Tobacco companies lost the fight against new e-cigarette regulations — in 2009

by Will Tucker on May 6, 2016

Despite lobbying intensely for their interests in Congress, tobacco giants didn’t put up much of the fight against the U.S. Food and Drug Administration’s new rules on e-cigarettes, pipe tobacco and cigars, records show.

That helped hand a victory to opponents concerned about the health effects of vaping. Announced Thursday, the rules impose a strong regulatory framework on a market that until now has operated with few constraints. But as vaping has risen in popularity, calls for regulation of the ostensibly safer way to inhale nicotine-infused vapor have also grown.

The move is “a milestone in consumer protection,” an FDA press release reads. The rules require producers to disclose their products’ ingredients to the FDA, as well as how they are manufactured, and apply for permission to sell them. E-cigarettes cannot be sold to people younger than 18 after the regs take effect in 90 days.

At the FDA, the loudest lobbying voices were medical trade associations like the Society of Thoracic Surgeons, the American Cancer Society and the American College of Cardiology. Each reported lobbying the FDA directly and specifically mentioned “e-cigarettes” in their reports.

By contrast, the biggest players in tobacco lobbying trained their resources on the House and Senate, which overall take a far more critical view of regulation than the Obama administration. On that playing field, the giants Reynolds American and Altria Group are unmatched. Reynolds’ lobbyists mentioned tobacco and e-cigarettes on 59 reports in 2015, while Altria Group’s lobbyists did so on 58 reports — and on 16 reports already this year. The American Thoracic Society mentioned the terms on 8 reports in 2015 in comparison.

Overall, Reynolds spent about $2.1 million lobbying in 2015, and Altria spent about $9.6 million. Because disclosure rules don’t require firms to specify how much an organization spends lobbying on any particular issue or bill, the number of mentions of the issue on the reports is the only reliable way to measure the intensity of their campaigns.

To help keep doors open in Congress, tobacco interests also have been generous donors to candidates and parties — mostly on the Republican side. In each of the last two election cycles — 2012 and 2014 — they have given about $3.9 million.

Reynolds and Altria haven’t lobbied the FDA directly since 2011. Altria’s 2015 filing with the Securities and Exchange Commission makes it clear why: This fight, essentially, was lost in Congress in 2009.

“In June 2009, the president signed into law the Family Smoking Prevention and Tobacco Control Act…the law grants the FDA authority to extend the FSPTCA application, by regulation, to all other tobacco products, including cigars, pipe tobacco and electronic cigarettes,” the disclosure reads.

And the regs that were released in final form yesterday were first publicly proposed in 2014 — so the train left the station long ago. Not even the American Vaping Association, a relatively new trade group that says it advocates for small-to-medium businesses in the industry, reported lobbying on them (or on any issue at all, actually; it has never filed a lobbying disclosure report). The group did, however, excoriate the rules when they were announced yesterday.

Reynolds’ 2015 SEC filing showed the company was resigned to the fact the regs were coming.

“These developments have had and will likely continue to have an adverse effect on the sale of tobacco products,” the company said of the FDA’s broad authority over tobacco in February, even before the new rules announced Thursday.

Reynolds appears to believe the new rules will create a sort of feedback loop, too, leading to more state-level activity contrary to their interests. “In addition to the anticipated regulation by the FDA of electronic cigarettes, referred to as e-cigarettes,” the company’s report reads, “various states have adopted, or are considering adoption of, taxes on e-cigarettes, restrictions on the promotion and distribution of e-cigarettes and tamper resistant and child resistant packaging requirements for e-cigarettes.”

Still, according to CNN, the number of vaping Americans has grown by 12 percent since 2014. And Reynolds in particular, despite the gloomy narrative in its report to the SEC, has shown an aggressive streak when it comes to capturing the e-cigarette market. In 2013, Lorillard, a major tobacco producer, snatched up two e-cigarette manufacturers and quickly moved on to a $27.4 billion merger with Reynolds in 2015 that made for a vaping products powerhouse — not to mention the second-largest producer of tobacco products in the country.