The FDA has been quite busy over the last few weeks, issuing three Advanced Notices of Proposed Rulemaking (“ANPR”) that could fundamentally change the tobacco industry in the years to come. We attempt to synthesize below how the rulemakings fit together in a broader regulatory framework and future implications for tobacco companies.

What is an ANPR?

It is important to understand that an ANPR is only the first step in what likely will be a very long process. An ANPR simply seeks information from stakeholders – Industry, public health advocates, etc. – regarding a particular issue. After all of the requested information has been submitted, the FDA considers the information in fashioning a proposed rule, or it may decline to issue a proposed rule. Indeed, it is not uncommon for an ANPR to result in no agency action at all. Assuming the FDA decides to issue a proposed rule, it is again submitted for comment by stakeholders. After those comments are submitted, the FDA must again consider those comments in determining whether and how to issue a final rule. This process is likely to take many years.

The ANPRs

The three ANPRs seek information from stakeholders regarding: (1) the potential mandated reduction of nicotine levels in tobacco products, particularly cigarettes, (2) the role of flavors in all tobacco products, including whether the FDA should ban or otherwise regulate flavors in all or certain tobacco products, and (3) the appropriate regulatory framework for premium cigars.

  • Nicotine standards – Our take is that the FDA is clearly inclined to issue a product standard mandating lower nicotine deliveries in cigarettes (if not other combusted tobacco products) over a period of time. However, the FDA needs to wrestle with a number of difficult issues, including whether lower nicotine levels actually cause smokers to consume more cigarettes in order to obtain the same amount of nicotine. The data on this issue appears to be in conflict, which could make a product standard difficult to implement. The law also requires the FDA to consider the potential for contraband trade, which is a very real likelihood when there is a substantial legally-mandated change to products that consumers favor. The FDA also will need to address the issue of whether lowered nicotine in cigarettes will simply cause consumers to switch to other products, such as little cigars. Finally, the law requires the FDA to consider technical achievability in implementing product standards, and in this case it is not clear that there is a commercially-viable solution.
  • Flavors – Our take is that the FDA is inclined to ban characterizing flavors in certain combusted products. Characterizing flavors, except menthol, are already banned in cigarettes, and it appears that the FDA is inclined to reconsider the approach on menthol. As with nicotine levels, the potential for contraband markets will be a serious impediment, particularly for menthol, given the popularity of this product in the United States. The FDA also could consider whether certain flavors make products more toxic, and thereby ban or otherwise regulate those flavors. Another question is whether the FDA will only ban “characterizing flavors” (flavors as denoted on the packaging or labeling), versus banning any flavor additives. For example, only “characterizing flavors” are currently banned in cigarettes, but there is no prohibition on having flavor additives in the product. The FDA does not seem inclined to ban flavors in electronic nicotine delivery systems, given the potential role of these products in transitioning smokers to less risky forms of tobacco use, although it does seem concerned about the perceived youth appeal of at least certain flavors. The FDA may attempt to draw a dividing line based on so-called “youth-oriented” flavors, but such a line seems very difficult to draw.
  • Premium cigars – The FDA seems inclined to reconsider its approach to regulating premium cigars. In fashioning the Deeming Regulations, the FDA previously considered – and rejected – a different regulatory framework for a defined category of premium cigars. The concept of an exemption for premium cigars has widespread support in Congress, and the ANPR seems to recognize this political reality. There is also good evidentiary support for a premium cigar exemption, given that morbidity and mortality rates for the typical premium cigar smoker are similar to morbidity and mortality rates for nonsmokers. This appears to be due to the fact that premium cigar consumers smoke only occasionally, and do not inhale.

How do the ANPRs fit into the bigger picture?

All three ANPRs were first announced in FDA Commissioner Scott Gottlieb’s July 28, 2017 statement regarding a “comprehensive approach to nicotine and tobacco.” The final outcome of all three ANPRs presumably would be consistent with Commissioner Gottlieb’s stated intent to encourage consumers to move down the “continuum of risk” toward less risky forms of tobacco use and to ease regulatory burdens for those products. For example, it would make good sense to ease regulatory burdens for premium cigars, given the largely undisputed evidence that they are significantly less risky than cigarettes, and do not have youth appeal. It also would make good sense to exclude less risky products (such as ENDS) from any regulations that would ban flavors or mandate lower nicotine levels. The trickier question is whether such regulations will extend to combusted products. Although the FDA seems inclined to do so, there is conflicting scientific evidence on these issues and a very real risk of contraband trade. In any event, it will take a very long time for this process to unfold.