E-cigarette makers worry new regulations will snuff out emerging business

Electronic cigarette makers and retailers are scrambling to escape expected new regulations that they say could wipe them out. [WATCH VIDEO]

As the $2 billion e-cigarette industry is gaining ground around the country, so is its lobbying presence in Washington. A fledgling trade group, the Smoke Free Alternatives Trade Association (SFATA), is flying members into Washington next week to meet with congressional staff and lawmakers to warn them about anticipated new rules from the Food and Drug Administration (FDA).

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They will be arguing that their devices should not be subject to same rules governing tobacco products, but will have to face off with public health groups as well as tobacco giants like Altria.

“It is a concerted effort to make the business case for electronic cigarettes to Congress,” said Cynthia Cabrera, SFATA’s executive director. “It's the perfect time for us to go and provide the faces to this industry.”

Thirty people representing 19 different companies — including electronic cigarette makers, retailers and distributors — will be coming to the capital as part of the trade group’s first fly-in visit.

SFATA members will be sharing draft legislation and looking for potential sponsors for their legislation. That draft bill says e-cigarettes, e-cigars and other vaporizing devices are not tobacco products.

“We would really like to set up a separate framework for regulation. It wouldn't have the burdensome compliance expenses. The reporting expenses under the Tobacco Control Act are onerous,” Cabrera said. “No one is saying that there shouldn't be regulation but that there should be appropriate regulation for this product.”

Tobacco giant Altria — the parent company for Philip Morris USA and NuMark, which markets e-cigarettes — feels differently, saying the new product warrants FDA scrutiny.

“We believe electronic cigarettes should be regulated by the Center for Tobacco Products at the Food and Drug Administration because, by definition, it is a product that is derived from tobacco,” said David Sylvia, an Altria spokesman.

Part of SFATA’s pitch to lawmakers next week will be that its members are small businesses squaring off with tobacco behemoths.

“Big tobacco companies are encouraging the federal government to exert their regulatory authority that would effectively wipe out its competition. It seems a little like the government would be leveling the market for them,” Cabrera said.

Sylvia disagreed, saying that government regulations haven’t prevented tobacco companies from developing new brands and products in the past.

“I just don't see how additional regulation has stifled business in tobacco,” Sylvia said.

The lobbying effort to protect e-cigarettes is expected to ramp up once the FDA unveils its proposal.

Eric Criss, the head of the Electronic Cigarette Industry Group, said his organization has been targeting the FDA as well as state legislatures, where several bills are under consideration, but hasn’t yet focused on Congress.

“I think at this point it’s primarily an FDA issue,” Criss said. “Once FDA acts, I think there may be a number of reasons to be over on Capitol Hill.”

The FDA’s proposal to expand its authority to encompass e-cigarettes, cigars and other types of tobacco products is currently under review at the White House’s Office of Management and Budget (OMB). Currently, the FDA can only regulate traditional cigarettes and smokeless tobacco.

The wait for the new rules has left K Street on tenterhooks.

“It's a big waiting game because everyone [in the tobacco industry] is trying to figure out what the hell they are going to put out. The regs are sitting at the OMB, they are doing their due diligence and they're behind because of the shutdown,” said one Republican lobbyist representing electronic cigarettes.

The draft rules were expected out by the end of October, but the OMB has until the end of December to finish its review. That deadline could be extended into next year.

The rule might allow the FDA to subject e-cigarettes to new fees and restrictions, which public health advocates say are necessary to protect children from aggressive marketing.

“It’s critical that they get it out as quickly as possibly to put in place the sales and marketing restrictions that are on other tobacco products to keep them from appealing to kids and misleading consumers,” said Danny McGoldrick, the vice president of research at the Campaign for Tobacco Free Kids.

Public health advocates said that until e-cigarettes are proven to be safer than regular tobacco products, they should be subject to the same types of rules and regulations.

“We need FDA oversight of these products urgently,” said Erika Sward, assistant vice president of national advocacy for the American Lung Association. “From a public health perspective, they need to prove that these products are not detrimental to public health and they haven't done that.”

In an Oct. 17 letter to OMB's Office of Information and Regulatory Affairs, SFATA said that their products do not pose the same health risks as normal cigarettes — noting some e-cigarettes don’t even have nicotine — and shouldn’t be treated the same way. The vapor e-cigarettes emit is different than cigarette smoke, they point out.

“E-cigarettes are not analogous to tobacco cigarettes and, therefore, they should not be regulated in the same manner,” the trade group wrote.

SFATA also said in the letter that new rules could “devastate” the industry in its infancy.

E-cigarette critics nevertheless are worried about the products’ appeal to children.

A recent report from the Centers for Disease Control and Prevention (CDC), which the industry has disputed, found that the percentage of middle- and high-school students who had ever tried e-cigarettes doubled from 2011 to 2012. Close to 1.8 million students had tried the products in 2012, according to the CDC.

The percentage of U.S. middle and high school students who use electronic cigarettes, or e-cigarettes, more than doubled from 2011 to 2012

Public health advocates said that the lobbying push by e-cigarettes is just following the lead of major tobacco companies.

“They’re everywhere,” McGoldrick said. “They’re right out big tobacco’s playbook in terms of their marketing tactics, in terms of their opposition to regulation.”