Loophole in Tobacco Regulation Bill
The House last month overwhelmingly passed the legislation, which for the first time would empower federal public health authorities to regulate tobacco. Some tobacco foes say the bill's 21-month escape clause would let companies start marketing cigarettes and other products in the development pipeline before the Food and Drug Administration has fully ramped up to regulate them.
"It is an opportunity for the companies to continue to put products on the market without a pre-market evaluation by the FDA," said Mitch Zeller, who headed the agency's tobacco office during the Clinton administration. That office was disbanded after the Supreme Court ruled in 2000 that the FDA did not have authority to regulate tobacco, a decision that provided the motivation for the current bill.
Zeller, who said he still counts himself as a strong supporter of the legislation, nonetheless called the loophole "unfortunate" and said it seems to be a "gift" to the tobacco companies.
The office of Sen. Edward M. Kennedy, D-Mass., who is one of the main authors of the bill, disagreed. The provision is in the bill to give the FDA some breathing room to set up its new tobacco division, and not as a favor to the industry, according to Kennedy's staff.
The legislation represents a compromise among major anti-smoking groups and some tobacco companies, including Philip Morris USA, the nation's largest. The bill has the support of a majority of senators, but it's unclear whether it will become law this year because the Bush administration has threatened a veto.
The controversial clause would not apply to all new products, only to those that are similar -- or "substantially equivalent" -- to ones that were on the market when the bill was introduced in 2007.
Under the provision, tobacco companies would be able to begin selling a new product provided they file a report with the FDA showing why the new product is similar to an existing one. That could be done at any time in the 21 months after enactment of the legislation. If the FDA later disagreed, it still would have the power to yank the product off the market.
After the 21 months, winning FDA approval for any product would get tougher.
Once the window closes, products similar to ones already on the market would have to first be cleared by the FDA before they could be sold to consumers.
Completely new products would face a higher hurdle from the time the bill is enacted. Companies would have to apply to the FDA before going to market, and the agency could deny approval if it finds that a product is not "appropriate for the protection of the public health" -- a standard that may be difficult for cigarettes to meet.
A spokesman for Philip Morris said the language in the bill speaks for itself and the company would have no further comment. But Kevin Altman, a consultant to small tobacco companies, said the 21-month window gives the industry some security as it prepares for a new world of closer oversight.
"Here was our concern. Let's say I launch a product today (that's) a straight-up-the-gut traditional cigarette," Altman explained. "The big fear was you go out there and the FDA comes out with regulations and says, 'Oh, that's not a registered product. You have to take it off the market.'"
Some companies launch different versions of essentially the same cigarette to try to expand their market, Altman said. He predicted that companies with brands under development, or those that are considering new versions of current products, would scramble to introduce them within the 21-month window.
Small cigarette companies were also able to get an expansion of the loophole in negotiations with Congress, Altman added.
When the legislation was introduced last year, it provided that only products similar to ones introduced by mid-2003 could be marketed without prior approval from the FDA during the initial time window.
But the bill passed by the House expanded that to include products similar to ones introduced by February 2007, a gain of more than three years.
Kennedy's office said changes in the effective dates of various legislative provisions are routine in drafting major bills, and that some were recommended by former senior FDA officials.
But Zeller, the former tobacco office chief who is critical of the loophole, commented, "They didn't ask me."