Government intervention in the e-cigarette industry on both sides of the Atlantic

By Entrepreneur India Staff

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Since their launch back in 2004, e-cigarettes have grown enormously in popularity, across the globe. The growth of vaping, across all age groups and social demographics, is nothing short of phenomenal, and companies from small startups to multi-billion dollar corporates are clamouring to get a slice of the e-cigarette market. Since both the US and the UK operate more or less free market economies, it comes as no surprise that the e-cig market has developed so successfully over the last 13 years. More recently, though, legislation on both sides of the Atlantic has shown just how far each country is willing to go with free market principles, before wading into the debate.

The basic principle behind a free market economy is that supply and demand dictates how an economy grows. Champions of this system assert that it creates competitive markets, gives consumers influence and generates a free and unconstrained political and economic environment. On the other side of the argument, critics argue that consumers need to be protected, as most businesses are motivated by profits and not consumer safety and wellbeing. It seems that vaping has given the governments of both the US and the UK much to think about, in terms of what legislation this nascent industry requires.

In the UK, the National Health Service (NHS) has come out firmly in favour of e-cigarettes as a less damaging alternative to conventional tobacco products. Extensive research has been carried out by Public Health England (PHE) into the potential dangers of e-cigarettes and their efficacy as a tool to help smokers quit regular cigarettes. The results of this research were very positive, and the NHS has subsequently endorsed the use of e-cigarettes by people who want to quit smoking.

Despite this support for e-cigarettes, the EU has recently felt the need to introduce new legislation to control the vaping industry. The Tobacco Products Directive, which came into force on May 20, 2017, has imposed a number of restrictions on e-cigarette products, largely concerning the size of e-cigarette tanks and refills, and the strength of nicotine in e-liquids. A notification scheme has also been introduced for all e-cigarette and e-liquid products, under the control of the Medicines and Healthcare products Regulatory Agency (MHRA). More information can be seen in this video.

The recent legislation in the EU has inevitably caused some grumbles within the vaping community and amongst e-cigarette manufacturers, but in the US, legislation has been much more heavy-handed. Far from endorsing the use of e-cigarettes as an aid to quit smoking, US authorities tend to see vaping as a channel that pushes more people into actually starting to smoke. Opponents are also vocal on the potential harm that e-liquids could cause, through both long-term use and accidental swallowing.

Against this backdrop, it's perhaps unsurprising that the Tobacco Control Act, which became law in 2009, requires all vaping products to be approved by the US Food and Drug Administration (FDA). With FDA approval potentially costing millions of dollars, and taking many months to obtain, this is indeed a punishing control mechanism for the industry to work with. The key to understanding why America is keen to see e-cigarettes as just as harmful as tobacco products lies in the enormous political and economic power held by the US tobacco companies. The mighty Philip Morris International (PMI), which controls more than half of the US tobacco industry and sold 850 billion cigarettes in 2015, actively supported the passage of the Tobacco Control Act through the legislative process. As the manufacturer of an alternative e-cigarette device, which uses heated tobacco leaf, rather than e-liquids, PMI is set to gain from this legislation, as it will find it easier and faster to move through FDA approval than the rest of the e-cigarette industry. Scratch the surface of the US approach to vaping, and consumer protection may not be at the heart of things, after all.

State legislators are also wading into the e-cigarette debate, with many jurisdictions restricting the sale of certain e-liquids. San Francisco has recently taken things one step further, banning the sale of flavoured e-liquids outright, because of concerns that fun flavours could encourage children to try vaping.

Back in the UK, surveys conducted by smoking charities, such as Action on Smoking and Health (ASH), have found overwhelmingly that e-cigarettes are effective in helping people to stop smoking, and are now more popular than other nicotine replacement therapies, such as gums and patches. It's true that there is currently no long-term data available on the use of e-cigarettes and their effects on users' health. However, the incontrovertible evidence to support their use as an aid to quitting makes the UK's approach to e-cigarettes seem a much more pragmatic and responsible direction to take than the US's current position.

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