Will big tobacco companies win the vapor war?
With new regulations already coming into effect in the US, many small vaping companies are wondering if the FDA’s deeming rule will swallow up the vaping industry – paving the way for big tobacco to swoop in and take it over.
The two biggest names in the tobacco industry in the US are Altria Group and R.J. Reynolds – and according to many sources, it looks as though they will be two of the only companies capable of dealing with the new regulations, which basically treat electronic cigarettes like any other tobacco product. The ‘Deeming rule’, as it is being called, would require electronic cigarettes that weren’t on the market during the predicate date of February 15th, 2007, to go through an extensive application process to get the products approved.
Information! This process, known as the premarket tobacco product application process, costs between $3 and $10 million, and takes an estimated 1,713 hours to complete. The problem is that most vaping companies in the US are not that large. They tend to be smaller startups that haven’t had a ton of time to grow.
So these new regulations seriously favor big tobacco, who has had literally decades of time to amass wealth and buy off their competition. The big tobacco companies are certainly capable of handling the new regulations – and stand to gain a substantial amount of the vaping industry market share should the deeming rules stick.
What is being done on behalf of the smaller vaping companies?
Thankfully, not all is lost yet. While many people (including an analyst at Wells Fargo named Bonnie Herzog) are saying that these new rules will stifle innovation and deliver a big win for big tobacco, there are still some chances for success on the side of the vaping industry as a whole.
The biggest chance, perhaps, comes from new legal action that’s being taken up to fight the new regulations.
To date, there have been as many as 5 lawsuits filed to fight the new rules.
Information! The Right to be Smoke Free Coalition and nine other groups filed an official complaint back in June against not only the FDA, but also against the Commissioner of Food and Drugs Robert Califf, and Secretary of Health and Human Services Sylvia Burwell.
A company named Nicopure Labs, LLC, also filed a lawsuit – and these two cases were ordered to be consolidated by a district court judge in Washington D.C. The main arguments behind these lawsuits are as follows.
First of all, the groups claim that their first-amendment rights are being violated because the new guidelines won’t allow them to give out free samples. Secondly (and perhaps most importantly), they are arguing that it is ‘unlawful and unreasonable’ to include electronic nicotine delivery systems as tobacco products under the Tobacco Control Act.
If the lawsuits are successful, it could lead to a change in the regulation language. There is also a possibility that the rules will need to go ‘back to the drawing board’ and get thrown out completely.
But how will it all end up? That’s the biggest question – and to be honest, there are a lot of companies (and vapers) watching these legal proceedings anxiously. On one hand, we could be seeing a huge victory for big tobacco. But on the other, we could see the vaping companies win in their fight against the deeming rule, and could see vaping preserved as it is (for the most part, anyway) for the time-being.
What’s going to happen?
To be completely honest, our opinion is that the E-cig companies and organizations involved in the lawsuits certainly have a case. It seems like the FDA will be hard pressed to get away with everything in the rules, especially since they would stifle innovation so drastically.
We are betting on a victory in the court system, really, as that seems like the most likely scenario to us. Obviously, that’s not necessarily a given – but we are both hopeful and optimistic that the checks and balances of our legal system will preserve the rights of the vaping industry to continue to do business without getting shut down by unnecessarily burdensome FDA rulings and regulations.