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The “Family Smoking Prevention and Tobacco Control Act”. Darryl Jayson Vice President Tobacco Merchants Association 2010 U.S. Tobacco Forum June 10, 2010 Raleigh, North Carolina. The Family Smoking Prevention and Tobacco Control Act (HR 1256).

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the family smoking prevention and tobacco control act

The“Family Smoking Prevention and Tobacco Control Act”

Darryl Jayson

Vice President

Tobacco Merchants Association

2010 U.S. Tobacco ForumJune 10, 2010

Raleigh, North Carolina

slide2

The Family Smoking Prevention and Tobacco Control Act(HR 1256)

  • HR 1256 was signed by President Obama on June 22, 2009.
  • HR 1256 grants the US Food & Drug Administration (FDA) the authorization to regulate the manufacture, sale and distribution of tobacco products.
slide3

The Family Smoking Prevention and Tobacco Control Act

SectionDescription

4b Agricultural Activities

“The provisions of this division (or an amendment made by this division) which authorize the Secretary to take certain actions with regard to tobacco and tobacco products shall not be construed to affect any authority of the Secretary of Agriculture under existing law regarding the growing, cultivation, or curing of raw tobacco.”

slide4

The Family Smoking Prevention and Tobacco Control Act

SectionDescription

901 FDA Authority Over Tobacco Products

While the FDA does have the authority to regulate all tobacco products, this Act does not apply to tobacco leaf: (1) that is not in the possession of a manufacturer of tobacco products; or (2) of the producers of tobacco leaf, including tobacco growers, tobacco warehouses, and tobacco grower cooperatives.

Nor shall any FDA employee have any authority to enter onto a farm owned by a producer of tobacco leaf without the written consent of such producer.

slide5

FSPTCA – Implication for Tobacco Growers

  • The FDA cannot directly affect tobacco growing or its practices.
  • Indirectly, it is not as clear as manufacturer leaf requirements could change over time.
slide6

The Family Smoking Prevention and Tobacco Control Act

SectionDescription

901 FDA Authority Over Tobacco Products

By September 22, 2009, the FDA must create the “Center for Tobacco Products”

By an as-of-yet undetermined date, create an office to assist small manufacturers (those that employ less than 350 employees in total for all entities)

902 Adulterated Tobacco Products

Defined as a tobacco product that consists of “any filthy, putrid or decomposed substance” or a “contaminated” product or one “prepared, packed or held under insanitary [sic] conditions”

slide7

The Family Smoking Prevention and Tobacco Control Act

SectionDescription

903 Misbranded Tobacco ProductsDefines as those tobacco products with labeling that is “false or misleading in any particular;” those failing to provide an “accurate statement of the quantity”.

904 Submission of Health Information

Cigarette manufacturers are required to provide to the FDA:

Ingredient DisclosureSmoke ConstituentsAll health-related and marketing- related internal studiesInformation concerning additives

slide8

The Family Smoking Prevention and Tobacco Control Act

SectionDescription

905 Annual RegistrationOn or before December 31st each year, tobacco products manufacturers must register their facilities & tobacco products.

906 General Provisions

Sets out general requirements with regard to notices of proposed rulemakings, public comment, and other aspects of rulemakings. Requires that all aspects of manufacturing, including “preproduction design validation” meet “good manufacturing practices”.

slide9

The Family Smoking Prevention and Tobacco Control Act

SectionDescription

907 Tobacco Product Standards

Tobacco products will need to meet a standard based on (1) nicotine yields; (2) “construction, components , ingredients, additives, constituents, including smoke constituents, and properties”; and (3) as determined by regulations related toas-of-yet undefined testing on a sample.

The sale of flavored cigarettes is prohibited (except for menthol), effective September 22, 2009.

slide10

FSPTCA – Implication for Tobacco Growers

Over time, tobacco growers may be asked by manufacturers to:

Further restrict nitrosaminesRemove other, as of-yet-unknown, constituents in tobacco leaf (possibly created during the curing process)

Use, restrict or limit certain pesticides, herbicides or other chemicals currently used in tobacco growing

slide11

The Family Smoking Prevention and Tobacco Control Act

SectionDescription

907 Tobacco Product Standards

Not later than one year after the establishment of the TPSAC, this committee will submit a report and recommendations on “the impact on the use of menthol in cigarettes on the public health… among children, African Americans, Hispanics and other racial and ethnic minorities.”

The Secretary is not, however, limited in his/her “authority to take action.”

slide12

The Family Smoking Prevention and Tobacco Control Act

SectionDescription

907 Tobacco Product Standards

Not later than 2 years after its establishment, the TPSAC will issue a report and recommendations on the impact on the public health of dissolvable tobacco products. Again, the Secretary’s authority is not limited.

Beginning June 22, 2011, manufacturers are prohibited from using either domestic or foreign tobacco with pesticide residue levels above a given tolerance.

slide13

The Family Smoking Prevention and Tobacco Control Act

SectionDescription

907 Tobacco Product StandardsSection 3: LIMITATION ON POWER GRANTED TO THE FDA

“Because of the importance of a decision of the Secretary to issue a regulation --

(A) banning all cigarettes, all smokeless tobacco products, all little cigars, all [large] cigars, all pipe tobacco, or all roll-your-own tobacco products; or

(B) requiring the reduction of nicotine yields of a tobacco product to zero,

the Secretary is prohibited from taking such actions under this Act.”

slide14

The Family Smoking Prevention and Tobacco Control Act

SectionDescription

908 Notification & Other RemediesGrants the FDA the authority to first issue a notification order, if the Secretary determines that a tobacco product “presents an unreasonable risk of substantial harm,” and second to issue a recall notice.

909 Records & Reports on Tobacco Products

All manufacturers and importers are required to maintain records and make whatever reports are mandated under regulation to ensure that the products are neither misbranded nor adulterated.

slide15

The Family Smoking Prevention and Tobacco Control Act

SectionDescription

910 Application for Review of Tobacco ProductsAll tobacco products (including those in test markets) that were not commercially marketed in the U.S. as of February 15, 2007 or those that have undergone any modification after February 15, 2007 are considered “new tobacco products,” and are subject to premarket reviews.

911 Modified Risk Tobacco Products

Pre-market approval is required though for claims to be made with regard to relative risk additional barriers need to be cleared using as its basis the scientific evidence presented by the applicant.

slide16

The Family Smoking Prevention and Tobacco Control Act

SectionDescription

912 Judicial ReviewAny person adversely affected by the regulation implementing the “tobacco standard” or has his/her application for review denied has 30 days to file a petition for judicial review with the U.S. Court of Appeals District of Columbia.

913 Equal Treatment of Retail Outlets

The FDA is required to issue regulations bearing on advertising restrictions for “retail establishments for which the predominant business is the sale of tobacco products” “accessible to individuals under the age of 18.”

slide17

The Family Smoking Prevention and Tobacco Control Act

SectionDescription

914 Jurisdiction & Coordination with FTC

915 Regulation Requirement

By June 22, 2012 the FDA will issue regulations that require the testing and reporting of all tobacco product constituents, ingredients and additives, including smoke constituents.

Small manufacturers have two years from the date the above regulations are promulgated. Furthermore, a minimum four year period is provided before test results are required.

slide18

The Family Smoking Prevention and Tobacco Control Act

SectionDescription

916 Preservation of State & Local Authority

917 Tobacco Product Scientific Advisory Committee

To be composed of 12 diverse members all of whom are required to have knowledge in at least one of “medicine, medical ethics, science, or technology involving the manufacturer, evaluation or use of tobacco products”:

7 from the medical field

1 from government

1 from the general public

1 from tobacco manufacturing (non-voting)

1 from small tobacco manufacturing (non-voting)

1 from tobacco growers (non-voting)

slide19

FSPTCA – Implication for Tobacco Growers

  • Tobacco growers will attend and participate at TPSAC meetings, although will not have an official vote when important decisions are being made.
  • The issue of “evidence-based science” to draw conclusions and eventually regulationsMenthol cigarettesDissolvable tobacco products
slide20

The Family Smoking Prevention and Tobacco Control Act

SectionDescription

918 Drug Products Used to Treat Tobacco DependenceBy June 22, 2012, the FDA is required to submit to Congress “a report that examines how best to regulate, promote and encourage the development of innovative products and treatments” that result in total abstinence, reduced consumption, and harm reduction from continued use.

919 User Fees

To be paid by tobacco manufacturers on a quarterly basis, beginning October 1, 2009.

slide21

FSPTCA – Implication for Tobacco Growers

  • Although user fees are direct costs for manufacturers, the average cost for these fees will amount to less than 5¢ per pack.
  • The true cost increases for manufacturers will come when they modify their manufacturing processes to conform to specifications listed in the new FDA regulations.
slide22

The Family Smoking Prevention and Tobacco Control Act

SectionDescription

201 Cigarette Label and Advertising WarningsBy September 22, 2010, nine new cigarette package warning labels are required to be displayed on manufactured packages on a random basis.

The new warnings need to occupy 50% of the upper portion of the front and rear of the pack, under transparent clear wrapping.

By June 22, 2011, the FDA will issue regulations requiring color graphic warning labels showing the health consequences of smoking with whatever size and format requirements the FDA “determines appropriate.”

slide23

The Family Smoking Prevention and Tobacco Control Act

SectionDescription

202 Authority to Revise Cigarette Warning Label Statements

203 State Regulation of Cigarette Advertising and Promotion

204 Smokeless Tobacco Labels and Advertising Warnings

205 Authority to Revise Smokeless Tobacco Warning Label Statements

206 Tar, Nicotine and Other Smoke Constituent Disclosure to the Public

slide24

The Family Smoking Prevention and Tobacco Control Act

SectionDescription

301 Labeling, Recordkeeping, Record InspectionBy June 22, 2010, the “label, packaging, and shipping containers of tobacco products other than cigarettes” manufactured for interstate commerce in the U.S. need to display “Sale Only Allowed in the United States” and for cigarette manufacturing the same display is required by September 22, 2010.

slide25

The Family Smoking Prevention and Tobacco Control Act

SectionDescription

302 Study and Report

By December 22, 2010, the Comptroller General is required to deliver a report to the Senate Health, Education, Labor and Pensions Committee and the House Energy and Commerce Committee on cross-border trade in tobacco products, including illicit trade and trade of counterfeit tobacco products, as well as cross-border advertising, disseminated from the U.S. to other countries and to make recommendations “on the monitoring of such trade” and the prevention or elimination of such advertising.

slide26

FSPTCA Timeline

June 22, 2009The Secretary of Health and Human Services began assessing fees on tobacco manufacturers and importers – fees collected quarterly – October 1, 2009.September 22, 2009Ban on flavored cigarettes (not menthol) took effect.March 19, 2010The CTP issued final rule regarding advertising and marketing restrictions.

March 22, 2010The 12-member Tobacco Products Scientific Advisory Committee was appointed.

slide27

FSPTCA Timeline - DELAYS

December 22, 2009(1) Cigarette manufacturers to submit list of all additives by brand/subbrand/quantity.

(2) Cigarette manufacturers to submit documents relating to health effects of tobacco products.

January 1, 2010(1) Companies to register tobacco product establishments.

(2) Cigarette manufacturers to submit product lists and report any changes.

slide28

FSPTCA Timeline

By June 22, 2010(1)Cigarette manufacturers to comply with advertising and marketing restrictions in Final Rule.

(2) Descriptor (“light”, “mild”, “low”) ban[Color?]

(3) Smokeless tobacco products:

“Sale only allowed in United States” label Information, including domestic/foreign content on labelNew warning statements on advertisements and warning label changes

FDA Draft Guidances for these measures were released by the Center for Tobacco Products on June 3-4, 2010.

slide29

FSPTCA Timeline

By October 1, 2010(1) The CTP to develop and publish an action plan to enforce restrictions on cigarette promotion and advertising to youth.

By December 22, 2010(1) The Comptroller General (GAO) to issue report on cross-border tobacco trade.

slide30

FSPTCA Timeline

By June 22, 2011(1) The CTP to issue regulations regarding color graphic warning labels/regulations.

(2) Pesticide limitations for tobacco.

By October 1, 2011(1) The CTP to issue regulations regarding the remote sale/distribution of tobacco products.(2) The TPSAC to issue its report on menthol cigarettes.

slide31

FSPTCA – Implication for Tobacco Growers

  • Many elements of the current leaf requirements by domestic cigarette makers will remain unchanged.
  • The U.S. cigarette industry will continue to decline but not disappear over time, thereby reducing leaf quantity needs.
slide32

FSPTCA – Implication for Tobacco Growers

  • An opinion: The regulations created and enforced by the Center for Tobacco Products must not contribute to increases in illicit trade.
  • For example, a sales prohibition of menthol cigarettes would create a 27% gap in the U.S. domestic cigarette market, which potentially could be filled by illegal imported, untaxed and unregulated product.
slide33
The “Prevent All Cigarette Trafficking Act of 2009” or “PACT Act” was signed by President Obama on March 31, 2010 and goes into effect on June 30, 2010.

Among other things, the PACT Act amends the Jenkins Act to include smokeless tobacco and prohibits the mailing of cigarettes and smokeless tobacco through the U.S. Postal Service.

The “PACT” Act (SB.1147)

slide34

C-32

  • A Canadian bill officially titled:“The Cracking Down on Tobacco Marketing Aimed at Youth Act”
  • Received Royal Assent on October 8, 2009
  • Scheduled to go into effect on July 5, 2010
  • C-32 to ban the sale of flavored cigarettes, cigarillos and blunt wraps, with the exception of menthol.
slide35

C-32

  • Would ban all flavors in cigarettes, cigarillos and blunt wraps, regardless of whether the flavor was “characterizing” or not
  • Would ban non-characterizing flavors such as licorice and cocoa
  • Would effectivelyban the import of U.S. cigarettes and burley leaf into Canada
slide36

C-32: Future Implications

  • Since Canada is a Virginia flue-cured cigarette market, C-32 can be interpreted as protectionist in that it would restrict trade in regular tobacco products to the benefit of the domestic industry.
  • The TobReg working group of the Framework Convention on Tobacco Control (FCTC) is examining C-32 as it may apply to Article 9 (Regulation of the contents of tobacco products ).
u s burley leaf cigarette exports to canada mt million of pieces

U.S. Burley Leaf & Cigarette Exports to Canada(MT, Million of Pieces)

Source: TMA’s Tobacco Trade Barometer (2002-09)

slide38

C-32: Future Implications

  • Does the FDA have the authority to extend its current flavor cigarette ban to “non-characterizing” flavors?
  • Will EU nations follow Canada’s lead and implement a similar flavor ban?
  • How does competition get affected around the world as a “total” flavor ban affects some multinational cigarette makers over others?
fctc and u s law
FCTC and U.S. Law

FCTC Checklist:

 (Article 5) General Obligations

(Article 6) Price and Tax Measures [SCHIP]

  • (Article 8) Protection from ETS [State/Local]

(Article 9) Contents of Tobacco Products [FDA]

(Article 10) Tobacco Product Disclosure [FDA]

(Article 11) Packaging & Labeling of Tobacco Products [FDA]

 (Article 12) Education, Communication, Training & Public Awareness [Health Care]

 (Article 13) Tobacco Advertising, Promotion & Sponsorship [FDA]

(Article 15) Illicit Trade in Tobacco Products [CCTA, PACT Act, FDA/GAO…STOP?]

  • (Article 16) Sales to and By Minors [FDA, State]

(Article 19) Liability [MSA, Progeny Engle, History]

slide40

THANK YOU

darryl@tma.org

609-275-4900, Ext. 216