On February 2, 2018, U.S. Smokeless Tobacco Company (UST) (the smokeless tobacco arm of Altria Group) filed a lawsuit in the United States District Court for the District of Columbia, challenging the FDA’s issuance of “Not Substantially Equivalent” (NSE) Orders for a new, portioned moist smokeless product, Copenhagen Bold Wintergreen Flavor Packs (Copenhagen Bold). This appears to be the first lawsuit challenging the FDA’s denial of an SE submission for a specific product.

The Copenhagen Bold SE submission compared the new product, a portioned smokeless tobacco in pouches with a grandfathered product in the same format (pouched smokeless tobacco) but containing different tobacco. UST had considered using a different grandfathered product – a loose tobacco product with the exact same blend and formula as Copenhagen Bold – but the FDA discouraged UST from doing so because the grandfathered product was in a different format. At the FDA’s suggestion, UST designated the grandfathered loose tobacco product with the exact same tobacco blend and formula as Copenhagen Bold as a “surrogate” product.

The FDA ultimately issued NSE Orders for the Copenhagen Bold products. In doing so, the FDA apparently ignored data regarding the surrogate product containing the exact same tobacco but in a different format. The FDA apparently reasoned that UST could use surrogate product data only when the predicate product was not available to be tested. Because data on the predicate product was available, the FDA refused to consider information regarding the surrogate product.

The NSE Orders found that there were “different questions of public health” between Copenhagen Bold and the grandfathered predicate in the same format but containing different tobacco. The FDA’s NSE Orders apparently did not dispute that the risks of Copenhagen Bold were within the range of risks in the smokeless tobacco market. Nor did the FDA dispute that putting identical grandfathered loose tobacco into mesh pouches reduces both nicotine and toxicants. The FDA’s determination apparently was based on a legal finding that the FDA can consider only a comparison between the new product and a single predicate, and that the market for smokeless tobacco products as a whole is irrelevant to the SE inquiry.

UST’s lawsuit challenges the FDA’s determination on several grounds. UST critiques the SE process in its entirety, stating that “FDA’s vague, inconsistent and ad hoc standards for substantial equivalence are arbitrary, capricious and in violation of due process.” The Complaint notes that a fundamental requirement of due process is for agencies to provide regulated parties with fair warning of prohibited or mandated conduct. UST asserts that the FDA has not met this standard in that it has failed to issue regulations establishing the requirements and standards for SE. Nor has the FDA (even in non-binding guidance) delineated any standards for the ultimate “different questions of public health” determination. Without any practical guidelines for regulated parties, and with a history of opaque and inconsistent determinations, UST asserts that the SE process falls short of constitutional requirements.

UST also challenges the specifics of the SE process, as applied to the NSE determination issued for Copenhagen Bold. UST asserts that this determination is “arbitrary and capricious” and contrary to the Family Smoking Prevention and Tobacco Control Act. UST specifically critiques the FDA’s practice of comparing the individual characteristics of new and predicate products, as opposed to focusing on whether the new product “as a whole” raises different questions of public health. UST also critiques the FDA’s improper exclusion from its analysis any data other than data from a single predicate in the same format, such as data pertaining to the market as a whole, or data pertaining to surrogate products in different formats.

The Future of SE

Both UST’s lawsuit and the FDA’s own recent pronouncements indicate that the SE process is due for, and will likely receive, a much-needed makeover. Whether the FDA will overhaul the process voluntarily, or be forced by court action, remains to be seen. Both the FDA and industry appear to agree that the process needs to be more clearly defined so that the industry has a better understanding of the FDA’s standards. UST’s lawsuit could result in further clarity regarding the ultimate evidentiary requirements for SE marketing orders. Stay tuned for further developments.