Thursday, January 12, 2017

As we’ve previously written about, 2016 represented a regulatory sea change for manufacturers, distributors, and retailers of e-cigarettes and other electronic nicotine delivery systems (ENDS), who became subject to FDA oversight and requirements under the May 2016 Deeming Rule for tobacco products. In Monday’s Federal Register, FDA issued a final rule to exclude products derived from tobacco from Federal regulation as “tobacco products,” if or when such products are intended for use as a drug, device, or combination product (the “Final Rule”). In other words, the Agency has formally clarified that even a product made or derived from tobacco may be regulated as a medical product if it is intended for use in a way that meets the legal definition of “drug” or “device.”

However, FDA’s attempt to apply further requirements and restrictions on tobacco-derived products comes amid intense government wrangling over how to regulate products like ENDS more generally. It also comes at the eleventh hour of the Obama Administration and in the face of a Republican-controlled Congress that has expressed an interest in repealing, or at least reviewing, a large proportion of Federal agency rulemakings completed in the past several months. So it is worth noting that although this Final Rule could have a profound effect on marketing schemes for tobacco products, drugs, and medical devices alike, Congress’s recent passage of the Midnight Rules Relief Act could eliminate the rule before it ever takes effect (set for February 8, 2017).

Specifically, the House of Representatives recently passed the Midnight Rules Relief Act of 2017 largely along party lines. If passed by the Senate and signed into law by President Trump, the bill would amend the Congressional Review Act (CRA) to allow Congress to group multiple regulations together and disapprove, thus overturn, them en bloc. Although the CRA only requires a simple majority to pass, current law requires Congress to review regulatory resolutions of disapproval one at a time. The regulations in danger of being overturned under the proposed bill would be ones submitted for congressional review within the last 60 legislative days, which in an election year covers regulations as far back as May 2016. Thus this activity is not only relevant to the new tobacco products Final Rule, but also many different FDA regulations finalized during that time period and affecting food, tobacco, and non-prescription drug areas – including the Deeming Rule itself, which was published in final form on May 10th.

The House’s quick action to position itself for a potential regulatory overhaul comes on the heels of a report by the House Freedom Caucus calling for over 200 regulations to be repealed by the Congressional Review Act (and that Freedom Caucus “wish list” does include the Deeming Rule). House Republicans are eager to roll back regulations en masse and that enthusiasm should be taken seriously by all potentially affected stakeholders. However, the Senate 60-vote threshold remains a hurdle to passage, and Senate Majority Leader Mitch McConnell has stayed quiet on this particular legislation.

Over the past year or so, House Republicans have decried the negative economic effects of the Final Deeming Rule and other tobacco regulations promulgated by FDA. Additionally, the nominee to serve as Secretary of Health and Human Services, Tom Price (R-GA), has opposed regulating tobacco in the past, and he may support walking back both the Deeming Rule and this new tobacco product regulation so that it can be written under the new leadership of the Trump Administration.

Congress has a lot on its plate in 2017 and there is no certainty that it will move swiftly on disapproving large groups of regulations. That said, the House has sent early signals that it is determined to expedite the roll back process, which should begin soon after President Trump takes office. We will keep monitoring these legislative and administrative activities and keep our readers apprised.