29/05/2024

Top Business

Trend About Business

FDA sends final menthol cigarette ban rules to White House

FDA sends final menthol cigarette ban rules to White House

The proposed prohibition of menthol-favored traditional cigarettes and flavored cigars has been sent by the Food and Drug Administration to the Biden administration for final review.

The Campaign for Tobacco-Free Kids provided the update Monday, which comes about 2½ months after the FDA was expected to unveil its final regulatory rules on the two products.

The FDA first disclosed its regulatory plans in June 2022 with the goal at that time of having the menthol prohibition in place by May 2023.

“Because of the profound, lifesaving benefit to our nation’s health, the White House and OMB should expedite their review and issue final regulations by the end of the year,” said Yolonda Richardson, the campaign’s president and chief executive.

“These rules represent truly historic action to drive down tobacco use — the number one cause of preventable death in the United States. Once implemented, they will protect kids from tobacco addiction, advance health equity and save hundreds of thousands of lives, especially Black lives.”

People are also reading…

Industry analysts have said that whatever regulatory standards are approved by the White House Office of Management and Budget will be speedily challenged in federal court by tobacco manufacturers and other parties.

“We expect a two- to three-year cycle from the day the FDA passes any rule to the time such rule is finalized after the likely court challenges,” said Jain Gaurav, an analyst for Barclays. “We don’t expect a menthol cigarette ban from the FDA implemented (if it were to pass) at least until 2026.”

Meanwhile, the agency faces challenges from Republican-sponsored legislation in the U.S. House of Representatives that would derail both initiatives.

The campaign has raised concerns about the increasing usage of flavored cigars by those under age 21.

“These flavored products have flooded the market in recent years and fueled the popularity of cigars with kids,” Richardson said.

The 2022 National Youth Tobacco Survey shows that cigars are the second most popular tobacco product (after electronic cigarettes) among all high school students, and are especially popular among Black high school students.

The FDA also has disclosed its intentions for setting a maximum nicotine level for tobacco products, moving the timeframe from October to December.

The Republican-sponsored U.S. House legislation would prevent the U.S. health secretary from finalizing, issuing or implementing any rule, regulation, notice of proposed rule making or order setting any standard that would prohibit menthol as a flavor in traditional cigarettes and cigars.

Another section applies similar language prohibiting setting a standard that mandates a maximum nicotine level for cigarettes.

As it relates to lower permissible nicotine levels in tobacco products, Gaurav said “we think it will take a decade or longer for the FDA to introduce nicotine caps due to the long nine-step process at the FDA, the inevitable litigation, and then the one-year time period given to retailers to sell down excess inventory.”

Menthol ban impact

California has emerged as a key litmus test for measuring the potential impact of a national ban of menthol traditional cigarettes.

A voter-approved statewide ban of most menthol and other flavored tobacco products went into effect Dec. 21.

Reynolds already sells a non-menthol version of No. 2 traditional cigarette Newport that has miniscule sales compared with the menthol version.

Gaurav, as well as other tobacco industry analysts, have said a menthol ban on cigarettes could have negative implications for tobacco stocks with a significant U.S. presence.

Gaurav has reported that menthol cigarettes account for 35% of cigarettes sold in the United States.

That includes more than 50% of cigarette volumes for both Reynolds American Inc., which makes No. 2-overall traditional menthol cigarette Newport and Camel menthol brands, and for ITG Brands Inc., which makes Kool and Salem menthol brands.

The volume is about 20% for Philip Morris USA, which has top-selling Marlboro.

Gaurav said U.S. menthol cigarette sales account for 25% of overall profits for Reynolds’ parent company, British American Tobacco Plc., as well as 15% of ITG’s parent company Imperial Brands Plc, and 20% for Philip Morris USA’s parent company Altria Group Inc.

Altria said in its first-quarter report that its California traditional cigarette volume declines have worsened to down 19%, compared with down 9% for the overall U.S. market.

[email protected]

336-727-7376

@rcraverWSJ