a flavored product in the past month and 70 percent say they use e-cigarettes ‘because they come in flavors I like.’ In contrast, there is no credible evidence that flavored e-cigarettes help adult smokers quit. In a report issued earlier this year, the U.S. Surgeon General concluded, ‘there is presently inadequate evidence to conclude that e-cigarettes, in general, increase smoking cessation’,” the organizations wrote.
The groups also called on the FDA to take prompt enforcement action to remove from the market products for which applications are required but are not submitted by the Sept. 9 deadline.
The organizations that issued the statement are the American Academy of Pediatrics, the American Cancer Society Cancer Action Network, the American Heart Association, the American Lung Association, the Campaign for Tobacco-Free Kids and the Truth Initiative.
