FDA Commissioner Scott Gottlieb wasn't terrible for electronic cigarettes, but there are likely few in the industry who will be sorry to see him go when he resigns next month.

While there's some truth in the saying that you're better off with the devil you know than the one you don't, another way to look at it is that President Donald Trump now has an opportunity to appoint someone more in line with his general low-regulation style, and e-cigs may now be able to become a full partner in reducing cigarette smoking.

A young woman leaning on a railing while she exhales vapor while vaping

Image source: Getty Images.

Friend and foe

Gottlieb's tenure as head of the FDA was the cliched mixed bag. He was responsible for delaying until 2022 the implementation of the agency's order that required e-cig makers to file and have the FDA sign off on every product they put on the market after February 2007.

He also sounded a more conciliatory tone toward the e-cig industry than his predecessors by affirming the FDA was "committed to encouraging innovations that have the potential to make a notable public health difference."

Although in that same announcement Gottlieb hinted at regulatory actions to come in regards to teen use of e-cigs, he became far more strident toward the industry after indications suggested teen use of electronic cigarettes was at "epidemic" proportions.

A Centers for Disease Control and Prevention survey found e-cig use among high schoolers surged 78% in 2018 (to 20.8%), while middle school usage was up 48% (to 4.9%). Students who were considered regular users of e-cigs also jumped at all grade levels. It was then that Gottlieb and the FDA really began gunning for the industry.

On the attack

Gottlieb cracked down hard on e-cigs and launched an offensive to combat teen use:

  • Warning letters were sent to over 1,300 retailers on limiting access to teens, the largest ever coordinated enforcement campaign in the agency's history.
  • Industry leader Juul Labs was asked to turn over documents about the design, marketing, and ingredients found in its product, as, with a market share north of 75%, its pods are far and away the most popular form of e-cigs.
  • Altria (NYSE:MO), British American Tobacco (NYSE:BTI), and other manufacturers were required to come up with a plan to limit teen access to the devices, or face having their e-cigs pulled from store shelves.
  • The availability of flavored e-liquids was limited to adult-only stores like vape shops, while only tobacco, mint, and menthol flavors were allowed to be sold in stores where the general public can buy them. It was reported just last weekend that Gottlieb went to the White House to lobby for the complete ban of flavored liquids in convenience stores. 
  • Gottlieb railed against Altria's $13 billion investment in Juul, alleging it amounted to reneging on the commitment to reduce teen use. He called representatives of both companies into his office to have them explain in person what they were doing.
  • Although Philip Morris International (NYSE:PM) expected to hear from the FDA about its reduced-harm label for its heated tobacco by the end of last year, the agency seems to be slow-walking it, as no decision has been forthcoming.

Despite the raging, electronic cigarettes are apparently helping reduce cigarette use. The University of Michigan's Institute for Social Research found teen use of cigarettes in 2017 hit its lowest level since they first began measuring in 1991. And the most recent study of e-cigs by researchers in the U.K. found the devices were twice as effective as any other form of nicotine replacement therapy in getting adult smokers to stop.

Check out the latest earnings call transcripts for Altria, Philip Morris International, and other companies we cover.

What comes next

Although a new commissioner may take a more hands-off approach to regulation, reducing teen e-cig usage seems likely to remain a cornerstone of the agency's mandate, because there is also a reported increase in the use of the devices by people who have never smoked.

Electronic cigarettes are a healthier alternative than traditional cigarettes, but they are not without health risks. All the manufacturers warn against vaping for recreational pleasure, so the likelihood the next FDA commissioner will keep shining a spotlight on that issue seems great.

Yet it also seems difficult for e-cig makers to prevent people from participating in what's often depicted in social media and other facets of pop culture as trendy. Still, it might be an easier task to focus on and help minimize if the industry is not having to fight an agency apparently resistant to the idea that vaping can help reduce cigarette smoking.