The Federal Trade Commission issued a report last week regarding the amounts spent by tobacco companies on advertising and promotion in 2007 and 2008.  Perhaps not surprisingly, the amount spent on advertising and promotion by the largest cigarette companies declined by 13% between 2006 and 2007, and another 8% between 2007 and 2008.

FDA recently issued draft guidance regarding how a manufacturer can establish that its tobacco product was commercially marketed in the United States as of February 15, 2007, thus exempting the product from the onerous premarket requirements of the Tobacco Control Act (“TCA”).  The guidance first explains that FDA interprets the phrase “as of February 15, 2007” as meaning that a tobacco product was commercially marketed – not in test markets – in the United States on February 15, 2007.

A significant provision of the Family Smoking Prevention and Tobacco Control Act is the requirement for tobacco manufacturers to operate in compliance with current good manufacturing practices (cGMP).   One good approach to understanding these requirements is to read the underlying regulations.  For finished pharmaceuticals this is 21 CFR Part 211.

Several years ago, the state of California filed suit against Native Wholesale Supply Company (“NWS”) for allegedly violating California’s MSA, cigarette fire safety, and unfair competition laws.  NWS, a tribally-chartered corporation headquartered in New York, sells and distributes cigarettes manufactured by the Canadian tribally-owned corporation Grand River Enterprises Six Nations.  In California, NWS primarily sells these cigarettes to Big Sandy Rancheria.  Big Sandy – or other Indian retailers in California to which Big Sandy directs NWS to transport Grand River cigarettes – then sells the cigarettes to the California general public.  Since late 2003, NWS has delivered over 325 million cigarettes, worth nearly $12 million, to California.  

The Chicago Tobacco Prevention Project (“CTPP”) is awarding grants to several housing organizations to encourage the adoption of smoke-free policies in apartment and condos in Chicago.  The CTPP represents an effort to create more smoke-free multi-unit residential properties in Chicago as part of the project’s overall effort to reduce smoking rates and exposure to secondhand smoke. The Project is run by the Respiratory Health Association of Metropolitan Chicago, in collaboration with City of Chicago’s Department of Public Health.  For more information: www.lungchicago.org/ctpp

The state of New York has begun enforcing its new regime for taxing cigarettes sold on Native American reservations.  The regime, enacted last summer but stalled by numerous court challenges, generally requires New York-licensed distributors to sell only tax-paid cigarettes to reservation retailers, with certain exemptions for sales to tribe members. 

Effective July 1, 2011, it is a criminal offense to sell electronic cigarettes (“e-cigarettes”) to minors in the State of Colorado.  Colorado Governor John Hickenlooper signed the law in March, which is codified at Colorado Revised Statutes, section 18-13-121.  The new law characterizes e-cigarettes as a “tobacco product.”  A person who violates the new law commits a class 2 petty offense, which may be punishable by a fine of two hundred dollars.  The new law also provides that municipalities may impose more stringent requirements than provided in this section of the Colorado Criminal Code.

On July 29, 2011, FDA issued a final rule to establish procedures for requesting exemptions from the substantial equivalence requirements of the Family Smoking Prevention and Tobacco Control Act.  Unfortunately, despite the vague statutory language regarding such exemptions, and numerous industry requests for more clarity regarding such exemptions, the final rule provided almost no guidance.

A recently completed study by research firm IBISWorld has concluded that the new graphic labels, which were just released by the FDA and include images of rotting teeth and corpses, will result in a decline of less than one percent in overall U.S. tobacco revenues in 2013, the date when the new labels must be used.