On Vaping, the Trump Administration Is Offering Some Hope

Cigarette smoking is, far and away, the most dangerous consumer product ever invented.  Everyone knows that, but people still smoke.  The “20% Prevalence” theory, which has ruled the tobacco world for decades, holds that no matter what antismoking campaigns you try or how much you educate, smoking cessation stalls at around 20% of the population.      

Public Health/Tobacco Ecosystem

Most people making money from smoking seem quite happy with the 20% number.  Big Tobacco makes its money selling the cheaply manufactured cigarettes.  Big Pharma makes its money from expensive smoking cessation pills, nicotine gum/patches and even more expensive lung cancer treatment.  The U.S. government rakes in around $15 billion annually in cigarette taxes. States receive billions from the Master Tobacco Settlement Agreement pursuant to which Big Tobacco pays the states a percentage from the sales of their deadly wares in exchange for a hall pass from the State Attorney General.

Media-savvy antismoking zealots in public health get paid to endlessly shout from rooftops for everyone to “stop smoking,” along with “save the children.” It won’t matter, 20% will still smoke.  Among the public health nonprofits, many are established and respected with their lifeblood from clinical studies, funded by Big Tobacco, Big Pharma or the Federal and state governments. 

It is an almost perfect, symbiotic and seemingly bulletproof financial ecosystem of public health and tobacco.

Rise of Vape

But, people continue to die from smoking, including the father of Hon Lik.  In the early 2000s, this unlikely Chinese pharmacist came up with a technological answer to this deadly question:  How can people get the hand-to-mouth habit satisfaction of nicotine delivery, without having to inhale dozens of deadly carcinogens created by combusting tobacco leaf?  Through his ingenuity, and a fortuitous idea that came in a dream, vaping was unceremoniously born.  It seemed like a workable solution to finally end smoking, by means of a cheap, less stinky, and much safer technology which allows people to get their nicotine fix directly along with trendy flavors instead of through tobacco leaves, and adjust the levels of nicotine to enable quitting. 

Vaping has developed into a grassroots led movement, embracing a disruptive technology that, for the first time in history, could break our fatal relationship with inhaled tobacco combustion.  However, two key concurrent events happened which increased the speed and ferocity of the inevitable crash between the public health/tobacco ecosystem and the ragtag group of vape upstarts. 

First, Wall Street spotted an opportunity to bring billions to the states to help offset the spiraling costs of Medicaid under Obamacare.  In exchange for selling municipal bonds which securitize the state’s future receipts from the Master Tobacco Settlement Act, the states could get a pile of money today for whatever the budget needed. 

Second, Public Health England and the Royal College of Physicians, the most respected medical society in the world, both agreed that vaping was at least 95% safer than smoking. The study analyzed the chemical compounds found in vaping and cigarette smoke, finding that the vast majority of the chemicals causing combustive-related toxicity are absent in vaping.   

More and more people quit smoking, and the 20% prevalence theory was modified to include a significant exception: technological advances.  According to the CDC, the percent of population who smoked in 2005 was 20.9%, compared to 15.5% in 2016 and falling fast. This decline coincides with the rise in vaping. 

Ecosystem Responds

Among the first ecosystem’s members to suffer were the states.  The top five largest bond defaults are all state tobacco bonds, aggregating $4.7 billion in defaults.  Puerto Rico sales tax bond issuance came in a distant sixth place, with a measly $175 million. This raised a hue and cry across the entire ecosystem.  But, the ecosystem’s divergent interests and motivations would be a challenge.  Compromises would have to be made, risks taken.

Bruce Yandle, an economics professor at Clemson University, and others developed a simple, but logical, public regulatory concept called the “Bootlegger and Baptist” theory.  It theorizes that for a regulation to emerge and endure, both the “Bootleggers,” who seek to obtain private benefits from the regulation, and the “Baptists,” who seek to serve the public interest, must support the regulation.   The public health/tobacco ecosystem has Bootleggers (Big Pharma and Big Tobacco), as well as Baptists (public health zealots and nonprofits).  In this case, the Federal and State governments not only make law, but are individually dual participants as both a Bootlegger (billions in cigarette money) and a Baptist (protect citizens and fund other Baptists). 

The public health nonprofits fired the first shot of the war.  Grand headlines began to appear, like “Chemical flavorings found in ecigarettes linked to respiratory disease,” from Harvard Gazette. The Article focuses on diacetyl and its gruesome result, popcorn lung disease. The public’s reaction was predictable, “Popcorn lung disease… whatever that doohickey is, it can’t be good.  We best not vape.” 

What the article conveniently omits is the fact that diacetyl present in vape is 750 times lower than that in cigarettes. Not even the much larger dosage present in cigarettes is sufficiently high enough to give smokers this insane sounding “popcorn lung” thing. 

The mandate was clear: Attack vaping, but omit any information of harm reduction, lest the cake-eating masses become unruly.  Media public relations and quasi-clinical studies weren’t enough, more was needed to protect the ecosystem.

Deeming Regulations

That was when the Food and Drug Administration's Center for Tobacco Products stepped in and extended its regulatory hand beyond mere tobacco regulation to vape regulation through its "Deeming Rule." The net effect of this 500-page tome of complexity and of discretionary authority is that the FDA’s Center for Tobacco Products (CTP) made quite a power grab. For those newly dragooned under its regulatory boot, the result was simple: If you were a small business with the most effective smoking cessation-type vaping products, all your products were banned come 2018.  You want to fight the FDA?  So cute you are, Mr. Fancy Pants.  If you are Big Tobacco with one cigalike product, it would be hard, but the CTP would let you through.     

As for the deadly cigarette, which the CDC estimates kills over 480,000 Americans each year, no worries.  Cigarettes have no regulatory hurdle at all under the Deeming Regulations, so their manufacturers could just keep pushing as they always had.  Big Tobacco sells cigarettes, and everyone else in the ecosystem, directly or indirectly, financially benefits. 

The ecosystem’s weakest link, however, was the public health zealots and nonprofits who created the media spin.  Those public health zealots were sometimes lunatick-y and some of their nonprofits were ridiculed by real scientists for their junk science. 

With those weaknesses in mind, the Deeming Regulations included some First Amendment suppression.  The FDA prohibited any vape sellers from making any statement that vaping was less harmful than cigarettes. 

Another problem: The 2009 Family Smoking Prevention and Tobacco Control Act applied only to tobacco products.  Inconveniently, vape products, as well as its Big Pharma’s smoking cessation products, aren’t made from tobacco products.   Through the tortured logic of a three-year-old with her hand in a cookie jar, the FDA unconvincingly took the position that all batteries, LED screens, software, ejuice (with or without nicotine) were to be deemed “tobacco products.”  So let it be written, so let it be done.  

Obviously, Big Pharma didn’t want its nicotine gums and patches to be regulated by the CTP under those draconian Deeming Regulations.  The ecosystem agreed: Big Pharma’s nicotine inhalers, patches and gums were carved out the CTP’s Deeming Regulations. 

For the moths in this swampy ecosystem, the CTP became the light. 

Wait, What?

In the months leading up to the 2016 election, the hashtag, “I vape, I vote” became a rallying cry in Twittersphere and on other social media.  We will likely never know the impact of the August 2018 vaping ban on voters.  Perhaps the working class fathers, mothers, sons and daughters in the rust belt didn’t want their loved ones to die over a silly nicotine addiction.  Doing about the only thing they have the power to do, they voted.

On Nov. 8, 2016, like so many others, the public health/tobacco ecosystem was delivered a breath-stopping gut punch.  As a result, President Trump brought in Scott Gottlieb as the new Chairman of the FDA, a young, highly qualified, innovative and energetic leader who believes in technology in public health.   

Much like Mick Mulvaney at the CFPB, Chairman Gottlieb started shifting FDA policy right away.  First, the effective dates of the “Deeming Regulations” that effectively banned vaping were extended outward by five years.  Second, for the first time ever, the FDA commissioner publicly endorsed vaping as a much less harmful alternative to cigarettes.  Third, and most importantly, the FDA considered implementing a regulatory scheme to reduce combustible cigarette nicotine to below addictive levels.  

One can reasonably assume that the buzzing CTP moths panicked against Gottlieb with all their might, and the sky was falling.  Gottlieb responded by announced that the FDA would consider moving vape products out of the CTP and grant them Over the Counter status, similar to Big Pharma’s nicotine chewing gums and patches.

Historically, the Over the Counter process for Big Pharma’s Nicotine Replacement Therapies like nicotine gums and patches were shuttled through the FDA with short clinical studies with due weight being given to harm reduction. Compared to the effective vape product ban under the CTP and its over 1,000,000 page long Premarket Tobacco Product Application for each product, Over the Counter treatment of vape products can save millions of lives. 

Every American citizen should be a little concerned about the outcome, because billions of dollars and millions of lives are at stake. 

Paul Porter is a practicing corporate transactional attorney in Charlotte, North Carolina.  He was the lead counsel on the sale of “Blu E-cig” to Lorillard, and currently represents vape manufacturers and retailers.

Cigarette smoking is, far and away, the most dangerous consumer product ever invented.  Everyone knows that, but people still smoke.  The “20% Prevalence” theory, which has ruled the tobacco world for decades, holds that no matter what antismoking campaigns you try or how much you educate, smoking cessation stalls at around 20% of the population.      

Public Health/Tobacco Ecosystem

Most people making money from smoking seem quite happy with the 20% number.  Big Tobacco makes its money selling the cheaply manufactured cigarettes.  Big Pharma makes its money from expensive smoking cessation pills, nicotine gum/patches and even more expensive lung cancer treatment.  The U.S. government rakes in around $15 billion annually in cigarette taxes. States receive billions from the Master Tobacco Settlement Agreement pursuant to which Big Tobacco pays the states a percentage from the sales of their deadly wares in exchange for a hall pass from the State Attorney General.

Media-savvy antismoking zealots in public health get paid to endlessly shout from rooftops for everyone to “stop smoking,” along with “save the children.” It won’t matter, 20% will still smoke.  Among the public health nonprofits, many are established and respected with their lifeblood from clinical studies, funded by Big Tobacco, Big Pharma or the Federal and state governments. 

It is an almost perfect, symbiotic and seemingly bulletproof financial ecosystem of public health and tobacco.

Rise of Vape

But, people continue to die from smoking, including the father of Hon Lik.  In the early 2000s, this unlikely Chinese pharmacist came up with a technological answer to this deadly question:  How can people get the hand-to-mouth habit satisfaction of nicotine delivery, without having to inhale dozens of deadly carcinogens created by combusting tobacco leaf?  Through his ingenuity, and a fortuitous idea that came in a dream, vaping was unceremoniously born.  It seemed like a workable solution to finally end smoking, by means of a cheap, less stinky, and much safer technology which allows people to get their nicotine fix directly along with trendy flavors instead of through tobacco leaves, and adjust the levels of nicotine to enable quitting. 

Vaping has developed into a grassroots led movement, embracing a disruptive technology that, for the first time in history, could break our fatal relationship with inhaled tobacco combustion.  However, two key concurrent events happened which increased the speed and ferocity of the inevitable crash between the public health/tobacco ecosystem and the ragtag group of vape upstarts. 

First, Wall Street spotted an opportunity to bring billions to the states to help offset the spiraling costs of Medicaid under Obamacare.  In exchange for selling municipal bonds which securitize the state’s future receipts from the Master Tobacco Settlement Act, the states could get a pile of money today for whatever the budget needed. 

Second, Public Health England and the Royal College of Physicians, the most respected medical society in the world, both agreed that vaping was at least 95% safer than smoking. The study analyzed the chemical compounds found in vaping and cigarette smoke, finding that the vast majority of the chemicals causing combustive-related toxicity are absent in vaping.   

More and more people quit smoking, and the 20% prevalence theory was modified to include a significant exception: technological advances.  According to the CDC, the percent of population who smoked in 2005 was 20.9%, compared to 15.5% in 2016 and falling fast. This decline coincides with the rise in vaping. 

Ecosystem Responds

Among the first ecosystem’s members to suffer were the states.  The top five largest bond defaults are all state tobacco bonds, aggregating $4.7 billion in defaults.  Puerto Rico sales tax bond issuance came in a distant sixth place, with a measly $175 million. This raised a hue and cry across the entire ecosystem.  But, the ecosystem’s divergent interests and motivations would be a challenge.  Compromises would have to be made, risks taken.

Bruce Yandle, an economics professor at Clemson University, and others developed a simple, but logical, public regulatory concept called the “Bootlegger and Baptist” theory.  It theorizes that for a regulation to emerge and endure, both the “Bootleggers,” who seek to obtain private benefits from the regulation, and the “Baptists,” who seek to serve the public interest, must support the regulation.   The public health/tobacco ecosystem has Bootleggers (Big Pharma and Big Tobacco), as well as Baptists (public health zealots and nonprofits).  In this case, the Federal and State governments not only make law, but are individually dual participants as both a Bootlegger (billions in cigarette money) and a Baptist (protect citizens and fund other Baptists). 

The public health nonprofits fired the first shot of the war.  Grand headlines began to appear, like “Chemical flavorings found in ecigarettes linked to respiratory disease,” from Harvard Gazette. The Article focuses on diacetyl and its gruesome result, popcorn lung disease. The public’s reaction was predictable, “Popcorn lung disease… whatever that doohickey is, it can’t be good.  We best not vape.” 

What the article conveniently omits is the fact that diacetyl present in vape is 750 times lower than that in cigarettes. Not even the much larger dosage present in cigarettes is sufficiently high enough to give smokers this insane sounding “popcorn lung” thing. 

The mandate was clear: Attack vaping, but omit any information of harm reduction, lest the cake-eating masses become unruly.  Media public relations and quasi-clinical studies weren’t enough, more was needed to protect the ecosystem.

Deeming Regulations

That was when the Food and Drug Administration's Center for Tobacco Products stepped in and extended its regulatory hand beyond mere tobacco regulation to vape regulation through its "Deeming Rule." The net effect of this 500-page tome of complexity and of discretionary authority is that the FDA’s Center for Tobacco Products (CTP) made quite a power grab. For those newly dragooned under its regulatory boot, the result was simple: If you were a small business with the most effective smoking cessation-type vaping products, all your products were banned come 2018.  You want to fight the FDA?  So cute you are, Mr. Fancy Pants.  If you are Big Tobacco with one cigalike product, it would be hard, but the CTP would let you through.     

As for the deadly cigarette, which the CDC estimates kills over 480,000 Americans each year, no worries.  Cigarettes have no regulatory hurdle at all under the Deeming Regulations, so their manufacturers could just keep pushing as they always had.  Big Tobacco sells cigarettes, and everyone else in the ecosystem, directly or indirectly, financially benefits. 

The ecosystem’s weakest link, however, was the public health zealots and nonprofits who created the media spin.  Those public health zealots were sometimes lunatick-y and some of their nonprofits were ridiculed by real scientists for their junk science. 

With those weaknesses in mind, the Deeming Regulations included some First Amendment suppression.  The FDA prohibited any vape sellers from making any statement that vaping was less harmful than cigarettes. 

Another problem: The 2009 Family Smoking Prevention and Tobacco Control Act applied only to tobacco products.  Inconveniently, vape products, as well as its Big Pharma’s smoking cessation products, aren’t made from tobacco products.   Through the tortured logic of a three-year-old with her hand in a cookie jar, the FDA unconvincingly took the position that all batteries, LED screens, software, ejuice (with or without nicotine) were to be deemed “tobacco products.”  So let it be written, so let it be done.  

Obviously, Big Pharma didn’t want its nicotine gums and patches to be regulated by the CTP under those draconian Deeming Regulations.  The ecosystem agreed: Big Pharma’s nicotine inhalers, patches and gums were carved out the CTP’s Deeming Regulations. 

For the moths in this swampy ecosystem, the CTP became the light. 

Wait, What?

In the months leading up to the 2016 election, the hashtag, “I vape, I vote” became a rallying cry in Twittersphere and on other social media.  We will likely never know the impact of the August 2018 vaping ban on voters.  Perhaps the working class fathers, mothers, sons and daughters in the rust belt didn’t want their loved ones to die over a silly nicotine addiction.  Doing about the only thing they have the power to do, they voted.

On Nov. 8, 2016, like so many others, the public health/tobacco ecosystem was delivered a breath-stopping gut punch.  As a result, President Trump brought in Scott Gottlieb as the new Chairman of the FDA, a young, highly qualified, innovative and energetic leader who believes in technology in public health.   

Much like Mick Mulvaney at the CFPB, Chairman Gottlieb started shifting FDA policy right away.  First, the effective dates of the “Deeming Regulations” that effectively banned vaping were extended outward by five years.  Second, for the first time ever, the FDA commissioner publicly endorsed vaping as a much less harmful alternative to cigarettes.  Third, and most importantly, the FDA considered implementing a regulatory scheme to reduce combustible cigarette nicotine to below addictive levels.  

One can reasonably assume that the buzzing CTP moths panicked against Gottlieb with all their might, and the sky was falling.  Gottlieb responded by announced that the FDA would consider moving vape products out of the CTP and grant them Over the Counter status, similar to Big Pharma’s nicotine chewing gums and patches.

Historically, the Over the Counter process for Big Pharma’s Nicotine Replacement Therapies like nicotine gums and patches were shuttled through the FDA with short clinical studies with due weight being given to harm reduction. Compared to the effective vape product ban under the CTP and its over 1,000,000 page long Premarket Tobacco Product Application for each product, Over the Counter treatment of vape products can save millions of lives. 

Every American citizen should be a little concerned about the outcome, because billions of dollars and millions of lives are at stake. 

Paul Porter is a practicing corporate transactional attorney in Charlotte, North Carolina.  He was the lead counsel on the sale of “Blu E-cig” to Lorillard, and currently represents vape manufacturers and retailers.