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    FDA Releases Long-Awaited Final Deeming Regulation

    Rule keeps Feb. 15, 2007 as grandfather date.

    By Melissa Kress, Convenience Store News

    SILVER SPRING, Md. — The wait is over. The Food and Drug Administration (FDA) issued its finalized deeming rule extending its authority to all tobacco products, including electronic cigarettes and cigars. The issuance comes two years after the agency first released its proposed deeming rule. The authority also extends to hookah tobacco and pipe tobacco.

    In addition to prohibiting the sale of these products to consumers under the age of 18, the finalized rule keeps the often-debated grandfather date as Feb. 15, 2007.

    With this move, the agency has laid the foundation for regulating all tobacco products, not just cigarettes and smokeless tobacco which have fallen under its authority since Congress passed the Family Smoking Prevention and Tobacco Control Act of 2009.

    "We have more to do to help protect Americans from the dangers of tobacco and nicotine, especially our youth. As cigarette smoking among those under 18 has fallen, the use of other nicotine products, including e-cigarettes, has taken a drastic leap. All of this is creating a new generation of Americans who are at risk of addiction," said Department of Health and Human Services Secretary Sylvia Burwell.

    "Today's announcement is an important step in the fight for a tobacco-free generation — it will help us catch up with changes in the marketplace, put into place rules that protect our kids, and give adults information they need to make informed decisions," she added.

    The finalized rule includes provisions prohibiting the sale of e-cigarettes, hookah tobacco or cigars to people under age 18. The provisions, which go into effect in 90 days, include:

    • Not allowing products to be sold to persons under the age of 18 (both in person and online);
    • Requiring age verification by photo ID;
    • Not allowing the selling of covered tobacco products in vending machines (unless in an adult-only facility); and
    • Not allowing the distribution of free samples.

    The finalized rule also requires manufacturers of all newly regulated products to show that the products meet the applicable public health standard set forth in the law and to receive marketing authorization from the FDA, unless the product was on the market as of Feb. 15, 2007. The tobacco product review process gives the agency the ability to evaluate important factors such as ingredients, product design and health risks, as well as a product's appeal to youth and non-users, according to the agency.

    The grandfather date does not spell immediate doom for products not on the market before February 2007. Under staggered timelines, the FDA expects manufacturers will continue selling their products for up to two years while they submit a new tobacco product application — and an additional year while the FDA reviews the application.  

    The FDA will issue an order granting marketing authorization, where appropriate. Otherwise, the product will face FDA enforcement, the agency said.

    Thursday's action marks a new chapter in the FDA's efforts to end preventable, tobacco-related disease and death, and is a milestone in consumer protection, the agency explained.

    "As a physician, I've seen firsthand the devastating health effects of tobacco use," said FDA Commissioner Robert M. Califf. "At the FDA, we must do our job under the Tobacco Control Act to reduce the harms caused by tobacco. That includes ensuring consumers have the information they need to make informed decisions about tobacco use and making sure that new tobacco products for purchase come under comprehensive FDA review."

    According to the FDA, the new rules will subject all manufacturers, importers and/or retailers of newly regulated tobacco products to applicable provisions, bringing them in line with other tobacco products the FDA has regulated under the Tobacco Control Act since 2009. These requirements include:

    • Registering manufacturing establishments and providing product listings to the FDA;
    • Reporting ingredients, and harmful and potentially harmful constituents;
    • Requiring pre-market review and authorization of new tobacco products by the FDA;
    • Placing health warnings on product packages and advertisements; and
    • Not selling modified risk tobacco products (including those described as "light," "low" or "mild") unless authorized by the FDA.
    The Grandfather Date Debate

    Despite the two-year wait, the final rule is "broadly as we anticipated and would be burdensome for small manufacturers to comply with, while increasing the barriers to entry and entrenching Big Tobacco even further," Bonnie Herzog, managing director of tobacco, beverage and convenience store research at Wells Fargo Securities LLC, said in a statement released Thursday. 

    "As such, we anticipate litigation from several manufacturers, which could unfortunately prolong the uncertainty plaguing the entire industry," she added.

    Notably, Herzog raised concerns that the requirements newly deemed products will be subjected to — like submission of ingredients and manufacturing standards — will be costly and burdensome for many small manufacturers.

    With a 2007 grandfather date, most new products will require a pre-market tobacco application to the FDA. According to Herzog, "the applications could take an average of 1,500 hours to complete, which is clearly a burden to the industry and could realistically slow down or stifle innovation."

    "Our main concern is that these final deeming regulations could realistically stifle innovation, which could dramatically slow industry growth by disincentivizing consumer conversion from combustible cigarettes," she explained. "This would ultimately have a net negative impact on public health, which is clearly in direct opposition to the FDA's goal."

    However, with the agency's staggered compliance periods, she noted that Wells Fargo Securities is encouraged that the FDA recognizes the continuum of risk, but believes these compliance periods could prove challenging for many manufacturers.

    When the FDA released its proposed deeming rule in April 2014, it proposed that e-cigarettes be held to the same grandfather date as traditional cigarettes, which is Feb. 15, 2007. That date was spelled out in the Family Smoking Prevention and Tobacco Control Act of 2009. However, since e-cigarette and vaping products are relatively new compared to other tobacco products, many in the industry argued the February 2007 date would effectively remove most products from the market.

    In the intervening two years, efforts have been winding their way through Congress to change that date. Most recently, the House Appropriations Committee voted in favor of an amendment to the FY 2017 Agriculture Appropriations Bill that would change the predicate date — also known as the grandfather date — for e-cigarettes, cigars and other tobacco products covered under the deeming rule to whatever date the FDA's final deeming rule goes into effect, as CSNews Online previously reported.

    This is just one effort on Capitol Hill. During a media briefing Thursday afternoon, Mitch Zeller, director of the FDA's Center for Tobacco Products, said were a new grandfather date to be enacted into law, "it would have an enormously adverse impact on public health and the ability of the FDA to do its job." For that reason, the administration opposes the two riders that were introduced in the House, he said.

    "If the grandfather date changes, which Congress can do through the legislative process, and the grandfather date becomes the effective date of the final rule, that will exempt all of these products from any pre-market review for marketing purposes," Zeller explained. "Worse, those unreviewed products will be able to serve as predicates to new products coming down the road.

    "We don’t think this makes sense from a public health perspective. This is the position the administration officially took last year when a similar rider was introduced and that is the administration's view today," he added.

    According to Zeller, the administration has not taken a position on a possible veto of any legislation that would change the date.

    "This final rule is a foundational step that enables the FDA to regulate products young people were using at alarming rates, like e-cigarettes, cigars and hookah tobacco, that had gone largely unregulated," Zeller said. "The agency considered a number of factors in developing the rule and believes our approach is reasonable and balanced. Ultimately, our job is to assess what's happening at the population level before figuring out how to use all of the regulatory tools Congress gave the FDA."

    For more information on the final rule, click here

    By Melissa Kress, Convenience Store News
    • About Melissa Kress Melissa Kress joined Stagnito Business Information's Convenience Store News and Convenience Store News for the Single Store Owner in November 2010. Her primary beats include alcoholic beverages and tobacco. Kress has been a professional journalist since 1995. A graduate of West Virginia University, she began her career in community journalism before moving to business-to-business publishing in 2000, covering commercial real estate.

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