On February 2, 2018, U.S. Smokeless Tobacco Company LLC (UST), a wholly owned subsidiary of Altria Group, Inc., filed suit against the U.S. Food and Drug Administration (FDA), U.S. Department of Health and Human Services (HHS), HHS Secretary Alex Azar, and FDA Commission Scott Gottlieb in the U.S. District Court for the District of Columbia challenging FDA’s application of the Substantial Equivalence (SE) Report standard. (Case 1:18-cv-00251.) The suit follows on FDA’s recent Not Substantially Equivalent (NSE) determinations for UST’s Copenhagen Bold Wintergreen Flavor Packs (Copenhagen Bold), and the agency appeal order upholding the NSE determinations, which UST argues is “arbitrary, capricious, and contrary to the TCA.” You can download UST’s complaint here.

Pursuant to the Food, Drug and Cosmetic Act (FDCA), as amended by the Family Smoking Prevention and Tobacco Control Act (TCA), all new tobacco products must be authorized by FDA before entering the market via either the Premarket Tobacco Product Application, SE Report or SE Report Exemption pathways.[i] A “new” tobacco product is a tobacco product that was either introduced to the U.S. market after February 15, 2007 (the “grandfather date”), or, if it was already on the market as of that date, had any modifications made other than to its labeling (e.g., a change in any design, component, part, constituent, including a smoke constituent, or in the content, delivery, or form of nicotine, or any other additive or ingredient).[ii]

The SE Report requires comparing the new product to a “predicate” product (e.g., a grandfathered product or a product that has already obtained SE marketing authorization). To be substantially equivalent, the new tobacco product must either (i) have the same (e.g., identical) “characteristics” as the predicate tobacco product, or (ii) if it has different characteristics, the submission must demonstrate that the new product “does not raise different questions of public health”. In other words, even if the characteristics of the new and predicate products differ, FDA may still determine the new tobacco product is substantially equivalent, and thereby permit its marketing, if the differences in the characteristics do not implicate new or different public health concerns.

The Copenhagen Bold products are smokeless tobacco products that consist of mint flavored loose tobacco packaged in a mesh pouch, which is intended to be placed under the lip. The lawsuit explains that the Copenhagen Bold products contain the same loose tobacco that was marketed as loose tobacco as of February 15, 2007, and have the same packaging format (i.e., a mesh pouch) as other grandfathered UST smokeless tobacco products, but that used different loose tobacco. In other words, the specific loose tobacco and mesh pouch combination used in the new Copenhagen Bold products was not on the market as of the grandfather date.

The lawsuit centers on the legal standard for substantial equivalence under the TCA. UST argues that while the first prong of the SE definition requires a comparison between a new product and a predicate product, the second prong of the definition does not mention a predicate product, but instead requires a broader inquiry regarding the “public health” impact of the new product.

UST argues that rather than considering whether the new Copenhagen Bold products generally raise different questions of public health than other similar products that were on the market as of February 15, 2007, FDA’s SE review relied only on a characteristic-by-characteristic comparison of the new products to the identified predicate products. Furthermore, FDA’s NSE determination provided no explanation about how those characteristics (i.e., the mesh pouch) caused the new products to raise “different questions of public health.” FDA failed to identify what those “different questions” supposedly were.

Rather, UST claims that the use of the mesh pouch with the loose tobacco actually decreases the release of nicotine and certain carcinogens, without any increase in harmful constituents. Thus, the Copenhagen Bold products present no new health risks compared to moist smokeless products marketed as of February 15, 2007, and do not raise different questions of public health. Accordingly, in UST’s view, the new Copenhagen Bold products readily satisfy the second prong of the SE standard.

UST also takes issue with FDA’s fluctuating advice regarding predicate products. It points out that FDA has changed its position as to whether a company may rely on more than one predicate product in an SE application, and has restrictively required that a predicate product have the same “format” as the new product (e.g., requiring that a new product that is a pouch of tobacco be supported by comparison to a predicate product that also is a pouch of tobacco). UST also discusses that, through private communications during the SE review process, FDA introduced a new concept of a “surrogate product” that could be used to provide supplemental information about other legally marketed products that are like the new product, but was not a predicate product per se. Ultimately, however, the Agency did not consider information on the surrogate product, as it had indicated it would.

UST charges that, “[b]y failing to define either ‘same characteristics’ or ‘different questions of public health,’ by regulating through ad hoc decisions, punctuated with vague, inconsistent guidance documents, not to mention unreliable private advice, FDA has made the SE provisions of the TCA indecipherable to regulated entities like UST.”

In the view of UST, it is appropriate to assess the second prong of the SE standard by looking to the public health impacts of the relevant category of tobacco products as a whole on the grandfather date, and to determine whether the new product poses “different questions of public health” in type or magnitude from the known risks of the grandfathered products generally. If a comparison of new and predicate products indicates that they are the same (i.e., identical) with respect to material characteristics, the analysis should end with the first prong. Otherwise, the analysis should proceed under the second prong, and comparison should be made to the public health impact of grandfathered products falling into the same category of tobacco products as the new product, not just a comparison of the new product to a single identified predicate.

In summary, the UST suit requests the following main forms of relief:

a. Declare that the NSE orders and agency appeal order for the Copenhagen Bold products are arbitrary and capricious, not in accordance with law, all in violation of the Administrative Procedure Act and the TCA, because the orders misconstrue the SE standard;

b. Declare that the NSE orders and agency appeal order failed to give UST fair notice of the applicable SE standards, depriving UST of due process of law, in violation of the Constitution;

c. Vacate and set aside the NSE orders and the agency appeal order.

d. Remand the matter to FDA to apply the correct legal standard; and

e. Enter a permanent injunction restraining FDA from implementing or enforcing the NSE orders and agency appeal order.

The case has been assigned to Judge Emmet G. Sullivan of the District Court. He issued a standing order regarding the proceedings of the case on February 6, 2018. The government’s answer to the UST complaint has not yet been filed. We will keep updated on the progress of the lawsuit.