FDA's Tobacco Dilemma
When our industry’s worst nightmare came to fruition and tobacco was placed in the lap of the Food and Drug Administration, our fears exceeded a cold sweat: Washington will wipe out tobacco. U.S. will follow Canada. Anti-tobacco folks will rule the Hill.
Such forecasts, though extreme, were not entirely without reason. For too long, tobacco has been our industry’s lifeblood, in some ways not unlike a company town with an umbilical tie to the largesse of its primary employer. Think Kodak to Rochester, IBM to Endicott.
As the titan tumbles, so does the town. Would our industry’s fate be the same?
Of course, it would also depend on the decline itself. A free fall would inflict disastrous casualties on a convenience channel in which tobacco accounts for roughly 40% of its revenues. Conversely, a parachuted descent based solely on consumers’ changing consumption habits would afford retailers a cushion to offset tobacco declines by developing less mature categories, tapping emerging trends and exponentially growing other mature segments.
No doubt, the FDA plays a Zeus-like role in tobacco’s trajectory. For this reason, on a brilliant January day, three CSP editors traveled from Phoenix, Chicago and New York to meet with the leadership team behind the FDA’s Center for Tobacco Products.
Our goal was clear: to understand FDA’s agenda. Will it be an activist, laying a heavy hand on the right to market tobacco, or will it embrace a more incremental approach?
CTP leader Lawrence Deyton is self-effacing, witty and personable, a nice guy with whom you’d gladly go to a hockey game. He is polite, civil and a very good listener, not easily flummoxed even when an editor questions some of his decisions.
Deyton, for sure, is not short on diplomacy. He’s hard to cast as the villainous regulator seething with ambition to stomp out tobacco.
What is clear in this early stage is that the Deyton administration is more deliberative than capricious. By and large, it has limited its scope to addressing congressional mandates, such as the legality of menthol, preventing underage sales and drafting graphic warnings on cigarette packages.
Deyton is not going maverick on the c-store channel. And for the moment, he seems intent on ensuring all sides that he knows what’s at stake. As a practicing physician, he recognizes the harmful effects of tobacco, but as a consumer and administrator he says he understands the fears of those who have an economic interest in making sure tobacco remains legal—from manufacturers to tobacco growers and the merchants who sell cigarettes, cigars, moist smokeless and everything else that makes up today’s tobacco category.
What is personally most vexing is trying to gain insight into Deyton’s mind. It is hard to map out a philosophy of his personal beliefs, much as it is with Mitt Romney.
Deyton may be likable, but what’s his view on the role of government? Does he prefer to educate and enforce, or enact and abolish, or possibly all the above? Does he believe all graphic warnings are the same? What about his definition of modified risk? We know what the statute states, but will modified risk be limited to cessation products such as gums and patches, or will it extend to products widely considered less harmful than cigarettes (e-cigarettes, moist smokeless)?
An hour of questions left me with no more clarity than when we began our interview. My sense is that Deyton will walk the tightrope of centrism. I would be surprised if CTP bans menthol outright.
I would be equally surprised if he embraces an elastic approach to modified risk. Political repercussions of treating OTP differently than cigarettes (though a strong argument can be made) are fraught with enormous risk. Overnight, children’s groups would cast Deyton as beholden to Big Tobacco at the expense of millions of innocent children. Fair or not, that is our reality, and Deyton’s conciliatory approach doesn’t model well for bold moves, whether for or against our industry.
The good news is: Don’t expect the Deyton team to ride shotgun on tobacco sales. At the same time, don’t look for him to open the door for greater sales through a more flexible modified-risk interpretation.