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Disposable e-cigarettes rule the world: the $2 billion US market ignored by the FDA

Disposable e-cigarettes rule the world: the $2 billion US market ignored by the FDA

2022-08-17

On August 17, according to foreign reports, the disposable e-cigarette market in the United States has grown from a retail footnote to a $2 billion giant in just three years. Disposable vaping products, primarily made by lesser-known manufacturers, have rapidly dominated the convenience store/gas station segment of the vaping products market.


The sales figures came from Chicago-based market research firm IRI, which obtained the figures through confidential sources, and was reported by Reuters today. According to Reuters, the IRI report shows that disposable e-cigarettes have grown from less than 2% of the retail market to 33% in three years.


This matches data from the 2020 National Youth Tobacco Survey (NYTS), which showed that single-use use among school-aged youth increased from 2.4% in 2019 to 26.5% in 2020. The single-use market grew rapidly when most retail stores stopped offering cartridge-based flavored e-cigarettes due to FDA action.


FDA creates an unregulated market


While not surprising to regular observers of the vaping trend, the new IRI study confirms that the FDA's focus is on preventing the sale of flavored electronic products by well-known mass-market brands like Juul and Vuse, as well as open-system products sold in vaping stores and online. Cigarette products - literally creating a parallel grey market for little-known disposable brands.


Grey-market e-cigarettes are like black-market products, but instead of being sold in underground illegal markets, they are offered in standard retail channels, where they are taxed and age-restricted.


The three-year growth period from 2019 to 2022 described in the IRI report is significant. In late 2018, then-market leader Juul Labs was forced to pull its flavored pods (except mint) from the market in response to a moral panic that tobacco control groups called the teen vaping epidemic.


Then in 2019, Juul also pulled its mint flavor, and President Donald Trump threatened to ban all flavored vaping products. Trump partially backed off, and in January 2020, the FDA announced new enforcement measures for pod and pod-based vaping products other than tobacco and menthol.


Blame the Puff Bar


The crackdown on flavoured products sold in the regulated market has been matched by a rapid growth in the one-off grey market, which regulators and national news media are largely unaware of. The first disposable brand to gain traction, Puff Bar, could become the face of the market, as it takes too much effort to track the deformed world of grey-market e-cigarettes. It's simpler to blame the brand for the problem, as many tobacco control departments do.


The FDA has spent a lot of time trying to take Puff Bar off the shelves, starting with a warning letter to Puff Bar distributors — sent a week after the company said it stopped sales in the U.S. — and later asking Congress to grant the agency regulatory authority over synthetic nicotine Because Puff Bar is back on the market nearly a year later, claiming to use a new non-tobacco-derived nicotine formula. (The FDA began regulating products containing synthetic nicotine this spring.)


Puff Bar is indeed a well-known brand, but by the time the FDA and CDC realized it, the name had morphed into a catch-all term for single-use e-cigarettes. NYTS data shows that Puff Bars are the single most popular brand among high school vapers in 2021 — roughly five times more than Juul — although actual Puff Bars were no longer widely available in stores at the time of the NYTS survey.


Of course, the survey didn't try to distinguish whether young vapers were using real Puff Bars (unlikely at the time), or whether they were calling the brand the same way many refer to all facial tissue as Kleenex. In fact, by the time the NYTS data was collected in 2021, there were already dozens, if not hundreds, of single-use products on sale.


Disposable e-cigarettes rule the world


None of the currently popular single-use e-cigarettes have been authorized by the FDA, although some single-use manufacturers have filed premarket tobacco applications (PMTAs), and some have filed claims against FDA Marketing Denial Orders (MDOs) in court or through FDA administrative appeals. ) questioned.


Two tobacco-flavored disposables—actually two variants of a single device—made by vaping product pioneer NJOY were authorized for sale by the FDA in June. But the low-power NJOY Daily, launched for nearly a decade, has little in common with today's popular disposable e-cigarettes.


Modern disposable e-cigarettes range from tiny Juul-shaped devices to high-volume products that fill the user's hand and deliver thousands of puffs. While they all use rechargeable lithium-ion batteries, only those with more than a day's worth of e-liquid have built-in USB ports that allow users to charge them until the liquid runs out.


Most popular disposables are filled with fruit-flavored e-juices, often mixed with a menthol-like coolant. There are very few tobacco flavors. In fact, if the FDA hadn't made up their minds to eliminate non-tobacco flavors, the gray market would never have gotten so big


These products are everywhere, not only in US stores, but around the world. Even in Australia, where the government has banned all nicotine vaping products without a doctor's prescription, there is still a serious panic over teenage use of widely available single-use vaping products.


What will Australians do with popular products that have already been banned? Probably the same way the U.S. FDA handles a $2 billion market that defies the agency's decree: by punishing businesses that try to comply with FDA rules. Fools who submit applications and make a good-faith effort to comply with the agency's regulations will get MDOs and warning letters, while gray-market sellers will change their product names and mock the clumsy regulator.


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