The Health and Economic Impacts of a U.S. Vaping Ban:

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The Health and Economic Impacts of a U.S. Vaping Ban:

October 28, 2019 17 min read 5 Comments


The Health and Economic Impacts of a U.S. Vaping Ban:


UPDATED: OCTOBER 26th, 2019

A U.S. vaping ban will not just inconvenience you and affect your ability to continue buying the vaping products you currently enjoy. It’ll also have a much wider impact on jobs, small businesses and public health. This study will provide a data-backed analysis of the likely health and economic outcomes of a vaping ban in the United States.

The United States vaping industry, as it currently exists, is on the verge of disappearing. President Donald Trump recently proposed that the U.S. immediately ban all non-tobacco flavored e-liquids. Though it remains uncertain whether the government will actually enact the ban, it hardly seems to matter in context of the fact that virtually the entire industry is set to go away in May 2020. One way or another, unless something changes, you will lose the ability to vape as you currently do in just a few short months.

How did things go so wrong? Why is it that the U.S. government has taken such a hard stance against vaping when some of the world’s other governments – even the United Kingdom’s own public health system – actively support it and encourage smokers to switch to vaping?

In this study, we’ll present the current long-term outlook for the vaping industry if events continue along their current track. You’re going to learn about the current status of U.S. vaping regulations and how those regulations, left unchecked, will affect your vaping experience.

A U.S. vaping ban will not just inconvenience you and affect your ability to continue buying the vaping products you currently enjoy. It’ll also have a much wider impact on jobs, small businesses and public health. This study will provide a data-backed analysis of the likely health and economic outcomes of a vaping ban in the United States.

Table of Contents:

- A Brief History of FDA Vaping Regulations

- What Is the PMTA Deadline for Vaping Products?

- What Is the Bottom Line on the FDA Vaping Regulations?

- What Is the U.S. E-Liquid Flavor Ban?

- Is Vaping Going Away in May 2020?

- What Is the Bottom Line on the U.S. E-Liquid Flavor Ban?

- Why Has the Government Taken Such a Firm Stance Against Vaping?

- Underage Vaping

- Mysterious Lung Illness

- Lost Tax Revenue

- Campaign Funding

- Is Anything Being Done to Prevent a U.S. Vaping Ban?

- Nicopure Lawsuit

- Cole-Bishop Amendment

- Vapor Technology Association Lawsuit

- Campaigns to Save Mint and Menthol E-Liquids

- What Will Happen if the FDA Bans E-Liquid Flavors?

- How an E-Liquid Flavor Ban Would Affect You

- An E-Liquid Flavor Ban Would Destroy Some Vape Shops

- An E-Liquid Flavor Ban Would Destroy Most E-Liquid Companies

- An E-Liquid Flavor Ban Would Create a Black Market

- An E-Liquid Flavor Ban Would Drive Vapers Back to Tobacco

- How Would a Vaping Ban Affect the Economy?

- How Would a Vaping Ban Affect Public Health?

- Who Would Benefit From a Vaping Ban?

- Big Tobacco

- Big Pharma

- Federal and State Governments

“While I like the Vaping alternative to Cigarettes, we need to make sure this alternative is SAFE for ALL! Let's get counterfeits off the market, and keep young children from Vaping!”

— President Donald Trump via Twitter

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A Brief History of FDA Vaping Regulations

On August 8, 2016, the U.S. Food and Drug Administration (FDA) announced that it deemed vaping products to be tobacco products and intended to regulate them as such under the provisions of theFamily Smoking Prevention and Tobacco Control Act of 2009. The primary way in which the Family Smoking Prevention Act affects vaping is that the Act froze the state of the tobacco industry as it was on February 15, 2007. From that date, no company could release a new tobacco product in the United States without first submitting a Premarket Tobacco Application (PMTA) and having that application approved by the FDA.

  • As of 2009, a company must have an FDA-approved PMTA in order to bring a new tobacco product to market.
  • Since the FDA applied the Family Smoking Prevention act to vaping, the FDA now deems all vaping products to be “new tobacco products” that are on the market without approval.
  • No vaping product currently on the market was being sold in 2007, so the Family Smoking Prevention Act applies to all vaping products.
  • Every vaping device – and every e-liquid flavor in every nicotine strength – is a separate product requiring its own PMTA. A typical PMTA is hundreds of thousands of pages in length and costs millions of dollars to compile. For traditional e-liquid makers – who offer many flavors in various nicotine strengths – going through the PMTA process is virtually impossible.
  • To receive approval, a PMTA must demonstrate that a new tobacco product is beneficial to public health and will not lead to increased tobacco use.
  • At the time of writing, no company has submitted a PMTA for any vaping product.
  • At the time of writing, only two tobacco products have successfully completed the PMTA process: Swedish Match snus and the Philip Morris iQOS heat-not-burn smoking system.

What Is the PMTA Deadline for Vaping Products?

The initial deadline for PMTA submissions was August 8, 2018. As the deadline approached, then-FDA commissioner Scott Gottlieb extended the deadline to August 8, 2022. The extension was given because many former smokers depended on the continued availability of vaping products and because the FDA had not yet released clear guidelines explaining the PMTA process.

In 2019, however, the vaping industry was dealt a major blow when anti-tobacco groups sued the FDA in federal court, complaining that the 2022 deadline was too lenient and stating that the FDA should begin regulating vaping products immediately. The court found in favor of the plaintiffs, and the FDA agreed to move its PMTA deadline to May 2020.

Companies that do submit applications for their vaping products will be allowed to continue selling those products pending approval of their applications.

What Is the Bottom Line on the FDA Vaping Regulations?

The bottom line is that all vaping products currently on the market will be illegal to buy or sell in the United States unless the makers of those products submit PMTAs by May 2020

Is Vaping Going Away in May 2020?

As things stand currently, in May 2020, all vaping products that do not pass the approval of the FDA regulations will be illegal to sell.

What Is the U.S E-Liquid Flavor Ban?

On September 11, 2019, U.S. President Donald Trump proposed that the government wouldban all e-liquid flavors with the exception of tobacco flavors. We’ll examine the reasons for the proposed ban shortly.

Alex Azar – the U.S. Health and Human Services Secretary – said that it will take the FDA “several weeks” to put the new policy into writing. The new policy will take effect 30 days after it is made public.

Although President Trump’s proposal to ban flavored e-liquids in the United States had an air of finality to it, Trump issued a statement on Twitter shortly after suggesting that he might have softened his stance somewhat.

“While I like the Vaping alternative to Cigarettes, we need to make sure this alternative is SAFE for ALL! Let's get counterfeits off the market, and keep young children from Vaping!”

It’s unknown whether the tweet represents a change in the President’s proposed policy on e-liquid flavors.

What Is the Bottom Line on the U.S E-Liquid Flavor Ban?

The bottom line is that, if the FDA moves forward with the proposed e-liquid flavor ban, all e-liquids other than tobacco and unflavored e-liquids will be illegal to buy or sell in the United States. Under the proposed policy, mint and menthol e-liquids will also be illegal. It’s unknown whether combination flavors – tobacco and cherry or tobacco and menthol, for example – will be exempt from the ban. Until the FDA issues clarification, you should assume that the ban will cover all non-tobacco flavors, even if they’re used in combination with tobacco.

If the manufacturer of a flavored e-liquid puts that e-liquid through the PMTA process successfully, it will become legal to sell again

Why Has the Government Taken Such a Firm Stance Against Vaping?

Vaping is an extremely complex issue for U.S. politicians. While most lawmakers are cognizant of the benefits that vaping brings to smokers, they also understand that the vaping industry can’t continue to exist in an unregulated state. Virtually all vapers would agree that the government seems to be regulating the vaping industry with an overly heavy hand. However, there are four key issues at play here.

Underage Vaping:

Vaping appeals strongly to many children in a way that tobacco hasn’t in many years. The2018 National Youth Tobacco Survey showed a 78-percent increase in youth vaping compared to 2017. As of 2018, 20.8 percent of high school students – that’s 3.05 million children – reported being regular vapers.

In 2017, just 11.7 percent of high school students vaped. Preliminary results from the 2019 National Youth Tobacco Survey suggest that 27.5 percent of high school students now vape. That’s an incredibly high number of children who are now addicted to nicotine. Underage vaping has gone on for so long that many of the students who reported vaping in past surveys are now high school graduates. They are now adult vapers who are addicted to nicotine even though they have never smoked cigarettes.

Mysterious Lung Illness:

In summer 2019, reports began to surface in the media about a mysterious lung illness related to vaping. Patients complained of symptoms such as chest pain, fever and shortness of breath. Some patients have had such severe lung damage that they needed to be placed on ventilators. At the time of writing, eight patients have died from this illness. In all, the Centers for Disease Control and Prevention (CDC) has tracked530 cases of the illness.

Most of the patients who have contracted this lung disease have reported the use of cannabis vaping products, but a few have claimed that they only used nicotine e-liquids. Most members of the public who do not vape – and even most politicians and many medical professionals – don’t understand that cannabis vaping and e-liquid vaping are two very different things. They have lumped the two types of vaping together and are urging others not to vape.

So far, the only substance that has been confirmed as a cause of the lung illness is Vitamin E acetate. It’s used as a thickener and cutting agent in THC vaping cartridges sold primarily on the black market. Vitamin E acetate is oily, and it makes THC cartridges appear as though they contain more THC oil than they actually do. Although public health officials haven’t confirmed that Vitamin E acetate is the only substance causing the lung illness, no commercial nicotine e-liquid product has been implicated in any of the cases.

The lung illness has not been reported outside the United States and Canada.

Lost Tax Revenue:

State and federal governments have long used tobacco excise taxes to generate extra revenue. The federal tax on tobacco is more than $1.00 per pack of cigarettes, and the revenue from the excise tax amounts to more than $12 billion per year. That’s a tiny drop in the bucket compared to the $4.4 trillion federal budget, but it’s still a significant amount of money. There is no federal tax on vaping products, and when you compare projections from 2015 to the actual revenue that the federal government is collecting from tobacco sales, it’s clear that vaping has put a serious dent in tobacco sales and the tax revenue generated from those sales.

Campaign Funding:

Companies in two very large industries – the tobacco industry and the pharmaceutical industry – would prefer that you didn’t vape. Buying a vaping product, after all, means that you’re not buying a pack of cigarettes or a nicotine replacement drug. Big Tobacco and Big Pharma donate considerable amounts of funding to both democrats and republicans during each election cycle to ensure that their concerns will be heard. Tobacco and pharmaceutical companies also try to sway politicians with extensive lobbying.

JUUL Labs has also donated heavily to political campaigns. However, it is important to note that JUUL is partially owned by Big Tobacco company Altria. As such, the interests of JUUL and the vaping community at large may not necessarily coincide. It would benefit JUUL if open-system vaping products were banned in the U.S.

Is Anything Being Done to Prevent a U.S. Vaping Ban?

Yes. There are politicians who support the vaping industry. There are also several companies and trade groups doing everything they can to prevent the industry from dying. However, those efforts have not been successful to date.

This is a brief overview of some of the more important legal and political maneuvers to save the vaping industry.

Nicopure Lawsuit:

In 2016, Nicopure – the maker of the Halo Cigs brand and an outsourced e-liquid manufacturer for several other companies –filed suit along with other vaping companies and trade groups against the FDA. The lawsuit complained that complying with the PMTA requirements presented an unnecessary and undue financial burden for the vaping industry and that vaping products didn’t meet the legal definition of tobacco products to begin with. In 2017, the court ruled in favor of the FDA. Nicopure appealed the case to the D.C. Court of Appeals. Current information suggests that the appeal is still pending.

Cole-Bishop Amendment:

In 2016, Congressional Representatives Tom Cole (R, OK) and Sanford Bishop (D, GA) attempted to add language to that year’s Agricultural Appropriations Bill which would have changed the “predicate date” for the FDA vaping regulations from February 15, 2007 to August 8, 2016 – the date on which the regulations were announced. The amendment would have allowed every vaping product on the market as of 2016 to remain on the market without going through the PMTA process. The amendmentwasn’t passed.

Vapor Technology Association Lawsuit:

In 2019, the Vapor Technology Association (VTA) – a trade group representing almost 800 companies in the vaping industry –filed suit against the FDA stating that complying with the new May 2020 PMTA deadline is impossible and will put many – if not all – small vaping companies out of business. The lawsuit was filed in the U.S. District Court of Kentucky.

As mentioned above, JUUL Labs has plenty of funding from Big Tobacco and doesn’t necessarily want other vaping products to remain on the market. JUUL has stated that it opposes the VTA lawsuit and is ready to submit its PMTA by May 2020.

Campaigns to Save Mint and Menthol E-Liquids:

One major issue with President Trump’s proposed ban of flavored e-liquids is that the ban would include mint and menthol flavors. Menthol cigarettes, meanwhile, would remain legal – a fact that many vapers and vaping industry professionals find inequitable and unfair. Reports suggest that JUUL isconsidering fighting a potential menthol e-liquid ban.

What Will Happen if the FDA Bans E-Liquid Flavors?

A potential flavored e-liquid ban, on its own, wouldn’t kill the vaping industry outright. However, the industry would go through several major and immediate changes.

How an E-Liquid Flavor Ban Would Affect You:

Tobacco e-liquids and unflavored e-liquids would both remain legal. In addition, nothing would prevent you from buying your own flavor concentrates and adding them to an unflavored e-liquid. In particular, turning an unflavored e-liquid into a mint or menthol e-liquid is relatively easy. At this time, liquid nicotine also isn’t a prohibited substance. You could still legally purchase your own nicotine, propylene glycol, vegetable glycerin and flavors and make your own e-liquids for personal use.

An E-Liquid Flavor Ban Would Destroy Most Vape Shops:

Vape shops earn much of their revenue from e-liquid sales, and an e-liquid flavor ban would drastically reduce the number of products that vape shops can sell. At the same time, a flavor ban will likely cause some vapers to lose interest in vaping and return to smoking. Having fewer customers and less inventory to sell, many vape shops will likely close in the event of a flavor ban.

An E-Liquid Flavor Ban Would Destroy Most E-Liquid Companies:

A flavor ban would force many e-liquid companies to close. Most e-liquid companies offer many different flavors. Some companies can pare their selections down to just tobacco and unflavored e-liquids, but there’s only going to be so much room on the market for e-liquid companies with such small flavor selections. Remember as well that when the FDA released their deeming regulations for the vaping industry on August 8, 2016, they froze the state of the market on that day. E-liquid companies can’t simply develop new tobacco e-liquids; those e-liquids would need to go through the PMTA process before they’d be legal to sell.

An E-Liquid Flavor Ban Would Create a Black Market:

A flavor ban would force many U.S. vape shops and e-liquid makers to shut down, but e-liquids, cartridges and pods would still be available from many other companies around the world. Some people will attempt to import flavored e-liquids for personal use and risk potential customs seizures. Others will attempt to import massive quantities of flavored e-liquids and pods for illegal resale. Some of those products will be potentially dangerous counterfeits. Still others will attempt to manufacture and sell their own black-market e-liquids. Since some of those private e-liquid manufacturers will undoubtedly purchase low-quality raw materials, make errors during mixing or exercise poor sanitation, the use of black-market e-liquids will likely result in some illnesses and deaths

An e-liquid flavor ban would be similar in many ways to the U.S. Prohibition era of 1920-1933. Nicotine, like alcohol, is a substance that people will find a way to get if it’s something they really want. Prohibition barely put a dent into national alcohol consumption, but the alcohol that people consumed was often made under unsafe conditions and with unsafe ingredients. Prohibitionincreased the number of sicknesses and deaths from alcohol use.

An E-Liquid Flavor Ban Would Create a Black Market:

A flavor ban would force many U.S. vape shops and e-liquid makers to shut down, but e-liquids, cartridges and pods would still be available from many other companies around the world. Some people will attempt to import flavored e-liquids for personal use and risk potential customs seizures. Others will attempt to import massive quantities of flavored e-liquids and pods for illegal resale. Some of those products will be potentially dangerous counterfeits. Still others will attempt to manufacture and sell their own black-market e-liquids. Since some of those private e-liquid manufacturers will undoubtedly purchase low-quality raw materials, make errors during mixing or exercise poor sanitation, the use of black-market e-liquids will likely result in some illnesses and deaths

An e-liquid flavor ban would be similar in many ways to the U.S. Prohibition era of 1920-1933. Nicotine, like alcohol, is a substance that people will find a way to get if it’s something they really want. Prohibition barely put a dent into national alcohol consumption, but the alcohol that people consumed was often made under unsafe conditions and with unsafe ingredients. Prohibitionincreased the number of sicknesses and deaths from alcohol use.

An E-Liquid Flavor Ban Would Drive Vapers Back to Tobacco:

In 2018, a research group conducted asurvey of more than 20,000 vapers. The survey found that the vast majority of the people using e-cigarettes for smoking cessation were not using tobacco-flavored e-liquids. By far, the most popular e-liquid flavor categories were fruits, beverages, candies and desserts. Based on the findings of the study, it seems logical to conclude that many vapers – forced to choose between real tobacco or an unsatisfying approximation of tobacco – would return to smoking.

A flavor ban would particularly affect people who prefer menthol e-liquids because menthol cigarettes are still available. Study after study has shown that menthol cigarettes aremore addictive than plain cigarettes. The survey cited above suggests that there are at least 1 million vapers in America who use menthol or mint e-liquids.

How Would a Vaping Ban Affect the Economy?

Vaping is no longer a niche industry in the United States. As of 2018,Reuters reported that about 10.8 million adults in the U.S. were regular vapers. Those vapers support a massive network of e-liquid and hardware manufacturers, distributors, wholesalers and vape shops. In 2017, a member of multiple vapor trade associations estimated that the vaping industry supported14,000-19,000 small businesses and employed 56,000-76,000 individuals in the United States. It’s likely that both figures are even higher now.

Some companies in the vaping industry have already begun to close. Well-known e-liquid maker Johnson Creek Smoke Juice announced that it was shutting down in 2017. Johnson Creek was formerly the e-liquid provider for Blu Cigs. Blu changed e-liquid providers, and since FDA regulations froze the e-liquid market and prevented the release of new products, Johnson Creek couldn’t develop more modern e-liquids. The company’s closure resulted in the loss ofmore than 60 jobs. If nothing changes about the way in which the FDA regulates the vaping industry, the same thing will happen across the country.

How Would a Vaping Ban Affect Public Health?

Some medical professionals have called vaping the greatest potential win for public health in many decades. That’s because the over 10 million U.S. adults who now vape no longer smoke. Smoking is the leading preventable cause of death in the United States, killing more than 480,000 people each year. Smokers cause a massive burden on both the healthcare system and the economy. Smokers requiring medical care in the U.S. run up bills totaling nearly$170 billion per year. Tobacco excise taxes don’t even come close to covering those expenses. In addition, while smokers are sick and receiving medical care, they aren’t working. That costs about $156 billion per year in lost productivity.

Exposure to cigarette smoke can also cause illness in nonsmokers. Illnesses due to secondhand smoke cost the economy $5.6 billion per year in lost productivity.

Some politicians have cited the mysterious vaping lung illness as a reason for banning e-liquid flavors or banning vaping altogether. Those politicians have lost sight of four very important points:

  • 480,000 Americans die from cigarette smoking each year. That’s more than 1,300 deaths each day.
  • Eight people have died from the vaping lung illness.
  • No commercial nicotine e-liquid product has been implicated as a potential cause of the lung illness.
  • Many of the people who lose access to their favorite e-liquid flavors in November 2019 – or to all vaping products in May 2020 – will return to smoking.

Who Would Benefit From a Vaping Ban?

It is not our intention to gloss over the topic of underage vaping. That is a serious problem. It’s an issue that could take years to resolve, and it appears that there is plenty of blame to pass around. However, one should also remain mindful of the fact that there are many major corporations who would very much like to see open-system vaping go away. Those corporations spend many millions of dollars per year on lobbying and on funding the elections of political candidates from both parties. These are the groups that have the most to gain from a vaping ban.

Big Tobacco:

Big Tobacco has had a hand in the e-cigarette industry for several years, and virtually all of the brands that you see in typical retail outlets today – JUUL, Vuse, Blu and Logic, to name four examples – are owned partially or outright by Big Tobacco companies. Big Tobacco isn’t really in the business of selling refillable e-cigarettes that work with bottled e-liquids. They sell closed-system devices instead because the refill cartridges and pods are extremely profitable and because no open-system vaping product is likely to make it through the PMTA process.

Putting a closed-system vaping product through the PMTA process, on the other hand, is very realistic as long as you have millions of dollars necessary to compile the application. The Big Tobacco companies have the resources to compile those applications. Small vaping businesses do not.

Altria – the maker of the Marlboro cigarette brand – has put itself into a position in which it stands to win regardless of what happens to the vaping industry. In 2018, Altria purchased a 35-percent stake in JUUL Labs at a cost of $12.8 billion. JUUL already controls three quarters of the American vaping market in traditional retail channels, and with Altria’s investment, the company has the resources necessary to compile PMTA applications for its products.

If JUUL’s application isn’t approved, Altria has already received approval to sell the heat-not-burn iQOS system in the United States. The iQOS system vaporizes tobacco rather than e-liquid, and it is the most obvious fallback option if America’s 10 million vapers find themselves unable to buy e-liquid in May 2020. Altria can still sell the JUUL e-cigarette internationally, so they win either way.

Big Pharma:

The population of adult vapers is comprised largely of former smokers who stopped smoking when they switched to vaping. If you’re a former smoker, you already know that vaping works for many people. What you may not know, though, is that theNew England Journal of Medicine published a study in 2019 showing that e-cigarettes are nearly twice as successful as traditional nicotine replacement products in helping smokers quit. The study involved 886 participants who were randomly assigned either e-cigarettes or traditional nicotine replacement products and monitored for one year. Among the e-cigarette group, 18 percent successfully abstained from smoking for one year. Just 9.9 percent of those receiving traditional nicotine replacement were able to quit.

Nicotine replacement therapy is an enormous part of the global nicotine market. Globally, the entire nicotine ecosystem was worth about$785 billion in 2017. Nicotine replacement therapy comprised 0.3 percent of the market, meaning that consumers spent around $2.35 billion on nicotine replacement in 2017.

Nicotine replacement isn’t the only medication that smokers use when attempting to quit. They also use prescription medications such as Chantix. Pfizer, knowing that it had a hit on its hands with Chantix,more than doubled the price of the drug from 2013-2018. As of 2018, the price of a 30-day Chantix prescription was $485, and the drug was earning Pfizer $997 million annually.

The total size of the global vaping industry was estimated to be about $10.2 billion in 2018, and every person who vapes is a person who isn’t using nicotine replacement or buying prescription drugs for smoking cessation. Big Pharma would love to see the U.S. vaping industry go away.


5 Responses

Tiffany Zhang
Tiffany Zhang

October 26, 2019

Can I get the author of this article please? If the information if given to the public.

wesley stutler
wesley stutler

October 22, 2019

I was a hard core smoker for 23 years until I discovered vaping. After 3 weeks of vaping and no cigarettes I felt so much better physically and the smell of cigarettes almost made me nauseous. I support a ban on underage vaping but leave my liquid alone.

Elijah Rea
Elijah Rea

October 22, 2019

I strongly support preventing minors from vaping. But I disagree that flavored vape juice targets minors. I only vape and quite smoking because I love the wide variety that vaping has to offer. If flavors are banned I will definately be going back to smoking. Please save my flavors. I smoked ciggs for 23 years and havent touched a smoke since vaping.

Fred
Fred

October 04, 2019

This study provided a data-backed analysis of the likely health and economic outcomes of a vaping ban in the United States. There is no reason flavored vape should be banned because BIG TOBACCO are losing money!

joseph
joseph

October 04, 2019

Companies will be forced to just sell tobacco and unflavored e-liquids, but that is not helping consumers who are avoid tobacco flavor anything. I mean that’s why majority start vaping flavored e-liquids. We need to come up with a better option then a ban!

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