Nicotine

We will help you formulate and execute the right regulatory strategy for your nicotine containing products, for the US market, the EU and other regions.

In the United States, the Food and Drug Administration (FDA) has primary regulatory authority over nicotine containing products. The steps are simple: evaluate your product, develop the science and prepare and submit the application before FDA.

• Kovacevic led the successful, multidisciplinary team which obtained the first premarket authorization ever issued by the Food and Drug Administration (FDA) and led submission of successful substantial equivalence (SE) reports for various tobacco products.
• We will advise you what are the necessary regulatory submissions, keep you informed of the latest FDA developments that impact the industry, assess the impact of the latest FDA statements, rules and guidance documents on your business, and prepare an integrated, proactive or defensive strategy, that may include product research, regulatory submissions and/or litigation.
• We will assess your product’s likelihood to succeed under the PMTA (premarket tobacco application) pathway, scope the research needs, recommend  research partners, if needed, and oversee your internal and external processes in support of the PMTA application.
• We will advise you on the scope and content of the substantial equivalence (SE) applications.
• We will provide a critical review of your draft PMTA/ SE reports, based on successful past applications before the FDA, and address the opportunities for improvement.
• We will engage with the FDA on your behalf requesting pre-submission meetings, or other types of meetings as needed. We will make sure that your meeting request and the supporting information meet FDA requirements to enable a constructive and effective meeting, that results in actionable information.
• More importantly, we will be perfectly candid and transparent as to the costs, likelihood of success, and contingency plans you need to deploy for a sustainable future for your business.
• For banking analysts and the investor community, we provide critical and prompt insights into FDA actions and statements, an overview of the rulemaking process, likelihood of success of challenges to proposed regulatory actions. We will discuss the intersection of FTC and FDA authorities, in particular where mergers are concerned.
• We will review your marketing and other product initiatives to minimize compliance and reputation risk.
• Due diligence: we will conduct the regulatory due diligence of target companies and/or products.

In 2009 the United States Congress passed an amendment to the Federal Food, Drug, and Cosmetic Act (FD&C Act) titled the Family Smoking Prevention and Tobacco Control Act (“Tobacco Control Act” or “TCA”). TCA gave a government agency, the Food and Drug Administration (FDA), primary jurisdiction over tobacco products. As of the passage of the TCA, four types of tobacco products were specifically regulated under the TCA, namely, cigarettes, cigarette tobacco, smokeless tobacco and roll-your-own tobacco, however, Congress allowed FDA to bring additional tobacco and tobacco-derived nicotine products under the TCA authority by deeming them “tobacco products” at a later date through notice-and-comment rulemaking, which FDA did in 2016.

How does FDA regulate ENDS products?

As mentioned above, when the TCA was signed into law only four types of tobacco products were specifically regulated under the TCA, namely, cigarettes, cigarette tobacco, smokeless tobacco and roll-your-own tobacco. The TCA authorized FDA to engage in rulemaking and bring (“deem”) products, meeting the definition of “tobacco product” under the FDA authority and impose TCA provisions on such newly deemed tobacco products. FDA issued a proposed deeming rule in 2014, collected comments, and issued a final rule in May 2016, effective August 8, 2016 (the “Deeming Rule”), deeming all other products that meet the definition “tobacco products”, including ENDS, and thus subjecting ENDS to the provisions of the TCA, including the premarket review requirement.

All ENDS currently on the U.S. market are not only “tobacco products” but also “new tobacco products”, meaning they were not on the market on February 15, 2007. As such, the Deeming Rule imposes premarket review requirements on all ENDS products, and does not allow any modifications to ENDS products after August 8, 2016.

How is a tobacco product defined in the TCA?

In order to understand what type of premarket authorization is necessary for ENDS, and for which types of products, we will discuss a few useful definitions.

A “tobacco product” is defined in the TCA as:

“a. Definition of Tobacco Products. Section 201 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 321) is amended by adding at the end the following:

The term ‘tobacco product’ means any product made or derived from tobacco that is intended for human consumption, including any component, part, or accessory of a tobacco product (except for raw materials other than tobacco used in manufacturing a component, part, or accessory of a tobacco product).
The term ‘tobacco product’ does not mean an article that is a drug under subsection (g)(1), a device under subsection (h), or a combination product described in section 503(g).

The products described in paragraph (2) shall be subject to chapter V of this Act.
A tobacco product shall not be marketed in combination with any other article or product regulated under this Act (including a drug, biologic, food, cosmetic, medical device, or a dietary supplement). “

What is a “new tobacco product”?

The U.S. is the only jurisdiction that requires a tobacco product dossier be submitted for review and authorization to the FDA prior to first marketing a “new tobacco product”. As such, FDA must first review and discretionarily authorize any change to a grandfathered tobacco product (which creates a new tobacco product) prior to the introduction of such new tobacco product on the U.S. market. A “grandfathered product” is a tobacco product that was commercially marketed in the U.S. as of February 15, 2007 (not only before that date). Clearly none of the ENDS products currently on the U.S. market were sold in the U.S. as of that date.

Thus, a ‘“new tobacco product” is defined as:

any tobacco product (including those products in test markets) that was not commercially marketed in the United States as of February 15, 2007; or
any modification (including a change in design, any component, any part, or any constituent, including a smoke constituent, or in the content, delivery or form of nicotine, or any other additive or ingredient) of a tobacco product where the modified product was commercially marketed in the United States after February 15, 2007.”

No new tobacco product (including no new, or modified ENDS product) may be introduced on the US market at present, and indefinitely, unless the manufacturer first obtains a premarketing authorization from the FDA under one of the three premarket authorization pathways provided for in the TCA, namely: (a) substantial equivalence (SE), (b) exemption from substantial equivalence (also termed “minor modification”) (MM) or (c) a premarket tobacco product authorization (“PMTA”).

Both the substantial equivalence pathway (SE) or the minor modification pathway (MM) require a close, side-by-side comparison between the new tobacco product (termed “subject”) and either a very similar grandfathered product (as noted above, a product sold on February 15, 2007), or with a product that received FDA marketing authorization under the SE pathway only, also termed a “predicate”. All SE submissions to date, and engagement with the FDA, demonstrate that FDA requires the SE predicate and the new tobacco product (or “subject”) to be virtually identical or, in any event, extremely similar in terms of product construction, manner of use, ingredients and emissions. Because no available 2007 predicates exist for close comparison with today’s ENDS, the only premarket pathway available to ENDS products is the PMTA.

Mindful of the large number of ENDS products that were on the U.S. market as of August 8, 2016, and which were all “new tobacco products”, rather than ordering all of those products off the U.S. market at once, the FDA Deeming Rule initially allowed ENDS manufacturers and importers two years, until 2018, to submit PMTA applications to the FDA as a precondition to continue to sell their respective ENDS products past the 2018 deadline. In 2017, a newly appointed FDA commissioner extended that compliance deadline to 8 August 2022.

European Union

In the European Union, each EU country transposed the EU TPD (Tobacco Products Directive) with slight country-specific variations. Certain EU regulations (such as  REACH) apply to nicotine containing products.

• Our principal oversaw all regulatory aspects for two acquisitions in the ENDS (electronic nicotine delivery systems) space – makers of electronic cigarettes based in the US and the UK.
• She also led the market entry into 27 EU markets of electronic cigarette (ecig) products, including vaping liquids and vaping devices, as well as closed systems (closed ENDS), including oversight of the premarket notification required under the TPD.
• We will assist you with the right regulatory strategy for individual markets, and can reach out to a network of trusted local lawyers ready to support with any local litigation or enforcement by local authorities.
• Kovacevic and her network partners speak several European languages, which is a huge asset for effective business transactions and for understanding local cultural nuances, whether it’s a matter of reviewing your proposed marketing materials, engaging clinical research organizations in European countries, or simply communicating with your business partners more effectively.

The Tobacco Products Directive (2014/40/EU) (TPD), which is based on the proposal of the European Commission, entered into force on 19 May 2014 and became applicable in the EU Member States on 20 May 2016. The Directive applies to the manufacture, presentation, and sale of tobacco related products including cigarettes, roll your own tobacco, pipe tobacco, cigars, cigarillos, smokeless tobacco, electronic cigarettes, and herbal products for smoking. TPD introduced a premarket notification scheme for, among other, ENDS products (vaping products, nicotine-contaning liquids for electronic cigarettes etc.), but also packaging, warning, and advertising restrictions. EU member states had some latitude in imposing additional measures. Some, like the United Kingdom, decided to encourage the ENDS market by providing user-friendly information and tools on the Medicines and Healthcare Regulatory Agency website – link here.

China and other jurisdictions:

• The regulatory framework differs from country to country, and we are aware that enforcement can be inconsistent, even where there are strict restrictions applying to nicotine containing products.
• We will support your partnership efforts with local distributors, evaluate the regulatory environment, advise on the right contractual arrangements, and support you with due diligence of any local acquisition target.

China is the birthplace of electronic cigarettes.  While the earliest prototype of a device resembling the modern e-cigarette is attributed to Herbert A. Gilbert in the 1960’s, it was inventor Hon Lik who introduced the first commercially successful electronic cigarette product in 2003. At present, Shenzen is the hub of e-cigarette technology (and not only), where most of the world’s vaping devices still originate.

Doing business with China has its own set of specific challenges. The tariffs war introduced additional uncertainty to an already heavily scrutinized jurisdiction. When doing business in China a local legal expert as well as a great Foreign Corrupt Practices Act (FCPA) compliance expert should assist you navigate the relationships with your local partners. Of all FCPA investigations conducted by the Department of Justice in conjunction with the U.S. Securities and Exchange Commission, a large number focus on activities involving China.