TOB_Magazine

[ T O B A C C O B U S I N E S S . C O M ] TOBACCO BUSINESS [ 89 ] From the manufacturer’s perspective, the unwillingness of the FDA to communicate and articulate reasonable substan- tial equivalence guidelines has to be the biggest concern. The FDA’s interpretation of the term “substantial equivalence” has essentially prevented many tobacco manufacturers from intro- ducing different and better products to satisfy their customers’ needs and wants. Since the 2016 election, many have hoped that the FDA would be examining this process to develop a comprehensible and reasonable application of the substantial equivalence rule. As it presently stands, however, a product that is much improved but new in 2018 cannot be sold, while a product that was sold in 2007 is free to remain on the market. This is contrary to innovation. Recently the FDA announced its so-called advance notices of proposed rulemaking (ANPRMs) on three subject matters: tobacco product standards for nicotine levels in certain prod- ucts, premium cigars and kid-appealing flavors in different tobacco products. These notices from the FDA are requests for information from the public and interested parties, pre- sumably in advance of issuing formal rules on these subjects by the FDA. In other words, the FDA intends to examine each of these subjects more closely, with the intent of writing more regulations. In the case of the ANPRM on premium cigars, the presumption by some in the industry is that the FDA intends to possibly try to examine a way to reduce regu- lations on these products. Reportedly, the FDA is also expediting its review of so-called “provisional substantial equivalence” filings on cigarettes. These are cigarette products for which a substantial equivalence appli- cation was submitted by March 22, 2011, and which were on the market as of March 22, 2011, (but after Feb. 15, 2007) and by law were allowed to stay on the market until they were exam- ined by the FDA. Despite the FDA saying that it would allo- cate resources to other areas, it has apparently moved forward with the examination of a number of these files to determine whether they meet the substantial equivalence test. The opera- tive concept here is that the FDA’s interpretation of substantial equivalence appears to be “virtually identical,” and thus nearly all substantial equivalence applications for combustible products are sure to fail. Not surprisingly, the FDA has recently issued a number of “not substantially equivalent” findings on a number of these provisional filings. Some of the major tobacco companies have filed lawsuits against the FDA. The overarching claim in these lawsuits is that the FDA action is “arbitrary and capricious.” It is hoped that these lawsuits will force the FDA to create some workable standards for substantial equivalence so that it means something other than “virtually identical.” From the retailer’s perspective, the FDA’s policy of stifling new product introductions would seem to endanger the very existence of some smaller manufacturers, thereby increasing retailers’ dependence on, and vulnerability to, a few large man- ufacturers. The FDA’s current interpretation of its authority and mission under the Tobacco Control Act, and its resulting harm to small businesses, is perhaps one of the most troubling aspects of that law. From the consumer’s viewpoint, the FDA is denying the consumer valuable information. For example, despite the difference in relative risks between a combustible product, on the one hand, and electronic nicotine-delivery system (ENDS) products, on the other, the consumer is denied that knowledge. Moreover, the regulatory regime is threatening to prevent adult consumers from gaining access to the products they have grown to know and love despite there being no science to establish youth interest in those products. For example, in the FDA’s zeal to address flavors in ENDS products, they could possibly ban something as adult-oriented as cherry-flavored pipe tobacco—simply because they either do not understand or because they don’t know how to regulate different products differently, or because they might consider it to be a meaningless distinction. Manufacturers and retailers need to fight like hell. Support elected officials who support your business and the tobacco industry. Send themmoney, work a poll, tell your friends what is going on, and keep up with the latest legislative activity happening in your state by visiting the National Association of Tobacco Outlets website, www.natocentral.org . As a litmus test for any person seeking your support to elected office, you need to ask them how they feel about individual responsibility and freedom of choice. You must also read and watch the news, mass media and entertainment with a critical eye and understanding of the messages being conveyed in the guise of even-handed news. History may later reveal that the tobacco industry is the “canary in the coal mine,” meaning that the regulatory zest directed at our industry is just a harbinger of bad outcomes elsewhere in our society as a result of generally misguided policies. TB The FDA’s current interpretation of its authority and mission under the Tobacco Control Act, and its resulting harm to small businesses, is perhaps one of the most troubling aspects of that law. Legal Column Continued Henry C. Roemer III is a business law attorney and partner at Finger, Roemer, Brown & Mariani LLP. He has extensive legal experience in tobacco and business transac- tional matters, and he represents tobacco companies in all aspects of compliance with federal, state and local matters.