Is This Beginning of the End for Combustible Cigarettes?

WASHINGTON, D.C. — The common theme of yesterday’s Food and Drug Law Institute (FDLI) conference here was that it’s not the nicotine that harms or kills smokers, it’s the combustion/delivery, according toBonnie Herzog, managing director of Beverage, Tobacco & Convenience Store Research for Wells Fargo Securities LLC. Herzog, who attended the conference of key regulatory, public health and tobacco industry players, reported that combustible cigarettes were demonized and a common goal of the speakers seemed to be aimed at migrating smokers from combustible cigarettes to electronic cigarettes.

“Bottom line, our bullish e-cig thesis remains intact,” wrote Herzog in an equity research brief this morning. “And, we have further conviction the regulatory stars will ultimately align for e-cigs, continuing to propel the category.”

Speaking at the conference, Mitch Zeller, director of the Food and Drug Administration’s (FDA) Center for Tobacco Products (CTP) stated the FDA has a huge opportunity to develop a “comprehensive nicotine regulatory policy” taking into account the continuum of risk as it relates to nicotine delivery products, with combustible cigarettes on one end of the spectrum and nicotine replacement therapy (NRT) on the other. Herzog said she was very encouraged that Zeller appears to be fully embracing the continuum of risk concept and views nicotine separately from the delivery, which, in Herzog’s view, portends favorably for e-cigarettes.

“We are also optimistic that this could have positive implications for eventual modified risk claims by non-combustible nicotine delivery products such as e-cigs and smokeless products.”

The industry is still waiting on proposed deeming regulations for e-cigarettes, which are currently at the Office of Management & Budget. How the FDA deals with pre-market approvals could have a major impact on rapid innovation in the e-cig category, Herzog noted.

On a different topic, Zeller suggested that the European Union ban on menthol products would have little bearing or influence on U.S. menthol regulation. The FDA is hearing comments on the menthol regulations until Nov. 22.

“Given the FDA’s stance that it must be guided by the science, we continue to believe a menthol ban is unlikely,” Herzog stated. “However, we believe the FDA could limit the level of menthol in cigarettes over time.”


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