What You Need to Know About Federal Regulation

Retailers and manufacturers alike should be watching these five hot-button regulatory issues.

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Federal Regulation Update

Below is a list of the top five federal level issues that concern both tobacco manufacturers and retailers.

scottgottlieb11. Dr. Scott Gottlieb Appointed to Head the FDA:
Perhaps nothing is more important to manufacturers and retailers than the recent appointment of Dr. Scott Gottlieb to head the U.S. Food and Drug Administration (FDA). Everyone is reading the tea leaves attempting to determine how Gottlieb will impact the current regulatory scheme and, in particular, the deeming regulations. [read more here]

Cigar Rights of America, IPCPR, Cigar Association of America2. Pending Litigation and Continuation of Compliance Dates:
On July 15, 2016, the Cigar Association of America (CAA), Cigar Rights of America (CRA) and the International Premium Cigar and Pipe Retailers Association (IPCPR) jointly filed suit against the FDA challenging the core of the deeming regulations, including requiring any covered tobacco product not on the market as of Feb. 15, 2007, to undergo the overly burdensome and costly premarket review process in order to remain on the market.
On Feb. 13, 2017, the three groups filed a motion for summary judgment seeking a determination of various issues presented in the case. In response, the Department of Justice, with a deadline of May 1, 2017, to file an opposition to the group’s motion, stated that they required more time to respond. As a result, on May 1, 2017, through an order jointly filed by the three groups and the Department of Justice granting a 90-day continuance, the FDA announced that it was extending and deferring enforcement of all upcoming compliance deadlines relating to the deeming regulations by three months to permit new leadership to fully assess and consider the issues presented in the lawsuit. The FDA has agreed to roll back the enforcement of all compliance deadlines occurring on May 10, 2017, or later by three months. [read more here]

3. Cole-Bishop Amendment Update:
On Feb. 16, 2017, Reps. Tom Cole (R-OK) and Sanford Bishop (D-GA) introduced into Congress H.R. 1136, more commonly known as the FDA Deeming Authority Clarification Act of 2017. The act provides for regulation of vapor product batteries and advertisements of vapor products, but it also amends the deeming regulations to move the grandfather date for all covered tobacco products from Feb. 15, 2007, to the effective date of the deeming regulations, Aug. 10, 2016, which would prevent certain vapor and tobacco products from having to go through the premarket review process. The act was left out of the agricultural appropriations bill passed by Congress in May, but there will still be an opportunity that the bill could be revived when Congressional Federal Budget negotiations resume in October.

4. A Lack of Clear Guidance on the Substantial Equivalence Process:
Under the Family Smoking Prevention and Tobacco Control Act, tobacco products (cigarettes, roll your own [RYO] tobacco and smokeless tobacco) that were not grandfathered were required to go through a premarket review process, including the filing of a substantial equivalence report showing that any differences between a covered tobacco product and a grandfathered predicate product did not present “a different question of public health.”

The deeming regulations require all covered tobacco products that are not grandfathered to go through the same premarket review process. Though the FDA released guidance in 2011 on filing a substantial equivalence report relating to cigarettes, RYO tobacco and smokeless tobacco, they have not provided any new or updated information on what is required for substantial equivalence reports for newly covered tobacco products, including cigars, pipe tobacco and e-cigarettes/vapor products. With substantial equivalence reports for each product likely to require numerous hours of work and cost hundreds of thousands of dollars (at least) to prepare, the FDA’s delay in issuing updated guidance of the substantial equivalence process for these newly deemed tobacco products puts manufacturers at a severe handicap in trying to navigate the premarket review process.

Age Verification5. FDA Field Inspections of Retailers Targeting Minimum Age Requirement to Sell Deemed Tobacco Products:
Ensuring that tobacco products are sold exclusively to those of legal age is one issue the entire industry agrees on. In recent industry presentations, the FDA has informed the industry that it has conducted thousands of field inspections and the target appears to be retailers selling to minors under the legal age for purchasing tobacco.

As with almost every state and local law, the deeming regulations also prohibit retailers from selling deemed tobacco products in any medium (including mail order as well as the internet) to any individuals under 18 years of age. In addition, the FDA mandates that retailers physically check the photo identification of all customers under the age of 27 who attempt to purchase a cigar. All retailers should remember to request the proper age verifying identification prior to selling tobacco products.

Contributed By Noah Steinsapir, General Counsel, Kretek International

This story first appeared in the July/August 2017 issue of Tobacco Business magazine. Members of the tobacco industry are eligible for a complimentary subscription to our magazine. Click here for details.

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