FDA Enforcement Blitz Combats Underage Use of Cartridge-Based E-Cigarettes and Threatens to Sack Premarket Review Compliance Policy and Flavors
On September 12, 2018, in a self-described “blitz”, FDA announced a deluge of enforcement actions, including more than 1,300 warning letters and fines to retailers aimed at addressing youth use of e-cigarettes, which FDA asserts has reached “epidemic” proportions, based on new, not-yet-released survey data. FDA also requested manufacturers of five “national brands,” whose cartridge (pod) based e-cigarettes the Agency claimed make up 97% of the “current e-cigarette market” (but apparently excluding the open-system vapor products market), and allegedly represent the majority of e-cigarettes sold to minors, to provide detailed plans to curtail youth use of their products. FDA also threatened drastic action that could impact the entire vapor industry, and millions of former smokers that rely on a variety of vapor products, if adequate responses are not received.
Addressing Increase in Underage E-Cigarette Use; Stopping Access at the Retail Level
In its press release, FDA clarified that these enforcement actions were part of a “large-scale, undercover nationwide” crack down on the sale of e-cigarettes to minors at both brick-and-mortar and online retailers. FDA Commissioner Dr. Scott Gottlieb further stated that FDA had failed “to predict what [he] now believe[s] is an epidemic of e-cigarette use among teenagers.” While he reiterated that FDA is “fully committed to the concept that products that deliver nicotine exist on a continuum of risk, with combustible products representing the highest risk, and [e-cigarettes] perhaps presenting an alternative for adult smokers who still seek access to satisfying levels of nicotine, but without all of the harmful effects that come from combustion,” he was unequivocal with respect to underage use, emphasizing FDA’s Youth Tobacco Prevention Plan launched earlier this year, and stating that he “won’t tolerate a whole generation of young people becoming addicted to nicotine as a tradeoff for enabling adults to have unfettered access to these same products.” On September 18, 2018, FDA issued another press release announcing that it would be advancing “The Real Cost“ Youth E-Cigarette Prevention Campaign to educate teens about the dangers of using e-cigarettes.
Notably, all of the cartridge-based e-cigarettes now being targeted by FDA (and the Big Tobacco brands in particular) are sold primarily in convenience stores, gas stations and similar outlets (along with cigarettes and other tobacco products), and appear to be the main source of youth access, as well as the focus of FDA’s retailer enforcement efforts. Indeed, the vast majority of the 1,300 warning letters and civil monetary penalties were sent to these types of retailers, rather than to vape shops dedicated to open-system vapor products. While dozens of vape shops and online vape retailers have also been cited by FDA for selling products to minors, those instances appear to represent just a fraction of the millions of transactions that occur annually in the 10,000+ dedicated vape shops across the country.
FDA Focuses on JUUL and JUUL-Like E-Cigarettes; Distinguishes Youth Concerns Between Closed and Open System Vapor Products
Although FDA’s recent announcement refers simply to the “e-cigarette market”, the vapor industry is actually very diverse and complex. Closed-system and cartridge-based e-cigarettes (like JUUL), the adolescent use of which FDA has made clear is its primary public health concern, is only a portion of the U.S. vapor products market, along with open-system vapor products (e.g., tanks, mods, e-liquids, etc.).
Indeed, FDA has been focusing on youth-use of cartridge-based e-cigarettes, and JUUL in particular, for several months, as stories about rampant teenage use have been heavily reported in the media, and the focus of Congressional inquiries.
Back on April 24, 2018, FDA announced its first set of 40 warning letters to retailers for underage sales of JUUL e-cigarettes and that it was examining the youth appeal of these products in an effort to end their sale to minors. FDA used its authority under Section 904(b) of the Family Smoking Prevention and Tobacco Control Act (TCA) to request JUUL Labs submit information regarding its marketing and research studies, and any other information it had on how certain product features might appeal to different age groups. Subsequently, in May 2018 FDA sent a second set of requests to several manufacturers seeking information on their JUUL-like products, including information on product marketing and design (as it may relate to the appeal or addictive potential for youth, youth-related adverse experiences), and consumer complaints, among other things.
FDA has now announced that it is targeting five national brands that dominate the closed-system cartridge-based e-cigarette market – JUUL and four other cartridge-based e-cigarettes, all of which are marketed by large tobacco companies: Vuse (Reynolds American), MarkTen XL (Altria), blu e-cigs (Fontem Ventures), and Logic (Japan Tobacco International, USA). Importantly, Gottlieb indicated that these specific e-cigarettes make up “the majority of products sold to minors,” while noting that “the biggest youth use seems to be among cartridge-based e-cigarettes, and not open-tank vaping products.” (Emphasis added.)
The Agency has requested these five manufacturers submit within 60 days detailed plans describing how they will address and mitigate widespread youth use of their products. For example, the FDA stated that such a plan may include:
Discontinuing sales to retail establishments that have been subject to an FDA civil monetary penalty for sale of tobacco products to minors within the prior 12 months;
Developing or strengthening any internal program in place to check on retailers, and reporting to FDA the name and address of retailers that have sold products to minors;
Eliminating online sales, whether through Internet storefronts controlled by the company or other retailers, or providing evidence to demonstrate that the company’s online sales practices do not contribute to youth use of e-cigarette products;
Revising current marketing practices to help prevent use by minors;
Removing flavored products from the market until those products can be reviewed by FDA as part of a PMTA.
The requests that the companies eliminate all online sales and remove flavored products from the market are extremely onerous and effectively require the companies to cease sales of legal products. FDA further noted that these actions are only examples of things the manufacturers might do to demonstrate FDA should continue to defer enforcement of the premarket review provisions with respect to their products, as discussed below, and encouraged the companies to “provide additional youth use prevention tools” for the Agency’s consideration.
Warning Letters to E-Liquid Manufacturers
Beyond illegal underage sales at the retail level, open-system vapor products have not been free from FDA scrutiny. In May 2018, FDA and the Federal Trade Commission (FTC) issued 17 warning letters to e-liquid manufacturers for marketing products the agencies claimed were both misbranded under Sections 903(a)(1) and 903(a)(7) of the FDCA and false and misleading under Section 5 of the FTC Act, for being packaged and/or labeled in a manner that imitated “kid-friendly” foods such as apple juice, candy, whipped cream and cereal. On August 23, 2018, FDA announced that all 17 companies that were warned have cooperated and have ceased all sales of the offending products. FDA has now issued 12 additional warning letters to retailers for continuing to sell those e-liquids, making clear that any existing inventory of the misbranded products must be removed from commerce.
Drastic Action by FDA Could Destroy the Vapor Industry
a. Premarket Compliance Policy
Along with the letters to the above manufacturers, Commissioner Gottlieb’s statement accompanying the September 12 announcement made clear that the recent increase in youth use may force FDA to revisit its premarket review compliance policy, pursuant to which manufacturers of deemed noncombustible tobacco products such as vapor products that were on the market as of August 8, 2016, when the Deeming Rule went into effect, have until August 8, 2022 to submit PMTAs, and can remain on the market through that date and pending FDA review. Moreover, under this compliance policy, if an application is timely submitted and accepted for scientific review, the subject product is permitted to remain on the market pending FDA review. This compliance policy was first announced in July 2017 as part of the Agency’s comprehensive plan for tobacco and nicotine regulation, and extended the original compliance policy in the Deeming Rule which only gave e-cigarette manufacturers until August 8, 2018 to submit PMTAs for their existing products.
But Gottlieb has now indicated that FDA is “seriously reconsidering our compliance dates for the submission of product applications when it is apparent that there’s widespread youth use of the product” and that it is “seriously considering a policy change that would lead to the immediate removal of these flavored products from the market.” FDA’s letter to JUUL and the other manufacturers states clearly that FDA is reconsidering its compliance policy, at least for cartridge-based e-cigarettes:
To fulfill our public health mandate to address youth addiction to nicotine, FDA is reconsidering its compliance policy for submission of PMTAs for [the JUUL e-cigarette] and other similar products that were illegally sold by retailers during this blitz, including whether earlier enforcement of the premarket review provision might be warranted.
(Emphasis added.) Critically, Commissioner Gottlieb stated that if the five companies referenced above do not submit plans to combat youth use of their products, or if those plans are insufficient to address the problem, the companies “face a potential decision by FDA to reconsider extending the compliance dates for submission of premarket applications.”
If FDA does decide to modify the compliance policy for cartridge-based e-cigarettes because of their apparent unique impact on youth compared to other types of vapor products, such action does have precedent. In its comprehensive plan, for example, FDA required deemed combustible products, such as cigars and hookah, on the market on August 8, 2016 to submit premarket review applications by August 8, 2021, because of the known-health risks of combustible tobacco.
However, open-system vapor product manufacturers should be aware that Gottlieb did note in his statement that FDA’s “policy reconsiderations apply to the entire category” and that FDA is “also re-examining the enforcement discretion we currently exercise for other e-cig products currently on the market without authorization.”
While it remains unclear what, if anything, FDA might do with respect to its current compliance policy, any move to shorten the PMTA grace period for the vapor industry at-large will have devastating consequences not only for thousands of small businesses that would effectively be banned, but also for the public health. These impacts were recently summarized in an amicus brief submitted by the Right to be Smoke-Free Coalition in the federal lawsuit filed by the public health groups challenging FDA’s compliance policy. You can read about that lawsuit and the amicus brief, which makes clear that the vapor industry needs at least until August 2022 to prepare applications given the need for long-term clinical data, on our previous blog post here.
b. Flavored Products
Also of concern for the vapor industry is the potential targeting of flavored products, which the industry has argued are, in fact, appropriate for the protection of the public health (see here). It is important to first recognize that there is no such thing as an unflavored e-cigarette or vapor product. Unlike combustible cigarettes or other tobacco-containing products, there is simply no “natural” tobacco or other flavors inherent to e-liquids. Rather, all flavors for these products are chemically synthesized and added to the base propylene glycol/vegetable glycerin solution. Thus, unlike cigarettes, a ban on characterizing flavors would effectively result in a ban of all vapor products.
Moreover, numerous published studies demonstrate, and FDA has acknowledged, that flavored vapor products and e-liquids can help adult smokers reduce their cigarette use and/or switch completely to vapor products. For example, a recently-released survey of almost 70,000 U.S. vapers found that 87.3% of respondents who quit smoking with e-cigarettes said that flavors were “extremely” or “very” important to their quit attempts.
Remaining Compliant in a Rapidly Changing Regulatory Landscape
The new FDA enforcement actions and broader threats against the industry raise the possibility of dramatically altering the regulatory landscape for e-cigarettes and other vapor products. FDA’s September 12 letters to the large manufacturers of cartridge-based e-cigarettes threaten to potentially end the premarket review compliance policy grace period for those types of products, but it is not clear if FDA would extend this to all vapor product manufacturers. Indeed, the stock market appears to have recognized this possibility, as legacy tobacco stocks rallied after FDA’s announcement. Apparently, the markets have concluded that if adults are not going to be permitted to vape, they will return to traditional combustible tobacco cigarettes – the most harmful nicotine delivery product. From our vantage point, and to the detriment of public health, it is hard to argue with this conclusion.
Accordingly, in view of FDA’s enforcement blitz and the Agency’s current focus on e-cigarette manufacturer advertising, marketing, and manufacturing practices we recommend vapor product companies:
Start preparing premarket applications (including PMTAs) sooner rather than later (and attend FDA’s public hearing on October 22-23, 2018).
Work with retailers (both brick-and-mortar and online) that have age and photo-ID verification procedures that comply with requirements applicable to tobacco retailers, including requirements that:
the retailer checks the photo ID of everyone under age 27 who attempts to purchase any tobacco product;
the retailer only sells tobacco products to customers age 18 or older (consider whether age-gating may be appropriate for online retailers); and
the retailer does not sell tobacco products in vending machines unless in an adult-only facility.
Work with legal counsel to ensure that your product labeling and marketing would not cause the product to be misbranded or misleading (e., by imitating potentially “kid-appealing” foods).
Make sure your advertising and product labeling fully comply with the nicotine addiction warning (and other labeling requirements).
Comply with TCA requirements, including registration and listing for U.S. establishments, ingredient listing, and health document disclosures.
Do not introduce new products after August 8, 2016 without receiving FDA premarket authorization.
Comply with all sales and marketing restrictions, including use of any modified risk claims and the ban on free samples.
Prepare to be inspected by FDA and other authorities (sign up for our audit and inspection program here).
Consider developing an internal audit program to evaluate the procedures used by retail partners to avoid youth-access to your products.
 See U.S. Food & Drug Admin., FDA News Release, FDA Takes New Steps to Address Epidemic of Youth E-Cigarette Use, Including a Historic Action Against More Than 1,300 Retailers and 5 Major Manufacturers for Their Roles Perpetuating Youth Access (Sept. 12, 2018).
 Christopher Groskopf, What Yelp Data Reveal About the Sudden Rise of Vape Shops in America, Quartz, (Feb. 10, 2016), https://qz.com/608469/what-yelp-data-tells-us-about-vaping/.
 The first set of letters were sent on May 17, 2018 to J Well, of Paris, France, for Bo Starter Kit; YGT Investment LLC and 7 Daze LLC, of Baldwin Park, California, for Zoor Kit; Liquid Filling Solutions LLC, of King of Prussia, Pennsylvania, for Myle Products; and SVR Inc., of Las Vegas, for SMPO Kit. Subsequently, in late May additional letters were sent to Myle Vape Inc. regarding Myle Products, and to MMS ECVD LLC regarding the Bo Starter Kit, to reflect additional relevant companies in the manufacturing and distribution chain.
 Guidance for Industry: Extension of Certain Tobacco Product Compliance Deadlines Related to the Final Deeming Rule (Revised) (August 2017), available at: https://www.fda.gov/downloads/TobaccoProducts/Labeling/RulesRegulationsG....
 The original Deeming Rule compliance policy also had a sunset period that only permitted manufacturers who submitted timely PMTAs to continue to market those products for an additional year, i.e., until August 8, 2019. Unless an application was authorized during that year, it would have to be removed from the market at that time, and could only be re-introduced if it received FDA authorization.
 Konstantinos F., M.D., MPH, et al., Patterns of flavored e-cigarette use among adult vapers in the United States: an internet survey (2018), at 6, 20.