A rubber stamp stands on an around sheaths of paper.

How Medicalisation Will Destroy the Electronic Cigarette Industry: Our Presentation to Parliamentary Researcher Dr Samuel

A rubber stamp stands on an around sheaths of paper.

(The following blog post is based on notes made for a meeting with parliamentary researcher Dr Gabrielle Samuel, who wanted to discuss the potential impact of medicalisation on the electronic cigarette industry.)

Obviously the potential health gain is the most important element of the medicalisation debate, and as we saw recently at the E Cigarette Summit scientists believe that millions of lives are at stake.

However, I have been asked to speak about the effect on the industry, so that’s what I am going to discuss here.

Current Problems with The Industry

i. Existing regulations are not being enforced coherently, and Trading Standards seem confused.

For example in Tower Hamlets Trading Standards stopped retailers from trading. They then reviewed their decision, decided they had got it wrong and actually the traders were selling Trading Standards compliant products.

So there is still lots of confusion about the regulations. Our industry body the Electronic Cigarette Industry Trading Association (ECITA) is trying to help by sending the information on required regulations to Trading Standards officers.

ii. In addition, ECITA’s industry standard of excellence, described as a code any industry would be proud to have by a trading standards officer, is only enforced on members.

Example of regulations enforced by ECITA include mandatory testing of eliquid to test for contamination and nicotine strength as well as age restrictions.

(This is not an attack on all non-members – ECITA membership is expensive and some traders who do not belong are making a good effort to apply some of the regulations. Of course, there are cowboys out there too!)

2. Effect on the Industry

We would fold, and estimate that the same would be for almost every other e-cigarette company not owned by a tobacco company. Decimate is the wrong word, as far more than 90% of thousands of small businesses would go bust.

i. Cost

ECITA estimate the cost of applying for medical licenses for some companies would be equivalent greater than the total turnover of the industry today. At the Ecigarette Summit this week, ECITA put this to Jeremy Mean but he told us he didn’t have enough information to comment..

Based on estimates provided by the Medicines and Healthcare products Regulatory Agency (MHRA), estimates of costs per licence are:

High estimate: a one-off cost of £390,000 + an annual cost of £249,000 per product
Low estimate: £252,000 and an annual cost of £65,000.

I’d like to point out that that these figures are basically a stab in the dark by the MHRA, who have admitted that they could be considerably higher, and haven’t even yet decided (after three years) what they will require in terms of studies.

Licenses required would include:

  • One for each strength (we have five)
  • One for each mixture
  • Possibly one for each flavour? MHRA not yet able to confirm (we have 42)
  • Each kit – we have four
  • Each atomiser – we will shortly have seven types
  • Batteries? – unknown (MHRA not yet able to confirm)

Based on the high estimates, assuming flavours needed testing, we believe the total initial cost for us would be well over thirty six million pounds, a turnover which even the larger e-cigarette companies do not yet have. It could be a lot more than that if we needed a licence for each combination of flavour, strength and mixture.

ECITA has run several models through the MHRA costing. They have had to produce different scenarios based on different costing estimates as the MHRA has not yet decided what will be required.

A single company with one device, one atomiser and three flavours would be looking at an initial cost of 1,176,093 with annual costs of £196,649.

For another company producing eliquid, under one scenario in which every flavour combination would require a MA (not yet confirmed by the MHRA) the cost would be over 22 billion, clearly beyond the realms of possibility.

You can see ECITA’s case studies on the ECITA blog here.

ii. No guarantee of success

One company spent four years and millions of pounds trying to build a product that would meet the requirements.

The MHRA kept sending them back to the drawing board until they finally gave up.

So you could spend millions on development, millions on applying for licenses and still fail.

Clearly, this would stop most companies from applying.

iii. Time taken to apply

ECITA estimates the process will take four years. That’s assuming that everything goes smoothly.

(But after three years the MHRA is still unable to provide accurate costings on the process, or provide detail on what is required, so we are sceptical things would go smoothly.)

As an example of the bureaucracy involved, Clive Bates, former director of Action on Smoking and Health (ASH) England, has pointed out that medical authorisation applications can run to 10,000 pages.

So even if we started to apply now, we would likely go out of business before the 2016 deadline.

We believe the first companies to apply will be guinea pigs (at their own considerable expense) until the MHRA decides what it requires – this could take years.

iv. How to ensure innovation and efficacy: competition v. regulation

At the moment innovation is fast paced. Companies typically upgrade their products several times a year. Devices are improving rapidly.

Regulation is likely to freeze this process because:

i. It takes several years to apply for an MA – by the time a company got an MA the technology would be obsolete.
ii. There is also the cost barrier which we have already mentioned.
iii. Concentration of e-cigarettes in a few hands due to huge barriers to entry, mostly the tobacco industry.

a. Are the tobacco industry motivated to help e-cigarettes when tobacco cigarettes are cheaper and easier to make AND when new research suggests ecigarettes are less addictive?

b. Tobacco industry has shown a failure to innovate in the past. Despite budgets of billions, tobacco cigarettes over the last hundred years are essentially the same – and they failed to come up with the e-cigarette, ignoring a patented design in the 1960’s. (See An Interview with The Inventor of The Electronic Cigarette.)

I note that Deborah Arnott from ASH England accepts smaller companies will be wiped out, but argues that consolidation would take place anyway.

I believe that this again demonstrates a misunderstands of vaping – while it is quite possible that larger companies will eventually dominate the increasingly less popular cigalike part of the industry, the wide variety of devices means that there will always be room for niche players.

iv. Do the MHRA understand the product?

The MHRA understand the electronic cigarette to be a nicotine delivery device similar to NRT.

In the ECigaretteSummit, Jeremy Mean from the MHRA argued that vapers don’t want the next new flavour, they just want a device which can deliver a droplet of nicotine to the lungs.

However, Dr Konstantinos alleges MHRA does not understand e-cigarettes. (Konstantinos has talked to us about this before, albeit in relation to the EU committee on ecigs, here.)

In our opionon, the electronic cigarette is much more than a medicine than to many users, which is why it has been so successful.

Are the MHRA the right people to control the direction ecigarettes go in, or is consumer choice through market forces a better way?

v. Black market

I’d just like to quote Dr J F Etter here, who said at the E Cigarette Summit:

“The ecigarette is a tsunami – you can not stop it with a law.”

Can you confiscate devices from several million people? (There are current estimates of 1.3 million, with some estimating there are two million users, there could be a lot more in 2016). In a survey we conducted, more than 80% of vapers have indicated that they are prepared to change their vote to protect their right to vape.

The MHRA claim that there will not be a black market, using the example of aspirin.

We think this shows a fundamental misunderstanding of the industry, and indeed if you look at the tobacco industry there is a huge problem with the black market. The electronic cigarette industry is characterised by a huge variety of devices and flavours that suits different users. If people can not get those devices legally they will get them illegally.

vi. Potential Conflict of interest.

i. 90% of MHRA’s funding comes from pharmaceutical companies.
ii. MHRA employees are sourced from pharmaceutical companies, and many continue to receive fees and salaries from the MHRA.
iii. The MHRA competes with other EU agencies for fee income from pharmaceutical companies
iv. Concerns about industry links have been highlighted by a parliamentary commission.

We note that while scientists at the ECigaretteSummit declared competing interests, the MHRA made no mention of their funding.

The pharmaceutical industry can benefit in two ways from medicalisation:

1. Damage to e-cigarette industry will help their nicotine industry.
2. With competiton removed, they will be able to enter the new medicinal e-cigarette market.

As a result, we believe it is possible there is a potential conflict of interest, and that the MHRA is not in a position to take part in the debate OR to regulate e-cigarettes.

A Solution

ECITA has developed an industry standard of excellence which goes far beyond basic consumer safety.

We suggest the government work with ECITA to implement and if necessary further develop this industry standard of excellence as a framework of regulation which will ensure safety and quality without compromising competition and innovation and without raising barriers to entry.

Note: Various other issues were also discussed, including:

  • the fact that medicalisation of e cigarettes is considered illegal by the EU legal committee
  • that where medicalisation has been attempted by nation states, it has been ruled unlawful by courts
  • whether e cigarettes could be a gateway to smoking
  • whether e cigarettes ‘renormalise smoking’, and if so whether this is offset by the public health gain of saving millions of lives

19 thoughts on “How Medicalisation Will Destroy the Electronic Cigarette Industry: Our Presentation to Parliamentary Researcher Dr Samuel”

  1. More excellent stuff James. A bit off topic I was appalled at Questiontime last night how the people in power in the UK are so closed minded to Global Warming. They were passionate like it was a religion. I have thought for a long time that global Warming had taken over as religion now the peeps don’t care or don’t believe they will burn in hell. When I hear your description of Mr Mean he makes the same noises… closed mind just like a religion.

    1. Hi David, if there’s one thing ecigarettes have shown us is that we can’t believe everything we are told. So I believe it’s important for people to keep an open mind, and allow debate – not shut off people because we don’t agree with what they say.

  2. I have a few points to make about this.

    Firstly, why are the MHRA getting involved in this. Do they regulate regular cigarettes because if they do then surely, they should have been banned years ago. Nicotine liquid is not a medicine is a recreational liquid, for me in the same category as something like beer.

    Secondly, to say that there would not be a black market is ludicrous. A lot of people I know buy direct from China already which would not be affected by these laws and they would almost certainly continue to do so.

    Finally, there have been lots of small studies of nicotine liquid and vapour. What is needed is a proper large scale study to be carried out to prove once and for all that it is safe.

    I personally am very nervous that this kind of legislation could be introduced. It would definitely drive my liquid supplier out of business. I stopped smoking regular cigarettes on 9 August 2011 and can honestly say that I haven’t looked back. I am fitter, my skin has improved and I don’t stink anymore and I am better off financially.

    What can we do to guarantee the future of our small e-cig businesses in the UK?

  3. 1. Because they perceive it to be a medicine..

    2. Quite!

    3. Agreed – I don’t think anyone is arguing with that!

    What vapers need to do is carrying on contacting their MPs directly- it’s been the most effective tool so far, and I am convinced it is why we won a compromise agreement in the EU.

  4. Contacting our MPs may be our only weapon. I don’t believe that the UK parliment have discussed e cigs yet….. Even the Anna Soubry thing did not get into parliment, just a sideways move. I have tried to get ALL vapers to contact their MPs and ECCA have a place on their forum to put in any responses. I did not get any support and I got the feeling that ECCA was not a place to go. We need to know where we stand with our own government and if favourable get a vote on vaping.

    1. Not our only weapon, social media and the net are also very powerful and I think we would have been crushed before if we didn’t have them.

      We have spoken to MEPs who say they have had thousands of letters and emails from vapers, and it has definitely made a difference – MEPs who were initially on the fence have been persuaded and some have made a huge difference. Rebecca Taylor and Martin Callanan have been a driving force behind the EU compromise (check out what Martin says here: https://www.ecigarettedirect.co.uk/ashtray-blog/2013/02/meps-who-supports-vaping-who-is-unsure-and-who-wants-a-ban.html).

  5. There is no logical reason why people should have particular flavors taken out of our line-up. I cannot for the life of me see that smoking menthol’s or having some coolada added to a fruity flavor is somehow conducive to forcing kids into smoking. There is so much misinformation being touted by vapers that many are confused about what constitutes ” the facts”.
    I should not like to see the one product that truly saved me me from an early death regulated into oblivion.

    1. Agreed. From a public health point of view there is the fact that the more variety and choice available the more people will find vaping an acceptable alternative to smoking. But then there’s also freedom of choice – why should the MHRA dictate or limit what we can use?

  6. They can never get away from the fact, that tobacco cigarettes are unregulated, and people will continue to ask why a safer alternative like e cigs need to be regulated as a medicine.

    More non smokers are becoming more aware and more accepting of e cigs, especially if their loved ones use them. They will soon realise that in making e cigs a medicine and less appealing, is all about protecting the profits of the pharmaceuticals and not about health. Something we vapers have known all along.

  7. Is it the manufacturer or the retailer who would need to obtain and pay for the licences ? Surely every vendor who sells a Kanger Protank won’t need to obtain a licence to do so ?? So unless a company makes it’s own Clearomisers, Tanks, Atties, etc, etc they’d be excempt ?

    1. You’d think so, wouldn’t you! But as I understand, it is the company importing the product that is responsible. I’ve even been told that a group of companies wouldn’t be able to work together because the licence goes with the location of the company (please don’t take this as gospel, though.)

      1. Are you telling me that when BP manufacture a product all the importers need a licence for it? Surely the manufacturer gets a licence and that product is then accepted. Not that I want us to get there just thinking of the effect. It will be a nightmare for them to licence the hardware. I think I will go and buy a vv vw torch…. Easy with a screw on bulb and reflector. As the carts and tanks can use no nic are they going to be able to stop them. eBay is a good example… They have a no nic policy… Just see what is available on there.

        1. BP – British Petroleum?

          I am not sure either, and it is a good point. It does seem to make sense that a producer like Kanger could get a licence (but not sure whether sense has had much to do with the process so far!)

      2. This is an issue that depends on what country is being referred to, and what type of product. If we are talking about the UK, and consumer products, then this applies: a retailer must be able to demonstrate that the product complies with regulations, and that may mean three things – a compliance marking (CE for example), a valid certificate of compliance (e.g a copy of the certificate issued by the testing authority, for that specific product), and when the product is examined by an inspector it must comply with expectations for that type of product and its certification. In general either the importer or the manufacturer will obtain the required certification, and this will be supplied to all retailers, as it would be unlikely the retailer would have a product certified unless perhaps they had exclusive rights to the product in the UK.

        Now, when you go to pharmaceutical products, I’m afraid that I don’t have a clue what applies. A person experienced in this area should be asked what the differences are to consumer product licensing. For example: can a single MA be obtained by the manufacturer and importer and this MA cover all retailers? (It would seem this applies to pharmaceuticals sold on the high street, just like consumer products, since Boots and Tesco certainly do not obtain MAs for their products, they use the central MA.) On the other hand there are different categories of products (such as OTC and scrip-only), and retailers (some products are pharmacy-only). So it is clear there are some differences to consumer product certification, where there is only one certificate needed and anyone can use it.

  8. Here’s a seriously off-the-wall suggestion: could ECITA as a body raise a case (and the necessary legal funding) to pre-emptively challenge the notion that the MHRA have any business AT ALL sticking their noses into the e-cig industry in any way, shape or fashion? There are already legal precedents set in the several other EU countries where medicalisation was dismissed by those countries’ courts to support this view.

    I honestly don’t know whether the government’s “Nudge Unit” which gave the MHRA such a delicious kicking about their original attempts to interfere still even exists, but if it does would it be worth trying to get them involved once again? If ECITA could obtain their support for the notion that all this constitutes a naked attempt to interfere with the development of a brand-new industry with potential positive impacts for public health, consumers and innumerable small-but-growing businesses – which exemplify the type of innovative and entreprenteurial spirit Cameron and his cronies claim to be so keen to encourage – you would be halfway there.

    I honestly believe that most active vapers perceive all this shenanigans as nothing less than an attempt to restrict and interfere with your trade in a seriously unhealthy and possibly corrupt manner by the twin ‘Forces of Darkness’ which are Big Pharma and Big Tobacco.

    In addition, every single one of the current millions of vapers Europe-wide and globally is in effect “voting” with their hard-earned coin to support the continued existence and development of this industry. We ARE still supposed to be democracies, aren’t we?

  9. Hi Wendy

    On your first point, legal advice is that we need to actually wait until the legislation is implemented before then challenging in court.

    Yes, probably a good idea to involve the NUDGE unit again. Perhaps ECCA would be the best people to contact them?

    On your third point, the MHRA has already ‘consulted’ with users, and users told them they didn’t want medicalisation. So much for democracy! In fact, when the MHRA produced slides showing how they are consulting with stakeholders (you can download the slide here: https://e-cigarette-summit.com/presentations/) users weren’t even mentioned.

  10. Thanks for the informative but slightly depressing reply, James. It still seems past belief that you cannot do anything about really bad legislation until AFTER it has been brought in – or shoved through, as appears to be the governmental habit nowadays! Perhaps the Yanks actually have a point in their litigation-obsessed society in the concept of the ‘Class Action Suit’.

    …and it belatedly crossed my mind that it wasn’t the “Nudge Unit” that I was thinking about at all, but rather the Regulatory Policy Committee who issued their (very damning) opinion about the MHRA’s first attempt to stamp out e-cigs, possibly back in 2010?? Couldn’t remember what they were called when I was typing my previous comment; apologies for my dodgy memory.

    Hopefully the RPC would be the chaps who just MIGHT be able to do something about the MHRA in the event they make any real attempt to go ahead with their crackpot legislation. I’ve just been over and checked out the ECITA blog and reminded myself just how sharp and dedicated a lady Katherine Devlin is. She isn’t likely to overlook an opportunity like the RPC if it becomes necessary, and we do now have a weight of numbers which we didn’t in 2010. Trying to keep my chin up about the prospects for the future but it does seem like unfeasably hard work at times!!

    1. “It still seems past belief that you cannot do anything about really bad legislation until AFTER it has been brought in…”

      I know, I know, but we have to go on what the lawyers say 🙁

      The Nudge Unit released a positive report on ecigs (https://www.ecigarettedirect.co.uk/ashtray-blog/2011/09/british-government-electronic-cigarettes.html) but it was the RCP who slammed the MHRA (see here: https://www.ecigarettedirect.co.uk/ashtray-blog/2010/06/uk-policy-committee-slams-mhra-over-e-cigarette-consultation.html).

      To be honest, I thought the next step was going to be the courts, but we do seem to be making some progress.

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