How To Defend Your Company Where It’s Most Vulnerable
Assessing the Effects of Deeming
The U.S. Food and Drug Administration’s (FDA) newly announced deeming regulations over e-cigarettes (as well as cigars, hookah tobacco and pipe tobacco) will transform that industry, said Ryan Sullivan, corporate counsel for BIC Corp., Shelton, Conn. The cost of meeting product registration requirements—submitting ingredient lists—will cost an estimated $2 million to $10 million per product.
“It’s going to force a lot of small players out of this, and you’re going to be left with a couple of players already in big tobacco who have the resources and ability to navigate through the regulatory scheme work,” said Sullivan. There is a congressional push to exempt existing manufacturers from having to comply with this particular requirement, and flavors were not included in the regulations, so the ultimate effect remains in flux.
Having the regulations in place is one thing; enforcing them is another. “You can have more rules, but where does the enforcement come from?” said Steve Burkhart, vice president and general counsel for BIC. The Department of Justice does not necessarily have a bigger budget for enforcing the deeming regulations, and depending on the result of the presidential election, it could have an even smaller one.
“If you don’t have the budget or are not being told to spend the money, then where is the fight likely to happen? Maybe in a civil lawsuit, in a courtroom, between private parties,” said Burkhart. “It’s great to have new rules, some clarity, at least starting the process. But it probably helps the plaintiff’s lawyers first, not the lawyer inside the justice department trying to enforce the new rule.”
Continued: 3 Lessons to Learn From Chipotle’s Crisis