The Troutman Sanders Tobacco Team was recently quoted in a Tampa Tribune article discussing the potential impact of the FDA’s deeming regulations on the premium cigar industry in general, and one Tampa-area business (J.C. Newman Cigar Company) in particular.
The article speculates that the regulations could be issued soon and discusses how the regulations (and particularly the FDA’s premarket review requirements) could affect many small businesses. We have been helping small businesses with the FDA tobacco premarket review process for five years so we now how it works. For all but the most well-capitalized companies, it is extremely challenging under the best of circumstances.
And the process has no discernible impact on public health because about 90% of the products are completely exempt from the process due to an exemption for products that were sold in 2007 and haven’t changed since then. The remaining 10% of the market consists mainly of small businesses like the Newman family referenced in the article.
We know the Newmans — they are good, hard-working people who are active in their community and in charitable causes. They resisted the temptation to move their operations abroad to support local commerce and jobs. If the FDA moves forward with its proposal as stated in the draft regulations, it is clear that the purported benefits will be far outweighed by the severe — and potentially business-killing — economic burdens.
Bryan Haynes is quoted in the article as saying that predicting what the FDA will do is a “fool’s errand.” Haynes also notes that the Obama administration’s new Cuba policy could delay or even change the scope of the regulations. “The administration would be talking out of both sides of its mouth,” he said. “On one hand it is interested in thawing relations with Cuba, but on other hand, FDA regulations would effectively ban their most important export.”