Appeals Court Finds FDA’s MDOs ‘Arbitrary and Capricious’

Agency did not consider marketing plans for several ENDS companies’ applications
Photograph: Shutterstock

GRANT, Fla. — The U.S. Food and Drug Administration must reconsider several premarket tobacco product applications (PMTAs) for electronic nicotine delivery system (ENDS) products and e-liquids after an appeals court said the FDA did not adequately consider the companies’ marketing plans.

Between Sept. 1 and Sept. 16, 2021, the FDA issued nearly identical marketing denial orders (MDOs) to each of the tobacco company petitioners—Bidi Vapor LLC, which is distributed by Grant, Fla.-based Kaival Brands Innovations, Group Inc.; Diamond Vapor LLC; Johnny Copper LLC; Vapor Unlimited LLC; Union Street Brands LLC; and Pop Vapor Co. LLC—for their non-tobacco flavored products.

The denials stated the applications lacked sufficient evidence demonstrating that the flavored products’ benefit to adult users would outweigh the risks to youth. The reviews also said the FDA did not evaluate the marketing plans “for the sake of efficiency,” because the agency was “not aware of access restrictions that, to date, have been successful in sufficiently decreasing the ability of youth to obtain and use [ENDS],” the U.S. Court of Appeals for the Eleventh Circuit said Aug. 23 in its majority opinion on the appeal.

Before the PMTA application deadline in September 2020, however, the FDA had issued nonbinding guidance, hosted public meetings and published a proposed rule explaining what evidence would be required in applications.

“The [FDA] repeatedly represented to tobacco companies that marketing and sales-access-restriction plans were relevant to its determination of whether their products were ‘appropriate for the protection of the public health’,” the court said.

The petitioners included those types of marketing plans in their applications. Bidi Vapor’s application, for example, included “product information, scientific safety testing, literature reviews, consumer insight surveys and details about the company’s youth-access-prevention measures, distribution channels and adult-focused marketing practices,” the court said. Bidi also requires all downstream business partners to establish and publicize a hotline for anonymous reporting of noncompliant sales and uses a state-of-the-art authentication system to ensure supply chain security and prevent counterfeit.

“The marketing and sales-access-restriction plans in the tobacco companies’ applications were relevant factors to the [FDA's] determination as to whether marketing the companies’ products would be 'appropriate for the protection of the public health,'” the majority opinion stated.

In response to those MDOs, the tobacco companies separately filed petitions for review and the orders were stayed. Bidi Vapor later filed a lawsuit claiming the FDA’s MDO was “arbitrary and capricious.”

Ultimately, the appeals court decided it was “arbitrary and capricious” for the FDA to ignore the relevant marketing and sales-access-restriction plans and remanded, or sent back, the applications back to the FDA for their further review.

The 2:1 opinion in favor of the petitioners led by Chief Judge William Pryor. The dissent disagreed on whether it was the role of the court to consider the novel marketing and sales-access-restriction plans submitted by tobacco companies. It also said it has not seen any marketing or access plans that would reduce youth access, or evidence that non-tobacco flavored vapor products offer an advantage over tobacco-flavored vaping products in decreasing smoking among existing smokers.  

The FDA declined to comment on this story, saying it would not comment on possible, pending or ongoing litigation.

Bidi Vapor Reacts  

Distribution in the ENDS market has been challenging, Eric Mosser, president and COO of Kaival Brands, said in a statement provided to CSP.

“As the exclusive U.S. distributor of Bidi Vapor’s products, this is a significant event for us and our downstream partners, as many awaited the decision before expanding distribution, and paves the way for potential revenue growth for our company,” he said.

The company is also glad the court recognized the potential importance and affects that an adult-focused marketing plan and strict sales and access restriction could have on addressing youth access.

“We strongly believe that the appeal to and illegal usage by youth can be significantly reduced, not by banning flavors which are necessary for adult smokers seeking non-combustible alternatives to cigarettes, but with responsible marketing, adult-oriented packaging, restrictive online access, and enforcement of the current laws and regulations to force out bad actors marketing illegal and counterfeit products,” Mosser said.

The FDA has not yet announced its plans moving forward, Bidi Vapor said. The agency could appeal the ruling or put Bidi Vapor’s, and the other companies’, PMTAs for its non-tobacco flavored devices in scientific review.

“We believe that Bidi Vapor has provided FDA with substantial, robust and reliable scientific evidence through, among other things, surveys, behavioral studies and clinical trials on our Bidi Stick products. We are confident the science will prove that the Bidi Stick is appropriate for public health,” said Kaival Brands Chief Science Officer and Founder Niraj Patel. “Following on FDA’s initial administrative stay of the MDO, we believed that the subsequent judicial stay was a good indication that the court found some merit in Bidi Vapor’s arguments and puts Bidi Vapor's PMTAs for the non-tobacco flavored ENDS one step closer to being properly and fully evaluated by the FDA. Bidi Vapor’s victory in our merits case confirms our prior beliefs. We look forward to cooperating with the agency through the scientific review process.”

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