White House significantly weakened FDA's proposed rules for cigars and ecigs

The FDA posted marked-up copies of the deeming rule that it submitted to President Obama's Office of Managment and Budget showing the changes that OMB made.
 
Toni Clary and Sharon Begley from Reuters did an excellent job of highlighting the key changes; their story is here.
 
Key changes they describe include:
 

In its draft, the FDA had proposed "prohibition of non-face-to-face sales (e.g. vending machines)." That would have opened the door to a ban on online sales. But OMB edited the sentence so that the prohibition refers only to vending machines.
 
In another significant change, OMB turned the FDA's proposal as it relates to cigars from a two-part rule - one for traditional tobacco products and one for products that have not previously been regulated - into a "two-option" rule, one of which would exempt "premium cigars."
 
...
 
OMB also deleted an FDA analysis showing that exempting premium cigars from a proposal to require large warning labels would save manufacturers $1 million to $3 million but incur costs to public health of $32.6 million to $34.2 million.
 
The White House office also deleted an extensive section in which the FDA calculated how many lives would be saved by regulating cigars, as well as the value of those lives. And it deleted a similar analysis for the improvements in health that would come from dissuading people from smoking cigars, such as through warning labels.
 
The "welfare gain" from reducing the number of cigar smokers, FDA calculated, would be $16 million to $52 million.
 
Similarly, OMB modified or deleted FDA concerns about the safety of e-cigarettes, including manufacturing quality.
 
It deleted FDA draft language saying it would review electronic cigarette cartridges to respond to evidence of poor quality control, variable nicotine content or toxic ingredients such as diethylene glycol, a chemical that the FDA said has caused mass poisonings in products such as the painkiller acetaminophen and cough syrup.

 
Here are the documents that FDA posted:
 
Notice of Proposed Rulemaking
FDA’s original NPRM - http://www.regulations.gov/contentStreamer?objectId=090000648175db1a&disposition=attachment&contentType=pdf
FDA’s original NPRM with OIRA’s edits in red - http://www.regulations.gov/contentStreamer?objectId=090000648175db1c&disposition=attachment&contentType=pdf
 
Regulatory Impact Assessment (cost-benefit analysis)
FDA’s original RIA - http://www.regulations.gov/contentStreamer?objectId=090000648175db1b&disposition=attachment&contentType=pdf
FDA’s original RIA with OIRA’s edits in red - http://www.regulations.gov/contentStreamer?objectId=090000648175db1d&disposition=attachment&contentType=pdf
 
 

Comments

OMB cut all the benefits of reduced cigar smoking from FDA rule

The Regulatory Impact Analysis (RIA) -- the cost-benefit analysis -- that the FDA submitted to the OMB had an extensive analysis of the benefits to public health from increased regulations of cigars.  The OMB deleted this entire extensive analysis of benefits and replaced it with statements that the benefits could not be quantified.
 
Here is the summary of benefits from page 9 of the redlined RIA that the OMB deleted:

 
The immediate quantifiable benefits generated by the proposed rule result from dissuading smokers of small and large cigars, thereby improving health and longevity. In our analysis of benefits, we find that the warning statement provision would lead to a sustained reduction in the population of cigar smokers; the number of cigar smokers would fall by 52,200 in 2014, with additional reductions of over 1,000 per year occurring over time as new cohorts reach age 18 and the population grows. We also find that the free sample prohibition would reduce the number of people who initiate cigar smoking by 22 to 56 per year. The estimated drop in the cigar-smoking population would in turn produce benefits for dissuaded smokers themselves and for the general public.
 

The draft rule that the FDA submitted also included a recognition that there are problems with "willingness to pay" as a way to measure the costs of smoking (page 24 of the redlined analysis):

 
There are several reasons to believe that the direct willingness-to-pay approach yields only approximations and is probably a lower bound of welfare gains accruing to dissuaded smokers. First, it relies on an implicit assumption that the value of avoided smoking initiation is equal to the value of cessation and that the value of cessation is equal across the entire smoking population. In fact, the willingness-to-pay data are only from those smokers who are potential participants in cessation programs. The value of avoided initiation may be higher than the value of cessation, which would tend to make the estimates of rule-induced benefits too low. A second reason willingness-to-pay for cessation programs represents a lower bound on benefits is that it captures only the misinformation and time-inconsistent preferences that smokers themselves recognize and act upon via participation in cessation programs. In addition to the gains as measured by willingness to pay, other gains may be realized through the additional but unrecognized health gains associated with smoking cessation or non-initiation. The willingness to pay for cessation reflects only the effects on health or well-being that consumers are able to internalize; they therefore reflect revealed consumer choices but may not fully reflect underlying preferences because of time-inconsistent behavior, problems with self-control, addiction, and poor information. By reducing smoking, however, the gains that are not directly internalized are nonetheless realized. These additional health gains are proportional to the level of market failure generated by internalities and should be added to the willingness to pay estimates to give the full welfare gain.

 
While there is strong empirical evidence that the whole willingness to pay model falls apart for addictive substances like tobacco, the OMB was not even willing to admit that this approach yielded a lower bound estimate and deleted the whole paragraph. 
 
On page 37 of the redlined version, the FDA admitted that the consumer surplus dicount could be as low at 10% (100%-90%) and speculated that it could be up to 93% (100%-7%).  The OMB deleted this discussion of uncertainty in this estimate and pulled a 70% number out of the air.  (Again, the whole idea of consumer surplus should not be applied to an addcitive good such as tobacco.)
 
And, as noted in my main blog post, OMB cut the benefit amounts and raised estimated costs.

Additional bad things the OMB did to the FDA deeming rule

They OMB doubled the time for companies to comply from 1 to 2 years.
 
The watered down the science a lot, particularly things on the triggering effects on heart attacks of fine particles and the cross-product issues around addiction (related to cigars).  There are many places where the FDA quoted "limited"evidence where the OMB changed it to say the FDA didn't know what to think.
 
The estimated benefits were reduced and the estimated costs increased.
 
The OMB added language making it unequivocal that internet sales were exempted.
 
The OMB removed language the FDA had included expressing concern about the poor quality control of ecigarettes and the common presence of contaiminants.
 
This behavior is consistent with OMB sitting on the process of getting rid of menthol; see http://tobacco.ucsf.edu/white-house-held-release-fda-scientific-report-m...

Worst case scenario

Many of us suspected that there was something amiss beyond the offices of the FDA's Center for Tobacco Products for quite some time.  They couldn't possibly be this slow and incompetent, could they?  Nothing is getting dome.
Then the truth started to become apparent.  The White House's Office of Management and Budget held on to a peer reviewed scientific report on mentholated cigarettes for a year: a report with virtually no budgetary implications whatsoever.  I wrote about White House interference in an editorial in Tobacco Control a couple of months ago and called out the president for failing to vigorously advance the regulatory agenda.  
Today's revelations suggest a worst-case scenario where the White House is engaging in a pattern of weakening the FDA's tobacco regulatory efforts at the behest of the industry's remaining friends on Capitol Hill, K Street, and, it seems, Pennsylvania Avenue.  
There is nothing that FDA can do about this.  It's a non-independent executive agency that is strictly controlled by the White House.  The only solution to this is to name and shame the White House and to seek a Congressional inquiry (perhaps from the panel that addressed e-cigarette marketing a week ago) to determine what is going on and why.  Under the microscope, OMB will be much more likely to behave.
-Mark Gottlieb
Public Health Advocacy Institute
Northeastern University School of Law