September 9 FDA PMTA deadline is Big Win for Big Tobacco
The American vaping industry is on the brink of irreparable damage this week due to a fast-approaching compliance deadline imposed by the U.S. Food and Drug Administration (FDA). Manufacturers of vapor products must submit a premarket tobacco product application (PMTA) or face having their vape juices and other gear pulled indefinitely from store shelves.
Because the expenses involved with FDA compliance are enormously high and because manufacturers must submit a PMTA for each individual flavor of e-liquid, thousands of businesses within the vapor industry will likely become extinct within the coming weeks. Only Big Tobacco companies with their massive coffers of cash and political influence will be able to successfully take advantage of this tremendous new hole in the vapor marketplace created by the PMTA regulations.
While the FDA suggests that a single PMTA will cost retailers anywhere from $117,000 to $466,000 per application, many within the vaping industry find this estimated range to be exceedingly low. Meanwhile, the financial investors magazine The Motley Fool is reporting that the true figure may escalate to the multimillions of dollars per product.
For example, The Rocky Mountain Smoke-Free Association estimates that a single PMTA will cost between $8.6 to $11.1 million per product when all is said and done. The organization also forecasts that the new regulations will force an astounding “14,000 small vape businesses employing 166,000 workers” to go out-of-business “representing $24 billion in economic activity.”
Is vaping doomed?
As of June 2020, the FDA estimates receiving only about 650 PMTAs for as many products. With tens of thousands of flavored vaping products once flooding the market when vaping popularity was at its peak in the pre-EVALI era, the new deadline means that former smokers looking to quit through vaping will be struggling to find their favorite e-liquids.
Many vaping enthusiasts will be forced to locate alternative brands through a rapidly depleting supply of vape retailers. And millions more vapers will be tempted to revert to combustible cigarette smoking entirely. This is a big win for Big Tobacco. In fact, Steve Forbes, Editor-in-Chief of Forbes Magazine forecasts that more Americans will die from vape bans and FDA anti-vaping restrictions like the PMTA process than will die from the coronavirus pandemic.
To be clear, documented scientific studies published in the United Kingdom by Public Health England (PHE) and endorsed by the Royal College of Physicians indicate that vaping is 95 percent less harmful than smoking.
The PHE research was first published in August of 2016, and several additional studies have been conducted over the years which fully support and/or enhance these lifesaving claims. Yet, the FDA refuses to this day to acknowledge the validity of the British research. In the UK, vaping is encouraged by public health agencies. In the U.S., it is demonized.
Big Tobacco companies stand to profit Big Time from the PMTA process.
The very first company to file a PMTA is the tobacco giant Phillip Morris, maker of such popular cigarette brands as Marlboro, Parliament, Merit, Virginia Slims, and Benson & Hedges. This company has already received four PMTA approvals by the FDA, and the September 9 deadline has not yet even passed. Three approvals are for flavored electronic disposable cigarettes called Heatsticks. The fourth is for Phillip Morris’s IQOS device which relies on the heating rather than burning of tobacco leaves.
Other Big Tobacco conglomerates like Lucky Strike and Dunhill maker British American Tobacco can also easily afford to pay the excessive fees associazte4d with a PMTA submission. JUUL Labs, manufacturer of the world’s highly popular yet most controversial pod-style vape, even appears to be struggling to leap the financial hurdles of the PMTA.
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Just last week, JUUL executives announced that they may be pulling out of several European markets just to stay afloat. The company is also rumored to be laying off up to 55 percent of its workforce in the coming days and weeks. Altria – a subsidiary of Big Tobacco’s Phillip Morris - even owns a substantial share in the JUUL Labs Corporation. If major conglomerates like JUUL are grappling with the enormous costs of the PMTA process, how are the Mom and Pop vape shops faring?
According to the Motley article, Amanda Wheeler owns five small vaping businesses in Arizona, Colorado, and Oklahoma. She explains her dilemma like this.
"Let's say I have 100 products and each of the flavors has five nicotine levels, which means five SKUs per flavor, legal and other fees will cost my stores in excess of $5.5 billion. There's not a small business owner in the United States who can afford $5.5 billion for SKU applications."
Ms. Wheeler then likens the anti-vaping restrictions imposed by the FDA to those of alcoholic beverages. Imagine if the federal government required the manufacturers of every alcoholic beverage available at the local liquor store to pay billions of dollars PER SKU. If that were the case, "We wouldn't have liquor today," Wheeler said.
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