Regulation

Business and health groups jockey to shape e-cigarette rule

Industry and health groups are flocking to the White House in hopes of winning last-minute changes to sweeping new regulations for electronic cigarettes and conventional cigars.

A hotly contested rule that would for the first time put both types of products under the Food and Drug Administration's supervision is undergoing final review at the White House's Office of Management and Budget (OMB).

Twenty-one meetings to discuss the so-called deeming rule dominated the office's schedule in November as dozens of business and advocacy groups fought to influence the final language.

At least a dozen more meetings are scheduled this month, a level of attention on par with the most complex and contentious rules issued by the Obama administration.

Under competing pressures, the administration had been forced to delay the rule's release, originally slated for this summer. A formal rulemaking agenda released last spring moved that deadline to Nov. 30, but given the remaining meetings, it appears unlikely that the regulations will come before the new year.

Industry groups, which account for the bulk of the meetings, are focusing their attacks on a "grandfather date" for electronic cigarettes set forth in an earlier draft of the regulation.

Under the agency's proposed rules, all products that hit stores after Feb. 15, 2007, would have to apply retroactively for approval, a process that companies say would put them out of business.

"If these rules went through, the only ones left standing would be big tobacco - what you see in convenience stores," said Schell Hammel of The Vapor Bar Inc., a Texas-based company with seven retail stores.

Hammel, who met with OMB officials on Nov. 3, said it would cost small "vape" shops millions of dollars to complete the testing that's required to apply for approval.

Hamel said she learned Tuesday that she'd be back before the OMB on Dec. 16 to argue in favor of applying the regulations only to products released after they go into effect.

At that meeting she'll be representing the Texas chapter of the Smoke Free Alternative Trade Association, of which she is president.

Health groups, meanwhile, contend that the rules, a byproduct of the Family Smoking Prevention and Tobacco Control Act of 2009, were created to protect public health, not industry groups.

"E-cigarette manufacturers have been on notice since at least 2011 that FDA planned to regulate their products, but they have taken advantage of the delay in regulation to introduce kid-friendly flavors, and now they want to limit FDA review of those products, which we think is absurd," said Vince Willmore vice president of communications for the Campaign for Tobacco-Free Kids.

The anti-tobacco group met with the OMB on Nov. 5 to push the administration to release the rules as soon as possible. Willmore pointed out that it's been more than four years since the FDA announced its plan to regulate cigars and e-cigarettes and well over a year since the rule was proposed.

"E-cigarette companies say it will put them out of business, but this law is about protecting kids and public health," he said. "It's not about protecting the ability of manufacturers to sell candy flavored e-cigs and cigars."

But pressuring the OMB to change the rules might not do industry groups any good.

J. Glynn Loope, executive director of Cigar Rights of America, notes that there is debate over whether the administration has the power to change the grandfather date or whether that would take an act of Congress.

The FDA has said it does not have the authority to alter or amend the date because it was set in the 2009 statute.

As they stand, Loope said, the regulations could have serious economic consequences for Honduras, Nicaragua and the Dominican Republic, all major exporters of cigars and cigar tobacco to the U.S.

If the date is not changed, Loope said, every cigar coming into U.S. market would have to apply as a new product under the deeming regulations. Not only would it be astronomically expensive, the process would fast become a political nightmare for the administration.

For instance, he said, the rule would hinder the president's efforts to normalize trade relations with Cuba, a country known for its high-quality cigars.

In addition to meeting with the OMB on Nov. 17, the cigar trade group is lobbying Congress to pass legislation to alter the rules. The House Appropriations Committee has already added language to its spending bill to push the date back, and groups are lobbying the Senate to do the same.

The potential for additional action on Capitol Hill has the American Lung Association concerned.

"The public health community is weighing in with OMB on the long-run need for a strong deeming regulation, but the immediate issue is whether or not the cigar and e-cigarette lobbies are going to make a back room deal in a smoke-filled room," said Erika Sward, assistant vice president of national advocacy for the group, which met with the administration on Nov. 20.

While the OMB is notoriously tight-lipped about rules under final review, groups on both sides of the fight said their audience with White House officials left them with a measure of confidence.

"It's always a good thing to be able to go and speak your mind and be heard," Hammel of the Vapor Bar said. "I think they have been very interested in hearing everything."

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