FDA Regulations a Double-Edged Sword for the US E-Cigarette Market

Stringent FDA regulations are curbing market growth for e-cigarettes in the US, according to a recent report from TechNavio.

While the market in still growing stateside, with a 24.22 percent CAGR from 2013-2018, growth is being seriously hampered by efforts from the US FDA to extend their regulatory control, which doesn’t currently cover vaping. Compare this to the 39.80 percent growth rate expected in the British market, and it’s easy to see how far the US is lagging behind.

Currently, the FDA only regulates e-cigarettes that are used for therapeutic purposes, as well as conventional cigarettes and tobacco.

But the organization is now proposing a rule that would extend the agency’s authority to cover additional tobacco products, such as e-cigarettes.

The new rules would ban the sale of e-cigarettes to people under 18 years of age and would require e-cig makers to disclose information regarding manufacturing components of the cigarettes and liquids. The FDA has also proposed that vendors provide health warnings on packets, similar to those on traditional cigarettes.

The main motivation for the regulations, according to the FDA, is consumer safety and concerns over the unknown health effects of e-cigarettes.

According to TechNavio, no proper research has been conducted on the negative effects of e-cigarettes or vaping on human health.

“Regulatory bodies are still not clear on how much nicotine or other chemicals are actually being inhaled by the body when smoking electronic cigarettes,” says Faisal Ghaus, Vice President of TechNavio research.

“The effectiveness of e-cigarettes in helping people quit smoking has also not been fully studied.”

Between March 2013 and March 2014, more than 50 complaints related to e-cigarettes, citing trouble breathing, headaches, cough, dizziness, sore throat, nose bleeds, chest pain or other cardiovascular problems, and allergic reactions such as itchiness and swelling of the lips were filed with the US FDA.

However these arguments are doing nothing to convince critics of the regulations, with many saying that all they will do is kill the vaping industry, which is still in its infancy.

A recent article from Motherboard outlines the proposed regulations clearly—any e-cigarette product made after 2007 must get FDA approval to be sold. This includes a health impact assessment, which can take up to 5,000 hours and cost between US$3-4 million. These are not numbers that small or independent retailers can swallow easily, meaning that the vape shops popping up everywhere will be left with no product to peddle.

Some are going as far as saying that the FDA regulations are just paving the way for big tobacco—an organization that has more than enough practice circumventing the rules imposed on the selling of tobacco. These organizations are the only ones with enough cash to weather the regulatory storm.

Currently, Lorillard, one of the top tobacco companies in the US, is dominating the e-cigarette market in the states with nearly 40 percent market share.

E-cigarettes in the US

Top Vendors in the E-Cigarette Market in the US

The FDA regulations were proposed in late April and will be open for public comment until July. Until then, it’s anyone’s game as to whether these regulations will be a boon for the health of Americans, or put the kibosh on the whole vaping industry.