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Home IRS & Taxes

FDA Center for Tobacco Products (CTP) Reform

by TheAdviserMagazine
7 months ago
in IRS & Taxes
Reading Time: 6 mins read
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FDA Center for Tobacco Products (CTP) Reform
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Amid the flurry of federal government activity over the last few weeks, the US Department of Health and Human Services announced a reduction of roughly a quarter of its workforce. Among other things, this is producing a change in leadership at the Food and Drug Administration’s (FDA) Center for Tobacco Products (CTP). New leadership will face significant challenges but will also have the opportunity to revisit decisions that have shifted consumption to illicit products and discouraged harm reduction—policies that, however well intended, have come at a significant cost in lives. In this blog post, we detail some of the lingering challenges plaguing the CTP and suggest a pathway forward.

The CTP has come under heavy criticism in recent years, which we have covered extensively due to the surge in illicit market activity and the resulting challenges of implementing tax policy on alternative tobacco products (ATPs). In 2022, the FDA requested the Reagan Udall Foundation conduct an independent investigation of the CTP. The resulting report highlighted several shortcomings, including a lack of a clear regulatory and product approval framework, an inefficient and slow product review process, a lack of transparency and communication, and broad struggles with the vaping market. We have identified four broad categories for CTP reform with direct policy actions to achieve each goal.

1. Enhance Transparency and Accountability

One of the biggest criticisms of the CTP is its lack of transparency in decision-making. Unlike the traditional process for selling products in a market economy in which innovators can immediately sell their products to consumers, companies wishing to sell nicotine products in the United States must go through the CTP to receive written permission (a marketing granted order, or MGO) from the FDA. To receive such authorization, manufacturers must prove that their product is “appropriate for the protection of public health.” Any tobacco or nicotine product lacking a marketing authorization order from the FDA cannot legally be sold in the United States.

Currently, companies seeking market approval for new, reduced-harm products receive little guidance on why applications are accepted or denied—or indeed what constitutes “appropriate for the protection of public health.” The CTP also provides infrequent information on agency actions and doesn’t describe how feedback from stakeholders, the public, or congressional oversight are incorporated into agency actions.

CTP Should Publish a Rubric that Includes Requirements for Product Approval

To improve transparency and accountability, the CTP should set out clearly defined criteria and standards for authorizing or denying new tobacco and nicotine products, including scientific standards for harm reduction. The FDA has been outspoken in requesting clinical control trials and other data as part of the new product application process. Once those data are received, however, there is no rubric for what constitutes appropriate protection of public health.

How much less harmful than cigarettes does a new product need to be? How are product concerns, such as youth usage, weighed against reduced combustible cigarette use? How are such measures even estimated without available data?

Right now, the way in which the CTP makes decisions about new products is a black box. Clear criteria would set standards for new products and inform innovation, while also providing the CTP the opportunity to receive feedback on those standards.

2. Streamline the Premarket Tobacco Product Application (PMTA) Process

The PMTA process, which manufacturers must undergo to introduce new tobacco products, is costly, slow, inconsistent, and burdensome. The FDA initially estimated costs upwards of $2.5 million, though actual costs can easily total $100 million. These extra costs don’t expedite the process, unfortunately. While the CTP was supposed to make a decision on product applications within 180 days, many product applications have sat on CTP desks for more than five years without a decision. These costs and delays have created market uncertainty and legal challenges.

CTP Should Create a Fast-Track PMTA Approval Pathway for Reduced-Risk Products

Products scientifically proven to be less harmful than cigarettes (e.g., e-cigarettes, heated tobacco products, and nicotine pouches) should undergo an expedited review. Many of these products may be new(er) to the US but have been sold abroad for many years. CTP regulators should act with haste to bring products to market that have been scientifically studied and have evidence demonstrating that they are less harmful.

Default Marketing Authorization Approval Should Occur After 180 Days

The CTP has consistently failed to meet statutory deadlines, but there are no ramifications for the agency for such failures. Applicants must simply wait patiently for the CTP to make its decision. A change in policy defaults would correct this broken procedure.

If marketing approvals were automatically granted when the CTP failed to make its decision on an application within 180 days, the agency would have some incentive to act in a timely manner. To prevent the agency from gaming the 180-day timeline by outright rejecting every proposal, every rejection issued by the agency would have to clearly detail how the product failed to achieve the well-defined product rubric recommended above. To avoid manufacturers gaming the system by flooding the agency with applications, the FDA should set some non-negotiable minimum requirements for both products and applications.

3. Fix the US Vaping Market

Perhaps the greatest failure of the CTP has been its treatment of electronic nicotine delivery systems (ENDS) and vaping products. As much as 98 percent of vaping products sold in the US are illicit. The problems are self-imposed, and the black market is almost entirely due to the CTP’s inaction. The good news is that the solutions are obvious and quick to implement.

CTP Should Authorize More Legal Vaping Products

The FDA has been extraordinarily slow and stringent when it comes to authorizing products for sale. From October 2019 to March 2024, the FDA received approximately 26.6 million PMTAs. Of those 26.6 million applications, the FDA agreed to review roughly 1.2 million (rejecting the rest). Of the 1.2 million files reviewed during those five years, the FDA granted MGOs for 30 products—0.001 percent of new product applications.

It took the FDA until June 2024 to issue the first MGO for a menthol-flavored product. To date, the FDA has authorized a total of 34 unique ENDS products. That figure separately counts vaping devices, pods, and different flavors of the same product.

Without legally authorized products available for sale, illicit products quickly filled the void to meet consumer demand. The demand for illicit products would be substantially diminished if the CTP authorized more products and put more resources into combatting illicit trade.

CTP Should Strengthen Enforcement Against Illegal Products

Illicit tobacco and nicotine products, particularly flavored disposable vapes from China, remain widely available. These products are openly sold in vape shops and corner stores, and major distributors advertise their illegal wares online.

Existing enforcement actions have been slow and often ineffective. The CTP can enhance its enforcement efforts by communicating clearly about what products are legal, and by working closely with the Department of Justice, Customs and Border Protection, state attorneys general, and local health departments to crack down on illegal products.

4. Address Blind Spots – The Teen Vaping Crisis That Isn’t

No agency is perfect, and the CTP’s tasks are difficult. Experts get things wrong. Leaders can be inattentive to the unintended consequences of certain decisions. And even when data are correctly analyzed and policies well-designed, the consumer and product environments constantly change. Regulating a constantly changing market requires relentless analysis of data and trends. The goal of reducing public harm from smoking is very much worth pursuing and to do so means the agency should continually check for blind spots—areas where a reevaluation of current, unbiased evidence requires a change in policy.

While we don’t know exactly how the CTP determines what constitutes a risk to public health, we do know that one of their primary concerns is youth consumption of products. Deterring youth usage was the cornerstone argument in the FDA’s successful argument to the Supreme Court as to why the agency has denied all MGOs for vapes with flavors other than tobacco and mint.

Youth usage of ATPs shows a promising trend. The 2024 data showed that 5.9 percent of surveyed teens reported vaping at least once in the last 30 days, a decrease from 7.9 percent in 2023. That is the lowest reported level in the past 10 years. This is great news, and it means that teen vaping isn’t a growing crisis. Youth usage of ATPs should continue to be monitored, but the data showing declining use need to be considered in the context of expanding products on the market that can be used to entice smokers to less harmful alternatives.

Nearly 450,000 Americans die annually from smoking. The CTP and FDA can dramatically reduce that number simply by authorizing less harmful products for sale in the United States. CTP reform is drastically needed. If implemented well, new CTP policies could save American lives and restore the function of legal markets for less harmful tobacco products.

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