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News: House Appropriations Bill Would Lessen FDA Devastation to Cigar Industry

9 Jul 2015

Yesterday, the House Appropriations Committee took an important first step toward fixing one of the most outrageous aspects of the proposed rules to regulate cigars under the Food and Drug Administration (FDA).

Fdaprotect

The appropriations bill passed the Committee yesterday for next year’s funding of the FDA, included a funding rider to stop the FDA from retroactively regulating cigars and other tobacco products introduced since February 2007. Under the legislative fix, the new date existing products would be grandfathered in as exempt from the costly and difficult FDA pre-approval process would change from February 15, 2007 to the date (likely later this year) when the proposed regulations are finalized.

While cigars introduced after the FDA’s cigar regulations go into effect would still be subject to FDA approval before being marketed or sold—a process that likely would take months or years and could cost an estimated $400,000 per each new cigar blend and size—the change would be a significant improvement from the current situation. Absent any change, under current law, most or every cigar introduced since February 15, 2007 would be subject to the FDA pre-approval process, with the likely impact of permanently making illegal most cigars introduced in the past eight years.

The key language in the appropriations bill still has a long way to go before becoming law. Having successfully passed the House Committee, including surviving an amendment vote 23-26 to strip the FDA regulation date change out of the bill, the bill now goes to the House floor for passage.

If it passes the House, the next step would be a companion bill from the Senate Appropriations Committee. There, Kansas Senator Moran, a co-sponsor of the Traditional Cigar Manufacturing and Small Business Jobs Preservation Act, is chairman of the subcommittee with oversight over the FDA and could be key to ensuring the language eliminating the February 2007 date is included in the Senate bill.

If such language passes out of the full Senate Appropriations Committee, next step would be the full Senate, after which the bill would go to President Obama’s desk to be signed into law or vetoed.

Analysis

With the Traditional Cigar Manufacturing and Small Business Jobs Preservation Act seemingly stalled for the immediate future, this is a significant and serious attempt to address the devastating impact of the proposed FDA regulations. Still, it faces  major challenges, not the least of which is the fact that the proposed FDA regulations could become finalized any day now—before any appropriations bills are passed.

According to an agenda issued last year, the deadline for the FDA regulations was June 2015, and in Senate testimony in March FDA Commissioner Margaret Hamburg reiterated that now-passed goal. In addition to time constraints, two other issues complicate the process significantly.

First, while cigar industry representatives work to protect cigars from the damaging impact of the regulations, the elephant in the room is e-cigarettes. A large part of the agitation for these regulations by anti-tobacco activists is because the deeming rule would effectively ban e-cigarettes and vaping devices—which they view, almost certainly incorrectly, as having negative public health implications.

While, in theory, new cigars could be approved by the FDA as “substantially equivalent” to grandfathered cigars, the e-cigarette industry was almost nonexistent in February 2007, meaning approval of e-cigarettes and other vaping products would be even more difficult than the already arduous process that new cigars would face. This hardens the anti-tobacco opposition to a change in the cutoff for grandfathered tobacco products, but it also means the growing e-cigarette industry could be a key ally for cigars in pushing for a change.

The second complication has nothing to do with specific issues of tobacco regulation but is the often dysfunctional federal budget process. While the system is set up for 12 appropriations bills, frequently budget showdowns due to fiscal deadlines lead to continuing budget resolutions and omnibus spending bills that combine various appropriation bills into one large spending bill. To ease passage, appropriations riders, like the one on FDA regulation approved yesterday by the House Appropriations Committee, can get stripped out of the final bill, especially if leadership doesn’t make their inclusion a priority.

Ultimately, while this rider can alleviate some of the damage FDA regulation of cigars will cause, it doesn’t fix the larger issue: The vibrant handmade cigar industry will come to a screeching halt if new cigars are forced to go through an FDA approval process that takes months (or years) and cost hundreds of thousands of dollars. To fix this bigger problem, cigar smokers must work towards passage of the Traditional Cigar Manufacturing and Small Business Jobs Preservation Act to remove the FDA’s authorization to regulate handmade cigars.

Patrick S

photo credit: Best Price Cigars

Drew Estate

12 Responses to “News: House Appropriations Bill Would Lessen FDA Devastation to Cigar Industry”

  1. JMac Thursday, July 9, 2015 at 7:26 am #

    It is this hope that is driving the onslaught of new brands and blends. Cigar bubble dead ahead.

  2. Mike Thursday, July 9, 2015 at 10:20 am #

    I’m not a fan of FDA regulation, but the proposed rule would not make every cigar introduced since 2007 illegal. From the FDA website:

    “The FDA’s proposal would delay the enforcement of premarket review until twenty-four months after the rule would take effect. During that time period, manufacturers would be free to market new products so long as they submit an application to the FDA. After that time period ends, manufacturers could continue to market those products until the FDA issues an order prohibiting the marketing.”

    More realistically, the FDA regs would start to potentially have a larger impact on new cigars after 2017.

    • Jacob Thursday, July 9, 2015 at 12:25 pm #

      I just googled that quote. It isn’t from the FDA’s website. It is from a “tobacco control” (I.e. anti-smoking) group called the public health law center.

      • Mike Thursday, July 9, 2015 at 4:55 pm #

        That is where I took it but it’s a reprint verbatim of the FDA’s writings.

    • Patrick S Friday, July 10, 2015 at 12:00 am #

      Yes the FDA has said it will wait 24 months before enforcing the pre-market approval requirement, but (absent this rider becoming law) all (under option 1) or most (under option 2) cigars introduced after 2/15/07 would still need to seek FDA pre-approval, which because of how complicated and costly that process will likely be means that for most cigars it will not make sense to go through the process. So it still is true that most new cigars introduced post-2007 will be made illegal to sell or market, it just won’t kick in until after the 24 months are over.

      Also, just because they give cigarmakers 24 months to submit their application, doesn’t mean those cigars can be legally marketed after the 24 month transition period even if their application is pending.

      • Mike Friday, July 10, 2015 at 9:01 am #

        Technically true but I just don’t believe that will happen. The FDA could also make 99% of e cigarettes illegal on the same rule and I do not think they will try that. They already attempted to ban them once.

  3. George E. Thursday, July 9, 2015 at 1:02 pm #

    While there’s certainly a lot of room for discussion and possibilities over what FDA regulation would mean and how it would be implemented, I don’t think anyone should kid themselves. If premium, hand-rolled cigars fall under FDA jurisdiction, the industry, as Patrick points out, will never be the same and cigar consumers will be much the poorer for it.

    • Mike Thursday, July 9, 2015 at 4:57 pm #

      I agree… But I don’t think anyone should kid themselves that the industry is likely to escape regulation.

  4. Mike Thursday, July 9, 2015 at 5:10 pm #

    FDA is proposing to extend the compliance period for submitting a marketing application under this pathway to 24 months following the effective date of a final rule. FDA is also proposing a 24-month compliance period for the submission of premarket tobacco applications (PMTAs). In addition, we intend to continue the compliance policy pending review of marketing applications if those applications are submitted within the 24 months after the final rule’s effective date.

    This is taken from FDA.gov. It mentions the 24 month compliance period.

  5. Mike Thursday, July 9, 2015 at 5:14 pm #

    I meant the federal register.

  6. JMac Friday, July 10, 2015 at 7:35 am #

    Imagine if the FDA wanted to regulate beer, wine, and whisky in the same way. Blending cigars is an art in just the same way as blending a whiskey.. There is something prejudicial going on here. In the mean time I’m stocking up on all my post 2007 release favorites.

    • Mike Friday, July 10, 2015 at 8:57 am #

      The FDA doesn’t regulate alcohol– thankfully. The ATF and trade bureau does in most cases.