24
TOBACCO OUTLET BUSINESS
MAY/JUNE 2013
CTP director, he “will face impatience
from all directions” as the agency is
expected to make a “long-awaited
decision” this year on whether to ban
menthol cigarettes, is preparing to
issue in April a proposed rule to extend
oversight to currently unregulated
tobacco products, and is facing
pressure from public health advocates
and industry officials over the backlog
of over 3,500 substantial equivalence
(SE) and new tobacco product (NTP)
applications from tobacco companies.
…Noting
that
Mitch
Zeller’s
appointment as the new director of the
FDA Center for Tobacco Products
may
not be as negative for the industry as
some might fear, Wells Fargo analysts
said that while the leadership change
could temporarily slow down near-
term progress on some of the major
outstanding issues, they think that
Zeller’s appointment will provide even
greater visibility to the CTP and serve
as a catalyst for action, which, the
analysts noted, will be beneficial to the
industry as the uncertainty stemming
from relative inaction on issues such as
substantial equivalence approvals and
menthol has been an overhang. Prof.
Michael Siegel of Boston University’s
School of Public Health said he believes
Zeller will likely take “a much more hard-
line approach” in his dealings with the
tobacco industry than his predecessor,
and expressed concerns that Zeller’s
work in recent years with consultants
Pinney Associates, where he advised
pharmaceutical companies such as
GlaxoSmithKline, represented a conflict
of interest as the FDA considers how to
regulate e-cigarettes, which, Prof. Siegel
noted, are viewed by many researchers
as a far less harmful product than
traditional cigarettes and a potential rival
to the FDA-approved pharmaceutical
smoking cessation aids.
…In their biweekly updateonMarch4,
Stifel analysts said that the appointment
of Mr. Zeller as the new CTP director
“does introduce some
uncertainty for
the tobacco industry
but particularly
for Lorillard” given his history, which
could be viewed as “adverse to tobacco
and menthol products in particular,”
whereas his predecessor Dr. Lawrence
Deyton “professed a science-based
approach to regulation,” adding that
the change in CTP leadership is also
expected to delay the agency’s release
of its menthol report and approvals for
SE applications.
…Writing in
The Atlantic
, Jacob
Grier says the
FDA is interfering with
market competition
, rather than
promoting public health by “essentially
ignoring” thousands of SE applications
by not having approved any, although
about 115 employees are reportedly
reviewing them.
…The FDA updated its
Product
Requirements
, Marketing & Labeling
page on its site with an interactive
tool on “[w]hich path is right for your
new tobacco product” along with
links to “Tobacco Product Review
and Evaluation Requirements” and
“Labeling Requirements.”
…UBS analysts said that while they
have been expecting an
FDA update
on menthol
during 1Q13, “we fully
acknowledge this timeline could be
pushed out” due to the news, adding
that although they see more upside
to Lorillard (+17 percent) than Altria
Group (+8 percent) over the next 12
months, “we also see more downside
to LO in the event the FDA spooks
investors with its initial viewpoint on
menthol.”
…The FDA Center for Tobacco
Products said February 12 that it posted
a new page to the Manufacturer section
of its web site regarding the agency’s
regulatory authority over certain
tobacco products
—namely “cigarettes,
cigarette tobacco, smokeless tobacco,
and roll-your-own tobacco” and its
intent to propose a regulation to extend
its authority to all products that meet
the statutory definition of “tobacco
product,” along with a new e-mail
address,
.
gov, for questions related to regulation
applicable to a particular product.
…Speaking at the summit meeting
of the SmokeFree Alternative Trade
Association (SFATA) in Las Vegas
on January 28, 2013 with a crowd
consisting largely of e-cigarette
purveyors, former FDA Chief Counsel
Ralph Tyler said it is doubtful that FDA
will approve modified risk tobacco
products (MRTPs) any time soon.
…In April, President Barack Obama
announced his annual budget, which
among other things proposed spending
and tax credit initiatives, including aid
for states to make free prekindergarten
education available. The program is to
be paid for by raising
Federal excise
taxes on cigarettes
and other tobacco
products, though the amount of
increase has yet to be revealed.
…Stifel analysts said given that the
pre-K education program could cost
up to $10 billion annually according
to some estimates, a
70-cent per pack
increase
would be required going
by the calculation that every 10-cent
increase produces $1.5 billion annually
for the government, adding that while
most of the companies they follow
planned for tax hikes of 5-10 cents per
pack in 2013 from state hikes alone,
an additional increase in the Federal
tax would cause a further reduction in
industry volumes.
…
The Economist
argues that despite
electronic cigarettes
being a life-saving
alternative for smokers, many public
health advocates are “determined to
stub them out” over concerns that
the devices may act as “gateways”
to smoking and their flavorings may
appeal to children, but these objections
appear to be driven by “puritanism, not
by reason,” as health activists “refuse
to endorse a product that reproduces
the pleasure of smoking without the
harm” when a better approach “is not to
demoralize smoking, but to normalize
e-smoking.”
TOB
TMA REPORT
On Other tObaccO issues…
