AP Photo/Nam Y. Huh
The US government is finally regulating the e-cigarette industry. That has e-cigarette companies worried they could disappear altogether.
E-cigarettes are easily the most cyberpunk change to the American visual landscape in the last decade. Where once nicotine users roamed the night with the red specks of burning tobacco floating a few inches from their lips, trailing noxious smoke, now multicolored LEDs light their faces as they puff huge clouds of vapor like bad perfume.
But an executive at one of America’s largest independent e-cig manufacturers tells Tech Insider that could all change soon. That’s thanks to a Food and Drug Administration decision to regulate the $3 billion industry (along with hookah, cigars, and other products) in the same way it regulates e-cigarettes.
Adam Kustin, vice-president of marketing at VMR Products, said the 499 page rule could create a regulatory and economic environment that would crush the industry. VMR products makes V2 vaporizers, the most popular online brand in the US, and one of the biggest not owned by a tobacco company.
E-cigarettes are electronic devices that deliver nicotine, often alongside flavoring, in clouds of water vapor. They are widely believed to be less harmful than tobacco, because they don’t deliver smoke into users’ lungs. However, that’s still very much up for debate (and complicated by the massive variety among products). A major American Heart Association (AHA) study has shown they introduce nicotine and other harmful substances into the air.
Why vaporizer makers fear the regulations
The FDA rule requires that new products meet pre-approval before companies can market them. In other words, the FDA will check that products are basically safe and are not overtly targeted toward children before said products are allowed to be sold.
After a series of grace periods, products released since 2007 (which is most of them) will have to meet the same standard.
Kustin said that VMR, which has over 1,000 product varieties, would only be able to afford to put a fraction of them through the regulatory process. And it has more resources than many smaller manufacturers. He also said he was concerned about the speed with which the FDA could meet the sudden influx of applications.
Regulators downplay that concern.
An FDA representative wrote in an email to Tech Insider that the agency will add additional staff to speed the process, and that regulatory costs to companies will be “likely between the low hundreds of thousands of dollars, not in the millions or tens of millions of dollars estimated by some others.”
But Kustin said even those costs would be enough to wipe out the market.
It’s a rounding error for those guys.
“Let’s say that the average cost to do a product is half a million dollars,” he said. “Let’s say that we can only do five, which is essentially the same as doing none, which is essentially the same as going out of business. If someone was consequentially smaller than my company, they would be able to afford to do exactly zero, which means they would go out of business.”
As for the e-cigarette brands owned by major tobacco companies, he said their makers don’t necessarily have an interest in investing in or fighting for a relatively small product in their portfolio, especially if it weans people off tobacco.
“They can also say, you know, ‘The e-cig business is small for us.’ It’s a rounding error for those guys.”
It’s unclear whether tobacco brands would get out of the e-cigarette market if regulation squashed the smaller players in the industry and drove up their costs.
Right now, that’s not what their rhetoric indicates. A spokesperson for Blu eCigs, which is owned by Imperial Tobacco Group, provided a statement to Tech Insider indicating that they also have concerns about the new rules.
The case for e-cigs
A reader might reasonably ask whether the collapse of a slice of the nicotine industry would really be a bad thing. But proponents like Kustin claim it could create a public health hazard as e-cigarette users return to tobacco cigarettes.
The argument he made on the phone is long, but worth reading in full to understand the pro-e-cigarette position. I’ll break it down point by point:
We can not make a claim that our products are cessation devices. Can’t do that. But the simple facts in the United States that are undeniable are the following:
Virtually every smoker wants to quit smoking. The estimates are between 70 and 95 percent of all smokers want to quit smoking. Most of them can’t do it given the current tools that are out there for them — which are different nicotine replacement therapies, or hypnosis or cold turkey. E-cigarettes are absolutely an alternative to the most deadly preventable disease, at least in America, maybe globally.
The detriment is that there is an alternative to combustible tobacco consumption that many people have relied on to quit smoking that will now be unavailable to them because of this regulation, if it stands as written.
In other words:
- E-cigarette makers can’t claim their products help people quit smoking, but…
- …they do want you to know that’s what they think.
- Most smokers want to quit. (The CDC pegs the number at 68.9 percent.)
- Most quitting methods are weak and hard to stick with. (This is also true.)
- E-cigarettes are a better option than cigarettes.
While it is widely believed that e-cigarettes are less harmful than burning tobacco, there is some evidence of carcinogenic effects from long-term exposure.
Some studies have shown moderate helpful effects for tobacco smokers. However, when researchers look more broadly at the available data, the results often make them less confident in that conclusion. And some studies have shown that e-cigarettes have no impact at all on quitting.
When several respected, peer-reviewed studies turn up such conflicting results what it actually means is: There’s not enough data available, the effect isn’t strong enough to catch, or there are variables we simply aren’t aware of yet. Or it’s some combination of all three of those possibilities.
There result is a world where, as Business Insider reported, some physicians actively press smokers to switch to e-cigarettes even as others push the industry to reform.
So Kustin’s argument, which is similar to that advanced across his industry, is not crazy. Nor does it fall into the same category as the decades of lies tobacco companies told the public about their products. However, it’s not clear that it represents the whole truth.
The FDA acknowledged in a statement to Tech Insider that there are rewards as well as risks to e-cigarettes, but pointed to concerns that they can hook young people on nicotine or end up supplementing, rather than replacing, existing addicts’ tobacco habits.
How the industry will fight back
Kustin said his industry doesn’t have the lobbying power of tobacco, but he’s confident their efforts will be enough to prevent the rule from passing as written.
Before the FDA’s announcement, some politicians were already coming to the industry’s defense.
An amendment introduced by House Representatives Tom Cole (R-Oklahoma) and Sanford Bishop (D-Georgia) to a spending bill would exempt existing products from regulation. If passed, it could save every product released since 2007 from requiring the FDA’s approval.
Kustin said that if it weren’t for that amendment, he’d be worried. But because it was introduced, he’s not.
If that doesn’t work out, he alluded to the possibility of challenging the rule in court.