115 employees, 3 years, 0 results

When the Food and Drug Administration was granted authority over tobacco products, many people (myself included) objected that this was an inappropriate field for the agency to be involved in. Among other reasons, it makes little sense for the FDA to approve products that are to some degree inherently dangerous. An excellent article from Michael Felberbaum of the Associated Press shows that the agency has failed to establish reasonable standards of review and has halted innovation in the parts of the industry it regulates:

Tobacco companies have introduced almost no new cigarettes or smokeless tobacco products in the U.S. in more than 18 months because the federal government has prevented them from doing so, an Associated Press review has found. [...]

Since June 2009, when the law allowing the agency to regulate tobacco went into effect, the tobacco industry has submitted nearly 3,500 product applications, according to data obtained by the AP under a Freedom of Information Act request. While none have been ruled upon, the vast majority of these products are already being sold.

A grandfather clause in the law allows products introduced between February 2007 and March 2011 that are similar to those previously on the market to be sold while under review. They can be removed from store shelves if they don’t pass muster with the agency. But 400 products submitted for review since March 2011 are being kept off the market.

The reviews, which are supposed to take 90 days, have dragged on for years in some cases. About 90 percent of applications have lingered for more than a year.

Nearly 3,500 applications over three years and zero rulings. Perhaps the agency is understaffed? Not exactly:

The [FDA's Center for Tobacco Products] has an annual budget of more than $450 million, funded by the industry, and more than 365 employees, about 115 of whom work on the application reviews.

One hundred fifteen employees and zero rulings. One wonders what they do all day.

Part of the problem is that the agency evaluates products not merely on their physical characteristics, but also on whether they may entice new smokers or discourage current smokers from quitting. Since any new product is intended to appeal to someone, it’s not clear to me how applicants can decisively prove to hostile regulators that their products meet this requirement.

Perhaps one does not feel much sympathy for the tobacco companies. But note that the FDA has signaled that it will likely soon be regulating cigars too, and imagine giving the lumbering agency veto power over all new cigar blends. If Philip Morris and Lorillard can’t push new products through the approval process, how will boutique cigar makers fare? As demonstrated by the FDA’s handling of tobacco thus far, regulation could be devastating to the premium cigar industry.This is a topic I’ll be covering in greater depth next week.

Update 12/14/12: Michael Siegel weighs in too:

The rest of the story is that the Tobacco Act is working exactly as I predicted it would: as a way to protect the existing cigarettes on the market and block any real possibility of competition from what could be truly safer products.

Leave a Comment

*