Winston Churchill once said that “If you destroy a free market you create a black market” and nowhere is the validity of that statement clearer than with drug prohibition. Instead of eliminating drug use, prohibition spurred a flourishing illicit market. In the United States, lawmakers are just now coming to grips with the fact that the only way to eliminate illicit markets is to displace them with legal, regulated markets. With cannabis, for example, states are currently in the process of balancing regulations to be strict enough to protect the public, but flexible enough to allow legitimate businesses to thrive and compete with their illicit counterparts. But unfortunately, this lesson remains unlearned when it comes to tobacco, as indicated by the half-baked effort to prohibit synthetic nicotine.
Slipped into the $1.5 trillion omnibus spending bill approved by President Biden last week was a provision giving the Food and Drug Administration (FDA) authority to regulate synthetic nicotine as a “tobacco product.” Supporters of the measure hail it as necessary to close a “loophole” that e-cigarette companies can use to evade federal regulation because the FDA’s authority over e-cigarettes was previously limited to nicotine derived from tobacco. The reality, however, is that this measure would have been unnecessary, and this loophole never used, if the FDA had only provided the e-cigarette industry with a realisticway to earn FDA approval and bring products to market legally.
Federal regulation of tobacco has functioned primarily to protect the cigarette business since 2009. That year, Congress granted to the FDA authority to regulate the tobacco industry, a measure that anti-tobacco advocates claimed would protect public health and rein in the industry. What it actually did (in addition to earning the FDA millions of dollars in “user fees” from tobacco companies) was to create a protective bubble around the industry’s largest players (which explains why companies like Philip Morris supported it), shielding them from competition and ensuring their market dominance.
However, that sweetheart deal was threatened by the innovation of e-cigarettes, which, for the first time, offered smokers a truly satisfying and safer alternative to cigarettes. So once again, supposedly anti-tobacco advocates came to the rescue of the tobacco business.
The 2009 law passed by Congress gave the FDA power to regulate tobacco products, but not nicotine. Unencumbered by regulations designed to keep new products off the market, e-cigarette technology, small vapor businesses, and consumer demand for safer nicotine products flourished, giving rise to what may very well be one of the greatest public health advancements in decades. Smokers, or potential smokers, turning instead to noncombustible forms of nicotine, like e-cigarettes, could save billions of people around the world from the death and disease caused by smoking. But it also might mean that some people who had quit smoking, or didn’t start for fear of the health risks, might choose to consume nicotine via these safer means.
In response to this development, many anti-smoking advocates abandoned the goal of reducing the death and disease caused by smoking and instead began to focus on nicotine. Despite the fact that nicotine—divorced from combustion—poses an insignificant public health risk, they set their sights on ending all recreational nicotine use at any cost, even if it meant eliminating life-saving smoking alternatives, exacerbating the problem of over-policing, or even protecting once-scorned cigarette businesses. To that end, they endeavored to close the e-cigarette “loophole” created by federal regulation, lobbying the FDA to expand its definition of “tobacco products” to any product containing nicotine derived from tobacco. In 2016, the FDA did exactly that.
Theoretically, this change meant that federal regulations would treat far less harmful e-cigarettes the same as deadly cigarettes. Even if that were the result, it would have been terrible for public health to treat products with vastly different risk profiles as equal. But, in practice, the statute resulted in more stringent regulation of safer e-cigarettes than their deadly combustible counterparts because, unlike cigarettes, e-cigarettes were forced to undergo an onerous, expensive, and functionally insurmountable FDA pre-approval process.
Despite promises from officials under the Trump administration that the FDA would create a “streamlined” approval process for the thousands of small e-cigarette businesses, that process never materialized. Instead, the industry was left to navigate what appears to be an intentionally insurmountable process. This is evidenced by the fact that after seven years and over 6 million applications, the FDA has so far approved just three vapor products, all from R.J. Reynolds, while denying thousands of applications from small and mid-sized producers, often for failing to include evidence that the FDA told applicants they need not include.
The FDA’s bungled handling of the e-cigarette pre-approval process has resulted in several companies suing the agency for what they call the “arbitrary and capricious” denial of their applications. But other vapor companies have taken a different route in response to attempts to wipe out their industry. One controversial strategy, used most notably by the popular brand Puff Bar, was to replace tobacco-derived nicotine with synthetic nicotine. Since the FDA’s statutory authority over e-cigarettes only extends to those containing tobacco-derived nicotine, companies like Puff Bar hoped that the switch would allow them to bypass federal regulations altogether, but the move seems to have raised Puff Bar to the bogeyman status previously held by Juul.
The provision inserted into the omnibus spending bill aims to close off this latest loophole by giving the FDA authority over any product “containing nicotine from any source.” Now that the bill has been signed by President Biden, companies using synthetic nicotine are required to file pre-market tobacco applications within 60 days and receive approval from the FDA within 120 days of the bill’s enactment in order to stay on the market legally. Given the FDA’s sluggish track record, many of those applications may not even be reviewed, let alone approved, in that time period, which would make the bill a de facto prohibition on those products.
Proponents of the measure argue that the use of synthetic nicotine is just another trick by vape companies to skirt regulation and hook youngsters on nicotine. But, as should be obvious from the more than 6 million pre-market tobacco applications submitted by e-cigarette makers to the FDA, the industry doesn’t want to bypass regulation. Companies want to be regulated and for their products to be approved by the FDA, but the, FDA has made it painfully clear that there is no way for those companies to earn its approval (except perhaps a handful of tobacco-owned giants). What currently exists is an illusion: a way for e-cigarette companies to waste time, energy, and money, only for the FDA to issue blanket denials, in some cases without even bothering to review application materials.
This lack of a viable pathway into the regulated market has pushed the industry toward synthetic nicotine as one of the few remaining options to continue offering adults the products they need to stay smoke-free without flouting the law. And closing this latest “loophole” without giving companies a way to enter the market legally will not solve the problem. All it will do is guarantee that companies and consumers are pushed in ever-greater numbers toward a growing illicit market where there are no consumer protections and no age restrictions—or back to smoking.