The government shutdown could delay a Food and Drug Administration ruling that is expected to curb TV advertisements of e-cigarettes.
Government Shutdown Could Delay Expected E-Cig TV Ban Again
The FDA had announced its plan to issue a decision in October on whether and how to regulate the booming e-cig industry. And an FDA spokesman said staff at the agency's Center for Tobacco Products remain at their posts because it is funded by tobacco industry fees and not subject to annual budget appropriations. But the shutdown, now in its seventh day, has furloughed 45% of the agency's employees, including some working on tobacco issues in the office of FDA Commissioner Margaret Hamburg, the spokesman said.
A virtual seminar on tobacco regulation has already been postponed until funding is restored, according to the FDA website.
The spokesman declined to comment on the timing of the ruling beyond citing an FDA agenda expressing the intent to weigh in on e-cigarettes this month.
Several people involved with the tobacco industry now believe an October decision on e-cig regulation is unlikely.
"With the government shutdown as one factor, it looks highly likely that the expected October timing for news on deeming regulations will be delayed, probably until next month," said Michael Lavery, a tobacco industry analyst with CLSA Americas.
The FDA also has a history of kicking the can on e-cigs. It has delayed regulatory action on e-cigarettes since October 2011, when it first planned to weigh in.
The e-cigarette market, which is expected to reach $1.7 billion in sales this year, is currently unregulated, allowing for Big Tobacco's historic return to the airwaves after more than 40 years as well as renewed spending on print ads. The nation's top three tobacco companies -- Altria, Reynolds American and Lorillard -- have rolled out TV commercials promoting their respective products in the category. Other e-cig makers, including NJoy and Fin, have also run TV commercials.
But an FDA ban on TV advertising is considered a "no brainer," according to a report last month from CLSA. That would curb an emerging source of revenue for TV networks, where spending on e-cigarette commercials rose 17.9% to 2012 from 2011, according to a Citibank report.
Anti-smoking groups aren't eager for any further delay. "Everyone is frustrated," said Danny McGoldrick, VP-research at the Campaign for Tobacco Free Kids. "The FDA said more than three years ago that they would take over regulating all tobacco products."
Attorneys general from 41 states signed a letter before the shutdown urging Ms. Hamburg to stick with the October schedule. Several health organizations also sent a letter to President Obama encouraging him to pressure the FDA to cast its decision.
A Centers for Disease Control report out last week said the percentage of high school and middle school students who have tried e-cigarettes doubled in 2012 from 2011. The report said 10% of high schoolers had puffed an e-cig and 2.8% of middle school students had done the same.
"If the shutdown delays the decision, then shame on Congress for one more thing," Mr. McGoldrick said. "If it's for another reason, then shame on everyone else."
E-cigarette marketers will still have some time to advertise on TV even if the FDA does eventually propose the expected rules. Once the FDA issues its decision, or "deeming regulations," a public comment period will begin. Regulations would likely take effect roughly one year after the comment period ends, Mr. Lavery said.
Lorillard, which owns the top-selling Blu e-cigs, supports regulation that encourages cigarette smokers to switch to e-cigs, the company's chairman, president and CEO Murray S. Kessler said last month in a USA Today op-ed.