Lighting Up a Gray Area
At CRU, e-cig exec explains FDA regulation situation
WASHINGTON -- When Roy Anise, executive vice president of NJOY Electronic Cigarettes "lit up" inside the FDA Tobacco Control Center, he did so hoping it would make a point.
As he enjoyed his e-cigarette in the company of some of the country's most ardent tobacco regulators, Anise and his team were celebrating a court's decision to regulate their product like tobacco, rather than the alternative that would have "sunk it." The company invested nearly $2 million in legal fees to fight the FDA's assertion that e-cigarettes are nothing more than a drug delivery device.
After what he calls a "David and Goliath-type battle," the FDA decided not to appeal a 2010 ruling by three judges of the U.S. Court of Appeals for the D.C. Circuit who ruled that the FDA can only regulate electronic cigarettes as tobacco products and not as drugs--and therefore cannot block their import.
In mid-2011, the FDA agreed to regulate e-cigarettes in the same manner they do all tobacco products according to the Family Smoking Prevention & Tobacco Control Act of 2009.
But despite that, as Anise explained in a session titled "Electronic Cigarettes: Fad or Fortune" at CSP's Convenience Retailing University event in Fort Worth, Texas, last week, the case of regulation is still a bit wishy-washy. E-cigarettes occupy the same gray area as cigars. In light of that, company's like NJOY are abiding by a few hard and fast rules to keep their product out of the drug category, and are playing nice with regulators at the FDA, as well as on the state level, to ensure their product stays on the right side of regulation. With the FDA now moving from the courtroom to the marketplace, Scottsdale, Ariz.-based NJOY "is investing quite a bit of money to be ready for an FDA regulated world," Anise said.
Rules to abide by include:
- Retailers must ensure age verification of all e-cigarette products.
- There can be no health or therapeutic claims.
- The only two flavors NJOY will offer is tobacco or menthol.
- Packaging must come equipped with the proper warnings.
In what could mean more good news for the fledgling product, Anise cited studies that count 40% of adult smokers looking for alternatives to traditional cigarettes. Social media studies, and other measurement of how the product is traveling via word of mouth has Anise confident that electronic cigarettes will grow to be a $3-5 billion category over the next five years.
"This is something I have not experienced in any other category I've ever worked in," he said, noting that "there's just an education process that needs to take place."