But now, Arnold is worried he might lose everything.
By May 12, for the first time ever, vaping manufacturers must file applications to the Food and Drug Administration proving their products benefit public health —or risk having them yanked from the market.Arnold says he can’t afford the hundreds of thousands, or even millions, of dollars he figures it would cost to do the exhaustive applications for his products, which come in 128 flavors and multiple nicotine strengths. But he can’t afford trouble with the FDA, either.
Get ready for RoundTwo of the vaping wars. For public health groups, May 12 represents a milestone in the FDA’s sluggish, long-overdue effort to regulate e-cigarettes. For small companies like Arnold’s, the deadline looms as an existential threat.
“Is this going to destroy me?” Arnold wondered aloud recently. “I’m losing a lot of sleep over it.”
Those for and against vaping are gearing up for a rerun of last fall’s fight over a proposed federal ban on flavored e-cigarettes. The vape shops and their e-liquid suppliers largely won that one. But the new dispute over how forcefully the FDA will enforcethe May 12 deadline carries even higher stakes: It could determine the U.S. market for e-cigarettes, the credibility of the agency and whether vaping re-emerges as a political issue during this election year.
Small manufacturers like Arnold want the May mandate postponed or softened. They insist they cater to adults trying to quit smoking and should be treated differently than big e-cigarette companies like Juul Labs, which popularized the sleek, cartridge-based vapes embraced by teens.
Without a rollback, there are likely to be “13,000 small businesses on the chopping block,” in 2020, primarily small- to medium-size e-liquid makers and their vape shop customers, warned Tony Abboud, executive director of the Vapor Technology Association.
Anti-tobacco groups have no sympathy for the industry, saying it has spent years fighting regulation rather than preparing for it.
“These manufacturers have known that their day of reckoning would come eventually,” said Erika Sward, a spokeswoman for the American Lung Association. “If they cannot prove to the FDA their product should stay on the market, or choose not to submit it for FDA review, then it must be removed from store shelves and online retailers. You can’t sell a product inhaled into people’s lungs and not have oversight.”
For Arnold, who got into the vaping business in 2012, the last year has been tumultuous. Last summer, a new vaping-related lung disease emerged that killed at least 64 people. Though health authorities eventually attributed most of the cases to contaminated THC, the high-inducing component of cannabis, Arnold’s revenue dropped by more than a third amid consumer jitters. He laid off 10 percent of his staff, which now numbers 80.
In September, the White House announced plans to bar sales of almost all flavored e-cigarettes to stem a surge in youth vaping. That triggered a backlash from vape shop owners and their conservative-group allies who warned of widespread industry job losses — an argument amplified by some of Trump’s political advisers. The administration wound up exempting the vape shops’ core products: the open-tank systems that vapers fill
with e-liquids. It banned the sweet and fruity cartridge-based e-cigarettes sold mostly in convenience stores. The partial ban went into effect earlier this month.
Now, that same coalition of smaller players and conservative groups is pushing for a “streamlined” vaping application for small businesses making open-tank products, including e-liquids. It would require by May 12 information such as ingredients and proof that sales are aimed at adults, with more data required later. Vaping interests have also gone to court to try to delay the deadline.
In a Jan. 23 radio interview, Health and Human Services Secretary Alex Azar gave the companies some reason for hope. He said the administration is working with vaping associations to “create pathways that would streamline approval for the open-tank small vape shop-based products.” He added that the administration is focused on cartridge-based devices “with kid-attractive flavors,” not open-tank systems.
But vaping advocates say they have heard nothing from Azar about such a process. Sen. Richard J. Durbin (D-Ill.), meanwhile, called Azar’s comments “incredibly alarming” and demanded an explanation.
The FDA declined to clarify Azar’s remarks. An HHS spokeswoman pointed to steps the agency is taking to help small businesses.
E-cigarettes have never been approved by the FDA; they are sold under agency “enforcement discretion.” In recent years, the agency made clear e-cigarettes would need authorization to stay on the market, but then moved the application deadline around so many times a federal judge finally set the date as May 12. Without a deadline, wrote U.S. District Judge Paul W. Grimm, “the industry will raise every roadblock it can . . . to keep its products on the market without approval.”
Public health groups agree. They say the FDA must aggressively implement the deadline and force products off the market that aren’t in compliance. If the agency does that, “it may be possible to reverse the e-cigarette epidemic,” said Matthew Myers, president of Campaign for Tobacco-Free Kids. “If they fail, we will have a youth e-cigarette epidemic for decades to come.”
The manufacturers’ applications must prove that products are “appropriate for the protection of public health,” a high standard set by federal law. Companies must show that the items benefit the population as a whole, help adults quit smoking and aren’t likely to be used by young people. Companies also must submit toxicological testing. If they file by May 12, they can keep selling their products for a year.
The FDA estimates that the cost of each application could be between $117,000 and $466,000, but it says there are ways to lower that, including by bundling related products into the same application. Mitch Zeller, director of the FDA’s Center for Tobacco Products, said the agency has held webinars, issued guidance and met with small firms to provide additional advice.
Many vape shops buy finished “vape juice” products from other companies and, as retailers, don’t have to submit applications. But those that mix nicotine liquid and flavors for customers are considered manufacturers and thus must get FDA authorization for their products. “They have to decide what business they want to be in,” Zeller said.
The industry scoffs at the FDA’s cost estimates, saying they are much too low and the agency guidance much too vague. Smaller companies argue that the industry will end up being dominated by large e-cigarette makers owned by well-heeled tobacco companies — because only they will be able to afford the applications.
Juul, for example, which is partly owned by Altria, has already spent more than $100 million on an application to keep selling its menthol- and Virginia tobacco-flavored pods. It has conducted multiple clinical and behavioral studies, chemical and toxicological analysis and other tests.
The other four major manufacturers of cartridge-based products told Congress they have filed applications or plan to by the deadline. Products currently banned must be cleared before being returned to the market.
Some small manufacturers say they will simply ignore the May 12 deadline and see what happens. Others are considering filing applications for a single product or forming consortia to share costs on research. Some vape shops plan to focus exclusively on sales and stop mixing. Others are switching to selling CBD, or cannabidiol.
Arnold, 40, started vaping in 2010, which he said enabled him to kick a 20-year smoking habit. His e-liquids are made in a 500-square-foot laboratory in a warehouse behind his office.
For now, he’s planning to submit an application of some kind by May 12, but he’s not exactly sure what. He feels, he said, like he is “living on the side of a volcano. You don’t know what’s going to happen next.”