Tobacco Product Regulation: Most FDA Spending Funded Public Education, Regulatory Science, and Compliance and Enforcement Activities
Released: 2014-06-20T00:00:00

Letter

Background

FDA’s Authority to Regulate Tobacco Products

The Tobacco Control Act provides FDA with the authority to regulate cigarettes, cigarette tobacco, roll-your-own tobacco, and smokeless tobacco products, as well as the authority to deem other tobacco products to be subject to FDA’s regulatory authority. Under the act, FDA has the authority to issue regulations controlling the manufacture, marketing, and distribution of tobacco products. The act also places limitations on FDA’s regulatory authority over tobacco products. For example, the Tobacco Control Act prohibits FDA from banning all tobacco products in certain categories, lowering nicotine yields to zero, or raising the minimum age to The Tobacco Control Act includes provisions purchase tobacco.requiring FDA to regulate tobacco products using a public health standard, which takes into account the risks and benefits of tobacco products on both users and non-users of tobacco products. This standard is unique to FDA’s regulation of tobacco products, as other products regulated by FDA, such as drugs and medical devices, use a “safe and effective” standard.

FDA executes its regulatory authority under the Tobacco Control Act through CTP. CTP’s Office of Health Communication and Education (OHCE), Office of Science (OS), and Office of Compliance and Enforcement (OCE) have primary responsibility for developing the public education, regulatory science, and compliance and enforcement infrastructure for the tobacco program and carrying out the associated activities. CTP has additional offices that support the activities of these offices (see table 1).

In addition to establishing CTP, the Tobacco Control Act required FDA to reissue regulations originally published in 1996 that, among other things, banned cigarette sales to minors. The act also banned all flavors except tobacco and menthol in cigarettes and directed FDA to issue regulations requiring the display of graphic warning labels depicting the negative health consequences of smoking on cigarette packages and advertisements.

The Tobacco Control Act also requires that manufacturers of new tobacco products submit information—for example, a statement of the product’s ingredients—to FDA and receive marketing authorization before introducing those new tobacco products into the U.S. market. The act established three pathways for FDA’s review of new tobacco product submissions: (1) the Substantial Equivalence (SE) pathway, which is for new tobacco products that have the same characteristics as a predicate tobacco product that is already legally marketed or has different characteristics that do not raise different questions of public health; (2) the Exemption from SE pathway, which is for new tobacco products with minor modification of another product marketed by the same manufacturer; and (3) the Premarket Tobacco Product Application (PMTA) pathway, which is for new tobacco products that do not meet the criteria for the other two pathways. The act also required manufacturers to submit applications to FDA to market modified risk tobacco products (MRTP), which are products that are sold or distributed for use to reduce harm or the risk of tobacco-related disease associated with commercially marketed tobacco products. CTP is responsible for reviewing new tobacco product submissions and MRTP submissions and determining whether manufacturers may introduce the products in those submissions to the U.S. market. §§ 6, 101(b), 123 Stat. at 1783, 1791 (codified at 21 U.S.C. §§ 387d(a)(3), (e)). Manufacturers are required to report HPHC data at least 90 days prior to introducing a tobacco product that was not on the market on June 22, 2009. and recommendations about the impact of menthol cigarette use on the public health not later than one year after its establishment.

Tobacco User Fees

The Tobacco Control Act requires FDA to assess user fees on manufacturers and importers of tobacco products that are subject to FDA regulation based on their market share and specifies that tobacco user fees can only be applied toward FDA activities related to the regulation of tobacco products.collected is specified in the act for each fiscal year, beginning in fiscal year 2009 (see table 2), and the total amount does not vary based on the number of tobacco products under regulation.

FDA Spent Nearly 80 Percent of User Fees Collected, Mostly for Public Education, Regulatory Science, and Compliance and Enforcement

FDA spent nearly 80 percent of the tobacco user fees collected as of March 31, 2014, with more than half of its spending occurring in fiscal year 2013. The majority of FDA’s spending was for activities related to public education, regulatory science, and compliance and enforcement, with spending for public education and regulatory science activities exceeding spending for compliance and enforcement activities.

FDA Spent 79 Percent of User Fees Collected, Mostly in Fiscal Year 2013

As of March 31, 2014, FDA spent about $1.48 billion (79 percent) of the $1.88 billion in tobacco user fees collected (see fig. 1).FDA’s spending—$868 million—occurred in fiscal year 2013.

Most Spending Was for Public Education, Regulatory Science, and Compliance and Enforcement Activities

About 79 percent ($1.17 billion) of user fees spent as of March 31, 2014, on tobacco-related activities was for activities related to public education, regulatory science—which includes product research, product review, and regulation and guidance support—and compliance and enforcement. These activities were carried out by OHCE, OS, and OCE, respectively. Most of the spending was for public education and regulatory science activities, with nearly all of the public education spending occurring in fiscal year 2013. (See fig. 3.)

Spending for FDA’s public education activities has focused on (1) developing and launching public education campaigns to educate consumers, particularly youth, on the dangers of tobacco use and (2) communicating information on CTP activities to the public. As of March 31, 2014, 89 percent ($450 million) of the $508 million FDA spent on tobacco public education activities went to develop and launch public education campaigns (see fig. 4). Almost all of this spending ($430 million) occurred in fiscal year 2013, when FDA awarded task orders for its public education campaigns.

In February 2014, FDA launched its first youth tobacco prevention public education campaign, targeting at-risk youth. FDA plans to launch four additional campaigns targeted at rural; multicultural; lesbian, gay, bisexual, and transgender; and American Indian/Alaska Native youth in fiscal years 2015 and 2016. According to CTP officials, CTP has been working with contractors to develop research plans and create campaign materials for its media campaigns. The task orders for the 5 youth public education campaigns—which were awarded in fiscal year 2013 after the agency spent about 2 years developing an acquisitions infrastructure— account for nearly $314 million of the $450 million spent on public education campaign efforts since fiscal year 2010. According to FDA, the agency focused its public education campaigns on youth prevention because tobacco use is almost always initiated and established during adolescence. The goal of the public education campaigns is to reduce the number of youth who experiment with tobacco use to ultimately reduce the number of future tobacco users.

FDA’s first public education campaign, “The Real Cost” campaign, targets youth from ages 12 to 17 who are open to smoking or already experimenting with cigarettes. The campaign launched nationally in a variety of media outlets, including online, and is expected to run for at least 1 year. Campaign messages are intended to make the target audience aware of the risks of smoking by highlighting consequences that, according to FDA, concern youth, such as loss of control due to addiction and health effects like tooth loss and skin damage.Additionally, the campaign will include messages that specifically address the health consequences of menthol cigarettes.

FDA also awarded an evaluation contract in an effort to determine the impact of its youth public education campaigns. Baseline evaluation began in fiscal year 2014, prior to the launch of the first campaign. According to CTP officials, additional evaluations will be conducted at various intervals appropriate for each of the campaigns and evaluation results will be used to assess changes in key tobacco-related knowledge, attitudes, beliefs, and behaviors over several years to determine if exposure to the campaigns is associated with a decrease in cigarette smoking among youth.

In addition to its youth-targeted public education campaigns, FDA has funded two additional public education campaigns, one targeting consumers at the point-of-sale and one for retailer education. Point-of- sale campaign materials target adults who are social smokers and adult smokers who are ready to quit. FDA’s “Break the Chain of Tobacco Addiction” campaign was developed by CTP in fiscal year 2010 and provides retailer education designed to encourage voluntary compliance with all FDA regulations. Task orders for these campaigns totaled an additional $84 million of the $450 million spent on public education media campaigns since fiscal year 2010. Like FDA’s youth-targeted campaigns, FDA officials stated that the agency plans to evaluate these campaigns to determine their impact.

According to FDA officials, the agency’s other public education activities involve communicating CTP’s mission and regulatory activities to stakeholders—including tobacco manufacturers, retailers, public health stakeholders, and lawmakers, among others—and the public. FDA issues press releases and conducts media outreach, such as outreach to publicize tobacco regulations and the results of CTP’s compliance and enforcement work; develops and maintains CTP’s website; develops written materials such as frequently-asked questions and materials for CTP events; and assists the individual offices with written communications. In addition, FDA holds webinars to improve education and dissemination of information to stakeholders and listening sessions to provide stakeholders with the opportunity to make comments and raise concerns.

Regulatory Science Activities

FDA spending related to regulatory science has focused on three activities: (1) building a scientific research base, including research on tobacco products and use patterns, (2) developing and implementing a tobacco product review process, and (3) developing the scientific basis to support regulations and guidance. As of March 31, 2014, about 94 percent of the $478 million FDA had spent on regulatory science activities went to building a scientific research base on tobacco products and tobacco use, including spending for a longitudinal study and centers for tobacco regulatory science (see fig. 5). The proportion of spending on regulatory science activities that has been dedicated to building the scientific research base has remained fairly consistent since fiscal year 2010.

Building a Scientific Research Base Since fiscal year 2010, FDA has funded scientific research to better understand tobacco products, their impact on the health of users and non-users, use patterns and perceptions of tobacco products, and the effectiveness of tobacco marketing, advertising, and graphic warning These research projects, funded by FDA tobacco user fees, labels.have been conducted in collaboration with other federal entities, such as the National Institutes of Health (NIH) and Centers for Disease Control and Prevention (CDC), as well as with non-federal entities (see table 3).

FDA initiated some key long-term projects to help build its scientific research base. For example, FDA funded a 5-year contract in fiscal year 2011 in collaboration with NIH to conduct the Population Assessment of Tobacco and Health study through an NIH contract. The study is a national longitudinal study of tobacco use and how it affects the population’s health. The study’s objectives include examining reasons why some people use tobacco and others do not, and how and why people start using different tobacco products. According to FDA, study findings will provide a scientific framework to inform decisions about tobacco products and future changes in tobacco products. FDA spent $113 million on the study in fiscal year 2011 through March 31, 2014. FDA, in collaboration with NIH, also awarded $53 million in grants in fiscal year 2013 to fund 14 Tobacco Centers of Regulatory Science to generate public health research to inform tobacco regulation and to train tobacco regulatory scientists. The Tobacco Centers of Regulatory Science funded research including a project focused on understanding the cardiovascular effects of tobacco use to determine the specific elements of tobacco products contributing to cardiovascular injury, which could ultimately help inform regulatory standards for tobacco products. FDA expects to spend more than $273 million in funding for these research projects through fiscal year 2018.

In addition to funding research projects to better understand tobacco products already under FDA’s regulatory authority, in fiscal year 2013, FDA also funded scientific research related to tobacco products not yet under the agency’s authority, including research projects on e-cigarettes and cigars. For example, in order to inform CTP’s regulatory efforts, the agency funded research examining consumer perceptions, attitudes, and beliefs about new and emerging products, such as e-cigarettes and little cigars. According to CTP officials, this research will help inform decisions on how to regulate these other tobacco products. (See app. II for additional examples of research projects supported by FDA spending.)

Developing and Implementing a Tobacco Product Review Process FDA’s regulatory science activities also included establishing and implementing processes for reviewing submissions made by manufacturers to market new tobacco products and submissions for marketing MRTPs, and for receiving and assessing adverse event and product problem reports. FDA receives submissions for CTP to review and determine whether manufacturers may introduce new tobacco products to the U.S. market or market MRTPs. CTP developed and implemented the review processes for such submissions, which FDA began receiving in June 2010 and were mostly submitted through the SE pathway.

FDA made its first decisions on SE submissions in late June 2013—about 3 years after FDA’s receipt of the first SE submission. As of March 31, 2014, FDA had made a final decision on a total of 30 regular SE submissions, finding 17 submissions to be substantially equivalent and 13 submissions to be not substantially equivalent to a predicate tobacco product. FDA had made a final decision on a total of four provisional SE submissions, finding all of them to be not substantially equivalent to a predicate and requiring the products to be removed from the market. (See table 4). CTP officials reported that CTP prioritized regular SE submissions over provisional SE submissions because tobacco products in provisional SE submissions can remain on the market legally unless and until FDA issues an order of not substantially equivalent whereas products in regular SE submissions cannot enter the market until FDA issues an order that it is substantially equivalent to a predicate.

In addition to conducting reviews of submissions, FDA designed and implemented a system in fiscal year 2013 to receive and assess tobacco product adverse event and product problem reports to inform the agency’s regulation of tobacco products. The reports are submitted by tobacco product consumers and healthcare professionals using the FDA/NIH Safety Reporting Portal. CTP’s OS has been systematically assessing the adverse events, product quality problems, and product use errors included in the reports to inform FDA regulation of tobacco product development, manufacture, and marketing. According to CTP officials, the ongoing assessment of the reports is critical to identifying and understanding risks, especially as the tobacco industry develops novel products in response to market and regulatory influences. For example, the assessment of adverse events reported by a large and diverse population of consumers may reveal problems that were not anticipated while the product was being used in research studies.

FDA’s regulatory science activities also include developing the scientific basis to support regulations and guidance for the tobacco industry, including proposed regulations to deem additional tobacco products to be subject to FDA’s authority and guidance on reporting and submission review. According to FDA officials, from fiscal years 2010 through 2013, much of FDA’s initial work to develop tobacco regulations and guidance focused on activities related to requirements in the Tobacco Control Act, including activities to develop regulations on menthol flavoring in cigarettes and guidance for industry’s reporting of HPHCs in regulated tobacco products.

FDA has evaluated the science of menthol in cigarettes to determine what action, if any, the agency will take to regulate menthol. In March 2011, FDA received the Tobacco Products Scientific Advisory Committee report on menthol in cigarettes, which found that the removal of menthol cigarettes from the marketplace would benefit public health in the United States. Following the report, FDA conducted an additional, independent evaluation on the effects of menthol in cigarettes, which resulted in similar conclusions. On July 24, 2013, FDA issued an Advanced Notice of Proposed Rule Making to obtain comments or other information that may inform the regulatory actions FDA might take with respect to menthol in cigarettes.to the notice.

According to CTP officials, FDA is reviewing the responses FDA also worked on developing guidance for HPHCs. In August 2011, FDA issued a public notice listing 96 HPHCs in tobacco products and tobacco smoke that research indicated were harmful or potentially harmful to health. Based on public comment and FDA’s review of the scientific literature, FDA published a list of 93 HPHCs in April 2012.Also, in March 2012, FDA issued draft guidance for industry on reporting on these HPHCs. FDA also conducted research required by the Tobacco Control Act to ensure it publishes a list of HPHCs that will not be misleading to the public. Based on this research, the Tobacco Products Scientific Advisory Committee and FDA’s Risk Communication Advisory Committee made recommendations on further research and strategies FDA might use to effectively communicate the HPHC information to the public. Although FDA planned to publish a proposed regulation to implement the Tobacco Control Act requirements related to the testing and reporting of HPHCs by December 2013, it has not done so.

FDA also issued guidance for industry on other topics, including the recommended components of product review submissions and the product review process. For example, in January 2011—about 2 months prior to the statutory deadline for submitting provisional SE submissions— FDA issued a guidance document for tobacco manufacturers to use for making SE submissions, and in September 2011 FDA issued a draft guidance document with responses to frequently asked questions for SE submissions. According to CTP officials, in fiscal year 2014, FDA plans to issue final guidance on frequently asked questions for SE submissions and draft guidance for investigational tobacco products.

Compliance and Enforcement Activities

FDA’s tobacco compliance and enforcement activities have been focused on (1) tobacco retailer inspections; (2) inspections and enforcement of domestic manufacturers and imported tobacco products, and determinations of eligible predicate products in SE submissions; (3) surveillance and review of tobacco promotions, advertising, and labeling; and (4) outreach and small business assistance. As of March 31, 2014, about 68 percent of the $181 million FDA spent on compliance and enforcement activities was for tobacco retailer inspection activities (see fig. 6), which has accounted for the majority of compliance and enforcement spending each year since fiscal year 2010.

To help ensure that U.S. retailers are in compliance with tobacco laws and regulations, FDA began awarding contracts to states and territories in fiscal year 2010 to implement its tobacco retailer inspection program.of March 31, 2014, FDA had awarded over $91 million in contracts for retail inspections.

Tobacco retailer inspections, according to FDA officials, include undercover purchases to determine if retailers are selling to minors or are engaging in other practices prohibited under the Tobacco Control Act and its implementing regulations, such as the restriction on sales through vending machines and the ban on cigarettes with certain characterizing flavors, such as grape, coconut, and chocolate. If violations are identified, FDA may issue a warning letter or take enforcement action, such as assessing civil monetary penalties or imposing no-tobacco-sale orders. Warning letters are the agency’s principal means of notifying retailers of a first time violation and are used to encourage prompt voluntary compliance. If subsequent violations are found during re-inspection, FDA may initiate administrative action that can result in the imposition of a fine, or civil monetary penalty, based on the number of violations and period of time within which they occurred. For example, at one retailer that had already received a warning letter for a violation, inspectors found two additional violations less than a year later—for selling tobacco products to minors and failing to verify the age of a person purchasing tobacco products. As a result, FDA assessed a civil monetary penalty against this retailer for three violations within a 24-month period.

FDA may impose a no-tobacco-sale order prohibiting the sale of tobacco products at retail outlets that have committed repeated violations of the law. § 103(c), 123 Stat. at 1835 (codified at 21 U.S.C. § 333(f)(8)). According to FDA officials, other enforcement actions can include seizures, injunctions, and criminal prosecution.

FDA plans to collaborate with tribal communities to contract with the agency to enforce regulations on tribal lands. According to FDA, the agency has contracted with an American Indian-owned company to further its efforts to collaborate with American Indian tribes and gain insight on the best approaches to disseminate information about the Tobacco Control Act to Indian tribes and to tobacco retailers located on tribal lands. conducted, resulting in issuance of more than 14,000 warning letters and 1,347 civil monetary penalties. While FDA plans to contract with additional states and territories in fiscal year 2014, according to FDA officials, the agency is in the process of contracting with third parties, including private entities, to facilitate inspections in those states and territories not currently under contract. According to FDA, it awarded one new contract to a private contractor in April 2014 to facilitate retailer inspections in Florida and two additional third-party contracts in May 2014 to facilitate retailer inspections in North Dakota and South Dakota. CTP officials said that in addition to third-parties, CTP has its own inspectors on staff to inspect in states not currently under contract with FDA. As of March 31, 2014, the office has completed more than half of the planned 100,000 retailer inspections for fiscal year 2014.

In addition to awarding contracts, FDA developed training programs for state and territorial inspection officials to ensure inspections are performed in accordance with FDA requirements. Specifically, according to CTP officials, CTP’s OCE is responsible for providing technical support through periodic conference calls with inspection program coordinators, conducting annual in-person training regarding changes to the program, and requiring annual refresher training for inspectors. As of March 31, 2014, OCE reported training inspectors in all states and territories awarded contracts for retailer inspections, with more than 1,000 program coordinators and inspectors trained in fiscal year 2013. The office also developed a system for collecting and tracking information during inspections called the Tobacco Inspection Management System. According to OCE officials, inspectors use their mobile devices to upload data into the system, which is subsequently reviewed by OCE for potential violations. When appropriate, OCE issues enforcement actions.

Manufacturer and Import Inspections and Enforcement FDA conducts inspections of registered domestic manufacturing facilities, oversees imported tobacco, and determines the status of the predicate product cited in SE submissions. Beginning in fiscal year 2012, FDA has conducted biennial inspections of tobacco manufacturing facilities—FDA’s ORA conducts these inspections with the support of OCE as subject matter experts. According to FDA, the agency inspects manufacturing facilities for compliance with Tobacco Control Act requirements, including product and ingredient listing; packaging, labeling, and advertising requirements; and marketing authorization for new or modified risk tobacco products. As of March 31, 2014, FDA conducted 116 inspections at 100 registered manufacturing facilities. According to FDA officials, no warning letters have been issued or other enforcement actions taken as a result of manufacturer inspections.

FDA also implemented an import compliance program for tobacco products beginning in fiscal year 2012. According to FDA officials, ORA and U.S. Customs and Border Protection review imported tobacco products, conduct field exams, and maintain import bulletins and alerts that identify tobacco products in violation of the Tobacco Control Act. Any tobacco product found to violate regulatory requirements may be refused entry into the United States. For example, imported tobacco products that are labeled or advertised as “light,” “mild,” or “low,” and cigarettes that are labeled as having certain characterizing flavors other than tobacco and menthol, such as strawberry, grape, and vanilla, may be detained. As of March 31, 2014, FDA published four import alerts, including one for flavored cigarettes; one for regulated tobacco products using “light,” “mild,” or “low” in advertising or labeling; one for smokeless tobacco products without the required warning label; and one for tobacco products found to be not substantially equivalent—and refused the entry of two tobacco product imports.

OCE also assists OS in the tobacco product review process by determining if the tobacco product to which the new tobacco product is being compared in an SE submission meets the statutory requirements for a predicate tobacco product. In fiscal years 2011 through 2013, OCE completed over 1,350 predicate eligibility determinations. In addition, OCE is responsible for ensuring that the tobacco products in provisional SE submissions found to be not substantially equivalent are no longer sold or distributed in the United States as of the date on the FDA-issued not substantially equivalent order.

Promotion, Advertising, and Labeling Surveillance FDA also conducts surveillance activities for the promotion, advertising, and labeling of tobacco products. CTP’s OCE conducts routine monitoring and surveillance of websites and social media, publications, and tobacco industry promotion and sponsorship of events that sell, distribute, promote, or advertise regulated tobacco products; and reviews and evaluates regulatory submissions of tobacco product labeling, advertising, and consumer information materials. Additionally, CTP’s OCE is responsible for ensuring that warning statements on smokeless tobacco product labeling and advertising are in compliance with requirements in the Tobacco Control Act, such as the packaging and advertising bearing the warning statement. From fiscal year 2010 through March 31, 2014, OCE officials reported monitoring over 3,000 websites and over 68,000 issues of publications, resulting in 155 warning letters to manufacturers, distributors, and online retailers for violations. For example, warning letters were issued to (1) a website for selling clove cigarettes, a regulated tobacco product containing a characterizing flavor which is prohibited under the Tobacco Control Act; (2) a tobacco manufacturer for promoting the sale of cigarette tobacco (a regulated tobacco product) labeled as pipe tobacco (an unregulated tobacco product) on its website; and (3) a manufacturer for offering its tobacco products online as “light” and “mild” without an FDA order to market a modified risk tobacco product.

Outreach and Small Business Assistance In addition to the three key compliance and enforcement activities mentioned above, CTP also conducts outreach and small business assistance activities to help ensure compliance with the Tobacco Control Act and regulations. OCE and its Office of Small Business Assistance are responsible for outreach and small business assistance. According to FDA officials, these activities include responding to inquiries from small manufacturers and retailers and providing information on relevant tobacco guidance and regulations, primarily through webinars that addressed certain topics, such as common issues identified during FDA’s scientific evaluation of substantial equivalence reports and regulations regarding distribution of free samples of smokeless tobacco.

FDA Encountered Challenges As It Established CTP, Including Setting Review Time Frames

FDA faced challenges related to starting up a new center, which affected CTP’s efforts to educate the public, build the regulatory science base, and enforce the new law and regulations. While FDA officials indicated that the agency has taken steps to address some of the challenges it faced— such as those related to contracting and staffing—challenges related to building the scientific basis for regulating a previously unregulated product and setting review time frames remain. Despite these challenges, neither FDA officials nor public health and tobacco industry stakeholders identified any limitations in FDA’s authority to carry out its responsibilities under the Tobacco Control Act.

According to CTP officials, one challenge FDA encountered, but which they believe the agency has addressed, was a lack of an acquisitions infrastructure that would allow it to quickly award contracts for public education activities. According to these officials, FDA had to develop a contracting mechanism of a sufficient size and scope to allow FDA to solicit and award large public education campaign contracts, which had never been done by the agency before. This process also included determining the type of contracts to award. The officials said that it took about 2 years before two pools of contractors were established, from which FDA could draw for future public education campaigns, delaying public education campaigns that were originally slated to launch in fiscal year 2012. CTP officials reported it was important to build an FDA contracting infrastructure for these campaigns, because public education activities are FDA’s continuing responsibility. CTP officials stated that to decrease the toll of tobacco use on public health, public education activities must be managed by FDA, with a sustained fiscal and personnel commitment. While doing so delayed efforts to launch its public education campaigns, CTP officials told us they do not expect similar delays in the future.

Additionally, according to CTP officials, CTP’s OCE faced initial challenges in getting up and running—in particular in setting up the retailer inspection program, including the contracts for the program. According to CTP officials, in a very short period of time and with limited staff in place, CTP’s OCE had to draft an initial request for proposals to award contracts to states and help them navigate through the contracting process, commission state and territorial officials to conduct retail compliance inspections, develop and implement training programs for inspectors, coordinators, and retailers, and develop a new information technology system to collect and report retailer compliance inspection data. However, these officials reported that since the early stages of the tobacco program, the center has built a strong FDA tobacco compliance and enforcement infrastructure, and noted that if additional tobacco products are deemed to fall under the authority of CTP, they should be able to expand and cover them relatively easily.

Concluding Observations

In the 5 years since the Tobacco Control Act was enacted, FDA has set up a new center and undertaken numerous activities to regulate a previously unregulated product using a public health standard, and the agency remains in the process of conducting research and setting up its regulatory structure. FDA has taken some steps to address our previous recommendation to institute performance measures for its review of new tobacco products by establishing time frames for regular SE and Exemption from SE submissions, as well as for MRTP submissions, and by planning to monitor its progress towards meeting those time frames. However, we remain concerned that the agency has not yet established any performance measures for the more than 3,000 provisional SE submissions, representing tobacco products that can stay on the market unless and until FDA finds them not substantially equivalent. It is important that the agency move forward on reviewing these submissions—particularly, those that FDA has identified as having the greatest potential to have a public health impact—to ensure that only products that meet the act’s requirements are permitted to be on the market. The agency has indicated that it intends to identify and implement performance measures for these provisional SE submissions as it gains more experience reviewing them. We continue to believe that until FDA establishes performance measures including time frames for completing reviews of the large backlog of provisional SE submissions, the agency’s ability to operate efficiently, achieve effective results, and plan appropriately will be hampered. This will be particularly pressing as FDA moves forward with plans to deem additional types of tobacco products to be subject to its regulatory authority, which has the potential to generate a substantial number of new submissions requiring review. Similarly, it will be important for the agency to establish time frames for submissions for any newly deemed products, as FDA has indicated that the just-released time frames will not apply to submissions for newly-deemed products.

Agency Comments

We provided a draft of this report to HHS for comment, and its comments are reproduced in appendix IV. HHS agreed with the need for performance measures related to its new tobacco product review process. In its comments, the department noted several reasons why it has been difficult for FDA to set performance measures for provisional SE submissions. According to HHS, FDA received a large number of provisional SE submissions in a short period of time, which required the agency to prioritize the review process based on the complexity of the public health concerns likely to be raised by the products under review. As a result, HHS noted that the initial reviews are more complicated, with unpredictable time frames. Additionally, because provisional SE submissions were received early in CTP’s SE review process, HHS commented that many submissions have deficiencies that require corrections from manufacturers and further slows the review and approval process. However, HHS noted that the knowledge gained during the review of provisional SE submissions will inform the process in the future and allow FDA to eventually set performance goals for these submissions.

While we acknowledge there are complexities to the provisional SE review process, we believe that it is critical that FDA set performance measures for managing the review process of provisional SE submissions, including establishing time frames for review and monitoring progress toward meeting those time frames. Since these products can remain on the market unless and until FDA determines they are not substantially equivalent, it is important for FDA to effectively manage the review of these products to fulfill its responsibility to protect the public health.

HHS also provided technical comments that were incorporated, as appropriate.

We are sending copies of this report to the Secretary of Health and Human Services, the Commissioner of FDA, and other interested parties. In addition, the report will be available at no charge on the GAO website at http://www.gao.gov.

If you or your staff have any questions about this report, please contact me at (202) 512-7114 or at crossem@gao.gov. Contact points for our Office of Congressional Relations and Office of Public Affairs can be found on the last page of this report. Other major contributors to this report are listed in appendix V.

Appendix I: Summary of Center for Tobacco Products Offices and Key Activities

This appendix provides a summary of the offices that comprise the Food and Drug Administration’s (FDA) Center for Tobacco Products (CTP), their key activities, spending on each key activity, and examples of activities through March 31, 2014 (see table 6).

Appendix II: Examples of Tobacco-Related Research Projects Supported by Food and Drug Administration Spending

This appendix provides examples of research projects supported by the Food and Drug Administration (FDA) spending of tobacco user fees in fiscal years 2010 through March 31, 2014. Although FDA spending supported these research projects, in addition to FDA, other federal agencies, such as the National Institutes of Health (NIH) or the Centers for Disease Control and Prevention (CDC), as well as non-federal entities, such as research institutes, conducted or had oversight over these research projects (see table 7).

Appendix III: Positions at the Center for Tobacco Products (CTP) at the End of Each Fiscal Year as of March 31, 2014

Appendix III: Positions at the Center for Tobacco Products (CTP) at the End of Each Fiscal Year as of March 31, 2014 Office Office of Health Communication and Education Office of Compliance and Enforcement Other CTP offices include the Office of the Center Director, the Office of Management, the Office of Policy, and the Office of Regulations. According to CTP officials, as a result of an organizational review, entities within the Office of Policy were reassigned as of April 1, 2014, to the Office of the Center Director, the Office of Management, and the Office of Science.

Appendix IV: Comments from the Department of Health and Human Services

Appendix V: GAO Contact and Staff Acknowledgments

GAO Contact

Staff Acknowledgments

In addition to the contact named above, Kim Yamane, Assistant Director; Hernán Bozzolo; Sandra George; Cathleen Hamann; Erin Henderson; and Mariel Lifshitz made key contributions to this report.