In May 2016, the FDA released new regulations that allow it to regulate vapor products — a $3.5 billion US market segment that includes both disposable electronic cigarettes and expensive refillable devices — as tobacco products.
Dave Infante | June 27th, 2016
On the surface, it all makes sense. Government regulation brings with it quality standards, mainstream faith in the marketplace, and (hopefully) a long-term benefit to the public health.
So why is the vaping industry calling foul?
I spoke with over a dozen pro-vape advocates while writing a feature on the regulations. Nearly all of those sources claimed to be in favor of regulation, but decried the FDA’s approach as calculated sabotage of their rapidly growing industry, giving the story a decidedly more sinister subtext.
Suggestions of vast conspiracies to undermine America’s vape entrepreneurs are fringe claims, mostly. They were difficult to disregard, though, because the paranoia in the pro-vape camp is pervasive, verging on obsessive.
They’re also undeniably intriguing. So let’s examine them — not as fact, but as the widely traded, thinly supported conjecture of a marginalized community in crisis. Who killed vaping in America? If you listen to the truthers…
Big Tobacco killed vaping
Alleged reason: Vaping endangered cigarette revenues, and outpaced Big Tobacco technologically
Popularity within the vaping community: High
“It all comes down to big business. What the tobacco companies are doing is trying to eliminate all their competition,” Steve Milin, owner of Chicagoland vaping e-tailer and retailer Vapor4Life, told me in a phone interview in April, before the regulations had been released.
This line of thinking — which is accepted as fact in many vaping circles, and entertained in nearly all of them — pivots on the claim that the FDA’s regulatory requirements pose an insurmountable financial burden to most vapor companies. That part is probably true. The FDA estimated in its 2014 proposal that bringing a single product to market would cost around $335,000. An independent research firm later told the Wall Street Journal that the process would likely run $2-10 million. Either way, it’s a big chunk of change for what’s essentially a roll of the dice that your product will eventually earn approval to be sold.
If nothing else, Big Tobacco has lots of cash — and the liquidity to tie it up in calculated gambles to get their e-cigarettes onto shelves after the two-year grace period expires. But most vaping companies don’t. With the exception of Big Tobacco’s vaping products, said Cynthia Cabrera, executive director of SFATA, the industry’s largest trade association, “everybody is a small business.” They also tend to manufacture “open-system” refillable devices, which have more components requiring approval, and more juice flavor variations, each of which would require its own approval. By contrast, Big Tobacco traffics closed-system “cig-alikes” with fewer components and flavor choices, because they’re cheaper to manufacture and get approved by the FDA.
So by simple back-of-the-envelope math, it’s easy to see that larger corporate players stand to potentially benefit from the FDA’s regulations. But are they deliberately poisoning the well? Maybe.
This theory’s central bit of evidence is the fact that in 2014, RJ Reynolds, Altria, and Lorillard all submitted comments to the FDA suggesting that the agency should ban open-system mods — the ones that vapers love, and that Big Tobacco’s cig-alikes compete with. Pro-vape advocates say this is just the tip of the iceberg in Big Tobacco’s war of attrition on the vaping industry. The financial burden, say pro-vape advocates, is now so high that tobacco corporations — who have, putting it mildly, a bad track record of giving a shit about anyone, ever — will be the only players in the space that’ll be able to market products. “Big Tobacco is in place to take over the market,” said Greg Conley, head of the American Vaping Association. “That’s very bad news.”
Big Pharma killed vaping
Alleged reason: Vaping endangered nicotine-replacement therapy and medical treatment revenues
Popularity within the vaping community: Medium
“You look at [anti-vaping tobacco-control organizations’] websites, and it says who their donors are. It’s all the Big Pharmaceutical companies,” Aaron Biebert told me. He’s the director of A Billion Lives, a documentary about the various forces arrayed against the industry.
He’s not wrong. The American Lung Association lists AstraZeneca and Pfizer as two of its major corporate partners; the American Cancer Society has Merck and Genentech; theAmerican Heart Association, Bristol-Myers Squibb, GlaxoSmithKline, and Pfizer. So on, and so forth.
Some pro-vape advocates claim that the big drug companies (and the health insurance conglomerates, care providers, et al.) are leveraging this cozy financial relationship into a powerful anti-vape lobbying effort. The motive?
Cornering the nicotine-replacement therapy (NRT) market. When you include vapor products, this category is estimated to reach around $20 billion globally by 2023. Without the boost of e-cigarettes’ enormous growth, though, the category is “lackluster” — particularly in the US. That’s partly due to America’s decreased smoking rates, and partly to vaping. Thanks to the popularity of vapor products amongst smokers who have failed cessation efforts using offerings like the nicotine patch and gum (the efficacy of both is a source of some debate), or prescription drugs, the enormous cessation market is totally changing.
That’s scary stuff for Big Pharma, enough so that it gave at least a million dollars in campaign donations to at least seven senators who supported the FDA’s May 2016 decision. Then again, like Biebert opined, “this isn’t even a conspiracy” — it’s just money in politics undermining our democratic process, same as it ever was.
The tobacco-control lobby killed vaping
Alleged reason: Organizations viewed vaping as tobacco use and therefore ideologically evil, and don’t want to swallow their pride
Popularity within the vaping community: High
Some people view this as a conspiracy not of money, but of morality and vanity. Some pro-vapers accuse tobacco-control groups of being an obsessive, prideful, dogmatically driven community that doesn’t care about public health as much as it cares about being the good guys who eradicate tobacco and nicotine from society. “You have an ideology at work that says: ‘it looks like smoke, it must be evil,'” opined Conley.
In theory, the conspirators aren’t bloodless corporate stooges. Much worse: they’re vindictive puritans.
This is a more sinister theory, and almost impossible to prove or disprove. But it’s fantastic to ponder. The logic goes that American health organizations like the ALA, AHA, and ACS have thrived off the tidy moral binary cigarettes offered, and that vaping has presented a gray area that they can’t square with their donor base.
Or with themselves: “Nobody wants to admit when they’re wrong,” said Conley. “These are people who have never had to admit they’re wrong. You’re dealing with tobacco control! These are the white hats!” He thinks there’s an ego problem in the anti-vape camp. They’ve become so accustomed to their stature as Big Tobacco vanquishers, he says, that they’re not willing to entertain nuanced appeals about vaping.
Those appeals have been made: vaping is safer than cigarettes; nicotine released from burnt tobacco is drastically less harmful than the burnt tobacco itself; and that even partially replacing cigarettes with vapor products can have a positive health impact. All of these claims are supported by science, but none of them fit in a rigid good-vs.-evil narrative, and because of that, some vapers suspect that their pleas are being ignored.
In this theory, the conspirators aren’t bloodless corporate stooges. Much worse: they’re vindictive puritans, piously advancing a version of morality that reaffirms their own goodness and condemns the gray area of medical relativism where vaping sits. That’s not necessarily the case. Of all the theories, this one was so unsubstantiated that even its proponents scoffed at their own paranoia when talking about it. But still, there’s a rough parallel in American history where that sanctimony did drive prohibition of a specific vice: actual Prohibition. And so, the murmurs swirl and swell.
Bureaucracy killed vaping
Alleged reason: States were desperate for cigarette tax revenues, and viewed vaping regulation as a way to legitimize agencies’ existence
Popularity within the vaping community: Medium
“I’m gonna get you goin’ on this one,” Peter Denholtz, owner of NYC’s Henley Vaporium, told me. He was referring to the Tobacco Master Settlement Agreement, inked in 1998, which bound the Big Four (Philip Morris, RJ Reynolds, Brown & Williamson, and Lorillard) to pay $206 billion in Medicaid costs, smoking-related public health damages, and advocacy funding, to be remitted over the next quarter-century. “What you had was counties and cities that benefited from getting [their portion of] this money every year,” Denholtz continued. “But then Wall Street got smart.”
Banks including Citigroup, JPMorgan, UBS, Goldman Sachs, Morgan Stanley, and now-defunct firms like Bear Stearns and Lehman Brothers offered state governments upfront cash for the rights to their future payouts. If that sounds like a massive payday loan scheme… well, it kind of is. As ProPublica reported in 2014, these deals saddled some state and local governments with approximately $64 billion in future debt, in exchange for just $3 billion in cash from the banks. Woof.
What’s all this got to do with vaping? Those debts are coming due, but the cigarette tax revenues with which states planned to repay the banks have fallen precipitously. People aren’t smoking as much as they used to, and vaping is partially responsible. “Clearly, there’s not a whole lot of motivation to kill tons of tax money, and that’s ultimately what cigarettes also represent,” said Biebert.
Legally, the debt has to be repaid with settlement money, not tax money. But as Cezary Podkul noted in the ProPublica investigation, “Taxpayers lose out when tobacco income that could be spent on other government services is diverted to paying off” the toxic, balloon-payment bonds that their governments took on at the turn of the century. The logic goes that governments have asserted vaping regulation as a panacea, to stem the decline of cigarette taxes, which would, in turn, ideally generate enough revenue to replace the settlement money that must be used to repay the bonds without sending states into default. Ideally.
So… should we believe the conspiracies?
It’s fun to laugh at both conspiracy theorists and vapers. No surprise then, that it’s especially entertaining to ridicule the vapers who are conspiracy theorists. But despite the wide-eyed, far-reaching, and in some cases, thinly supported hypotheses of global corporate-federal-medical collusion against vaping, each of these claims springs from actual truths. And for the vapers who feel ostracized from society and betrayed by their elected officials and public health institutions, a little bit of truth can lead to a whole lot of truthing.