New Rules Expected to Impact E-Cigarette Industry

The federal government on Thursday announced sweeping new regulations for electronic cigarettes that could upend the multibillion-dollar industry and for the first time require e-cigarette makers to submit their products for a safety review.

Before brands are allowed to stay in the market, regulators would have to check the ingredients, design and flavor of the fast-growing devices, which have found a foothold with teenagers.

“Millions of kids are being introduced to nicotine every year, a new generation hooked on a highly addictive chemical” Health and Human Services Secretary Sylvia Burwell said. “We cannot let the enormous progress we’ve made toward a tobacco-free generation be undermined by products that impact our health and economy in this way.”

The rules issued by the Food and Drug Administration would also extend long-standing restrictions on traditional cigarettes to a host of other products, including e-cigarettes, hookah, pipe tobacco and nicotine gels. Minors would be banned from buying the products.

E-cigarettes are battery-powered devices that turn liquid nicotine into an inhalable vapor. Though nicotine can be addictive, e-cigarettes lack the chemicals and tars of burning tobacco. Yet the devices have not been extensively studied, and there’s no scientific consensus on any potential benefits or harms from “vaping.”

More than 15 percent of high school students report using e-cigarettes, up more than 900 percent over the last five years, according to federal figures. High school boys smoke cigars at the same rates as regular cigarettes.

Beginning in August, retailers will be prohibited from selling the tobacco products to those under 18, placing them in vending machines or distributing free samples. While nearly all states already ban sales of e-cigarettes to minors, federal officials said they will be able to impose stiffer penalties and deploy more resources to enforce the law.

The FDA action comes five years after the agency first announced its intent to regulate e-cigarettes and more than two years after it floated its initial proposal.

Public health advocates applauded the decision.

“Ending the tobacco epidemic is more urgent than ever, and can only happen if the FDA acts aggressively and broadly to protect all Americans from all tobacco products,” said Harold Wimmer, president of the American Lung Association.

The vaping industry says the lengthy federal reviews would be time-consuming and costly and could put many smaller companies out of business.

The regulations “will cause a modern-day prohibition of products that are recognized worldwide as far less hazardous than cigarettes,” said Gregory Conley, president of the American Vaping Association. “If the FDA’s rule is not changed by Congress or the courts, thousands of small businesses will close in two to three years.”

The agency has stumbled before in its efforts to regulate the space. In 2010, a federal appeals court threw out the agency’s plan to treat e-cigarettes as drug-delivery devices rather than tobacco products.

House Republicans are already pushing back. A House spending committee last month approved industry-backed legislation that would prohibit the FDA from requiring retroactive safety reviews of e-cigarettes that are already on the market and exempt some premium and large cigars from those same regulations. E-cigarette products introduced in the future would still undergo the safety reviews.

Lawmakers on Capitol Hill have long enjoyed a close relationship with the tobacco industry, which has already given more than $1.8 million to members of Congress this election cycle, according to the Center for Responsive Politics.

The FDA first gained authority to regulate some aspects of cigarettes and other traditional tobacco products under a 2009 law. But since e-cigarettes do not actually contain tobacco, they were not covered by the original law.

The FDA spent more than two years finalizing its proposal for regulating nontraditional tobacco products, delayed for months by industry resistance.

Some smokers use e-cigarettes as a way to quit smoking tobacco or to cut down. However, there’s not much scientific evidence supporting those claims, though officials said they are working on that research.

“In the meantime, we know there are many other proven cessation tools available,” Burwell said.

E-cigarettes sales grew to an estimated $3.5 billion in 2015, according to Wells Fargo. After ballooning over several years, sales have recently begun to slow due to negative publicity and questions about safety. Retail sales are dominated by a handful of traditional tobacco companies, including Reynold’s American’s Vuse and Imperial Tobacco’s blu brands. Those products are sold nationwide at convenience stores and gas stations.

Hundreds of smaller companies sell more specialized products – often with refillable “tanks” and customized flavors – at vape shops and over the Internet. That space alone may be worth $2 billion in sales, according to estimates, though precise figures are not available.

(Associated Press Writer Mary Clare Jalonick contributed to this story.)