When it comes to fast growing, disruptive technologies that are changing American lifestyles for the better, much attention is given to the likes of Uber and AirBnb. They’ve changed how we travel and where we stay. And the onslaught of criticism as well as regulatory and tax fights they’ve been subjected to has been immense. But these state and local fights have paled in comparison to a fight over how to regulate another disruptive technology: e-cigarettes and vapor products.
Within the next year, the Food and Drug Administration (F.D.A.) will likely finalize a proposal to regulate these smoke-free products. The F.D.A.’s new set of rules would classify e-cigarettes as tobacco products and require every product currently on the market to go through a multi-million dollar approval process. The regulation threatens to stifle a fast-growing, U.S.-based industry that is establishing a track record of selling products that help smokers transition away from cigarettes. In the process, these costly and burdensome rules would turn the vapor market, which is now currently served by thousands of independent and family-owned businesses, over to companies that have long exhibited a lack of regard for public health – Big Tobacco.
Until this year, most revenue in the e-cigarette and vapor industry came from products known as “cigalikes,” which are e-cigarettes that resemble combustible cigarettes in size and shape. These products are prominently displayed in tens of thousands of convenience stores throughout the United States and were once thought to be the future of the vapor market. When America’s two largest tobacco companies, Altria and Reynolds American, belatedly began selling e-cigarettes earlier this year, they bet all their money on producing cigarette lookalikes. But according to a report by the Wells Fargo analyst Bonnie Herzog, vapor products that don’t resemble traditional cigarettes at all are winning the day.
While Herzog estimates that cigalike sales will remain strong at $1 billion in 2014, she forecasts that those sales will be eclipsed by the $1.5 billion estimated to be generated by the refillable “open vapor” products. These products tend to be larger in size and have no resemblance to a traditional cigarette. Importantly, they are more affordable over time and offer consumers options to customize their vaping experience. They are also commonly sold by small, companies that specialize in selling vaping products. These are the products that are proving themselves the most helpful for smokers looking for an alternative.
Not surprisingly, America’s largest cigarette companies have decided that they are not content to sit back and watch as their once loyal and dedicated customers become ex-smokers with products they do not produce. In an effort to protect the e-cigarette market from competition, they are publicly lobbying the F.D.A. to take steps that would shut down the entire $1.5 billion open vapor product. And if the federal government doesn’t see through these transparent tactics and Congress allows it, Big Tobacco just might win.
Reynolds American – of Camel cigarettes ‘fame’ — has said the Food and Drug Administration should simply ban the sale all open vapor products, including the nicotine-containing liquids used in these devices. Altria – the makers of Marlboro cigarettes – hasn’t overtly suggested a ban on its competition, but has advocated for mandates of excessive testing on all open vapor products and liquids that would be so costly that it would shut down most companies in the market. The actions of both companies are tacit admissions that they simply cannot compete in the current vapor product market.
The overall growth of the open vapor product market makes sense. Smoked tobacco products are killers, while vapor products are tobacco-free and contain none of the tar or carbon monoxide that makes smoking so lethal. These are anti-tobacco products. Based on the evidence to date, it is clear many smokers are switching to vapor products and are seeing measurable health benefits.
Surveys of e-cigarette users have demonstrated that vapers who use open vapor products are far more likely to be smoke-free than are those who use cigalikes products that are designed to resemble and taste like cigarettes. Shutting down the largest part of the vapor industry while leaving deadly combustible cigarettes on the market would be a setback for public health.
It’s time for Washington regulators to take a deep breath and allow innovative technology to grow.