In essentially ignoring thousands of applications to create new cigarette brands, the U.S. Food and Drug Administration is interfering with market competition, not promoting public health.
David Sley wants to sell cigarettes. This, by his own admission, does not make him the most sympathetic person to feature in an article about excessive government regulation. Yet Sley, an aspiring entrepreneur who has spent more than two years trying to navigate the Food and Drug Administration's new tobacco regulations, has legitimate cause to complain. The entire cigarette industry has been brought to a standstill by the FDA, forbidden from introducing any new products since March 2011. Tobacco companies contend that the agency's actions rest on uncertain scientific and legal grounds -- and, for once, they may be right.
The Tobacco Control Act of 2009 granted the FDA unprecedented authority to regulate cigarettes. Among its new powers is pre-market review: New cigarettes cannot be introduced without an order from the agency. The law provides two routes to approval. One route is for completely new tobacco products and requires a highly detailed review. The other is for products that are "substantially equivalent" to those already on the market.
The latter option has become a source of contention between applicants and the FDA. As first reported by Michael Felberbaum of the Associated Press, since 2009 the agency has received about 3,500 substantial equivalence reports. Approximately 115 employees work on reviewing them. And to date they have issued exactly zero rulings.
"We're just asking for the ability to market our product, and see if it sells."
Products introduced before March of 2011 have been allowed to enter the market provisionally, although the agency may order their removal at any time. The approximately 500 products submitted for review since then, however, are hostage to an approval process that progresses glacially, presents vague standards, and makes no promise of reaching a conclusion.
Hence David Sley's complaint. Sley, 28, works in the financial sector in Chicago. A few years ago he saw an opportunity to compete with Natural American Spirit cigarettes, a formerly independent brand now owned by Reynolds American. Sley created his own brand named Hestia Tobacco, lined up investors, and made arrangements with a manufacturer to produce the cigarettes. What he didn't count on was the slog of getting his product through the FDA's approval process.
Sley's first contact with the agency came in November 2010 with an email seeking advice on what a small business must do to get market approval. This was the beginning of more than two years of communication, during which the agency was often slow to provide needed information, or never provided it at all. His frustration has driven him to reveal the entirety of this correspondence, presenting the first inside look inside look at how the FDA handles applications for new cigarettes.
Simply getting approval for the Hestia Tobacco brand name required multiple inquiries over an entire year. Sley first asked about the acceptability of Hestia, an allusion to the Greek goddess of the hearth, in October 2011. Seven more inquiries with three different FDA employees followed before he finally received word in October 2012 that the agency would allow it.
Also in October 2011, Sley asked whether his plan to age tobacco in cedar, a common practice in the cigar industry, would violate the Tobacco Control Act's ban on characterizing flavors. David Ashley, director of the Office of Science at the FDA's Center for Tobacco Products, replied by merely quoting the statute without clarification. Despite multiple follow-ups, Sley still has not received an answer. In an interview in February, Ashley said that he had not thought about the question. A spokesperson for the FDA has declined any further comment on the issue.
Then there is the substantial equivalence report, which Sley submitted in June of 2012. A new product is considered substantially equivalent to an existing product if it has the same characteristics, "characteristics" legally defined as "materials, ingredients, design, composition, heating source, or other features." The law also allows for a finding of substantial equivalence when a product differs in characteristics but raises no new questions of public health.
Hestia Tobacco's report details in minute specification the components of its cigarettes along with those of Natural American Spirit. One page lists the main ingredients, of which there are only two: flue-cured tobacco and water. Additional pages examine the filter and paper, everything down to the decorative ink. A final page looks at construction: Both cigarettes measure 84 millimeters in length and 24.5 millimeters in circumference. They are nearly identical in weight. They are, one might conclude, substantially equivalent.
This was insufficient for the FDA. Nearly four months later the agency responded with a letter demanding eight more categories of information, including "a comparison of your new tobacco product and predicate tobacco product with respect to heating source" -- in other words, how are the cigarettes lit? Other demands include an environmental impact assessment and a list of harmful and potentially harmful constituents for each cigarette.
This last request goes beyond the explicit requirements of the law and entails expensive lab testing. It's an especially burdensome requirement for a start-up -- and a risky one, too, since no one knows what variations the agency may allow.
Though unable to meet all of the FDA's demands, Sley responded as best he was able and beseeched the agency to rule on his case by December 2012. "We want a license to fail," he wrote to one of the regulators reviewing his application. "The freedom to see if consumers want this product. We're just asking for the ability to market our product, and see if it sells. Currently, we remain unable to do so."
The Tobacco Control Act requires that the FDA rule on new product applications "as promptly as possible, and in no event later than 180 days after an application is received." That's for completely new products; whether this deadline applies to products applying via the substantial equivalence pathway is a matter of dispute. The law suggests that companies submit these reports ninety days prior to launch, implying that this type of review is less time-consuming. However the FDA contends that the statutory deadline does not apply at all to substantial equivalence reports. Under its interpretation, these applications can be held in perpetual limbo.