What proposed FDA regulations mean for e-cigarettes and cigars

I had a relaxing morning planned until the FDA announced its proposed regulations extending its authority to more tobacco products, including e-cigarettes and cigars. Predictably most of the press is focusing on the former, but the proposals over cigars are also very interesting. The long PDF detailing the proposal is here. Since you probably don’t want to read that, read this post instead.

First, a little background on how the existing law works with regard to cigarettes. The most important power that the Tobacco Control Act gave the FDA was pre-market review. Before releasing a new cigarette, producers must now get explicit approval from the FDA. This created three classes of products:

1. Products that were already on the market as of February 2007 are grandfathered in and allowed to be sold without review, although the FDA could hypothetically order them off the market.

2. Products introduced between February 2007 and March 2011 are allowed on the market while under provisional review. Producers have had to submit applications, but they are allowed to continue selling while the FDA reviews them.

3. Since March 2011, all new products must receive FDA approval before being sold.

This has resulted in a freeze of the cigarette market since 2011. In the three years since then, only two new cigarettes have been approved for sale. The anti-competitive effect this has had on the cigarette market has been my primary criticism of the FDA’s handling of tobacco. It has been reviewing applications for four years, currently has more than 150 employees working on reviews, has received approximately 4,000 applications, and has managed to rule on only 34 of them. For more detailed information on this, see my coverage in The Atlantic and Reason. (Keep in mind, too, that the Tobacco Control Act was fully backed and negotiated by Phillip Morris. They knew what they were doing.)

It’s also helpful to know what the FDA is looking for in new product applications. The law establishes two routes to approval. One is for completely new products (premarket tobacco applications) and requires extremely burdensome amounts of data; this is basically uncharted territory at this point. The other is “substantial equivalence.” To get approval by this route, a new product must demonstrate that it is substantially equivalent to a predicate product that was already on the market as of February 2007 or has since been approved by the FDA. “Substantially equivalent” is defined to mean having the same characteristics (materials, ingredients, design, composition, heating source, or other features) or raising no new questions of health. (To see why this is a huge obstacle to new producers, see my articles above.)

It’s been known for a long time that the FDA planned to extend its authority beyond cigarettes. The biggest concern is how the agency’s sluggish review process will affect these new products, especially e-cigarettes and cigars. These are both dynamic sectors of the market and applying the same standards that the agency uses for relatively commodified cigarettes is extremely problematic.

Impact on e-cigarettes: As mentioned above, substantial equivalence applications must specify a predicate product by which to compare the new product. That predicate product must have been on the market by February 2007. You can see the problem here. The market for e-cigarettes barely existed then. Thus the review process as it exists now is essentially a death sentence for e-cigarettes. As the agency notes in its proposal today, its hands are tied: “Because this date is written into the statute, we do not believe that we have the authority to amend it with respect to e-cigarettes or other products.”

Because of this, the FDA’s proposal gives e-cigarette companies two years after the date the rule goes into effect to submit a premarket tobacco application (PMTA). What happens after that is anybody’s guess. But unless the law changes, it looks like the substantial equivalence option is off the table for e-cigarettes and the variety of products that remain for sale will be extremely restricted. If any products successfully navigate the PMTA process, they will likely be those with lots of financial backing and perhaps the right connections.

Impact on cigars: The FDA’s proposals regarding cigars are intriguing. The agency offered two options. Option 1 is to treat cigars just like other tobacco products, subjecting them to all the same burdens of review. Option 2 is to carve out an exemption for premium cigars.

The first option, as I’ve been warning for a long time, would be disastrous. Hundreds of new cigars come out every year in distinct blends, shapes, and ages. Forcing them into a review process that has managed to approve only two cigarettes in four years would destroy the market as we know it. It would also require all cigars to be substantially equivalent to those already on the market in 2007, making the sector considerably more boring.

The fact that Option 2 is even being considered shows that the FDA is aware of this. Under this option, exemptions would be made for premium cigars. A cigar would be exempt if it:

(1) Is wrapped in whole tobacco leaf

(2) contains a 100 percent leaf tobacco binder

(3) contains primarily long filler tobacco

(4) is made by combining manually the wrapper, filler, and binder

(5) has no filter, tip, or non-tobacco mouthpiece and is capped by
hand

(6) has a retail price (after any discounts or coupons) of no less than $10 per cigar

(7) does not have a characterizing flavor other than tobacco**

(8) weighs more than 6 pounds per 1000 units.

This is not a perfect definition, but it’s a start. The biggest drawback is that it would create a price floor of $10 per stick and this price would be adjusted (i.e. increased) every two years. It’s still possible to get pretty nice cigars for under $10, especially if one buys them a box at a time, so this would be a substantial imposition on cigar smokers. At this point, however, I’m just glad that the option to exempt premium cigars from the FDA’s pre-market approval process exists at all.

Impact on pipes: Pipe smokers, now few and far between, did not put a substantial lobbying effort into influencing the FDA’s new regulations. As a result, pipes get very little discussion in the proposal. However pipe tobacco will be subject to the full authority of the FDA and, if I am reading it correctly, pipes themselves would be subject to pre-market review as well. That seems potentially problematic for unique, handmade briar and meerschaum pipes. Pipe smokers, stock up now or prepare to order from overseas!

What’s next: There are seventy-five days to comment on the proposed regulations. The biggest fight will be over e-cigarettes, which are the hottest topic in the press. In my view it’s a mistake for the FDA to wade into this until it gets its review process under control or can provide a workable alternative to the substantial equivalence path. The upside is that it will take at least two years before it takes enforcement action, which will allow more studies on e-cigarette’s effectiveness as a harm reduction tool to be conducted.

(Note also that the law requires the FDA to examine health impacts on the population level, not on the individual user, so it could order e-cigarettes off the market even though they are unambiguously safer than cigarettes. Remember too that the head of the FDA’s Center for Tobacco Products, Mitch Zeller, came directly to the job from consulting for GlaxoSmithKline, which makes nicotine replacement therapies that compete directly with e-cigs. Might pharmaceutical companies use the new restrictive review process to develop nicotine vapor devices of their own? I would not be at all surprised.)

Cigars have been almost completely off the radar of press and anti-smoking groups, but expect that to change as the debate over exempting them unfolds. Cigar smokers will have to continue keeping the pressure on lawmakers and the FDA to not destroy the industry. It will be important to show that premium cigars are primarily enjoyed by adults and have different health effects than cigarettes for the typical user. (For a summary of the latter, see here.)

Regardless of which option the FDA takes, I expect black market sales of cigars to increase. If it takes Option 1, the variety of cigars available in the United States will suffer greatly. If it takes Option 2, the price will rise to $10 a stogie.* Cuban cigars are pretty alluring already! If you enjoy the company of your local tobacconist, savor the next few years you have together. Their store may not be around much longer.

* Update to add that cigars could escape the price floor by winning FDA approval, but given the agency’s record so far I would not expect many to achieve that. Cigars that were on the market before 2007 could remain available at a lower price too.

** Additional note: I’ve asked the FDA several times whether ageing tobacco in cedar wood, a traditional practice for many cigars, would run afoul of the rule against characterizing flavors. They have not been willing to clarify this.

Multnomah County misleads bar owners

As a follow-up to my article in yesterday’s Oregonian about the failed attempt to include e-cigarettes in the state’s smoking ban, today I’m posting a memo Multnomah County officials have sent to local bars and restaurants. In it, they mislead business owners about the dangers of e-cigarettes, telling them:

State law does not currently prevent the use of e-cigs; however business owners are encouraged to include e-cigs in no-smoking policies. E-cigs pose serious health risks and challenges to enforcement of the Smokefree Workplace Law as it appears people are smoking indoors.

The letter then recommends that businesses include e-cigarettes in their no-smoking policies, adopt completely smokefree outdoor dining areas, and adopt a completely tobacco-free policy for their entire properties. (Here’s a PDF of the memo.)

There are valid reasons why a bar or restaurants might ban the use of e-cigs, such as the fact that some guests find them annoying. But county officials’ claim that the devices pose “serious health risks” is completely unsubstantiated. There’s not even much evidence that e-cigarettes are dangerous for users, much less for bystanders exposed to vapor secondhand.

There have been two recent studies on exposure to e-cigarettes in realistic indoor conditions. They are summarized here and here. Conclusion of the first:

… the quality and quantity of chemicals released in the environment [by vaping] are by far less harmful for the human health compared to regular tobacco cigarettes. Evaporation instead of burning, absence of several harmful chemicals from the liquids and absence of sidestream smoking from the use of the e-CIG are probable reasons for the difference in results.

And the second:

The study showed that e-cigarettes are a source of secondhand exposure to nicotine but not to combustion toxicants… Using an e-cigarette in indoor environments may involuntarily expose nonusers to nicotine but not to toxic tobacco-specific combustion products.

Even in the case of nicotine, exposure from real cigarettes was ten times higher than that from e-cigarettes.

Those are studies of indoor use. Multnomah County’s advice is to ban them outdoors too. The idea that indoor e-cigarette use could be harmful to bystanders is at least worthy of investigation, although the evidence so far is that it’s nothing to worry about. The idea that outdoor use presents serious health risks is wildly implausible.

This is yet another example of how the crusade against e-cigarettes is driven by unscientific alarmism rather than any empirical evidence of danger. County officials have shown that they have no credibility on the issue by misleading local business owners about the alleged risks.

Oregon’s war on vaping

The Oregon legislature recently failed to pass completely sensible restrictions on selling e-cigarettes to minor, an effort undermined by more extreme anti-smokers who were more intent on banning vaping in workplaces, bars, and restaurants. In today’s Oregonian, I write about lawmakers’ misguided attempt to include e-cigarettes in the smoking ban and their next proposal to impose new taxes on them. An excerpt:

I never thought I’d say this, but I’m actually getting nostalgic for the original smoking ban debate. Advocates exaggerated the dangers of secondhand smoke, but at least they made an effort to ground their views in science and demonstrate that non-smokers were being harmed.

The same cannot be said for those seeking to extend current bans to cover vaping. They’ll be the first to tell you that more study of e-cigarettes is needed. But why wait for results? They’re ready to ban first and ask questions later.

Read the whole thing here.

New at Reason

After a long absence (my previous article was in 2008!), I’m back in the pages of one of my favorite publications today. Over at Reason I take a look at the FDA’s latest actions against tobacco, explain why they accomplish nothing for public health, and spell out what they imply for the future of cigars and e-cigarettes.

The article also updates the case of Hestia Tobacco, whose regulatory tribulations I profiled at The Atlantic one year ago. Unfortunately, they are no closer to coming to market than they were before. See that article for a more in-depth explanation of the laws that allow the FDA to keep new tobacco products in regulatory limbo.

Finally, be sure to check in at Michael Siegel’s blog, where he has been tearing apart the FDA’s action this week from a slightly different perspective.

How grilling meat really is like a smoking a cigar

In his “Explainer” column at Slate yesterday, Brian Palmer raised alarm about grilled and smoked meats, suggesting that by eating them we may be, as the headline puts it, “Cooking Up Cancer”:

A growing body of research suggests that cooking meats over a flame is linked to cancer. Combusting wood, gas, or charcoal emits chemicals known as polycyclic aromatic hydrocarbons. Exposure to these so-called PAHs is known to cause skin, liver, stomach, and several other types of cancer in lab animals. Epidemiological studies link occupational exposure to PAHs to cancer in humans. When PAHs from a flame mingle with nitrogen, say from a slab of meat, they can form nitrated PAHs, or NPAHs. NPAHs are even more carcinogenic than PAHs in laboratory experiments. The reasonable conclusion is that grilling meat may be hazardous to your health.

The evidence linking cancer to cooking meat over a combustion source has been accumulating for decades. Epidemiologists first noticed a connection between the consumption of smoked foods and stomach cancer in the 1960s. Japan, Russia, and Eastern Europe, where smoking is a popular way to preserve meat and fish, became laboratories for gastric cancer research. Newer studies suggest that eating smoked meats may lead to cancer even outside the gastrointestinal tract. A 2012 study, for example, linked smoked meat consumption with breast cancer.

Palmer then compares current attitudes toward grilled meats to outdated acceptance of tobacco use:

In the mid- to late-19th century, doctors determined that lip and tongue cancer rates were higher among smokers of pipes and cigars. Despite this link, major medical journals mocked those who opposed smoking. The Lancet, the leading journal of the time and still one of the most important medical journals in the world, wrote in 1879, “We have no sympathy with prejudices against … tobacco, used under proper restriction as to the time and amount of the consumption. … A cigar when the mood and the circumstances are propitious [is] not only to be tolerated, but approved.” Moderation, not abstinence, was the order of the day.

[...]

It wasn’t until 1964 that the Report of the Surgeon General finally and firmly declared that smoking was indisputably linked to the surge in lung cancer. By that time, epidemiologists had a complete picture of the long-term effects of the increase in cigarette smoking that began around the time of World War I. The conclusions practically drew themselves. Still, it took the public health community decades to agree that smoking in moderation is a terrible idea.

I learned of the article from my friend Jeff Woodhead on Twitter, who took Palmer to task for sensationalizing the dangers of grilling and noted that habitual cigarette use carries far greater risks than exposure to charred meat. I don’t disagree. However I want to defend Palmer on one point. He is actually correct to compare grilling meats to smoking tobacco, though not in the way he realizes.

That pack-a-day consumption of cigarettes greatly elevates one’s risk of lung cancer is no longer disputed by any sensible person. Moderate use of other forms of tobacco, in contrast, carries much less danger. The Lancet article that Palmer mocks for suggesting that moderation in tobacco use is nothing to worry about overstates the case but was not too far from the truth.

Just how dangerous is it to enjoy an occasional cigar “when the mood and the circumstances are propitious?” A study in Preventive Medicine compared rates of lung cancer among smokers of various kinds of tobacco to those of non-smokers. Cigarette smokers were 16 times more likely than never smokers to get lung cancer. Smokers of cigars only, pipes only, and cigars and pipes all fared much better. Further, lung cancer among pipe and cigar smokers was concentrated among those who were the heaviest consumers. “Among pipe and/or cigar smokers only, patients with lung cancer were more likely than controls to have been long-time smokers of 5 or more cigars or 5 or more pipefuls per day and to have inhaled. The odds ratio for those smoking 5 to 9 cigars or pipes per day was 3.2 and for those smoking 10 or more units 6.7. The odds ratio of those cigar or pipe smokers who inhaled was 12.3.”

A cohort study published in The New England Journal of Medicine followed about 17,000 men enrolled in Kaiser Permanente health plans who reported never smoking pipes or cigarettes. Over a course of more than 20 years, the study compared health outcomes for non-smokers and smokers of cigars. Cigar smokers carried a relative risk of cancer in the aerodigestive tract of 2.02 and in the lungs of 2.14.

A third study in BMJ examined the risks of dying from three smoking-related diseases among former cigarette smokers who had switched to smoking pipes or cigars. Their mortality risk relative to users of pipes and cigars who were never cigarette smokers was 1.51. To put that in perspective, their relative risk compared to people who had never smoked at all was 1.68. In other words, the study found that even former cigarette smokers who switch to pipes and cigars lowered their mortality risk to a level not much above that of never smokers.

Brad Rodu, an advocate of harm reduction approaches in tobacco control, summarizes many of these risks. What it basically comes do is this: Cigarettes are uniquely dangerous because they are inhaled directly into the lungs and are very addictive. Other forms of tobacco that are mainly enjoyed in the mouth and lend themselves less easily to habitual consumption are significantly less dangerous. The risks are real, but much, much lower than those associated with cigarettes.

How does all of this compare to eating meat? Palmer doesn’t cite many sources that specify the dangers, but one study he links to does associate consumption of smoked meat with breast cancer. It finds an adjusted odds ratio of 2.31-3.13. If that’s accurate (and it may be on the high side), then eating lots of grilled meat may actually be a lot like enjoying an occasional cigar — which is to say that it’s a reasonable choice many adults may decide to make.

(Note: Some of the studies cited in this post use relative risk while others use odds ratios. These are not identical measures but should be roughly comparable.)

It’s also interesting to ask how this compares to the dangers of exposure to secondhand tobacco smoke. Smoking bans have proliferated on the justification that workers should not be put at risk. Whatever one’s opinion of these policies, consider the findings from the landmark 2006 report from the Surgeon General. The report concludes without equivocation that environmental tobacco smoke increases the risk of lung cancer in non-smokers. By how much? The reports’ table of meta-analyses of studies estimates relative risks of exposure at home for non-smoking spouses or at work for non-smoking employees in a range of 1.12 at the low end to 1.43 on the high end. Those are low relative risks! If they are enough to justify comprehensive bans on indoor smoking — not to mention the outdooor bans that are now so popular — then one may well question the ethics of allowing restaurant cooks to expose themselves to grill smoke on our behalf.

One of the big problems with reporting on cancer is that it focuses on the wrong question. Journalists ask, “Does X increase the risk of cancer?” The answer is very often yes, but they don’t follow-up with, “By how much?” Lifestyle choices carry trade-offs and better reporting would help readers put them into perspective. Palmer, to his credit, does write that the “risk-reward equation for smoking differs from that of grilling or frying meat” and acknowledges that the epidemiology on the latter is not yet clearly established. His mistake is to carelessly lump all forms of tobacco use into one, ignoring the fact that different types and different use patterns carry substantially different levels of risk.

Of course, few yet advocate completely giving up grilled or smoked meat, much less passing legislation to restrict it. “Everything in moderation,” said one of the toxicologists quoted in the Slate article. One assumes that the toxicologist’s definition of “everything” doesn’t include tobacco, because who would say that these days? But Palmer’s comparison of grilling to smoking isn’t crazy. It just tells us a lot more about contemporary bias against tobacco use than it does about the dangers of meat.

Nicotine and regulatory capture

horsebrass 021

The FDA is expected to announce very soon new regulations governing chewing tobacco, cigars, and likely electronic cigarettes. If you’ve followed my writing on this, you know I don’t think this bodes well for the quality side of the tobacco market. The law giving the agency authority over tobacco products was brokered by an alliance of Philip Morris and anti-smoking groups, and the new head of the FDA’s tobacco division, Mitch Zeller, came to the job straight from consulting for GlaxoSmithKline on nicotine replacement therapies. The agency’s record so far has been distinguished much more by its anti-competitive effects than by any actual achievement improving public health.

The Boston Globe recently interviewed Zeller to get some indication of where the agency may be headed. As expected, it appears likely that Zeller will pursue mandating the removal of nearly all nicotine from cigarettes:

1. Create a non-addictive cigarette. We have the authority given to us by Congress to reduce nicotine in cigarettes down to nearly zero,” Zeller said. Since nicotine is the addictive chemical in cigarettes, teens who start smoking products that are almost nicotine-free could, in theory, never get hooked in the first place. Researchers now have access to 9 million cigarettes with varying amounts of nicotine to start testing whether products with lower amounts will lead to less addiction among new smokers. But don’t expect an ultra-low-nicotine product for at least a few years, Zeller added, since the studies are just beginning.

A few notes on this:

1) This would obviously be good news for Zeller’s former client in the pharmaceutical industry. Removal of nicotine from cigarettes would leave smokers craving nicotine and many of them would likely turn to patches, gums, and the like. Zeller indicates in the same interview that the agency should perhaps remove warning labels from nicotine replacement therapies that discourage consumers from using them long-term, noting that using these products for life is healthier than smoking.

Even if this is good policy, Zeller’s previous job casts doubt on the FDA’s ability to consider the issue impartially. As many warned at the time of his appointment, his role as lead regulator of tobacco creates a blatant conflict of interest at the agency.

2) Mandated removal of nicotine could be good news for makers of electronic cigarettes, which now include the Big Tobacco companies. But it’s not clear that the FDA will turn a favorable eye to those, either. If the agency’s performance on cigarettes is any indication, e-cigarettes could be caught in a bureaucratic morass that keeps new products off the market with scant scientific justification.

3) Rather than turn to pharmaceuticals or e-cigarettes, at least some smokers will likely switch to cheap, low-quality cigars. Even if the FDA does not initially regulate nicotine levels in cigars, this will provide the impetus to extend the regulation. We’ve seen this before with bans on flavors or changes to tax policy when producers and consumers respond with products that technically qualify as cigars or pipe tobacco. Lawmakers and regulators then attempt to close the “loophole.” Makers of high-quality, traditional cigars would be caught in the crossfire. Whether or not one has any personal interest in cigarettes, if you enjoy an occasional pipe or cigar, then the FDA’s path should have you worried. There may be no way to produce a traditional cigar and comply with the FDA’s demands. This is the road that could lead to the complete destruction of the industry.

For more on how the FDA is getting tobacco regulation wrong, see my articles from the past year:
Who’s killing the electronic cigarette?
How the FDA is keeping new cigarettes off the market
The case against a smoke-free America

Two new cigarettes, now authorized for sale

This week the FDA sent out a press release boasting that its Center for Tobacco Products has finally issued a few decisions on new tobacco products:

For the first time since the Family Smoking Prevention and Tobacco Control Act of 2009 gave the U.S. Food and Drug Administration the authority to regulate tobacco products, the agency has authorized the marketing of two new tobacco products and denied the marketing of four others through the substantial equivalence (SE) pathway. [...]

“Today’s historic announcement marks an important step toward the FDA’s goal of reducing preventable disease and death caused by tobacco,” said FDA Commissioner Margaret A. Hamburg, M.D. “The FDA has unprecedented responsibility to protect public health by not allowing new tobacco products under FDA’s authority to come to market without FDA review.”

To put this into context, when I wrote about the FDA in March the agency had received about 3,500 new product applications. The most reasonable interpretation of the law giving the agency authority over tobacco implies that these reviews should take only 90 days, and certainly no more than 180, yet some of these have languished in a bureaucratic quagmire for years. Issuing only six decisions since 2009, with more than 100 employees at work reviewing them, is hardly an accomplishment worthy of praise.

(If you’re wondering, Hestia Tobacco, the brand I profiled for The Atlantic, remains tied up in the review process with no end in sight.)

It’s also worth emphasizing what these approvals don’t mean. They don’t mean that these two new cigarettes are any safer than products already on the market, only that they don’t raise any new questions of health. In other words, they’re just as lethal — though no more so, we are told to believe — as other cigarettes. New cigarettes like Hestia, which by any sensible standard also raise no new questions of public health, continue to be blocked. It’s difficult to see what good is accomplished by requiring them to go through this lengthy approval process.

And in the midst of this, the future of e-cigarettes remains unclear. As I explained at The Umlaut this week, this product that is indisputably safer than real cigarettes may soon fall under the same heavy-handed regulation that has brought the tobacco industry to a standstill. If that happens, the FDA will have even less to brag about that it does today.

Who’s killing the electronic cigarette?

That’s the topic of my article for The Ümlaut, a new website published by Jerry Brito and Eli Dourado:

Since no one seriously disputes that using e-cigarettes is far safer than habitually inhaling cigarette smoke, allowing them to compete should be a no-brainer. Unfortunately, the law allows the FDA to ban new tobacco products even when they are irrefutably safer than what is already for sale. The agency evaluates applications based not only on the risk to individual users, but also on how they impact smoking cessation and initiation in the population as a whole. If the FDA decides that these effects outweigh the health benefits, it could ban e-cigarettes not because they are dangerous, but rather in spite of their safety.

I feel obliged to make one update to the story. In it I say that the nadir of fear-mongering about e-cigarettes is a doctor from the Mayo Clinic telling journalist Eli Lake that the propylene glycol used in some brands is “similar to antifreeze.” He was recently outdone by a North Carolina doctor who appeared on a local news segment to warn viewers that e-cigarette vapor could be “several thousand degrees” when it hits your lungs. The physics of this would be rather remarkable, as would e-cigarette users’ ability to endure the product if it were true. Michael Siegel has the details and you can watch the segment here.

Cato podcast on FDA tobacco regulation

While in DC this week I recorded a couple podcasts. Here’s the first, with the Cato Institute’s Caleb Brown. In it we cover FDA regulation of cigarettes, e-cigarettes, and cigars.

One minor correction: We were only discussing these inhalable products, so I misspoke when saying that current FDA regulations only cover cigarettes. The agency regulates smokeless tobacco too.

Update 5/30/13: Or if you prefer video…

Tobacco news roundup

New FDA Center for Tobacco Products director Mitch Zeller tells Bloomberg to expect action from the agency soon and that he seeks to craft a “comprehensive nicotine policy.” What could that mean? Unmentioned in the article are Zeller’s ties to producers of pharmaceutical nicotine replacement products or his interest in reducing nicotine levels in cigarettes to near zero, a proposal he brings up in the most recent issue of Tobacco Control.

My friends the Stogie Guys have a couple recent posts that are worth reading. In the first, they explain how Big Tobacco has become the enemy of small, premium tobacco through its lobbying efforts. In the second, they examine what a new bill requiring online merchants to collect sales taxes may mean for the cigar industry.

Hestia Tobacco, the brand whose struggle to navigate the FDA’s approval process I documented for The Atlantic, is finally in business. Not selling cigarettes, of course, but rather filtered little cigars. Sale of their cigarettes must await greater competence at the agency. If the product interests you, go check them out.

Christine Quinn, a leader in polls to replace Bloomberg as New York City’s next mayor, appears to have embraced Bloomberg’s nannying legacy. She has proposed raising the legal age to purchase cigarettes within the city to 21. As J. D. Tuccille notes at Reason, this would be good news for black market sellers, who already claim more than 60% of the state’s cigarette market.

Tobacco tax skepticism

My latest article for The Atlantic provides four reasons to oppose the new tobacco taxes proposed in the White House budget.

DC wants to ban e-cigs in bars

People in DC bars are “vaping,” or using electronic cigarettes, indoors. A couple members of the DC city council — Yvette M. Alexander and David Grosso — have introduced a bill to include e-cigarettes in the city’s smoking ban:

In an interview, Alexander said e-cigarettes are being “used to usurp the smoking ban.”

“It is smoking, is an inhalant and it’s similar to smoking,” said Alexander, chairwoman of the Health Committee. “We don’t know what the ill effects of this are, and it’s still a bother to some people.”

“Similar to smoking” and “a bother.” Time was city officials at least made a show of finding evidence of harm before imposing bans. E-cigarettes may be annoying to other patrons, but there’s no evidence or reason to believe that secondhand vapor (is that a thing now?) is something to fear. And to point out the obvious, bar and restaurant owners are perfectly free to set their own policies if guests prefer to avoid it.

New taxes on pipes and cigars?

According to Bloomberg, President Obama will be proposing new tobacco taxes to fund pre-kindergarten programs:

Obama’s 2014 budget proposal, to be released April 10, would finance a pre-kindergarten program for 4-year-olds with higher taxes on cigarettes and other tobacco products. The president outlined the program in his annual State of the Union speech to Congress. He’s seeking to increase spending in areas such as education while Republican lawmakers are pushing for additional budget cuts as a way to reduce the federal deficit.

White House spokesman Jay Carney declined to elaborate on the proposed tobacco-tax increase. “Wait for specifics,” he told reporters at a briefing yesterday.

Never mind for now that cigarette smokers already suffered a more than doubling of the federal tax in Obama’s first year in office. The “other tobacco products” part of this proposal is reason to worry for those who enjoy pipes and cigars.

The 2009 tobacco tax increases to fund the Children’s Health Insurance Program created some significant disparities among similar products. Pipe tobacco was taxed at a far lower rate than roll-your-own (RYO). Large cigars sometimes get much more favorable treatment than small cigars. As a result, producers and consumers shifted to pipe tobacco instead of RYO and added just enough weight to small cigars to qualify as large. The distorting effects of these taxes were immediate and striking:

These changes are almost entirely a matter of legal classification. Actual consumption patterns haven’t changed in the way the chart suggests. Neither pipes nor premium cigars have enjoyed an explosion of new consumers as a result of these taxes.

Nonetheless, the government wants to fix this disparity. A report from the General Accounting Office, the source of the chart above (PDF), estimates that in the first two years of new taxes these substitution effects may have cost the treasury up to $1.1 billion.

One way to fix the disparity would be to lower taxes on RYO and small cigars, but that’s not going to happen. So don’t be at all surprised if the proposal from the Obama Administration includes tax hikes on pipe tobacco and large cigars, imposing substantial new costs on consumers and retailers.

For more, read Michael Siegel’s take on the tax proposal. And for a longer explanation of how smoking bans, higher taxes, and FDA regulation threaten the premium cigar industry, see my December article in The Atlantic.

Update 4/10/13: Via International Premium Cigar and Pipe Retailers on Facebook, this is apparently the language in the budget proposal:

Increase tobacco taxes and index for inflation

Under current law, cigarettes are taxed at a rate of $50.33 per 1,000 cigarettes. This is equivalent to just under $1.01 per pack, or approximately $22.88 per pound of tobacco. Taxes on other tobacco products range from $0.5033 per pound for chewing tobacco to $24.78 per pound of roll your-own tobacco.

The Administration proposes to increase the tax on cigarettes to $97.65 per 1,000 cigarettes, or about $1.95 per pack, increase all other tobacco taxes by about the same proportion, and index the taxes for inflation after 2014. The Administration also proposes to clarify that roll-your-own tobacco includes any processed tobacco that is removed for delivery to anyone other than a manufacturer of tobacco products or exporter. The rate increases would be effective for articles held for sale or removed after December 31, 2013.

As predicted, all loose tobacco would be treated equally, resulting in a huge tax increase for pipe smokers. Details on cigars are lacking, but it looks they would be hit too.

More questions from the FDA

Good news: The FDA is once again taking action on the application of Hestia Tobacco, the aspiring start-up whose case I profiled in The Atlantic this week. Bad news: The agency returns with a new round of demands for information.

To recap, in order to bring their cigarettes to market, Hestia Tobacco and brand owner David Sley must prove that their product is substantially equivalent to a product that was already on the market before February 2007. Sley identified the original blend of Natural American Spirit as his chosen predicate and submitted a report demonstrating the very tight similarities between it and his product.

Natural American Spirit is an established brand, successful enough that its parent company was acquired by Reynolds American in 2001. Even if you don’t smoke, there’s a good chance you’re familiar with it. Yet Hestia Tobacco’s newest task is proving that this product really was for sale, as explained in an email Sley received this morning and in a phone call yesterday:

Dear Mr. Sley,

Thank you for taking the time to speak with CTP’s Office of Compliance and Enforcement today regarding your 905(j) submission. In follow-up to our conversation, please find below a summary of the information we requested.

1. Evidence demonstrating that the predicate tobacco product was commercially marketed in the United States as of 2/15/2007

Please provide evidence to demonstrate that the predicate tobacco product was commercially marketed in the United States on 2/15/2007. If you cannot provide evidence demonstrating the tobacco product was commercially marketed on 2/15/2007, per our discussion, we suggest that you provide evidence that your product was commercially marketed before and after 2/15/2007.

Examples of such evidence may include, but are not limited to, the following:
• dated copies of advertisements;
• dated catalog pages;
• dated promotional material;
• dated trade publications;
• dated bills of lading;
• dated freight bills;
• dated waybills;
• dated customer receipts; or
• dated distributor or retailer inventory lists.

2. Evidence Description

Please provide a brief statement or chart explaining and identifying any abbreviations (e.g. item number and/or product description) in the evidence and how it references the predicate tobacco product.

3. Package Description

Please provide a statement as to whether the cigarettes are sold as a soft pack or hard pack.

4. Statement that the predicate tobacco product was not in a test market as of 2/15/2007

As you stated in the teleconference, your predicate tobacco product is Original Blend Natural American Spirit and you do not own the product. Thus, in addition to providing a statement that to the best of your knowledge the predicate tobacco product was not in a test market only on 2/15/2007, please provide additional evidence to show that product was not in a test market only. Examples of this additional evidence can include but are not limited to: dated copies of U.S. advertisements, dated U.S. promotional materials, dated online U.S. product reviews, dated U.S. articles, etc.

We request that you provide the above information for the following 905(j) Report (SE0004644) as soon as possible.

You may receive additional requests if further information is needed. Please do not hesitate to contact me if you have any questions.

Thank you!

[Redacted]

Hestia Tobacco’s application was submitted in June of last year. As explained in my article, the law implies that these reviews should be complete within 90 days, or at most 180. Regardless of whether one considers this latest request for information legitimate, it’s rather late for the agency to be getting around to it. And the timing — arriving the first business day after my article ran — is something to ponder.

Markets not in everything

My article today at The Atlantic looks at the anti-competitive effects of the FDA’s regulation of tobacco:

David Sley wants to sell cigarettes. This, by his own admission, does not make him the most sympathetic person to feature in an article about excessive government regulation. Yet Sley, an aspiring entrepreneur who has spent more than two years trying to navigate the Food and Drug Administration’s new tobacco regulations, has legitimate cause to complain. The entire cigarette industry has been brought to a standstill by the FDA, forbidden from introducing any new products since March 2011. Tobacco companies contend that the agency’s actions rest on uncertain scientific and legal grounds — and, for once, they may be right.

In the article I document Sley’s attempt to launch a new cigarette brand, a process which has dragged on for more than two years without resolution. As you may remember, the Tobacco Control Act was backed and negotiated by Philip Morris, who just might have anticipated such a result.

The extremely slow approval process also bodes poorly for the premium cigar market, which is even more dynamic than that for cigarettes. Cigar lovers should pay close attention when the FDA issues its proposed rules for cigars later this year.

Read the whole thing.

California brings smoking ban inside the home

It was only a matter of time:

Millions of Californians would not be able to smoke tobacco inside their own homes under new legislation that would raise the bar nationwide for fighting secondhand smoke.

No state ever has ventured into personal bedrooms and living rooms with its smoking restrictions, but California is going even further than that by targeting owner-occupied residences as well as rental units.

Specifically, the measure would prohibit lighting up a cigarette, cigar or pipe in condominiums, duplexes and apartment units. [...]

Levine’s bill would permit outdoor smoking near apartments or condos, but only in a clearly marked area that is at least 20 feet from any housing unit and 100 feet from a playground, school or pool.

Who could have predicted that ignoring property rights and letting bad science go unchallenged would lead to this?

Reform Oregon’s smoking ban

An Oregonian editorial last week was refreshingly libertarian, calling for same-sex marriage, tuition equity for some undocumented immigrants, restraint on gun control, and even opposition to the state’s smoking ban. I sent in a letter about the last item, which they published today:

The Jan. 12 libertarian-leaning editorial “Protect and expand personal freedom: Agenda 2013″ was a breath of fresh air, especially in regard to our state’s excessively stringent smoking ban.

Current law makes few exceptions for businesses that cater to smokers, making it essentially illegal for entrepreneurs to open new cigar bars or smoking lounges even in stand-alone tobacco shops. Regardless of whether one supports a broad smoking ban, it’s difficult to justify forbidding these businesses to open.

Sensible reform would replace the current exemptions, which apply only to venues that have been grandfathered in, with objective guidelines that would allow both existing and aspiring business owners to offer smokers an indoor refuge.

As I reported in the Oregonian in 2011, the promised decline in heart attacks that the smoking ban was supposed to usher in never developed.