I provided input to a US Congressional Oversight inquiry into the burgeoning illicit trade in vapes in the United States. Many people are urging the Federal government to address this challenge with more enforcement. I believe the problem is caused by the enormous costs, long delays, and highly limiting barriers to entry created by the FDA’s pre-market tobacco authorisation process. Until that is fixed, enforcement will fail, and it would be dangerous if it succeeded.
My contribution, as sent to Congressional staff, is below with links to two background documents.
I very much welcome the new inquiry into illicit trade, including into the large-scale trade in unregulated Chinese vapes. This problem can be addressed with a radical new approach from the FDA’s Center for Tobacco Products. I hope the inquiry will play a decisive role in causing that to happen.
I have written a briefing on how to approach this.
Fixing the broken and lawless American tobacco and nicotine market (PDF with one-page summary)
FDA’s approach to tobacco and nicotine – a critical perspective (PDF)
Problem: FDA throttles legitimate competition. There is no doubt this problem is now running out of control, with only about 6% of the US market supplied by FDA-authorised products and likely around 70% by illicit Chinese vapes, with the balance stuck in the FDA’s grossly inefficient assessment process. At the moment, illicit Chinese vape products are outperforming American products in terms of both cost and innovation because the FDA-authorised products are about ten years out of date. The FDA process is extremely slow, the barriers to entry are incredibly high, and it only works for products that 20 million American vapers mostly do not want. The problem is not that the Chinese products are bad – it is that they are good and have an unfair advantage created by the FDA.
Solution: competition from legal products. In short, the answer is to allow far more law-abiding American and other companies to compete by authorising far more products (>4,000 vs 34 vapes), much faster (<180 days vs 5 years) and at far lower costs (<$100-500k vs $20-100m compliance). This could be achieved by splitting the process between pre- and post-market assessment – as described in detail in the briefing above.
Solving the problem with enforcement. Health groups have shamefully pressed for a massive enforcement effort to “clear the market” of unauthorised products. But, if successful, this would leave only products that people generally do not like and drive many back to smoking. A major enforcement effort would be unmanageable without dramatically shrinking the illicit market through competition with compliant, authorised products.
Blame. The market is a chaotic mess and largely unregulated. The problem is caused by the FDA and the approach that the Center for Tobacco Products has taken to assessing safer alternatives to cigarettes. Whatever its intent, the Center for Tobacco Products has protected the cigarette trade from lawful competition,
I hope these views are of some assistance to the Inquiry as it takes on this critical question.