While headlines as of late have consisted largely of political commentary, foreign relations, and national tragedies, the FDA’s handling of the e-cigarette issue in the United States has been lurking about the news for months now. The most recent mainstream news coverage on the topic is the “constructive” meetings that have been held between the FDA and “big tobacco” (otherwise known as public enemy number one).
These meetings, according to reports, are in the interest of reducing the number of teenagers and other non-smokers using vaping products, which were originally intended as a way to wean smokers off of cigarettes with supposedly less toxic chemical and nicotine-containing vapor. However, instead of simply glancing at this problem, which has been called an “epidemic” even by spokespeople for Altria (the parent company for Phillip Morris, maker of Marlboro), it is important to stop and take a look at the bigger picture. Are the FDA, United States government, and state lawmakers doing the right thing?
To help answer that, and to provide some context to an issue that spreads far further than many understand, I reached out to an investor and industry insider with their feet firmly planted both in the culture and industry of tobacco in the United States. While the insider did not reveal the contents of any private shareholder or company documents (they would still like to remain anonymous for obvious reasons), they possess a unique perspective that can shed light on an increasingly complex subject.
First, let’s take a look at the heart of the problem: the e-cigarettes themselves. One company at the center of the epidemic is JUUL, which was founded by two former smokers in 2015 in the interest of helping smokers find a better alternative. Since then, their product has swept the nation, and led the pack of vapor products pushed to the top of the priority list of both concerned citizens and government organizations. With more and more young men and women using tobacco products, the scramble for adequate reform is reaching a fever pitch.
The FDA is blaming big tobacco for marketing tactics that hooked teens and young adults, in a campaign reminiscent of big tobacco’s time on Capitol Hill. The aforementioned insider has a different explanation for the outbreak of young tobacco users. “No company has ever held a market like this, in any industry, and I honestly don't think they expected it,” claims the anonymous expert on JUUL Labs. “It was some cultural bubble that just went off, exploded, and nobody knows why.”
“I understand it’s scary, for parents, teachers, schools, etc, but the FDA seized countless documents from companies like JUUL, and then you heard nothing about it. That’s because there is nothing in any of it that says the industry has been marketing to these kids. I know that. They never had to; society did it for them.”
If the FDA’s actions towards curbing advertisements that target the youth of America is not going to help the situation, what else can be done? In an attempt to out-flank big tobacco, the FDA is also attacking flavored products, and the government is implementing increased taxes and regulation on cigarette alternatives (such as New Jersey’s slew of tax changes on vapor products and chewing tobacco).
What kind of impact might that have? It would seem obvious that pricing prospective customers out of the smoking-alternative market, and making the products harder to purchase would not on its own reduce the number of tobacco product users. Instead, according to the industry insider, it would only drive customers back to cigarettes. “[It is not clear if] the FDA sees it, to be honest.” This certainly does not hurt big tobacco; in fact, it serves purely to stifle the need for further innovation of less dangerous methods of nicotine delivery.
When asked if an electronic cigarette would have genuine uses for a smoker trying to quit, the insider replied “I honestly think that it would.” And, if the numbers are correct, they indeed seem to be useful. Smoking rates in the United States have dropped almost five percent over the past decade or so. However, that still might not change the number of people looking for a way to get their fill of nicotine.
A cursory look might suggest that the FDA’s pressure on the vaping industry has caused Altria to pull flavored varieties of their MarkTen system from the market, and stung the company’s hopeful future in the e-cigarette niche. However, as the investor and insider is quick to point out, the biggest public tobacco company in the world (state-owned China National Tobacco holds the title of the biggest overall, with products such as the famous Chunghwa) is in fact doing itself a favor by pulling these products. Why sell vapor products when you can sell cigarettes to the same market, while buying yourself some good PR in the process?
This is far from the first time that the FDA has handled issues regarding big tobacco with questionable foresight. Despite their concession that the risks that come with “heat-not-burn” tobacco products are less than those from cigarette smoking, the FDA barred Philip Morris International from marketing their IQOS system (which heats tobacco to a temperature of about 350 degrees Celsius to allow for nicotine release) in the United States as a lesser-risk smoking alternative.
Scared to help big tobacco line their pockets, the FDA has been quick to slap down anything that could help bolster the profits of companies like Altria and R.J. Reynolds (owner of products like Camel). However, the ultimate result of these regulations may well be the exact opposite of what the FDA is hoping for; helping these companies sell more cigarettes to the American people.
In the words of the industry insider; “it’s an interesting climax that this is coming to, and it really is a broad topic with big implications. People are having a hard time understanding that.”