Smoke and fire: FDA's e-cig rules spark a battle

The fight over the Food and Drug Administration's new e-cigarette regulation has begun.

A lawsuit filed this week by a Florida-based maker of vaping products and liquids used in e-cigarettes called Nicopure Labs argues that the FDA overstepped its authority under the 2009 Tobacco Control Act to include products that are "neither made nor derived from tobacco nor intended for human consumption."

At issue is the FDA's decision, announced May 5, requiring the agency to approve e-cigarettes that have gone on the market since 2007 -- essentially all of them. Complying with the rules would cost e-cigarette makers $1 million per product SKU, according to Ray Story, the head of the Tobacco Vapor Electronic Cigarette Association, a trade group. He describes it as a "de facto ban" that will cause users to smoke more regular cigarettes.

The FDA rejects the industry's claims and notes that it's providing additional time for small producers to comply with the rule.

"I think it's safe to say that the FDA has bent over backward to try and help as many of those companies who are willing to make an effort and recognize that they cannot operate in the wild, wild west any longer," said Erika Seward, a spokeswoman for the American Lung Association.

E-cigarettes work by vaporizing a flavored liquid rather than burning tobacco like conventional smokes. As a result, backers of e-cigs say they're a less harmful to users. The industry has been marketing the product as a tool to quit smoking regular cigarettes, though critics say no evidence yet backs up that claim. E-cigs' popularity has skyrocketed in recent years, and the global market is forecast to reach $50 billion by 2025.

Jan Verlurer, the CEO of e-cigarette maker V2, argues that his industry is in the best position to curb tobacco use, which kills 500,000 Americans annually, an effort that he says the FDA's new rule will stymie.

"You have a product that is 80-95 percent less harmful that traditional tobacco that is being regulated at the same level of intensity," he said, adding "no one is saying that e-cigarettes are healthier than breathing air."

Regulators and public health advocates are especially concerned about the skyrocketing use of e-cigs by young people. A 2015 survey by the FDA and the Centers for Disease Control and Prevention found that 16 percent of high schoolers used the devices versus 1.5 percent in 2011. The new FDA rule would also ban the use of flavors, such as candy, that would appeal to young people.

However, the ban doesn't go far enough, according to the Campaign for Tobacco-Free Kids.

"While e-cigarette manufacturers will claim these rules impose an unfair burden on them, they allow all e-cigarettes to remain on the market for at least three years, no matter how great their appeal to kids, unless the Administration moves quickly to close these gaps," the organization said in a statement.

According to V2 CEO Verleuer, the FDA's rules will help big tobacco companies, which have been trying to cement their foothold in the e-cig market to offset plummeting sales of conventional smokes. He categorically rejects any association with the traditional cigarette makers and said the FDA failed to account for the differences.

Some medical groups, such as the U.K.'s Royal College of Physicians, have noted that e-cigarette use could lead to declines in smoking and smoking-related illness while acknowledging that these new products carry risks. A 2014 study from the Center for Tobacco Products at Virginia Commonwealth University reached a similar conclusion.

The American Lung Association remains unconvinced because three-quarters of e-cig users still use conventional smokes. "They're making health claims that have not been proven," the association's Seward said. "They're ripping pages from big tobacco's playbook as they're trying to gain more market share for their products."

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    Jonathan Berr is an award-winning journalist and podcaster based in New Jersey whose main focus is on business and economic issues.