Department of Health and Human Services 
Office of Inspector General 
FDA Could Take Stronger 
Enforcement Action Against 
Tobacco Retailers With 
Histories of Sales to Youth and 
Other Violations 
Ann Maxwell  
Deputy Inspector General 
 for Evaluation and Inspections 
September 2023, OEI-01-20-00240  U.S.  Department of Health and Human Services 
 
Office of Inspector General 
Report in Brief 
September 2023, OEI-01-20-00240 
Why OIG Did This Review  FDA Could Take Stronger Enforcement 
Youth tobacco use in the United 
Action Against Tobacco Retailers With 
States remains a high public health 
concern.  The Food and Drug  Histories of Sales to Youth and Other 
Administrations (FDAs) Tobacco 
Retailer Compliance Check  Violations 
Inspection Program is a critical part 
What OIG Found 
of its approach to prevent youth  Key Takeaway 
FDA conducted more than 1 million 
access to tobacco.  Through that 
Over the 10 years ending  inspections from 2010 through 2019, by 
program, FDA inspects tobacco 
in 2019, FDA inspected  inspecting, at least once, 74 percent of 
retailers to determine whether they 
nearly three-quarters of  tobacco retailers that were in business 
are in violation of tobacco law or 
tobacco retailers  nationwide as of 2020.  FDA almost 
regulation.  If FDA finds a violation, 
it may issue an advisory action, such  nationwide at least once.   always returned to inspect retailers 
as a warning letter, or an  However, it could take  where it found violations within 
enforcement action, such as a civil  stronger action against  12 months.  In some States, inspection 
money penalty (CMP).  When FDA  retailers with histories of  activities were correlated with 
issues an enforcement action, it  noncompliance.  neighborhoods socioeconomic 
must consider mitigating factors  conditions, raising questions about how 
including the nature, circumstances,  FDA and its contractors select retailers to inspect.  Overall, FDAs actions 
extent, and gravity of the violation  against retailers that violated tobacco laws and regulations were in 
and, with respect to the violator,  accord with its policies. 
ability to pay, effect on ability to 
continue to do business, any history  However, retailers with histories of violations were often not subject to 
of prior such violations, and the  the strongest enforcement actions.  FDA collected the full amount for 
degree of culpability.  only 9 percent of the CMPs it issued to retailers with histories of 
violations compared to 60 percent of CMPs it issued to retailers with 
How OIG Did This Review 
fewer violations.  Also, retailers in our sample that could have been 
We analyzed data from FDA on  subject to a no-tobacco-sale order (NTSO) usually did not receive one.  
retailer inspections; violations; and 
However, we did not determine the extent to which FDAs consideration 
advisory and enforcement actions 
of mitigating factors or actions by Administrative Law Judges played a 
from 2010 through 2019.  We also 
role in these outcomes. 
analyzed retailer inspection and 
violation histories for a random 
What OIG Recommends 
sample of retailers that were subject 
We recommend that FDA (1) give greater weight to retailers past 
to enforcement actions.  To 
noncompliance when taking enforcement actions against retailers with 
determine whether FDA inspection, 
histories of violations and (2) determine whether variation in inspection 
advisory, or enforcement actions 
activity on the basis of neighborhoods socioeconomic status is 
varied by neighborhood 
appropriate and the extent to which it is meeting FDAs objective for 
socioeconomic characteristics, we 
protecting vulnerable populations.  FDA concurred with our second 
compared FDA inspection data to 
recommendation and neither concurred nor nonconcurred with our first 
the Area Deprivation Index.  We 
also interviewed FDA officials about  recommendation.  FDA described steps it would take toward 
the agencys direction and  implementing both recommendations. 
management of the Tobacco 
 
Retailer Compliance Check 
Inspection Program. 
     
TABLE OF CONTENTS 
 
 
BACKGROUND ................................................................................................................................................ 1 
FINDINGS ....................................................................................................................................................... 10 
From the beginning of FDA's tobacco retailer inspection program in 2010 through 2019, FDA 
inspected nearly three-quarters of tobacco retailers nationwide ........................................................................ 10 
FDA largely acted in accord with its policies and statutory requirements when it penalized retailers 
that violated tobacco restrictions ..................................................................................................................................... 14 
In some States, inspection activities were correlated with neighborhoods socioeconomic conditions
 ....................................................................................................................................................................................................... 16 
Retailers with histories of violations were often not subject to the strongest enforcement actions ...... 19 
CONCLUSION AND RECOMMENDATIONS .......................................................................................... 25 
Give greater weight to retailers past noncompliance when taking enforcement actions against 
retailers with histories of violations ................................................................................................................................. 25 
Determine whether variation in inspection activity on the basis of neighborhoods socioeconomic 
status is appropriate and the extent to which it is meeting FDAs objective for protecting vulnerable 
populations ............................................................................................................................................................................... 26 
AGENCY COMMENTS AND OIG RESPONSE ......................................................................................... 27 
DETAILED METHODOLOGY ...................................................................................................................... 28 
APPENDICES................................................................................................................................................. 33 
Appendix A: Statistical Tables ............................................................................................................................................ 33 
Appendix B: Agency Comments ........................................................................................................................................ 34 
ACKNOWLEDGMENTS AND CONTACT ................................................................................................ 39 
ABOUT THE OFFICE OF INSPECTOR GENERAL .................................................................................... 40 
ENDNOTES .................................................................................................................................................... 41 
 
 
 
 
   
BACKGROUND 
OBJECTIVES 
1.  To determine the extent and nature of inspections under the Tobacco 
Retailer Compliance Check Inspection Program. 
2.  To determine the extent and nature of Food and Drug Administration's 
(FDAs) enforcement actions resulting from the program. 
 
Inspections of tobacco retailers are a critical part of FDAs efforts to prevent the sale 
and marketing of tobacco products to youth.  The purpose of these inspections is to 
obtain compliance from retailers by enforcing laws and regulations intended to 
prevent youth access to tobacco products.  Despite FDAs Tobacco Retailer 
Compliance Check Inspection Program having carried out more than 1 million 
inspections since 2010, youth tobacco use in the U.S. remains a high public health 
concern.  In particular, e-cigarettes, a type of electronic nicotine delivery system 
(ENDS), have eclipsed other forms of tobacco to become the most commonly used 
tobacco product among youth.1, 2  In 2020, close to 20 percent of high schoolers, or 
over 3 million students, reported that they currently used e-cigarettes.3  Since then, e-
cigarette use among youth may have declined, although a substantial number of 
youth still use these products.4, 5 
Preventing youth access to tobacco is one of three focus areas of FDAs Youth 
Tobacco Prevention Plan, which itself is a component of FDAs Comprehensive Plan 
for Tobacco and Nicotine Regulation.  Curbing marketing of tobacco products aimed 
at youth and educating youth on the dangers of tobacco use are the two other focus 
areas of FDAs Youth Tobacco Prevention Plan.6 
The Tobacco Control Act 
In 2009, Congress passed the Family Smoking Prevention and Tobacco Control Act 
(Tobacco Control Act), which amended the Federal Food, Drug, and Cosmetic Act 
(FD&C Act) and authorized the FDA to begin regulating tobacco products in the 
United States.7  The Tobacco Control Act granted FDA comprehensive authority over 
certain types of domestic tobacco products, including the manufacturing, distribution, 
and marketing of these products.8  User fees from tobacco manufacturers and 
importers are the sole source of funding for FDA's regulation of tobacco products.9  
The Tobacco Control Act also gave FDA authority to deem additional tobacco 
products subject to FDA oversight.  In 2016, FDA finalized the Deeming Rule that 
brought other tobacco products, such as cigars and ENDS, under its authority.10 
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Additional Legislative and Regulatory Action to Enhance FDAs 
Oversight of Tobacco  
Since the passage of the Tobacco Control Act, additional legislative and 
administrative actions have enhanced and added clarity to FDAs oversight of tobacco 
products.  See Exhibit 1 for a timeline of these and other selected actions that have 
enhanced FDAs oversight over tobacco products through 2020. 
   
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Exhibit 1: Laws, regulation, and guidance have increased FDAs oversight of 
tobacco products. 
 
Source: OIG analysis, 2022 
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Since 2020, additional actions have further enhanced FDAs oversight over tobacco 
products.  In March 2022, Congress amended the FD&C Act to clarify FDAs authority 
to regulate tobacco products containing nicotine from any source, including synthetic 
nicotine.11  In May 2022, FDA issued proposed rules that would prohibit characterizing 
flavors in cigars and menthol as a characterizing flavor in cigarettes, adding to the list 
of cigarette flavorings banned by the Tobacco Control Act of 2009.12, 13 
Through rulemaking in 2021 and in proposed rules in 2022, FDA has emphasized its 
interest in protecting the health of vulnerable populations through its oversight of 
tobacco products.14, 15  This aligns with Section 105 of the Tobacco Control Act, which 
directs FDA to ensure enforcement of restrictions against youth access to tobacco 
products in minority communities.16  FDA defines vulnerable populations as groups 
that are susceptible to tobacco product risk and harm due to disproportionate rates 
of tobacco product initiation, use, burden of tobacco-related diseases, or decreased 
cessation. 17  Vulnerable populations can include, but are not limited to, youth; those 
with lower socioeconomic status; certain races or ethnicities; sexual or gender 
minorities; underserved rural populations; those pregnant or trying to become 
pregnant; those in the military or veterans; and those with mental health conditions or 
substance use disorders.18 
The Tobacco Retailer Compliance Check Inspection Program 
FDAs Tobacco Retailer Compliance 
Check Inspection Program assesses 
retailers adherence to tobacco 
requirements established by the FD&C 
Act, as amended by the Tobacco 
Control Act.  This program works in 
concert with FDA's other tools to 
prevent youth access, such as 
manufacturer inspections and online 
investigations.  Businesses include, but 
are not limited to, independent/chain 
gas stations, convenience stores, and 
vape shops.  As of 2019, FDA estimated 
that about 360,000 tobacco retailers 
were operating nationwide.19 
FDA contracts with States, Tribes, and 
third-party contractors to inspect 
retailers that sell tobacco in the U.S.20  
Typically, FDA contracts specify a number or range of retailers that contractors must 
inspect annually based on the estimated total number of tobacco retail 
establishments in their respective States along with other factors such as contractor 
capacity.  Since the program began in FY 2010, FDA has awarded over $430 million in 
contracts.21 
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FDA conducts two types of compliance check inspections: those unrelated to 
restrictions on sales to underage purchasers (formerly called advertising and labeling 
inspections) and UB inspections.22  UB inspections aim to ensure that retailers comply 
with restrictions on sales to underage purchasers.  After each inspection, inspectors 
document their findings in a database called the Tobacco Inspection Management 
System (TIMS).  Inspectors use TIMS to document retailer information, such as name 
and address, as well as inspection data, such as the dates and types of inspections 
conducted at the retailers location.  If inspectors observe a violation during either 
type of inspection, inspectors may revisit the retailer to conduct a followup 
inspection.23  All retailers, including those that did not have any violations observed 
during an inspection, may be inspected again in the future.  FDA does not use a set 
cycle that establishes how often it should inspect retailers.  See Exhibit 2 for details on 
FDAs process for inspecting tobacco retailers. 
Exhibit 2: FDAs process for inspecting tobacco retailers 
 
Source: OIG analysis, 2022 
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FDA Actions When Retailers Violate the Tobacco Control Act 
FDA has the authority to take advisory and enforcement actions when it determines 
that a retailer has violated the Tobacco Control Act.  Advisory actions include warning 
letters.  A warning letter represents FDAs attempt to bring a retailer into compliance 
and establish prior notice.  Enforcement actions include civil money penalties (CMPs) 
and no-tobacco-sale orders (NTSOs).  A CMP is a fine that FDA assesses for violating 
the Tobacco Control Act.  An NTSO is an order that prohibits a retailer from selling 
tobacco products indefinitely or for a specified period of time.  Finally, in certain 
cases, FDA may pursue other enforcement actions including criminal prosecution, 
seizure of tobacco products, or an injunction. 
The Tobacco Control Act establishes the penalties FDA may impose for violating the 
Act.  The penalties increase with subsequent violations if the violations occur within 
timeframes prescribed by FDAs statutory schedule of penalties.  Generally, FDA issues 
a warning letter the first time it finds a retailer in violation.  If FDA finds the retailer in 
violation during subsequent investigations, it has the authority to issue CMPs that 
increase with each additional violation.  When FDA finds that a retailer has committed 
repeated violations of the same FDA requirements, it has the authority to pursue an 
NTSO or other enforcement action.24  See Exhibit 3 below for a schedule of FDAs 
progressive enforcement actions. 
The Tobacco Control Act also requires FDA to consider mitigating factors that may 
affect the penalties FDA imposes for violations.  Mitigating factors include the nature, 
circumstances, extent, and gravity of the violation or violations and, with respect to 
the violator, ability to pay, effect on ability to continue to do business, any history of 
prior such violations, the degree of culpability, and such other matters as justice may 
require.25  Although the Tobacco Control Act directs FDA to consider these factors, it 
provides FDA with discretion in how to apply them. 
   
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Exhibit 3: FDAs schedule of enforcement penalties for retailer violations of 
restrictions on the sale and distribution of tobacco products26 
 
Source: 87 Fed. Reg. 15100 (Mar. 17, 2022).  FDA updates CMP amounts annually in accordance with the Federal Civil 
Penalties Inflation Adjustment Act Improvements Act of 2015. 
Efforts by Other HHS Agencies 
In addition to FDAs compliance and enforcement efforts, FDA collaborates with other 
HHS agencies on significant efforts to better understand and prevent youth tobacco 
use.  This includes working with the Centers for Disease Control and Preventions 
Office on Smoking and Health on programs such as the National Youth Tobacco 
Survey (NYTS) and the Substance Abuse and Mental Health Services Administrations 
(SAMHSA) Synar program.  One component of the Synar program is State-run 
inspections of retailers to determine noncompliance rates with State laws that 
prohibit tobacco sales to underage buyers.  States include the noncompliance rates in 
an annual report to SAMHSA on their efforts to prohibit youth access to tobacco 
products.27  The Synar program does not include an enforcement component, 
although States may pursue State-level enforcement actions for retailer violations.  
Although the goals of FDAs and SAMHSAs compliance check inspection programs 
differ, the agencies coordinate their programs to prevent youth access to tobacco 
products.28 
Related OIG Work 
OIG previously issued a data brief evaluating FDAs oversight of tobacco 
manufacturing establishments.  The data brief examined tobacco manufacturing 
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establishment registration and product listing as well as FDAs inspection and 
enforcement actions from 2010 to 2015.  We found that FDA largely met its 
requirement to inspect manufacturing facilities biennially and that it concluded no 
enforcement action was needed after the inspections.29 
OIG also issued a report evaluating FDAs online tobacco retailer investigations 
program, which evaluates online retailers compliance with tobacco laws and 
regulations.  We found that FDAs approach to overseeing online tobacco retailers 
needs improvement.  We recommended that FDA (1) collaborate with the Bureau of 
Alcohol, Tobacco, Firearms and Explosives on oversight of online tobacco retailers; (2) 
complete its rulemaking on non-face-to-face sales of tobacco products, as required 
by the Tobacco Control Act; (3) collect data to support process and outcome 
measures for its oversight of online tobacco retailers; and (4) publish information and 
performance data on its oversight of online tobacco retailers.  FDA concurred with our 
first and fourth recommendations and neither concurred nor nonconcurred with our 
second and third recommendations. 
Methodology 
This study of FDAs Tobacco Retailer Compliance Check Inspection Program is 
national in scope.  It includes inspections of retailers in the 50 States and the 6 U.S. 
territories (hereinafter referred to as States) and 4 Tribes.  Our analysis covers 
inspections and related advisory and enforcement actions from the beginning of the 
program in CY 2010 through CY 2019.  In certain parts of our analysis, it was 
appropriate to scope the analysis more narrowly. 
We analyzed the following sources of information for this study: TIMS data on retailer 
inspections; a review of advisory and enforcement actions for a random sample of 
inspections; and the University of Wisconsin-Madison School of Medicine and Public 
Healths Area Deprivation Index (ADI).  To determine if there was a relationship 
between the socioeconomic status of a retailers block group and FDAs inspection, 
advisory, and enforcement activities, we compared the retailers inspection and 
enforcement data to the ADI.30  We also used information from interviews of FDA 
officials and followup sets of written questions and answers.  Lastly, we used 
information from FDAs public website on relevant law, regulation, and guidance; 
priorities in enforcing the Tobacco Control Act; and strategies to reduce youth access 
to tobacco. 
We note that we did not independently verify the TIMS data or information relayed to 
us by FDA officials.  Also, although we did assess the extent to which FDA followed its 
schedule of penalties when determining which penalties to issue to violative retailers, 
we did not determine if FDA followed the appropriate administrative process to issue 
each penalty, including how it considered mitigating factors. 
See the Detailed Methodology for details on scope, analysis, and limitations. 
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Standards 
We conducted this study in accordance with the Quality Standards for Inspection and 
Evaluation issued by the Council of the Inspectors General on Integrity and Efficiency. 
 
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FINDINGS 
From the beginning of FDA's tobacco retailer inspection 
program in 2010 through 2019, FDA inspected nearly three-
quarters of tobacco retailers nationwide 
From 2010 through 2019, FDA conducted more than 1 
million inspections, covering 74 percent of tobacco 
retailers in business nationwide as of 2020 with at least  63% 
one inspection.  In 44 of 55 States, inspectors exceeded 
the national average by inspecting more than 74 percent 
of retailers.  Furthermore, over this period, FDA inspected 
of inspections are 
57 percent of retailers more than once, with the average 
undercover buys to 
retailer inspected three times.  The Tobacco Control Act 
assess compliance 
does not set inspection coverage benchmarks for the 
with restrictions on 
Tobacco Retailer Compliance Check Inspection Program.  
youth tobacco 
However, FDA works with contractors to set State-level 
sales. 
inspection coverage targets based on factors such as local 
conditions/geography and contractor capacity.  
Undercover Buy inspections constitute the majority of inspections63 percent.  See 
our companion product, Supplemental Data on Tobacco Retailer Inspections, for more 
details on State-by-State inspection data. 
To monitor continued compliance, FDA almost always returned 
to inspect retailers again within 12 months of an inspection that 
found violations 
FDA returned to conduct a followup inspection within 1 year after 88 percent of 
inspections that found violations.  Following up with a subsequent inspection within 
12 months is important because it upholds the integrity of the progressive 
enforcement laid out in FDAs schedule of enforcement penalties.  Failure to do so 
means that retailers that continue to violate restrictions on the sale of tobacco 
products may avoid FDA enforcement penalties intended to bring about compliance.  
This is because FDAs schedule of enforcement penalties considers consecutive 
violations in 12-month intervals. 
Thus, if a retailer with a violation goes 12 months without a followup inspection, FDA 
is potentially missing an opportunity to identify continuing noncompliance.  In some 
cases, this can mean that retailers that repeatedly sell tobacco products to underage 
people never face any penalty beyond a warning letter.  In the example in Exhibit 4 
below, FDA conducts a series of inspections at a retailer, including a followup 
inspection within 6 months of finding a violation.  Yet later, FDA does not follow up 
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on a violation for 15 months, resulting in a second warning letter.  If FDA had 
conducted its follow up within 12 months, it might have potentially identified a 
violation warranting a CMP for two violations within 12 months. 
Exhibit 4: FDA may have missed an opportunity to pursue a CMP when it did 
not return to inspect a retailer within 12 months of the retailers prior 
violation for selling tobacco to an underage person. 
 
Source: OIG analysis, 2022 
The median number of days between an inspection that found a violation and a 
followup inspection was 178 days, or about 6 months.  Oregon (33 percent) and 
Nevada (51 percent) had the lowest rates of inspections followed up on within 
12 months. 
FDAs inspection coverage varied widely among States, and FDA 
is addressing challenges in States where it inspected the fewest 
retailers  
From 2010 through 2019, inspection coverage varied widely by State, from as high as 
99 percent to as low as 32 percent.  Over half of States inspected 90 percent or more 
of retailers that were in business as of 2020.  Yet some States lagged significantly.  For 
example, 32 percent of retailers in Nevada and 37 percent of retailers in the Virgin 
Islands had an inspection.  See Exhibit 5 for a map of coverage by State. 
   
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Exhibit 5: Percentage of retailers with at least one inspection from 2010 
through 2019 
 
Source: OIG analysis, 2022 
FDA told us that each State has had its unique challenges and circumstances for 
completing inspections, and sometimes these related to securing contractors to 
conduct inspections.  One contracting challenge is that some States were unable or 
unwilling to contract with FDA to inspect tobacco retailers.  In response, FDA 
established contracts with third-party entities where it was not feasible to contract 
with States.  This delayed establishing the Tobacco Retailer Compliance Check 
Inspection Program in those States, which affected inspection coverage in the first 10 
years of the program.  Indeed, in five of the seven States where FDA inspected fewer 
than 60 percent of retailers, FDA used third-party contracts that it initiated in 2014 or 
later4 years later than its earliest contracts with States. 
Furthermore, in States where FDA inspected the fewest retailers, FDA reported 
addressing other types of contracting challenges. 
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Nevada: In Nevada, where FDA inspected 32 percent of retailers, FDA 
was unable to establish a contract with the State and initially used a 
cadre of FDAs own inspectors.  In 2014, FDA brought on a third-party 
contractor, but, according to FDA, that contractor failed due to 
problems meeting Nevadas licensure requirements for inspectors.  In 
2018, FDA brought on a new contractor that was able to meet 
Nevadas licensure requirements. 
 
California: In California, where FDA contracts with the State and 
inspected 42 percent of retailers, FDA reported that Californias budget 
problems have hampered the States ability to fund inspections up-
front.  FDA told us it has been working with California to mitigate the 
challenge, including modifying its contract to prioritize inspecting 
retailers in areas that have not had an inspection yet. 
 
Virgin Islands and Puerto Rico: Finally, FDA struggled to establish 
viable contracts in the U.S. Virgin Islands and Puerto Rico before the 
territories suffered widespread destruction in 2017 from Hurricanes 
Irma and Maria.  After the storms, FDA put a hold on inspections in 
the Virgin Islands and has since brought on a new contractor.  In 
Puerto Rico, according to FDA, it canceled its contract because storm damage made it 
difficult to carry out inspections.  FDA has been working with a new contractor to 
rebuild its database of retailer addresses.  For this reason, FDA could not provide us 
with data to determine the percentage of retailers it inspected in Puerto Rico. 
   
Inspections on Tribal Lands 
FDA contracts with some Tribes to conduct tobacco retailer compliance checks on 
Tribal lands.  From 2014 through 2019, FDA had inspection contracts with four 
Tribes.  In addition, FDA told us that it sends its own inspectors to conduct 
inspections on Tribal lands.  The Tobacco Control Act prohibits States from 
conducting tobacco retailer inspections on Tribal lands without written permission 
from Tribes.  FDA told us that it conducts outreach to Federally recognized Tribes 
to inform them of FDAs tobacco authorities and explain how Tribes can work with 
FDA, such as through inspection contracts.  Data about tobacco compliance check 
inspections on Tribal lands are limited.  FDA could not provide TIMS data on 
inspections that occurred on Tribal lands before FY 2017. 
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FDA largely acted in accord with its policies and statutory 
requirements when it penalized retailers that violated tobacco 
restrictions 
FDAs schedule of penalties for tobacco retailers establishes a progressive framework 
of actions that increase as retailers accrue additional violations over time.  First-time 
violators, for example, receive warning letters, but additional violations within 
12 months escalate to a CMP, or higher-level actions that FDA can take, such as an 
NTSO.  However, according to FDA, most retailers become compliant after receiving a 
warning letter. 
From 2010 through 2019, FDA cited violations in 10 percent of inspections.  Among 
the 118,725 violative inspections, the majority79 percentresulted in warning 
letters, the lowest level of FDA action, and fewer than 1 percent resulted in NTSOs, the 
highest level.  See Exhibit 6 for a breakdown of FDAs progressive enforcement 
actions. 
Exhibit 6: From 2010-2019, FDA cited violations in 10 percent of inspections.  
FDA took 118,725 actions in response to these violative inspections. 
 
Source: OIG analysis, 2022 
FDA adhered to the schedule of penalties when it issued CMPs 
FDA issued CMPs to retailers that aligned with the progressive levels in its schedule of 
penalties 97 percent of the time.  Also, 95 percent of the time, FDA issued CMPs at 
the maximum dollar amount specified in its schedule of penalties.  See Tables 1 and 2 
in Appendix A for point estimates and confidence intervals. 
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From 2010 through 2019, FDA issued 24,708 CMPs.  Most CMPs were for two to three 
violations within 24 months.  See Exhibit 7 below for a breakdown of all FDA actions, 
including CMPs, by penalty level. 
Exhibit 7: Percentage of CMPs issued by penalty level 2010-2019 
 
Source: OIG analysis, 2022 
FDA prioritized enforcement for newly covered tobacco products 
after the Deeming Rule took effect in 2016 
After FDA deemed cigars and ENDS as covered tobacco products, cigars and ENDS 
comprised most of the products cited in inspections with violations (38 and 21 
percent respectively).  FDA considers a range of factors when setting enforcement 
priorities for tobacco retailers, including TIMS data; research on national youth 
tobacco use; and insights from program coordinators about local youth trends and 
conditions.  FDA prioritized enforcement for ENDS products; e-liquids; and these 
products components or parts in response to the growth of ENDS use among youth 
over the past decade.31  Prior to the Deeming Rule, packaged cigarettes were 
associated with the most violations.  See Exhibit 8 below, for details on the products 
associated with violations before and after the Deeming Rule. 
   
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Exhibit 8: After the Deeming Rule took effect, the percentage of violative 
inspections related to selling cigars and ENDS products accounted for nearly 
60 percent of all violative inspections. 
 
   
Source: OIG analysis, 2022 
In some States, inspection activities were correlated with 
neighborhoods socioeconomic conditions 
We observed a strong relationship between neighborhoods socioeconomic status, 
indicated by the Area Deprivation Index (ADI), and measures of inspection activity in 
26 States.a  In some States, more disadvantaged neighborhoods had more inspection 
activity; in other States, they had less.  
 
a Spearman rank correlations of at least +/- 0.8.  These correlations show a strong association between  
neighborhoods socioeconomic status and measures of inspection activity, but not whether variation in one 
caused variation in the other. 
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We note that Section 105 of the Tobacco 
Control Act directs FDA to ensure enforcement 
As required by FDAs retailer 
of restrictions against youth access to tobacco 
inspection contracts, in identifying 
products in minority communities.  Also, FDA 
retailers to inspect, contractors 
directs contractors to consider socioeconomic 
must consider:  
status as one of several factors to consider when 
identifying retailers to inspect.  Furthermore, 
(1)  areas with high rates of youth 
FDA directs contractors to conduct followup and 
tobacco use;  
other inspections of certain retailers, while 
(2)  areas where youth report easy 
contractors choose the remaining retailers to 
access to tobacco products;  
inspect.  However, the relationships we 
(3)  areas located in close proximity 
identified raise questions as to how FDA and its 
to middle and high schools; and  
contractors select retailers to inspect. Identifying 
(4)  regions with lower 
which factors may be driving the correlations we 
observed or the relative contribution of FDA-  socioeconomic populations. 
versus contractor-directed inspections to the   
correlations was outside the scope of this  Contractors are also required to 
review.    conduct inspections in a variety of 
different locations (urban, 
See Exhibit 9 below for details on States with 
suburban, and rural) and of a 
strong correlations.32  For detailed State-by-
variety of outlet types. 
State inspection data and correlations with ADI, 
see our companion product, Supplemental Data 
on Tobacco Retailer Inspections. 
   
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Exhibit 9: States with strong correlations between neighborhoods 
socioeconomic status and inspection activity 
 
Source: OIG analysis, 2022 
In 18 States, more socioeconomic disadvantage in a neighborhood was correlated 
with more inspection activity, as indicated by strong positive correlations between ADI 
and one or more measures of inspection activity.  More socioeconomic disadvantage 
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in a neighborhood was correlated with a greater percentage of inspected retailers 
and/or more inspections per retailer in 13 of these States.  In eight States, more 
socioeconomic disadvantage in a neighborhood was correlated with more inspections 
finding violations and/or more violations per retailer than for retailers in less 
disadvantaged areas.  In New York and Ohio, there were strong positive correlations 
between more disadvantage and all four measures of inspection activity. 
Conversely, in eight States, more socioeconomic disadvantage in a neighborhood was 
correlated with less inspection activity, as indicated by strong negative correlations 
between ADI and one or more measures of inspection activity.  More socioeconomic 
disadvantage was correlated with a smaller percentage of inspected retailers and/or 
fewer inspections per retailer in four States.  In five States, retailers in areas with more 
socioeconomic disadvantage had fewer inspections finding violations and/or fewer 
violations per retailer.  Puerto Rico had strong negative correlations between 
socioeconomic disadvantage and inspections and violations per retailer. 
Given that in some States, more disadvantaged neighborhoods had more inspection 
activity, and in other States, they had less, we are unable to conclude if FDA's 
objectives for distributing inspection activity or protecting vulnerable populations are 
being met. 
Retailers with histories of violations were often not subject to 
the strongest enforcement actions 
In considering the enforcement actions it will take, 
FDA relies on its schedule of penalties as well as 
In determining the amount of 
mitigating factors relevant to retailers individual 
a civil penalty, or the period to 
circumstances.  Mitigating factors include, among 
be covered by a no-tobacco-
other things, the retailers degree of culpability 
sale order, the Secretary shall 
and history of prior violations.  Although FDA 
take into account the nature, 
must consider mitigating factors when 
circumstances, extent, and 
determining what enforcement actions to take, it 
gravity of the violation or 
has discretion in how it applies them.  In some 
violations and, with respect to 
cases, it may find that mitigating factors merit 
the violator, ability to pay, 
settling with the retailer for a lower dollar amount 
effect on ability to continue to 
than originally sought in the CMP.  Indeed, it is in 
do business, any history of 
FDAs interest to work with retailers that take 
prior such violations, the 
steps to comply with the Tobacco Control Act 
degree of culpability, and such 
after their first violations.  In some cases, other 
other matters as justice may 
entities could affect the penalties retailers face 
require. 
after a violation.  For example, an Administrative  Section 303(f)(5)(B) of  
Law Judge could reduce the penalty after an  the FD&C Act 
administrative hearing.  Also, the Department of 
Justice can pursue a retailer for failing to pay a 
CMP. 
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Nevertheless, we found that the small number of retailers that repeatedly violate the 
Tobacco Control Act are often not subjected to more punitive actions.  This risks 
undermining FDAs efforts to control youth access to tobacco and enforce other 
restrictions on tobacco intended to safeguard public health. 
Retailers with histories of violations did not pay CMP amounts 
sought in full as often as retailers with fewer violations 
Retailers with histories of violations paid in 
full for only 9 percent of CMPs they 
Retailers did not pay 
received.  By comparison, retailers with 
fewer violations paid in full for 60 percent of  nearly $18 million of the 
the CMPs they received.  When a retailer 
CMPs they received, the 
accumulates five or more violations in the 
majority of which was 
last 3 years of inspections, FDA can issue a 
CMP of $5,000 or more.  From 2010 through  due from retailers with 
2019, FDA issued 2,927 such CMPs to 
histories of violations. 
retailers with such histories of violations.  
However, retailers only paid the full amount 
of 272 of these CMPs of $5,000 or more.  This compares to CMPs that FDA issued to 
retailers with fewer violations, for which retailers paid 13,034 of 21,781 CMPs in full.  
CMPs that were not paid in full include CMPs that were lowered from the amounts 
originally sought by FDA during the settlement process or after a hearing with an 
Administrative Law Judge.  See Exhibit 10 below for details on the portions of CMPs 
that FDA collected from retailers with histories of violations versus from those with 
fewer violations.  See Exhibit 11 below for details on the total amounts of CMPs issued 
to and collected from retailers with histories of violations versus from those with 
fewer violations. 
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Exhibit 10: Collection of CMPs issued to retailers with histories of violations 
versus retailers with fewer violations (2010-2019) 
 
Source: OIG analysis, 2022 
Exhibit 11: Amounts of CMPs that FDA issued and collected to retailers with 
histories of violations versus retailers with fewer violations (2010-2019) 
 
Source: OIG analysis, 2022 
Retailers in our sample that could have been subject to an NTSO 
usually did not receive one 
 
FDA issued NTSOs to only 7 of the 22 retailers in our sample that met its criteria, 
based on repeat violations over time, for an NTSO.  Accordingly, each of the 22 
retailers accrued first-time violations of one or more requirements of the Tobacco 
Control Act followed by at least five subsequent, repeat violations of the same 
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requirements.  These retailers previously received a warning letter and, possibly, three 
CMPs from FDA for those violations. 
Despite the histories of noncompliance of the remaining 15 retailers, FDA issued them 
additional CMPs ranging from $2,000 to $11,410 rather than issuing them NTSOs.  
FDA collected less than half of these CMPs in most cases.  FDA collected the full 
amount of the CMP it sought in only one instancefrom the retailer that received the 
lowest CMP of $2,000.  However, we did not determine how FDAs treatment of 
mitigating factors, which it is required to consider, played a role in its decision to 
forgo issuing NTSOs to these retailers or the amount of CMPs they paid.  We also did 
not determine whether decisions by Administrative Law Judges affected these 
outcomes.  See Exhibit 12 below for an example of the enforcement history for 1 of 
the 15 retailers in our sample with a history of violations that did not receive an NTSO 
from FDA. 
   
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Exhibit 12: Although a gas stations violations from 2015 through 2018 met 
NTSO criteria, FDA did not impose an NTSO against the retailer. 
 
Source: OIG analysis, 2022 
FDA told us that it reserves NTSOs for particularly egregious offenders where 
previous monetary penalties associated with CMPs have not brought the retailer into 
compliance.  However, among the retailers in our sample with a history of violations, 
FDA largely continued issuing CMPs and then did not collect the full amount of those 
CMPs.  Given estimates that the average American convenience store makes about 
$1,000 per day in tobacco sales, even the shortest NTSO that FDA has ever issued10 
daysrepresents a more significant penalty than what the 15 retailers in our sample 
faced.33  Although we did not assess how mitigating factors influenced FDAs decision 
to impose CMPs in lieu of NTSOs, our findings raise concern that FDA may not be 
giving sufficient weight to retailers history of violations when imposing enforcement 
actions. 
Furthermore, in determining a history of violations, FDA counts certain violations 
related to products covered by the Deeming Rule separately from violations related to 
other tobacco products.  In other words, when FDA cites a retailer for selling 
cigarettes or smokeless tobacco products to youth and then cites the same retailer for 
selling newly covered tobacco products to youth after the Deeming Rule, it cannot 
count the second citation as a repeat violation for selling to an underage person.  
FDAs interpretation of the Tobacco Control Act, which FDA communicated in 
guidance, considers those as distinct, and not repeat, violations.34 
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Repeat violations matter because they determine whether retailers could face the 
most stringent enforcement action in FDAs schedule of penalties, an NTSO.  In our 
10-year review period, FDA issued a total of 204 NTSOs.  Also, in our random sample 
of 110 inspections out of 2,912 with three or more prior violations, we identified nine 
instances in which this required approach of counting repeated violations separately 
for tobacco products covered by the Deeming Rule prevented FDA from considering 
an NTSO.  This suggests that there may be many instances in which FDA cannot issue 
an NTSO simply because the tobacco products involved fall under different regulatory 
provisions, even if the retailers action is fundamentally the same (e.g., selling tobacco 
to an underage person, whether the product sold was a cigarette or an ENDS 
product).  
 
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CONCLUSION AND RECOMMENDATIONS 
This report, alongside our companion product, Supplemental Data on Tobacco Retailer 
Inspections, sheds light on FDA's 10 years of experience inspecting tobacco retailers.  
In that time, FDAs Tobacco Retailer Compliance Check Inspection Program has made 
strides and faced challenges in preventing youth access to tobacco and other 
violations.  FDA inspected the majority of retailers at least once in that period and 
followed up on almost all with violations within 12 months.  FDA adhered to the 
schedule of penalties when it issued CMPs.  Also, it has worked to address a range of 
challenges that have arisen as it established and managed inspection contracts in 
each of 60 State, territorial, and Tribal jurisdictions. 
Nevertheless, responding effectively to serial violators remains a challenge for FDA.  A 
small number of retailers with histories of violations have emerged over the 10 
years.  These retailers have often not been subject to the strongest enforcement 
actions.   
Given that tobacco products represent a significant threat to public health, FDA must 
use each of the tools within its schedule of penalties as effectively as 
possible.  Furthermore, FDA must act in accordance with its interpretation of the 
Tobacco Control Act regarding repeat violations for purposes of issuing an 
NTSO.  The Tobacco Control Act also requires FDA to consider mitigating factors in 
enforcement.  FDA does, however, have discretion in how it weighs these mitigating 
factors.  Our findings raise questions about how FDA applies this discretion. 
To that end, we recommend that FDA: 
Give greater weight to retailers past noncompliance when 
taking enforcement actions against retailers with histories of 
violations 
CMPs: FDA accepted less than the original amount as payment in full for over half of 
CMPs it issued for $5,000 or more.  When pursuing enforcement actions such as 
CMPs and NTSOs, FDA must consider the nature and circumstances surrounding the 
violation; the retailers ability to pay; its ability to continue to do business; and any 
history of similar violations by the retailer.  Considering these issues is an important 
safeguard to ensure that retailers are not unfairly or unduly punished for violating the 
Tobacco Control Act.  However, by the time FDA issues a CMP of $5,000, a retailers 
history of violations should figure much more prominently among the factors FDA 
considers when negotiating any settlement with the retailer.  Failure to follow through 
on these higher-dollar CMPs weakens incentives for such retailers to change behavior. 
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NTSOs: From 2010 through 2019 and over 1 million inspections of tobacco retailers, 
FDA only issued 204 NTSOs.  The Tobacco Control Act requires FDA to cite a retailer 
with five violations that are repeated violations of the same requirements before it 
can issue an NTSO, not just five subsequent violations to a first violation.  This means 
that by the time retailers have met this threshold, they have, in a 36-month period, 
accrued at least six and potentially many more violations of the Tobacco Control Act. 
We understand that the mitigating factors that FDA must consider play a role in FDA's 
decision making on NTSOs.  However, FDA only issued NTSOs to 7 of the 22 retailers 
in our sample that could have received one.  This this raises questions about whether 
FDA is giving proper weight to retailers past noncompliance, which is another factor 
that FDA must consider. 
Determine whether variation in inspection activity on the basis 
of neighborhoods socioeconomic status is appropriate and the 
extent to which it is meeting FDAs objective for protecting 
vulnerable populations 
Section 105 of the Tobacco Control Act directs FDA to ensure enforcement of 
restrictions against youth access to tobacco products in minority communities.  Also, 
socioeconomic status is one of several considerations that FDAs contractors must 
consider in selecting retailers to inspect.  We found that, at least according to the 
Area Deprivation Index, more disadvantaged neighborhoods had more inspection 
activity in some States, and in other States they had less.  FDA should use our analysis 
as a starting point to explore whether variations in inspection activity are appropriate 
and serving FDAs goals to protect vulnerable populations.  If FDA detects unintended 
bias in how it directs its contractors or in how contractors allocate resources that is 
counter to these goals, it should take appropriate action. 
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AGENCY COMMENTS AND OIG RESPONSE 
 
FDA concurred with one of our recommendation and neither concurred nor nonconcurred with the 
other, as detailed below.   
First, FDA neither concurred nor nonconcurred with our recommendation that it give greater weight to 
retailers' past noncompliance when taking enforcement actions against retailers with histories of 
violations.  FDA agreed with OIG that it is appropriate to give greater weight to histories of 
noncompliance when determining penalties for such retailers and stated that it already does so.  FDA 
stated that many retailers are small businesses and it must balance a retailers history of violations with 
mitigating factors including the retailers ability to pay and the effect of a penalty on its ability to 
continue to do business.  Nonetheless, FDA stated that it will initiate internal discussions, including with 
its counsel, to determine whether history of violations can be given greater weight in the settlement 
process, increasing with each subsequent violation.  
Second, FDA concurred with our recommendation that it determine whether variation in inspection 
activity on the basis of neighborhoods socioeconomic status is appropriate and the extent to which it is 
meeting FDAs objective for protecting vulnerable populations.  FDA affirmed its commitment to health 
equity and stated that contractors are required to consider several risk-based factors in selecting areas 
for inspections and ensure that they conduct inspections in a variety of locations and outlet types.  
However, FDA also noted that FDA-directed inspections, such as those of retailers with prior violations, 
do not consider risk-based factors.  To address our recommendation, FDA stated that it will initiate 
meetings with subject matter experts within the agency to evaluate the variation we identified and 
make recommendations on how to better address and achieve health equity should its evaluation 
findings warrant doing so. 
OIG appreciates the steps FDA committed to taking to address our recommendations. 
For the full text of FDAs comments, see Appendix B. 
 
 
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DETAILED METHODOLOGY 
Scope 
This evaluation of FDAs Tobacco Retailer Compliance Check Inspection Program is 
national in scope.  It includes inspections of retailers in the 50 States and 6 U.S. 
territories.  Our analysis covers Undercover Buy and other inspections, and related 
advisory and enforcement actions from the beginning of the program in 2010 
through 2019.  Our analysis of the percentages of retailers inspected focused on 
retailers listed in TIMS as in business as of January 1, 2020.  In certain parts of our 
analysis, it was appropriate to scope the analysis more narrowly.  We describe those 
instances in the relevant sections that follow. 
Data Sources 
We analyzed the following sources of information for this study: data on retailer 
inspections from FDAs Tobacco Inspection Management System (TIMS); a review of a 
random sample of inspections; and the University of Wisconsin-Madison School of 
Medicine and Public Healths Area Deprivation Index (ADI).  We also used information 
from interviews of FDA officials and followup sets of written questions and answers.  
Lastly, we used information from FDAs public website on relevant law, regulation, and 
guidance; priorities in enforcing the Tobacco Control Act; and strategies to reduce 
youth access to tobacco. 
Inspection Activity 
To assess the extent and nature of inspections and violations, we requested TIMS data 
from FDA, which included data on the population of tobacco retailers known to FDA; 
inspections; and advisory and enforcement actions.  FDA provided the data we 
requested covering the beginning of the program in 2010 through 2019.  From these 
data, we selected inspections that TIMS identified as closed and resolved by FDA as to 
whether the inspections found violations.  We used the TIMS data provided by FDA to 
determine the extent of FDA advisory and enforcement actions and to identify the 
trends and patterns in FDAs inspections of tobacco retailers.  Although we did not 
independently verify TIMS data, we occasionally used data from FDAs website and 
online dockets to correct for anomalies we discovered in the data. 
Our analysis of inspection rates among retailers that were in business as of 2020 
excludes retailers in the Northern Mariana Islands and Puerto Rico due to the natural 
disasters experienced in these jurisdictions and the impact on the data available for 
analysis.  
   
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Adherence to FDAs Schedule of Enforcement Penalties 
To determine the extent to which FDA followed its schedule of penalties, we 
conducted a review of a random sample of violative inspections.  This review was 
necessary because the TIMS data that FDA provided to us only had details on the 
number and types of violations FDA cited during inspections that resulted in warning 
letters.  Details on the violations cited during inspections that resulted in CMPs and 
NTSOs were not available in the data.  This prevented us from analyzing TIMS data 
alone to identify and count retailers violations.  Therefore, for a random sample of 
violative inspections, we abstracted violations data from dockets on FDAs website.  
We then projected these data to the population of all violative inspections. 
Population and Sample Selection 
The population for our review of FDAs adherence to its schedule of penalties 
comprises 118,725 retailer inspections in TIMS that found violations of the Tobacco 
Control Act between 2010-2019.  We stratified this population into three strata based 
on the count of prior inspections with violations that the inspected retailers had.  We 
did so to ensure that the inspections we sampled were associated with retailers with a 
range of inspection histories.  This is important because retailers inspection histories 
drive the levels of progressive discipline called for in FDAs schedule of penalties.  
Exhibit 13 below describes the strata and the populations distribution among them. 
We note that, for stratum A, we sampled all 81,584 violative inspections for review 
because we could verify the outcome of all inspections using TIMS data.  For these 
inspections, retailers had no prior violations.  FDAs policy is to issue a warning letter 
for a retailers first violative inspection, no matter how many violations FDA cites 
during that inspection.  Using TIMS, we could verify that retailers did indeed receive 
warning letters in accordance with FDA policy. 
Exhibit 13: Population of violative inspections by stratum 
Stratum  Violative  Sampled Violative 
Inspections  Inspections 
Stratum A: 0 prior inspections  81,584  81,584 
with violations 
Stratum B: 1 or 2 prior  34,229  110 
inspections with violations 
Stratum C: 3 or more  2,912  110 
inspections with prior 
violations 
Total  118,725  81,804 
 
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Data Abstraction 
For each sampled inspection in strata B and C, we compiled data on the sampled 
inspection and the inspected retailers inspection history from dockets on FDAs 
website.35  For each sampled inspection, we looked up FDAs enforcement docket and 
reviewed it to identify and record the violations FDA cited during the inspection, such 
as selling cigarettes to an underage buyer or failing to verify a buyers age.  In 
addition, for the retailer associated with each sampled inspection, we reviewed the 
retailers previous 4 years of inspections.  For each of these inspections, if they 
resulted in violations, we looked up FDAs enforcement docket to identify and record 
the violations FDA cited.  The result was a full picture of the violations FDA cited 
during each sampled inspection and any violations it cited the retailer for in the 
previous 48 months, which is the window of time that FDAs schedule of penalties 
considers. 
Analysis 
For each inspection, we reviewed the violations contained in the sampled inspection 
and the associated retailers inspection history.  We determined the extent to which 
FDA issued CMPs and NTSOs in accordance with the schedule of penalties.  
Additionally, we assessed the extent to which FDA issued CMPs for the dollar amount 
called for in the schedule of penalties effective at the time of the violation.  To do so, 
we used a two-stage review with automated analysis of the abstracted data followed 
by a manual review to confirm potential disagreements between FDA-issued penalties 
and OIG-determined penalties. 
Finally, we projected the results of our review.  Our findings are generalizable to the 
population of 118,725 violative inspections in TIMS that took place from 2010 
through 2019. 
Socioeconomic Analysis 
To determine if there was a relationship between a retailers socioeconomic status 
and FDAs enforcement, we compared the retailers inspection and enforcement data 
to the University of Wisconsin-Madison School of Medicine and Public Healths Area 
Deprivation Index (ADI).  The ADI is a measure based on the Health Resources and 
Services Administrations American Community Survey and is validated to the Census 
Block Group.36  ADI measures socioeconomic conditions within Census Block Groups.  
ADI considers 17 measures related to education, income, employment, housing, and 
household characteristics.37  A higher ADI score means that an area has a higher level 
of advantage compared to other regions.  We reported correlations between the ADI 
and FDAs inspection activities and its advisory/enforcement actions if the Spearman 
rank correlation coefficient was 0.8 or -0.8.  We referred to such correlations as 
strong correlations.  The correlation statistics are shown in our companion product, 
Supplemental Data on Tobacco Retailer Inspections.   
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To tie retailers to their U.S. Census Block Group, we created a data set that included 
each retailers unique ID; address; and inspection and violation counts.  We geocoded 
retailer location data using Esri ArcMap to match the retailers with the appropriate 
U.S. Census Block Group identifier.38 
We then joined the geocoded retailers to the ADI using ArcMap.  We manually 
geocoded 336 retailers, mainly those located along water borders such as coastal 
areas, that were not assigned an ADI value.  This resulted in 559,935 retailers assigned 
an ADI value through ArcMap or by manual geocoding. 
We excluded some retailers from our ADI analysis.  We excluded six retailers for which 
ArcMap was unable to match a location and eight retailers that were either from 
dummy inspections or not assigned a zip code in the original inspection data.  We 
also excluded 2 retailers that were located in the wrong state in the original data and 
633 retailers that were too close to state borders to be correctly located.  In addition, 
we excluded seven retailers in Puerto Rico that could not be geocoded.  Our analysis 
also excluded retailers in America Samoa, Guam, the Northern Mariana Islands, and 
the Virgin Islands because the ADI does not assign values in those locations. 
In addition, we excluded 50,962 retailers because they were located in block groups 
with suppressed ADI values.  The ADI suppresses certain block groups when (1) there 
is a low population and/or housing in that block group; (2) there is a high percentage 
of the population living in group quarters populations; (3) there is a combination of 1 
and 2; or (4) a block group was not assigned an ADI value because there were data 
missing from the American Community Survey.39 
After excluding these retailers from our analysis, there were 559,300 retailers that 
were properly geocoded and assigned an ADI value. 
We grouped each of the retailers into one of 148,405 unique block groups.  We then 
ran correlation analyses to determine whether there was any relationship between the 
block group ADI and our variables of interest at the state level.  We analyzed 
correlations between a block groups ADI and the following metrics for retailers at 
each ADI level in each state: (1) average count of inspections, (2) average number of 
violations, (3) average number of warning letters, (4) average number of CMPs, and (5) 
average number of NTSOs. 
Legal and Policy Analysis 
We consulted several sources to understand relevant laws, regulations, and guidance.  
Sources included a review of laws including the Tobacco Control Act and subsequent 
legislation; FDA regulations; guidance on FDAs website; interviews; correspondence 
with FDA officials; and consultation with OIGs Office of Counsel. 
   
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Limitations 
We did not independently verify the TIMS data or information relayed to us by FDA 
officials.  Because TIMS data do not contain the dates on which retailers closed, our 
analysis of repeat inspections does not account for retailers that could not be re-
inspected because they had closed.  Also, although we did assess the extent to which 
FDA followed its schedule of penalties when determining which penalties to issue to 
violative retailers, we did not determine if FDA followed the appropriate 
administrative process to issue each penalty including how it considered mitigating 
factors.  Additionally, although we evaluated FDAs oversight of the Tobacco Retailer 
Compliance Check Inspection Program as a whole, we did not evaluate FDAs 
oversight of individual contracts. 
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APPENDICES 
Appendix A: Statistical Tables 
Table 1.  Point estimate and confidence intervals for instances in which FDA 
could have issued a CMP but issued a warning letter instead, 2010-2019 
Point  95-percent 
Outcome  estimate  confidence interval 
CMP issued (n = 201)  97.25  92.24  99.06 
CMP not issued (n = 5)  2.75  0.94  7.76 
N = 206 
 
Table 2.  Point estimate and confidence intervals for frequency with which 
FDA issued CMPs for the appropriate dollar amount according to the 
schedule of penalties, 2010-2019 
Dollar difference amount between OIG's 
calculated money penalty and CTP's  Point  95-percent 
issued penalty  estimate  confidence interval 
CMP amount within the range of one degree 
of difference on the schedule of penalties   
(n =190)  94.86  89.54  97.55 
CMP amount outside the range of one 
degree of difference on the schedule 
of penalties (n = 16)  5.14  2.45  10.46 
N = 206
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Appendix B: Agency Comments 
Following this page are the official comments from FDA. 
FDA Could Take Stronger Enforcement Action Against Tobacco Retailers  
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TO: 
Deputy Inspector General 
Office of Evaluation and Inspections 
FROM:  Beethika Khan 
Associate Commissioner for Economics and Analysis 
Office of Policy, Legislation, and International Affairs
SUBJECT:  Draft Report, OEI-01-20-0024
Attached are the Food and Drug Administrations general and technical comments to the 
Office of Inspector Generals   1, 202  draft report entitled FDA
.  Thank you for the opportunity to provide feedback. 
Attachments 
U.S. Food and Drug Administration 
10903 New Hampshire Avenue 
Silver Spring, MD 20993
www.fda.gov 
FDA Could Take Stronger Enforcement Action Against Tobacco Retailers  
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OIG Draft Report: FDA Could Take Stronger Enforcement Action Against Tobacco Retailers 
With Histories of Sales to Youth and Other Violations, OEI-01-20-00240   
Thank you for the opportunity to review and comment on OIGs draft report. 
FDAs enforcement work is a key part of the Agencys efforts to protect youth from tobacco 
products. The Agency has a comprehensive compliance and enforcement program that oversees 
all entities in the supply chain  importers, manufacturers, distributors, and retailers. Since 
enactment of the Tobacco Control Act in 2009, FDA has secured contracts with states, 
territories, and third parties to conduct in-person inspections of tobacco retailers, which has 
resulted in more than 1.4 million inspections. 
FDA staff carefully review the results of each inspection and take action, as appropriate. Many 
retailers comply with the law but when violations are found, FDA staff put together the evidence 
to develop a warning letter. FDA first issues a warning letter to achieve compliance. When 
retailers do not come into compliance after receiving a warning letter, FDA then typically 
utilizes enforcement actions such as civil money penalties (CMPs), and no-tobacco sale orders 
(NTSOs) for subsequent violations. To date, FDA has issued more than 128,000 warning letters, 
30,000 CMPs, and 220 NTSOs based on violations found during retailer inspections. 
FDA continuously monitors the marketplace and takes actions to maximize public health impact, 
including, for example, action against products with targeted advertising to young people or an 
uptick in use among youth. Informed by marketplace data, for example, FDAs retailer 
inspection program recently conducted a nationwide inspection blitz cracking down on the sale 
of unauthorized e-cigarettes commonly used by youth. This blitz resulted in the issuance of 
nearly 200 warning letters to brick-and-mortar retailers. As described above, if retailers do not 
come into compliance after receipt of a warning letter, the Agency will seek enforcement actions, 
including escalating CMPs and NTSOs, as necessary, until a retailer comes into compliance. The 
amount of enforcement action needed varies depending on the facts and individual circumstances 
of each case. 
More information about FDAs compliance and enforcement activities can be found at: 
https://www.fda.gov/tobacco-products/compliance-enforcement-training/advisory-and-
enforcement-actions-against-industry-selling-tobacco-products-underage-purchasers and 
https://www.fda.gov/tobacco-products/compliance-enforcement-training/advisory-and-
enforcement-actions-against-industry-unauthorized-tobacco-products. 
FDAs comments on OIGs recommendations are below. 
Give greater weight to retailers' past noncompliance when taking enforcement actions 
against retailers with histories of violations 
FDA agrees that giving greater weight to retailers past noncompliance is appropriate and we 
currently do that when determining appropriate enforcement tools and during the settlement 
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of violations and we will further consider this recommendation.  
FDA remains committed to implementing the escalating penalty schedules for repeated 
violations within prescribed timeframes in the Family Smoking Prevention and Tobacco Control 
Act (Tobacco Control Act).  FDA is concerned about retailers that continue to violate the law 
and does heavily weigh that mitigating factor against the retailer when settling a case with a 
retailer who has received multiple CMPs, generally settling for progressively higher amounts in 
those subsequent CMP cases. 
For violations of the statutory prohibition on the sale of tobacco products to youth and the sale 
and distribution regulations found under 21 Code of Federal Regulations part 1140, FDA follows 
the penalty schedule outlined in the Tobacco Control Act to determine the amount sought in a 
CMP complaint. This schedule escalates based on the number of violations observed during 
certain timeframes. Similarly, FDA may seek NTSOs only when a retailer commits five repeated 
violations of particular requirements under the law. 
The law also requires the Agency to take into account the following mitigating factors in 
determining the amount of the civil penalty or time period of the NTSO: 
 the nature, circumstances, extent, and gravity of the violation or violations;
 ability to pay;
 effect on ability to continue to do business;
 any history of prior such violations;
 the degree of culpability; and
 such other matters as justice may require.
Many retailers are considered small businesses and factors such as their ability to pay and the 
effect on their ability to continue to do business must be balanced with the history of violations 
and other mitigating factors.  While FDA makes every effort to hold retailers, including small 
businesses, accountable by seeking escalating penalties for historically violating the law, we 
must by law consider the information and evidence presented by a retailer during the settlement 
process. 
By November 2023, FDAs Center for Tobacco Products (CTP) will initiate discussions within 
the agency, including counsel, to determine whether the history of violations can be given even 
greater weight, increasing more with each subsequent violation, when considering mitigating 
factors and reduction in settlement amounts. 
Determine whether variation in inspection activity on the basis of neighborhoods 
socioeconomic status is appropriate and the extent to which it is meeting FDAs objective 
for protecting vulnerable populations 
FDA Could Take Stronger Enforcement Action Against Tobacco Retailers  
With Histories of Sales to Youth and Other Violations - OEI-01-20-00240  Appendix B | 37  FDA concurs with the recommendation. Advancing health equity is a high priority for CTP. 
Ensuring health equity and protecting vulnerable populations1 is an integral part of FDAs work 
to protect public health generally and prevent and reduce tobacco use by young people. 
The Tobacco Control Act required FDA to develop an enforcement action plan.  To develop the 
plan, FDA solicited and analyzed input from stakeholders including public health organizations, 
minority community groups and leaders, other stakeholders with demonstrated expertise and 
experience in serving underserved communities, groups serving youth, patient groups, 
advertising agencies, and the regulated industry. In 2010, FDA issued its enforcement action 
plan, available on its website at:  https://www.fda.gov/tobacco-products/rules-regulations-and-
guidance/enforcement-action-plan-promotion-and-advertising-restrictions.  Consistent with this 
plan, FDA requires the contractors that conduct tobacco retail inspections in the states and 
territories to prioritize geographic areas with a higher risk for regulatory violations. Contractors 
must consider: 
1. Areas with high rates of youth tobacco use;
2. Areas where youth report easy access to tobacco products;
3. Areas located in close proximity to middle and high schools; and
4. Regions with lower socioeconomic populations (which is included due to these areas
having been historically targeted via marketing and is therefore attempting to remedy past
biases).
Further, contractors are required to ensure inspections are conducted at a variety of different 
locations (urban, suburban, and rural) and include a variety of outlet types throughout the 
jurisdiction.  We also note that other factors impact the inspection assignments such as 
prioritizing retailers with prior violations, which are FDA-directed inspections and do not 
consider whether the violative retailers are in these higher risk categories. 
FDA evaluates how the contractors propose to meet these requirements for routine inspections; 
however, we recognize more can be done to evaluate the variation in inspection activity on the 
basis of neighborhoods socioeconomic status; whether it is appropriate; and the extent to which 
we are addressing health equity. 
To address this recommendation, by December 2023, CTP will initiate meetings with subject 
matter experts within the agency to evaluate this variation and make recommendations on how 
we may better address and achieve health equity, if the evaluation findings warrant it. These 
subject matter experts may include CTPs Senior Advisor for Health Equity, senior staff in 
CTPs Office of Science, and staff in FDAs Office of Minority Health and Health Equity.  
1 FDA uses the term vulnerable populations to refer to groups that are susceptible to tobacco product risk and 
harm due to disproportionate rates of tobacco product initiation, use, burden of tobacco-related diseases, or 
decreased cessation. Examples of vulnerable populations include those with lower household income and 
educational attainment, certain racial or ethnic populations, individuals who identify as LGBTQI+, underserved 
rural populations, those pregnant or trying to become pregnant, those in the military or veterans, or those with 
behavioral health conditions or substance use disorders. 
FDA Could Take Stronger Enforcement Action Against Tobacco Retailers  
With Histories of Sales to Youth and Other Violations - OEI-01-20-00240  Appendix B | 38  ACKNOWLEDGMENTS AND CONTACT 
Acknowledgments 
Matt Blackburn served as the lead analyst for this study.  Others in the Office of 
Evaluation and Inspections who conducted the study include Jac Carreiro, Caitlin 
Foster, Rachel Pavia, and Elizabeth Sandefer.  Office of Evaluation and Inspections 
headquarters staff who provided support include Kevin Farber, Rob Gibbons, Althea 
Hosein, and Michael Novello. 
We would also like to acknowledge the contributions of other Office of Inspector 
General staff, including Justin Koppa. 
This report was prepared under the direction of Joyce Greenleaf, Regional Inspector 
General for Evaluation and Inspections in the Boston regional office, and Ken Price, 
Deputy Regional Inspector General. 
Contact 
To obtain additional information concerning this report, contact the Office of Public 
Affairs at Public.Affairs@oig.hhs.gov.  OIG reports and other information can be found 
on the OIG website at oig.hhs.gov. 
Office of Inspector General 
U.S. Department of Health and Human Services 
330 Independence Avenue, SW 
Washington, DC 20201 
FDA Could Take Stronger Enforcement Action Against Tobacco Retailers  
With Histories of Sales to Youth and Other Violations - OEI-01-20-00240  Acknowledgments and Contact | 39  ABOUT THE OFFICE OF INSPECTOR GENERAL 
The mission of the Office of Inspector General (OIG), as mandated by Public Law 
95-452, as amended, is to protect the integrity of the Department of Health and
Human Services (HHS) programs, as well as the health and welfare of beneficiaries
served by those programs.  This statutory mission is carried out through a nationwide
network of audits, investigations, and inspections conducted by the following
operating components:
The Office of Audit Services (OAS) provides auditing services for HHS,
either by conducting audits with its own audit resources or by overseeing audit work 
done by others.  Audits examine the performance of HHS programs and/or its 
grantees and contractors in carrying out their respective responsibilities and are 
intended to provide independent assessments of HHS programs and operations.  
These audits help reduce waste, abuse, and mismanagement and promote economy 
and efficiency throughout HHS. 
The Office of Evaluation and Inspections (OEI) conducts national
evaluations to provide HHS, Congress, and the public with timely, useful, and reliable 
information on significant issues.  These evaluations focus on preventing fraud, waste, 
or abuse and promoting economy, efficiency, and effectiveness of departmental 
programs.  To promote impact, OEI reports also present practical recommendations 
for improving program operations. 
The Office of Investigations (OI) conducts criminal, civil, and administrative
investigations of fraud and misconduct related to HHS programs, operations, and 
beneficiaries.  With investigators working in all 50 States and the District of Columbia, 
OI utilizes its resources by actively coordinating with the Department of Justice and 
other Federal, State, and local law enforcement authorities.  The investigative efforts 
of OI often lead to criminal convictions, administrative sanctions, and/or civil 
monetary penalties. 
The Office of Counsel to the Inspector General (OCIG) provides
general legal services to OIG, rendering advice and opinions on HHS programs and 
operations and providing all legal support for OIGs internal operations.  OCIG 
represents OIG in all civil and administrative fraud and abuse cases involving HHS 
programs, including False Claims Act, program exclusion, and civil monetary penalty 
cases.  In connection with these cases, OCIG also negotiates and monitors corporate 
integrity agreements.  OCIG renders advisory opinions, issues compliance program 
guidance, publishes fraud alerts, and provides other guidance to the health care 
industry concerning the anti-kickback statute and other OIG enforcement authorities. 
FDA Could Take Stronger Enforcement Action Against Tobacco Retailers 
With Histories of Sales to Youth and Other Violations - OEI-01-20-00240  About OIG | 40   
ENDNOTES 
 
1 Gentzke, A.S., Wang, T.W., Cornelius, M., et al.  Tobacco Product Use and Associated Factors Among Middle and High 
School Students  National Youth Tobacco Survey, United States, 2021.  MMWR Surveill Summ 2022;71 (No. SS-5):129.  
Accessed at https://www.cdc.gov/mmwr/volumes/71/ss/ss7105a1.htm?s_cid=ss7105a1_w on March 30, 2023. 
2 CDC.  Notes from the Field: Use of Electronic Cigarettes and Any Tobacco Product Among Middle and High School 
Students  United States, 20112018, November 16, 2018.  Accessed at 
https://www.cdc.gov/mmwr/volumes/67/wr/mm6745a5.htm  on March 30, 2023. 
3 CDC.  E-cigarette Use Among Middle and High School Students  United States, 2020, September 18, 2020.  Accessed at 
https://www.cdc.gov/mmwr/volumes/69/wr/mm6937e1.htm on March 30, 2023. 
4 FDA.  Youth E-cigarette Use Remains Serious Public Health Concern Amid COVID-19 Pandemic, September 30, 2021.  
Accessed at https://www.fda.gov/news-events/press-announcements/youth-e-cigarette-use-remains-serious-public-health-
concern-amid-covid-19-pandemic on April 26, 2023. 
5 FDA notes that the 2021 National Youth Tobacco Survey (NYTS) was fully conducted amid the global COVID-19 pandemic, 
during which time eligible students could participate in the survey in classrooms, at home, or at some other place.  Thus, 
estimates from the 2021 NYTS should not be compared with previous NYTS survey waves that were primarily conducted on 
school campuses.  (FDA.  Results from the Annual National Youth Tobacco Survey, March 10, 2022.  Accessed at 
https://www.fda.gov/tobacco-products/youth-and-tobacco/results-annual-national-youth-tobacco-survey on March 30, 
2023.) 
6 FDA.  Youth Tobacco Prevention Plan, 2020.  Accessed at https://www.fda.gov/tobacco-products/youth-and-tobacco/fdas-
youth-tobacco-prevention-plan on April 26, 2023. 
7 Family Smoking Prevention and Tobacco Control and Federal Retirement Reform, P.L. No. 111-31 (enacted July 22, 2009). 
8 Family Smoking Prevention and Tobacco Control and Federal Retirement Reform, P.L. No. 111-31, Div. A., Sec. 3 (enacted 
July 22, 2009). 
9 Federal Food, Drug, and Cosmetics Act  919.  FDA.  FY 2021 Justification of Estimates for Appropriations Committee, 2020, 
p. 268.  Accessed at https://www.fda.gov/media/135078/download on March 30, 2023. 
10 81 Fed. Reg. 28974 (May 10, 2016). 
11 Consolidated Appropriations Act, 2021, P.L. No. 117-103, Div. P, Sec. 111 (enacted March 15, 2022). 
12 87 Fed. Reg. 26396 (May 4, 2022). 
13 87 Fed. Reg. 26454 (May 4, 2022). 
14 FDA.  Proposed Rule: Tobacco Product Standard for Menthol In Cigarettes, 87 FR 26454-26502, May 4, 2022.  Accessed 
athttps://www.federalregister.gov/documents/2022/05/04/2022-08994/tobacco-product-standard-for-menthol-in-cigarettes 
on April 12, 2023. 
15 FDA.  Final Rule: Premarket Tobacco Applications and Recordkeeping Requirements, 86 FR 55300-55439, October 5, 2021.  
Accessed at https://www.federalregister.gov/documents/2021/10/05/2021-21011/premarket-tobacco-product-applications-
and-recordkeeping-requirements on April 12, 2023. 
16 Family Smoking Prevention and Tobacco Control and Federal Retirement Reform, P.L. No. 111-31, Div. A., Sec. 105 (enacted 
July 22, 2009). 
17 21 CFR  1114.3. 
18 21 CFR  1114.3. 
 
FDA Could Take Stronger Enforcement Action Against Tobacco Retailers 
With Histories of Sales to Youth and Other Violations - OEI-01-20-00240  Endnotes | 41     
 
19 FDA.  Compliance and Enforcement Report: Accomplishments and Activities of FDAs Center for Tobacco Products Office of 
Compliance and Enforcement.  Accessed at https://www.fda.gov/media/131943/download on March 30, 2023. 
20 FDA.  Ensuring Compliance with the Tobacco Control Act and Enforcing the Law.  Accessed at 
https://www.fda.gov/tobacco-products/about-center-tobacco-products-ctp/ensuring-compliance-tobacco-control-act-and-
enforcing-law on March 30, 2023. 
21 FDA.  FDA Tobacco Retail Inspection Contracts.  Accessed at https://www.fda.gov/tobacco-products/retail-sales-tobacco-
products/fda-tobacco-retail-inspection-contracts on March 30, 2023. 
22 FDA.  Retail Compliance Check Inspections and FDA Actions: An Overview For Tobacco Retailers, 2016.  Accessed at 
https://www.fda.gov/media/97871/download on March 30, 2023. 
23 FDA.  Retail Compliance Check Inspections and FDA Actions: An Overview For Tobacco Retailers, 2016.  Accessed at 
https://www.fda.gov/media/97871/download on March 30, 2023. 
24 FDA.  Ensuring Compliance with the Tobacco Control Act and Enforcing the Law.  Accessed at 
https://www.fda.gov/tobacco-products/about-center-tobacco-products-ctp/ensuring-compliance-tobacco-control-act-and-
enforcing-law. 
25 Federal Food, Drug, and Cosmetics Act  303(f)(5)(B). 
26 87 Fed. Reg. 15100 (Mar. 17, 2022).  FDA.  Advisory and Enforcement Actions Against Industry for Selling Tobacco 
Products to Underage Purchasers.  Accessed at https://www.fda.gov/tobacco-products/compliance-enforcement-
training/ctp-compliance-enforcement on March 30, 2023. 
27 SAMHSA.  Synar Program Annual Reports: Youth Tobacco Sales.  Accessed at https://www.samhsa.gov/synar/annual-
reports on March 30, 2023. 
28 FDA.  A Strategic Partnership: The Food and Drug Administrations (FDA) Tobacco Retail Compliance Inspection Contracts and 
the Substance Abuse and Mental Health Services Administrations (SAMHSA) Synar Program.  Accessed at 
https://www.fda.gov/media/82310/download on March 30, 2023. 
29 OIG.  FDA Oversight of Tobacco Manufacturing Establishments, August 2017.  Accessed at https://oig.hhs.gov/oei/reports 
/oei-01-15-00300.pdf on March 30, 2023. 
30 Block groups are defined as follows: A unit of U.S. census geography that is a combination of census blocks.  A block 
group is the smallest unit for which the U.S. Census Bureau reports a full range of demographic statistics.  There are about 
700 residents per block group.  A block group is a subdivision of a census tract.  (Esri.  GIS Dictionary.  Accessed at 
https://support.esri.com/en-us/gis-dictionary/block-group on March 30, 2023.) 
31 FDA.  Compliance and Enforcement Report: Accomplishments and Activities of FDAs Center for Tobacco Products Office of 
Compliance and Enforcement.  Accessed at https://www.fda.gov/media/131943/download on March 30, 2023.   
32 An increase in the average number of enforcement actions per violative retailer was correlated with more socioeconomic 
disadvantage as observed in Minnesota (0.93) and Connecticut (0.87).  An increase in the percentage of retailers with 
enforcement actions was correlated with more socioeconomic disadvantage in Connecticut (0.86). 
33 Convenience Store News.  Industry Report 2021 Deep Dive: Tobacco.  Accessed at https://www.csnews.com/industry-report-
deep-dive-2021-tobacco on October 17, 2022. 
34 Family Smoking Prevention and Tobacco Control and Federal Retirement Reform, P.L. No. 111-31, Div. A., Sec. 103(q)(1)(A) 
(enacted July 22, 2009).  
FDA, Civil Money Penalties and No-Tobacco-Sale Orders For Tobacco Retailers (Revised): Guidance for Industry, August 2023.  
Accessed at: https://www.fda.gov/media/80888/download on August 31, 2023. 
FDA, Civil Money Penalties and No-Tobacco-Sale Orders For Tobacco Retailers, Responses to Frequently Asked Questions 
(Revised): Guidance for Industry, December 2016.  Accessed at https://www.fda.gov/media/92558/download on August 31, 
2023. 
 
FDA Could Take Stronger Enforcement Action Against Tobacco Retailers 
With Histories of Sales to Youth and Other Violations - OEI-01-20-00240  Endnotes | 42     
 
35 We were unable to abstract data for one inspection in stratum C, due to an error in TIMS data. 
36 University of Wisconsin School of Medicine and Public Health Center for Health Disparities and Research.  About the 
Neighborhood Atlas.  Accessed at: https://www.neighborhoodatlas.medicine.wisc.edu/ on March 30, 2023. 
37 Maroko, Andrew R., et al.  Integrating Social Determinants of Health With Treatment and Prevention: A New Tool to Assess 
Local Area Deprivation, September 15, 2016.  Accessed at https://www.cdc.gov/pcd/issues/2016/16_0221.htm on March 30, 
2023. 
38 Esri.  What is geocoding?  Accessed at https://desktop.arcgis.com/en/arcmap/10.3/guide-books/geocoding/what-is-
geocoding.htm on March 30, 2023. 
39 University of Wisconsin School of Medicine and Public Health Center for Health Disparities and Research.  About the 
Neighborhood Atlas.  Accessed at: https://www.neighborhoodatlas.medicine.wisc.edu/ on March 30, 2023. 
FDA Could Take Stronger Enforcement Action Against Tobacco Retailers 
With Histories of Sales to Youth and Other Violations - OEI-01-20-00240  Endnotes | 43