Topics. Changes in Cigar Production and Use Fact or Fiction? FDA Deeming Regulations. Cigar Production Youth Usage

Transcription

1 August 19, 2014

2 Topics Changes in Cigar Production and Use Fact or Fiction? Cigar Production Youth Usage FDA Deeming Regulations Regulatory Process Scope of Regulation Questions Posed by FDA to Stakeholders Path- To- Market Cigar Industry Focus Takeaways/Themes 2

3 Changes in Cigar Produc2on and Use Fact or Fic2on? Reviewing the actual figures from the Tobacco Statistics Reports published by the TTB, large cigar production did dramatically increase between 2008 and 2013, however, the overall cigar production category remained relatively stable Large Cigars Little Cigars 5.8 Billion 10.0 Billion 12.8 Billion 13.3 Billion 13.6 Billion 12.5 Billion 6.9 Billion 2.9 Billion 1.5 Billion 1.2 Billion 1.3 Billion 1.2 Billion TOTAL 12.7 Billion 12.9 Billion 14.3 Billion 14.5 Billion 14.9 Billion 13.7 Billion 3

4 Changes in Cigar Produc2on and Use Fact or Fic2on? Cigar Production In 2009, the passage of the State Children s Health Insurance Program ( S- CHIP ) increased taxes on large cigars by 736% little cigars by 2,650% The passage of S- CHIP legislation changed the purchasing and usage patterns of cigars with a drastic swing towards large cigars rather than small cigars 4

5 Changes in Cigar Produc2on and Use Fact or Fic2on? Youth Usage U.S. Surgeon General Report (2014), The Health Consequences of Smoking 50 Years of Progress Data from obtained from the National YRBS indicate that current cigar use among male high school students declined from and then remained stable from Among female students, current cigar use declined from

6 Changes in Cigar Produc2on and Use Fact or Fic2on? Youth Usage CDC - MMWR, Kahn et. al (2014) During , a significant linear decrease occurred overall in the prevalence of current cigar use (22.0% 12.6%). A significant quadratic trend also was identified. The prevalence of current cigar use decreased from (22.0% 15.2%) and then decreased more gradually from (15.2% 12.6%). This review of the national Youth Risk Behavior Surveillance Survey indicates that cigar usage patterns among youth continue to decrease through 2013, and that the 12.6% is still 20% below the cigarette usage rate posted by the same study. 6

7 Changes in Cigar Produc2on and Use Fact or Fic2on? The National Survey on Drug Use and Health ( NSDUH ) also offers the perspective of a steady decrease in the 30- day use of cigars from , with the difference between 2011 and 2012 being statistically significant at the 0.01 level Total

8 Regulatory Process On June 22, 2009, the Family Smoking Prevention and Tobacco Control Act ( TCA ) took effect bringing cigarettes, smokeless tobacco and R.Y.O. under the regulatory authority of the FDA. It made further provisions that Other Tobacco Products ( OTP ) could be deemed regulated by the FDA following a notice and comment period. The proposed Deeming Regulation for OTP was promulgated on April 24, 2014 by FDA s Center for Tobacco Products. 8

9 Regulatory Process Steps to be taken BEFORE Deeming Regulation becomes effective: FDA provided until August 8, 2014 for public comments comment period is now closed FDA will review all comments and decide whether to draft additional regulations or change any of the proposed regulations FDA will submit the revised regulations to the White House Office of Management and Budget ( OMB ) which will conduct a final economic impact review FDA will then issue the Final Rule and set date that regulations will take effect Litigation or other factors (perhaps legislative) would impact effective date 9

10 Scope of Regula2on FDA proposed two Options for Regulations Option 1 All Tobacco Products would be regulated by FDA Option 2 All Tobacco Products except Premium Cigars would be regulated by FDA 10

11 Scope of Regula2on Vending Machines (on Effective Date ) Sampling Ban (on Effective Date ) User Fees (30 days) Submission of Ingredient Lists (6 months) Submission of Research Data (6 months) Registration of Manufacturing Facilities/Submission of Product Lists and Advertising (6 months) Prohibition on Modified Risk Claims (mild/light/low) (1 year) Premarket Review Requirements (2 years) Warnings and Other Label Requirements (2 years) Submission of HPHC Data (3 years) Tobacco Product Standard, Constituent Reporting, GMP s, Foreign Facility Registration (at some point in the future) 11

12 Scope of Regula2on* What is not yet covered: Most Advertising BTC, Sponsorship, Branded Items, etc., Pack Size No Flavor Ban/Restrictions* *FDA seeks comments on how to distinguish between a cigarette (for which there exists a ban on flavors) and a little cigar 12

13 Ques2ons Posed by FDA to Stakeholders FDA posed a series of questions about its proposed regulation, some of which are: Should premium cigars be subject to regulation or should they be exempt and, if so, suggested the following elements determine whether a cigar is premium: wrapped in whole tobacco leaf; contain 100% leaf tobacco binder; contain primarily long filler tobacco; made by manually combining wrapper, filler, and binder; have no filter, tip, or non- tobacco mouthpiece and are capped by hand; retailing for at least $10 per cigar; have no characterizing flavor; and weigh more than 6 pounds per 1,000 units 13

14 Ques2ons Posed by FDA to Stakeholders What additional steps should FDA take regarding flavors in cigars Can FDA adopt a different path- to- market process that currently exists for cigarettes, smokeless tobacco and R.Y.O. If not, what is the impact on cigars and other newly deemed products Are there alternatives to the proposed warning scheme for cigars What factors should FDA consider in determining if an item is a cigarette. Despite that it is being labeled as a cigar Should sampling of products other than smokeless tobacco be banned 14

15 February 15, 2007 (Grandfather Date) Any product that was on the market on February 15, 2007 may be sold without FDA approval Any product not on the market as of February 15, 2007 requires pre- market review FDA Deeming Regula2on Ques2ons Posed by FDA to Stakeholders Path- To- Market Substantial Equivalence Need to demonstrate product is substantially equivalent to a predicate product (product on the market on February 15, 2007) meaning it is the same or doesn t raise a different question of public health Premarket Tobacco Product Application If you cannot complete a SE, Premarket Application is the pathway What types of changes to the product require premarket review? So long as one submits SE or PA within 2 years of the Effective Date, the product can remain on the market until the FDA has ruled on the application 2 years after the Effective Date, any new product will need to either file a SE or PA application and have that application approved before the product can go to market 15

16 Cigar Industry Focus Retail groups, trade associations and manufacturers have all submitted comments Focus areas and key concerns raised include: The proposed definition of premium cigar was overly narrow (for example, price and flavor should not be determinative, and production on a low output machine could be an alternative to manual production) The proposed path- to- market process would be devastating to the premium cigar industry The path- to- market process for cigarettes, smokeless tobacco and R.Y.O., most notably using February 15, 2007 as the Grandfathered Date, is inappropriate and should be changed The path- to- market process should not be used to regulate label, package or cigar count changes (4 pack versus 3 pack of same cigar) Trademarked brand names should not be banned because of proposed regulations (for example, the proposal that light and mild not be used as descriptors) Sampling in adult only venues, and mail order sales to age- verified adults should be maintained for cigars Health warnings should be consistent with current FTC obligations of certain manufacturers and not conflict with state law 16

17 Takeaways/Themes The proposed deeming regulations, if adopted as currently written, will impact the volume of deemed products on the market Key issues impacting volume of products on the market: Path- To- Market FDA s regulation of packaging/labeling formats via path- to- market or otherwise FDA s treatment of flavors Cost of compliance causing manufacturers to withdraw from market 17