Why the implementation of the new Tobacco Products Directive may present a regulatory conundrum for manufacturers of electronic cigarettes

Since 2013, the Medicines & Healthcare Regulatory Products Agency (“MHRA”) has stated its policy objective to regulate electronic cigarettes (“e-cigarettes”) and other nicotine-containing products as medicines. In December 2015, the MHRA issued a marketing authorisation (“MA”) to Nicovations Ltd (part of British American Tobacco's Next Generation Products division) for its e-cigarette product, e-voke.

This approval opens the door to the prescription of e-voke on the NHS as a smoking cessation product, and it is forecast that an increasing volume of e-cigarettes will obtain market entry under the highly regulated medicines regulatory framework. This is an important development, because it illustrates the application of the two pronged EU regulatory framework applicable to e-cigarettes whereby products can be classified either as medicines or as consumer products. The focus of this article will be to explore the regulatory conundrum presented by e-cigarettes and to explain the widespread ramifications presented by borderline product classification.

What is an e-cigarette?

E-cigarettes are devices simulating cigarettes. Most e-cigarettes contain a battery, an atomiser and a replaceable cartridge. The cartridge contains nicotine in a solution of either propylene glycol or glycerine and water, and sometimes also flavourings. When you suck on the device, a sensor detects the air flow and starts a process to heat the liquid inside the cartridge, so it evaporates to form water vapour. Inhaling this vapour delivers a hit of nicotine straight to your lungs. By contrast with conventional tobacco cigarettes, where smoke is inhaled into the lungs and then exhaled, there is no combustion involved in the use of e-cigarettes and therefore there is no smoke. Vapour is released into the air only when the user exhales.

How e-cigarettes are currently regulated

Currently e-cigarettes are regulated by consumer product regulation. However, it is important to note that in the UK, any product making a medicinal claim, such as for example that it can help a person to cut down or quit smoking, would be subject to medicinal product regulation and would require an MA. Products making no such claims are covered by the less prescriptive consumer product legislation.

As indicated above, in the UK the MHRA has expressed a desire for manufacturers of e-cigarettes to voluntarily submit MA applications for e-cigarettes as medicines: “We want to ensure licensed nicotine-containing products – including e-cigarettes – which make medicinal claims are available and meet appropriate standards of safety, quality and efficacy to help reduce the harms from smoking.”

What is changing?

On 20 May 2016, the Tobacco Products Directive 2014/40/EU (“TPD”) will come into force. This widely anticipated directive has gone through numerous revisions, and in addition to various new requirements for tobacco products, the legislation also details new regulations covering e-cigarettes. So e-cigarettes will soon be available for sale under the TPD, except where therapeutic claims are made or they contain over 20 mg/ml of nicotine (TPD, Article 20). If a manufacturer seeks to commercialise an e-cigarette which falls within either category it will require an MA in accordance with the pharmaceutical legal framework of Directive 2001/83/EC (commonly referred to as the “Medicines Code”).

E-cigarettes containing less than 20mg/ml of nicotine will be classified as tobacco-containing products and fall under the TPD. (There are transitional arrangements allowed by the TPD, and the MHRA has recently issued guidance to clarify the timelines for companies to ensure compliance. E-cigarettes or refill containers can be released for sale on the UK market until 20 November 2016. From 20 May 2017 all products sold to consumers must be fully compliant with the TPD. Products which are regulated under the TPD only need to be notified to the appropriate regulatory authority, which in the UK will also be the MHRA.) However, manufacturers intending to commercialise products as smoking cessation aids will also require an MA. So if, say, a product contains less than 20mg/ml nicotine but the manufacturer intends to market the product as a smoking cessation aid, the manufacturer would still need to file an MA application to the MHRA. Conversely, if a product fell below the nicotine threshold and did not present any health claims, it would be subject to the less rigorous provisions of the TPD.

Why does this matter?

The MA granted to e-voke is particularly noteworthy from a regulatory perspective, as it illustrates how the application of the TPD can present classification challenges where products appear on the borderline between the applicable regulatory frameworks. Products that are classified as medicinal products must meet the intricate requirements of the EU pharmaceutical legal framework including, inter alia, the above-mentioned Medicines Code. As a result, these products will be subject to rigorous clinical safety, quality and efficacy testing. The MA applicant must also demonstrate that the risk-benefit profile is positive.

The adoption of one regulatory pathway as against another is hugely significant, as it impacts on the cost and time taken to obtain market access. The rigorous process of obtaining an MA for medicinal products is costly and time consuming, especially when compared to the more general product safety obligations contained within the consumer product legislation.

However, it should be noted that the cost of obtaining an MA for e-cigarettes will be vastly reduced when compared to the cost of obtaining approval for innovative medicinal products. This is because nicotine is a well-established substance and in regulatory terms, a MA applicant can submit an abridged application whereby the applicant does not need to submit the full data package comprising pharmaceutical, pre-clinical and clinical trials data in support of the application.

Market access

The e-cigarette market is already significant and continues to grow. Indeed, in 2015 the market was estimated at approximately £4.75bn ($7bn).

Despite the increased cost, time and resource of pursuing an MA, the classification of e-cigarettes as medicinal products may also prove to be commercially lucrative for manufacturers as it paves the way for the supply of these products on the NHS. This is important because it opens up the NHS as a potential new market to producers of e-cigarettes, and this alone may justify the investment in obtaining an MA. It should be noted that e-cigarettes would only be available on NHS prescription if the pricing authority, NICE, gives a favourable cost-effectiveness decision, i.e. if NICE considers that e-cigarettes are a cost effective aid to smoking cessation.

Safety concerns

Over recent years, e-cigarettes have risen in popularity to become the number one quitting aid used by smokers. However in recent years, concerns have been raised leading to scrutiny. In particular, the British Medical Association remains sceptical over the long term effects of e-cigarettes due the lack of conclusive evidence of their effectiveness as a smoking cessation aid, the variability of the components of e-cigarette vapour, and the absence of a significant health benefit associated with dual use of e-cigarettes and tobacco cigarettes. Furthermore, a recent study by researchers at the University of California has found evidence to suggest that e-cigarettes are toxic to human airway cells, suppress immune defences and alter inflammation, while also boosting bacterial virulence. This appears to contradict the position of Public Health England, which recently issued a report concluding that e-cigarettes were 95% less harmful than conventional cigarettes.

For many stakeholders, the heightened regulation for e-cigarettes is demonstrative of the application of the precautionary principle. This is a central tenet of European law, as confirmed in the Lisbon Treaty, involving the application of specific measures to anticipate potential risks that are not yet known or cannot be scientifically confirmed or determined with sufficient certainty.

It is worth noting that although e-cigarettes authorised under the EU legal framework would have demonstrated the quality, safety and efficacy of the product as well as a positive risk-benefit profile, the regulatory authorities may at any time revisit their position if there is evidence of safety considerations which alter the risk-benefit profile of those products.

In summary

In the UK, it is likely that we will witness a growing number of MA applications by e-cigarette manufacturers to the MHRA. The increased frequency of e-cigarettes appearing under the pharmaceutical regulatory framework presents both challenges and opportunities. Clearly, the obligations for manufacturers in terms of time, costs and resource are more burdensome when compared to the less onerous consumer product legislation. In cases where a product does not meet the mandatory threshold of 20 mg/ml of nicotine, it remains open to manufacturers to elect the preferred regulatory pathway. Indeed, the attraction of pursuing an MA presents a significant commercial benefit to manufacturers, as the product would therefore have a label of efficacy associated with it which may attract tobacco smokers in their attempt to cease smoking. Moreover, it keeps open the possibility that the product would be prescribed to smokers by healthcare professionals and ultimately reimbursed by the NHS.

This article was first published in Journal of the Law Society of Scotland, April 2016