Wells Fargo Securities LLC recently attended the Smoke-Free Alternatives Trade Association (SFATA) Conference outside of Chicago, “headlined” by Mitch Zeller, Director of the FDA’s Center for Tobacco Products.
“Encouragingly, Director Zeller underscored the importance of ‘opening up the dialogue’ across various stakeholders in the nicotine space, suggesting to us that he and the agency remain committed to using science and data to shape regulation while recognizing the nicotine continuum of risk which is consistent with his previous comments. Director Zeller even remarked that conference participants were ‘preaching to the choir’ with regards to the need for the debate to change,” said Bonnie Herzog, managing director, beverage, tobacco and convenience store research for Wells Fargo Securities LLC.
Herzog outlined other key takeaways from Zeller:
(1) The societal debate around e-cigs needs to be re-focused on “issues that really matter”—namely what role e-cigs or other potentially less harmful, non-combustible nicotine delivery systems could play in net population-level harm reduction…
(2) The issues driving the e-cig/nicotine debate center around youth access, flavors, and marketing, which are undoubtedly very important but have diverted attention from the bigger-picture issues such as this reduction of harm mentioned above;
(3) The FDA has “taken seriously” the comments, considerations and concerns of small manufacturers who don’t have the financial and human resources of Big Tobacco; and
(4) The FDA is engaged with other FDA “centers” – particularly the Center for Drug Evaluation and Research (CDER) and Center for Devices and Radiological Health (CDRH) to explore the role of “therapeutic nicotine.”
“We remain cautiously optimistic that the FDA ‘gets it’ with regards to a nicotine risk continuum that will ultimately be reflected in regulation. We remain bullish on vapor long-term, but near-term we’re more cautious given increased uncertainty,” Herzog said.
Herzog noted that a consistent theme throughout the day was the need for alternatives for smokers who can’t or won’t quit, within a ‘continuum of risk’ framework.
Once the deeming rule is final, Herzog noted, it will proceed to the OMB (Office of Management and Budget) for review. The OMB’s cost/benefit analysis is expected to take about 3-6 months.
“Regardless of what the final rule entails, conference speakers encouraged the industry to start preparing (compiling ingredients lists, implementing manufacturing standards, etc.), even though implementation and enforcement of the regulation will likely take years in our view,” Herzog said. “Further, the final rule could be more of a ‘guideline’ in nature with guidance being issued over time to govern the specifics…”