FDA Tobacco Regulation: The Family Smoking Prevention and Tobacco Control Act of 2009
Released: 2009-05-28T00:00:00

Introduction

On April 2, 2009, the House passed the Family Smoking Prevention and Tobacco Control Act ( H.R. 1256 ; H.Rept. 111-58 , part 1 and 2) by a vote of 298-112. H.R. 1256 , introduced by Representative Waxman (D-CA), would give the Food and Drug Administration (FDA) broad new statutory authority under the Federal Food, Drug, and Cosmetic Act (FFDCA) to regulate the manufacture, distribution, advertising, promotion, sale, and use of cigarettes and smokeless tobacco (e.g., snuff and chewing tobacco). Similar legislation passed the House in July 2008, but was never taken up by the Senate. On May 5, 2009, Senator Reid (D-NV) introduced the Family Smoking Prevention and Tobacco Control Act in the Senate, on behalf of its primary sponsor, Senator Kennedy (D-MA). S. 982 , which is almost identical to the House-passed measure, was approved with amendments by the Committee on Health, Education, Labor and Pensions on May 20 and now awaits Senate floor action. The Administration has signaled its strong support for the legislation.

The Family Smoking Prevention and Tobacco Control Act would create a new FFDCA Chapter IX solely for the purpose of regulating tobacco products. Among its many provisions, the legislation would:

require all tobacco product manufacturers to register with the FDA and provide the agency with a detailed product list; mandate biennial inspection of all registered establishments; replace the existing health warning labels with more explicit health warnings in bold type occupying at least 30% of the front and back of the product package; require the manufacturer of a new tobacco product to submit a marketing application for FDA approval before entering the market, unless the new product is determined to be substantially equivalent to a tobacco product already on the market or it represents a minor modification of an existing product; require manufacturers seeking FDA approval, in order to market a product with a reduced-risk or reduced-exposure claim (including the use of descriptors such as "light," "mild," and "low"), to provide scientific evidence substantiating that claim and agree to conduct postmarket surveillance; give FDA the authority to regulate the sale, distribution, advertising and promotion of tobacco products in order to protect public health; require FDA to regulate Internet tobacco sales; authorize FDA to establish tobacco product standards requiring changes to the design and characteristics of tobacco products in order to protect public health (e.g., reducing nicotine yields and eliminating other harmful constituents); require FDA to establish good manufacturing practices for tobacco product manufacturers; require FDA to develop new regulations for the testing, reporting, and public disclosure of tobacco product ingredients and smoke constituents; preserve the authority of states and localities to take additional measures to restrict the distribution, advertising, promotion, sale, access to, and use of tobacco products; instruct FDA to issue new recordkeeping requirements to help counter the illicit trade of tobacco products; and assess user fees on manufacturers to pay for the cost of FDA tobacco regulation.

In addition, H.R. 1256 / S. 982 would require FDA to reissue its 1996 tobacco rule, which the U.S. Supreme Court struck down. The FDA rule consisted of three sets of provisions aimed at reducing underage tobacco use: restrictions on the sale and distribution of cigarettes and smokeless tobacco to reduce youth access to those products; restrictions on tobacco product marketing and advertising; and a new labeling requirement for packaging and advertising (see text box). Several provisions in the FDA rule were incorporated in the 1998 Master Settlement Agreement (MSA) between the states and the major cigarette companies. A summary of the MSA's public health provisions is provided in the Appendix .

In asserting jurisdiction over tobacco products, FDA argued that the FFDCA gave it the authority to regulate tobacco products based on its determination that cigarettes and smokeless tobacco are delivery devices for nicotine, an addictive drug. Under the FFDCA, drug and device manufacturers must demonstrate that their products are both safe and effective in order to gain FDA marketing approval. The safety and effectiveness standard poses a difficult challenge for regulating tobacco products, which are manifestly unsafe when used as intended. In 2000, the U.S. Supreme Court invalidated the FDA tobacco rule, finding that the agency's action was inconsistent with the congressional intent expressed in the FFDCA's overall regulatory scheme and in other tobacco-related legislation. For example, the Court concluded that if the FDA asserted jurisdiction based on the FFDCA's existing drug and device authorities, it would have no choice but to prohibit the marketing of such harmful products. A ban on tobacco products, argued the Court, would plainly contradict congressional policy. The Court's decision made it clear that Congress would have to enact legislation giving FDA new statutory authority over tobacco products in order for the agency to assert jurisdiction.

Lawmakers first drafted such language in the 105 th Congress (1997-1998) as part of an unsuccessful attempt to legislate the proposed national tobacco settlement. The language drew extensively on the FFDCA's existing drug and device provisions, but with modifications. By attempting to establish a new legal authority within the FFDCA for regulating tobacco products, the bill's sponsors sought to address the unique challenges tobacco products present and avoid the safety and effectiveness standard that applies to the regulation of drugs and devices. Under the new language, FDA would have to demonstrate that any proposed tobacco regulation was appropriate for the protection of public health. Such a determination would involve a consideration of the risks and benefits to the population as a whole, including both users and nonusers of tobacco products.

Following the Supreme Court's decision, and building on the language developed in the 105 th Congress, a bipartisan, bicameral group of lawmakers first introduced the Family Smoking Prevention and Tobacco Control Act in the 108 th Congress ( H.R. 4433 , S. 2461 ). The legislation was the product of months of negotiations in which lawmakers sought to balance the competing interests of public health groups and the tobacco industry. Both sides supported giving FDA the authority to regulate cigarettes and smokeless tobacco products, but they disagreed on the central question of how much regulatory control the agency should be given.

Public health advocates want FDA to have broad authority to take whatever actions the agency considers necessary to protect public health. They argue that giving FDA limited authority would invite tobacco companies to mount a legal challenge to every proposed regulatory action and would shield tobacco companies from liability. A weak FDA tobacco bill would, in their view, be worse than no bill at all. The tobacco companies, on the other hand, want to see certain restrictions placed on FDA's authority. They believe that having the federal government regulate and approve their products will help reduce future uncertainty and restore predictability for the industry by creating a uniform set of federal standards for the manufacture and marketing of tobacco products. But they oppose giving FDA unfettered authority to modify their products to the point that they are no longer acceptable to adult smokers, for example, by eliminating nicotine.

The current Family Smoking Prevention and Tobacco Control Act ( H.R. 1256 , S. 982 ) represents a compromise between those two competing positions. Leading public health groups and Philip Morris, the nation's largest cigarette manufacturer with about half of the U.S. market, strongly support the bill's regulatory framework. The other major cigarette companies, however, have broken ranks with Philip Morris and are opposed to the legislation. While they continue in principle to support FDA regulation of their products, they fear that the sweeping new regulatory authority outlined in the legislation, including the likelihood of tight restrictions on marketing, will help further consolidate Philip Morris's market dominance.

Comprehensive FDA tobacco legislation received an important endorsement from the Institute of Medicine (IOM). In a May 2007 report on reducing tobacco use in the United States, the IOM concluded that while strengthening existing tobacco control measures (e.g., state anti-smoking programs, excise taxes, indoor smoking restrictions) would result in some additional decline in smoking prevalence, more substantial and enduring reductions in tobacco use would only come from stronger federal regulation. Several of the IOM's recommendations would be implemented by the Family Smoking Prevention and Tobacco Control Act. They include conferring on FDA broad regulatory authority over the sale, distribution, and marketing of tobacco products; empowering FDA to regulate the design and characteristics of tobacco products; strengthening health warning labels on packages and advertising; and establishing science-based standards for evaluating reduced-harm products.

This report focuses on the Family Smoking Prevention and Tobacco Control Act. It includes a brief discussion of the contrasting views of FDA tobacco regulation held by the public health community and the industry, and provides some analysis of a number of key regulatory issues that the bill raises. Table 1 provides a detailed summary of all the provisions in H.R. 1256 (as passed by the House) and the key differences in S. 982 (as reported out of committee). A companion report, CRS Report R40196, FDA Tobacco Regulation: History of the 1996 Rule and Related Legislative Activity, 1998-2008 , by [author name scrubbed] and [author name scrubbed], provides some analysis of the 1996 FDA tobacco rule and the industry's successful legal challenge that overturned it. It also reviews the 1997 proposed national tobacco settlement and the implementing legislation that was introduced and debated in the 105 th Congress. That report concludes with a summary of legislative activity on the Family Smoking Prevention and Control Act in the 108 th , 109 th , and 110 th Congresses.

Contrasting Views on FDA Tobacco Regulation

Public Health Viewpoint

The Campaign for Tobacco-Free Kids is a leading anti-tobacco lobby. Working in partnership with the American Lung Association, the American Cancer Society, and the American Heart Association, the Campaign has championed comprehensive federal regulation of tobacco products. It argues that such regulation is necessary to reduce the enormous public health impact of tobacco use. According to the Centers for Disease Control and Prevention (CDC), more than 400,000 deaths each year are attributable to tobacco use, including one-third of all cancer deaths. Tobacco use accounts for almost $100 billion in annual health care costs. Despite the harm they cause, the Campaign notes that tobacco products are exempt not just from the FFDCA, but also from other federal consumer protections laws such as the Consumer Product Safety Act and the Controlled Substances Act. Thus, they are exempt from basic consumer protections like ingredient disclosure and product testing. The Campaign believes that the tobacco companies have taken advantage of this lack of regulation by marketing their products to youth, deceiving the public about the addictiveness of their products, and discouraging current tobacco users from quitting. The Campaign argues that strong and effective federal regulation is necessary to change industry practice.

The Campaign believes that FDA is the only agency with the necessary scientific and regulatory expertise to effectively regulate the manufacture, marketing, labeling, and sale of tobacco products. Along with numerous pubic health and other organizations, it strongly supports H.R. 1256 / S. 982 .

Industry Viewpoint

In 2001, Philip Morris issued a white paper in support of legislation giving FDA authority to regulate cigarettes. The company explained that its support for such legislation did not signal a reversal of its earlier opposition to the FDA's attempt to regulate cigarettes as restricted medical devices. Philip Morris opposed the 1996 FDA rule on the grounds that it would have left the agency with no choice but to ban the sale of cigarettes. The company argued that cigarettes simply cannot be found to be safe and effective as required under the FFDCA's existing drug and device provisions, a position with which the Supreme Court agreed in the FDA v. Brown & Williamson Tobacco Corp decision.

In the white paper, Philip Morris argued for giving FDA new legal authority to regulate cigarettes, not as drugs or medical devices but in a manner that reflects the "unique challenges that cigarettes present." Such regulation, said the company, "would provide greater consistency in tobacco policy, more predictability for the tobacco industry, and an effective way to address issues that are of concern.... These issues include youth smoking; ingredient and [smoke] constituent testing and disclosure; content of health warning on cigarette packages and in advertisements; use of brand descriptors such as 'light' and 'ultra light'; good manufacturing practices for cigarettes; and standards for defining, and for the responsible marketing of any reduced risk or reduced exposure cigarettes." Philip Morris set out in the white paper several principles for FDA tobacco legislation:

Tobacco regulation should reflect the unique health, social and economic issues associated with such products. Cigarettes should be regulated as cigarettes, not as a medical device. Regulation should not equal prohibition. Adults should be able to make their own decision whether to smoke. The government should continue to inform the public about the dangers of tobacco products and discourage their consumption, but should not restrict an adult's ability to make a decision about smoking. FDA should require that ingredients added by the manufacturers do not increase the inherent risks or addictiveness of smoking. The agency should have the authority to impose mandatory design changes to cigarettes to help reduce harm, provided the changes do not significantly diminish adult smokers' enjoyment of the product. Regulation should define reduced exposure and reduced risk products and establish guidelines for communications about such products in a way that is consistent and accurate and does not encourage smoking or discourage quitting. FDA should continue to address the broad issues of disclosure (e.g., the content of warning labels, information about ingredients and smoke constituents) so that adults smokers remain informed about health risks.

Philip Morris maintains that any new legislation must recognize cigarettes as legal products and respect the decision of adults to smoke. The company opposes any proposals that would give FDA the authority to ban cigarettes outright or to achieve a de facto prohibition by imposing ever-lower tar and nicotine yields that would render the product unpalatable to adult smokers. Such product changes, argues the company, would drive smokers towards illicit, unregulated products, where there are no standards for ingredients or tar and nicotine levels. FDA used a similar line of reasoning in developing the tobacco rule when it concluded that banning tobacco products under the FFDCA's drug and device provisions was not an option. The agency reasoned that a ban on cigarettes would encourage cigarette smuggling and the development of a black market supplying smokers with unregulated and potentially more dangerous products.

While Philip Morris actively supports the Family Smoking Prevention and Tobacco Control Act, the other major cigarette companies—R. J. Reynolds (which merged with Brown & Williamson in July 2004) and Lorillard—have criticized the legislation. Like Philip Morris, Lorillard supports additional regulation of tobacco manufacturers and tobacco products, but emphasizes that the FDA may "ultimately move to ban the conventional cigarette product" and that some legislation may "allow the FDA to alter what occurs naturally in the [tobacco] leaf." Lorillard believes that federal legislation "must advocate the research and oversee the development of potentially reduced exposure products" and "should codify the marketing and advertising restrictions already agreed to" in the Master Settlement Agreement. R.J. Reynolds would support additional "reasonable" regulation of tobacco products provided that tobacco remains legal and that any new regulation preserves the rights of adults to choose and purchase a wide range of "consumer-acceptable" cigarette brands. But they also stress the importance of maintaining a level playing field upon which manufacturers can compete for the business of adult smokers. This final point appears to lie at the heart of their opposition to the proposed legislation. R.J. Reynolds and Lorillard, which together account for approximately 38% of the U.S. cigarette market, may fear that sweeping new regulation of their products, including tight restrictions on marketing, will be to Philip Morris's advantage, allowing the nation's number one cigarette manufacturer to lock in its leading market share. They may worry that new restrictions on advertising would force consumers to rely on brand recognition and product placement, which would give industry-leader Philip Morris an advantage.

Tobacco Product Regulation under H.R. 1256/S. 982

The Family Smoking Prevention and Tobacco Control Act would result in a number of important changes in the labeling, advertising, and marketing of cigarettes and smokeless tobacco. As previously noted, H.R. 1256 / S. 982 would require the FDA to reissue its tobacco rule (minus the labeling provision). That would place new restrictions on youth access to tobacco products and on tobacco advertising, beyond those included in the MSA (see Appendix ). For example, all remaining brand-name sponsorship of sporting and other entertainment events would come to an end, and advertising in publications with a significant youth readership would be limited to black-on-white text. In addition, more explicit and conspicuous health warnings would appear on all tobacco product packaging and advertising. FDA would have the authority to revise the size and content of the warnings and add color graphics, if it determined that such changes would promote a greater public understanding of the health risks of tobacco use.

H.R. 1256 / S. 982 also would give FDA the authority to develop regulations restricting the sale, distribution, advertising, and promotion of tobacco products, to the full extent permitted by the First Amendment. Any proposed regulation would have to meet a new public health standard. That standard would require FDA to demonstrate that the proposal was appropriate for the protection of the public health, taking into account the risks and benefits to the population as a whole, including users and nonusers of tobacco products. In addition, FDA would have the authority to require changes in the design and characteristics of current and future tobacco products, such as the reduction or elimination of harmful ingredients and additives. Again, the agency would have to show that any such proposal was appropriate for protecting public health, based on a consideration of the risks and benefits to the population as a whole.

Under the legislation, manufacturers would have to obtain FDA approval in order to market a new product. The same public health standard would apply to such applications. Thus, FDA could deny a new product application if, among other things, the company failed to demonstrate that marketing the product would be appropriate for protecting public health. For conventional tobacco products, it is difficult to imagine how a manufacturer seeking approval of a new product would be able to meet that standard. However, H.R. 1256 / S. 982 provides two exceptions to the requirement that manufacturers obtain premarket approval for new products: (1) the manufacturer makes a claim and FDA, upon review, agrees that the new product is substantially equivalent (as defined in the bill) to a product already on the market; or (2) the new product is determined to be a minor modification of an existing product. For the first 21 months after the bill's enactment, manufacturers would be permitted to market a new product for which a substantial equivalence claim has been submitted, even if FDA has not reviewed and approved the claim. That final provision has attracted some criticism from public health officials. It was added to accommodate the industry's concern that it will take FDA some time to establish a tobacco regulatory program and have in place the necessary personnel and procedures to review industry submissions.

Finally, H.R. 1256 / S. 982 would prohibit the use of descriptors such as "light" and "mild." Any product for which the manufacturer, explicitly or implicitly, wished to make a reduced-risk claim would have to provide evidence substantiating that claim and meet additional requirements in order to obtain FDA approval to market that product. Table 1 provides a detailed summary of all the tobacco control provisions in H.R. 1256 (as passed by the House) and the key differences in S. 982 (as reported out of committee). Unlike S. 982 , the House measure includes several provisions dealing with retirement benefits of federal employees. Those provisions, which are not included in Table 1 , are intended to offset the projected loss in federal excise tax revenue due to enactment of H.R. 1256 and the resulting decline in tobacco consumption.

A more detailed discussion of some of the issues surrounding the regulation of reduced-risk tobacco products and FDA's authority to establish tobacco product standards follows. This section of the report concludes with a word about legislation's treatment of menthol cigarettes.

Reduced-Risk Tobacco Products

Both the tobacco industry and the public health community are eager to establish a regulatory scheme for "reduced-risk" tobacco products. In recent years Philip Morris and the other leading cigarette companies have test marketed a variety of products that are potentially less harmful to the individual user than traditional tobacco products. They include cigarettes made using genetically modified tobacco, and cigarette-like products that deliver nicotine using a combustion process that involves lower temperatures and a more controlled burn. The companies want FDA's approval to market these products without fear of the agency taking regulatory action against them. FDA has in the past asserted jurisdiction when cigarette manufacturers have expressly promoted their products as beneficial to health.

Public health advocates insist that FDA be given the authority not just to assess industry claims that a reduced-risk product is less harmful to the individual user under normal conditions of use, but also to weigh the risks and benefits to the wider population. They are concerned about recent efforts by the smokeless tobacco companies to market oral snuff and chewing tobacco as a safer alternative to smoking. The companies see the growing anti-smoking sentiment in the country and the spread of indoor (and outdoor) smoking restrictions as an opportunity to market their products to smokers who have trouble finding somewhere to smoke and who are considering alternative sources of nicotine. Epidemiological studies indicate that compared to smoking cigarettes, using smokeless tobacco products exposes an individual to less overall risk from a narrower range of diseases. But public health experts worry that promoting smokeless tobacco as a safer alternative to smoking will undermine efforts both to discourage youngsters from using smokeless tobacco and to encourage adult smokers to give up tobacco products altogether. As a consequence, there may be little if any overall improvement in the nation's health.

Public health officials often point to the introduction of low-tar cigarettes in the 1960s and 1970s to illustrate the challenges of regulating reduced-risk products. The companies were careful not to make any explicit health claims when they started to market "light" and "ultralight" cigarettes, but the implicit message was that these products provided a less harmful way of smoking and many smokers believed and continue to believe that they are safer than regular-strength cigarettes. Light cigarettes emit lower levels of tar and nicotine than regular-strength cigarettes, as measured by a standardized smoking machine test developed by the Federal Trade Commission and commonly referred to as the FTC method. However, the National Cancer Institute (NCI) concluded that there is "no convincing evidence" that the introduction of such low-yield products "resulted in an important decrease in the disease burden" among smokers. Many smokers who switched to low-yield cigarettes changed the way they smoked so as to maintain the desired intake of nicotine. They smoked more intensely by inhaling more deeply and more often and by covering the ventilation holes at the base of the filter. This compensatory smoking behavior exposed them to higher amounts of tobacco toxins.

H.R. 1256 / S. 982 would prohibit manufacturers from marketing "modified risk tobacco products" without FDA prior approval. The legislation defines modified risk tobacco products as any product:

whose labeling or advertising indicates, explicitly or implicitly, that the product is less risky than other tobacco products or reduces exposure to a substance in the product or its smoke; whose manufacturer has taken any action (other than through labeling or advertising) that "would be reasonably expected to result in consumers believing" that the product or its smoke reduces risk or exposure; or whose labeling or advertising uses descriptors such as "light," "mild," or "low" to characterize the level of a substance in the product.

In order to gain approval to market a modified risk tobacco product, a manufacturer would have two options. The first is to submit a reduced-risk claim. That would require the company to demonstrate to FDA that the product, "as it is actually used by consumers, will significantly reduce harm and the risk of tobacco-related disease to individual tobacco users; and benefit the health of the population as a whole.... " Alternatively, the manufacturer could assert that the product reduces exposure to a particular substance or substances. H.R. 1256 / S. 982 sets out detailed criteria for approving such a reduced-exposure claim in the absence of scientific evidence to make a reduced-risk claim . Those criteria, based on recommendations of the Institute of Medicine, include determining that the substance or substances are harmful; the exposure reduction is "substantial;" the reduced exposure is "reasonably likely" to lead to a "substantial and measurable and substantial reduction" in harm among individual users; and approval of such a product is "likely to benefit the health of the population as a whole." Applications for products that make exposure-reduction claims would be approved for five years at a time. All manufacturers of approved modified risk tobacco products, whether on the basis of a reduced-risk claim or a reduced-exposure claim, would be required to conduct postmarket surveillance and report their findings on an annual basis.

H.R. 1256 / S. 982 would require manufacturers, within one year, to stop using terms such as "light" and "low-tar" on their low-yield brands. Those brands would be permitted to remain on the market provided the manufacturers made any other changes necessary to ensure that the products did not fall under the definition of a modified risk tobacco product. For example, manufacturers have for years reported tar and nicotine yields (as measured by the FTC method) on cigarette advertising and on some very low-tar cigarette packs. Because this information implies that the product reduces risk or exposure, it too would have to be removed. Under a separate provision in the legislation, FDA would be required to develop new regulations for the testing, reporting, and public disclosure of tobacco product ingredients and smoke constituents, including tar and nicotine levels (see Table 1 ). Those regulations would replace the current FTC method.

It is difficult to imagine a company gaining FDA approval to market a modified risk tobacco product based on a reduced-risk claim, as least in the near term. Demonstrating that the product, as actually used by consumers, will reduce risk both to the individual user and to the population as a whole requires long-term epidemiological studies. However, gaining approval for a new product on the basis of a reduced-exposure claim in the absence of such studies does not require that the manufacturer meet such stringent requirements. For example, the company would have to show that the reduced exposure is "reasonably likely" to lead to a reduction in harm and that the product is "expected" to benefit the health of the population as a whole. Approving modified risk tobacco products under such criteria makes postmarket surveillance all the more important as a means of monitoring the product's actual impact on public health.

H.R. 1256 / S. 982 also would give FDA the authority to require the manufacturer of an approved modified risk tobacco product to comply with certain labeling and advertising requirements. Such authority could be used to place tight restrictions on the ability of manufacturers to market their modified risk products to individual tobacco users. Philip Morris and the other companies believe that they should be able to provide adult consumers with information about reduced-risk and reduced-exposure products, provided the information is accurate and not misleading, to help them make an informed choice.

Tobacco Product Design and Characteristics

H.R. 1256 / S. 982 would not permit cigarettes to contain any additive that is a "characterizing flavor" of the product or the smoke, other than tobacco or menthol. The legislation would give FDA the authority to develop product standards to reduce nicotine, reduce or eliminate other harmful constituents, or otherwise modify the composition and testing of tobacco products, if it determined that such regulation was appropriate to protect the public health. Once again, FDA would be required to make that determination based on a consideration of the risks and benefits to the population as a whole, which is the approach favored by public health officials. Unlike some of the previous FDA tobacco bills, there is nothing in H.R. 1256 / S. 982 to prevent the agency from requiring changes in the composition of tobacco products that would render them "unacceptable for adult consumption." Placing that restriction on FDA's ability to modify tobacco products had been a key requirement for the industry.

Critics of the idea of reduced nicotine levels, including former FDA Commissioner Andrew von Eschenbach, argue that "if the FDA ordered a cut in nicotine levels, smokers would alter their smoking habits in order to maintain their current levels of the addictive substance." Von Eschenbach said that such a decision could "ma[k]e the public health radically worse." On the other hand, supporters of low-nicotine products say that smokers may not be able to compensate for sufficiently reduced nicotine levels by inhaling deeper or smoking more frequently. Rather, such reduced-nicotine products may help smokers quit altogether.

The authority to set product standards would give FDA an important tool for modifying tobacco products already on the market so as to make them less harmful. However, developing such standards may be a long and difficult process. More than 4,000 chemical compounds have been identified in tobacco smoke, including about 60 known carcinogens. Researchers still know relatively little about the precise mechanisms by which individual compounds and groups of related compounds contribute to the overall health risks of smoking. It may take years to collect the data necessary to demonstrate that the reduction or elimination of a particular tobacco product constituent will lead to an improvement in public health.

As part of the standard-setting process, FDA would be required to take into account the technical feasibility of compliance, as well as the existence of any patents that might make it impossible to meet a compliance deadline. Also, the agency must consider whether a proposed standard might lead to a "significant demand for contraband or other tobacco products that do not meet the requirements of the [legislation]." Until more is learned about the nature of nicotine addiction, that requirement may pose a significant challenge to any proposed reduction in nicotine yield.

H.R. 1256 / S. 982 does not permit FDA to ban tobacco products, or to require the reduction of nicotine yields to zero. As discussed earlier, the industry has argued strenuously in favor of placing such restrictions on FDA's regulatory authority. Companies are fearful that the agency, left unchecked, could achieve a de facto ban by eliminating nicotine and making tobacco products unacceptable to adults. The public health community maintains that FDA should have unrestricted authority to take whatever actions it feels are necessary to protect public health.

Menthol Cigarettes

H.R. 1256 / S. 982 would ban the use of all artificial and natural flavors in cigarettes, except menthol. Menthol cigarettes are an important component of the U.S. cigarette industry, accounting for more than one-quarter of the approximately $70 billion domestic market. The exemption for menthol is widely viewed as an important compromise that was negotiated with Philip Morris in order to secure the company's support for the legislation. In June 2008, seven former HHS Secretaries from Democratic and Republican administrations wrote to members of the House and Senate urging them to ban the use of menthol in cigarettes. Their concern mirrors that of many in the public health community who question why menthol—by far the most widely used flavoring in cigarettes—is receiving special treatment.

The menthol exemption is controversial because mentholated cigarettes are the most popular choice among African-American smokers. According to the Surgeon General, more than three-quarters of African American smokers smoke menthol cigarettes, as compared to about one-quarter of white smokers. Public health officials hypothesize that the widespread use of mentholated cigarettes among African Americans may, in part, be the reason why they suffer from higher smoking-related health risks. Despite smoking fewer cigarettes per day and beginning smoking later in life, the years of potential life lost before the age of 65 is two times higher in black smokers than white smokers. Furthermore, African-American teen smokers have a greater risk of developing long-term consequences from smoking than other ethnic groups, and are in danger of experiencing the negative effects of tobacco earlier in their lifetimes. Researchers point to studies suggesting that menthol smokers may be exposed to higher levels of dangerous compounds than smokers of regular cigarettes. Some menthol brands, including top-selling Newport, contain among the highest levels of nicotine among leading cigarettes. There is also evidence that it is harder to quit smoking menthol products. Tobacco companies, while acknowledging the health risks of smoking, contend that menthol does nothing to worsen those risks.

Sponsors of H.R. 1256 / S. 982 argue that under FDA's broad new authority to promulgate tobacco product standards to reduce or eliminate harmful constituents, or otherwise modify the characteristics of tobacco products, the agency could ban menthol if it determined that such action was appropriate to protect the public health. Meeting that standard might perhaps require more definitive scientific evidence than is currently available. H.R. 1256 / S. 982 would require the Tobacco Products Scientific Advisory Committee, established by the legislation to advise the Secretary on nicotine addiction and other issues, to study and report on the public health impact of menthol cigarettes.

Legal Issues

This section of the report addresses First Amendment concerns with the requirement in H.R. 1256 / S. 982 that the HHS Secretary publish as a final rule the FDA's 1996 rule on cigarettes and smokeless tobacco and, in particular, the rule's ban on outdoor advertising for cigarettes or smokeless tobacco within 1,000 feet of a school or playground. In Lorillard Tobacco Co. v. Reilly , the Supreme Court held a similar provision unconstitutional. Unlike H.R. 1256 , the Senate version of the FDA tobacco legislation contains a provision, discussed below, that is designed to address these First Amendment concerns. This section also examines federal preemption of state law in the context of the FDA tobacco legislation, the Federal Cigarette Labeling and Advertising Act, and three Supreme Court cases.

Restrictions on Advertising and Promotion; First Amendment Issues

H.R. 1256 / S. 982 would give FDA broad authority to regulate tobacco product marketing if it determined that such regulation was appropriate to protect the public health. The HHS Secretary would be required to make that determination based on a consideration of the "risks and benefits to the population as a whole," including whether the agency's actions would discourage current users from quitting or encourage others to start using tobacco products.

This section will review briefly the U.S. Supreme Court's decisions on government regulation of advertising and other forms of commercial speech, before analyzing the FDA's 1996 rule in the context of such decisions. In Central Hudson Gas & Electric Corp. v. Public Service Commission (1980), the Court established a four-part test for deciding the constitutionality of commercial speech regulation. First, in order to be protected by the First Amendment, the commercial speech must concern lawful activity and not be false or misleading. Second, the government must demonstrate that by restricting such speech, it is seeking to further a substantial government interest. Third, the restrictions must directly advance that interest. Fourth, there has to be a reasonable fit between the type of restrictions imposed and the government's objectives—in other words the regulation cannot be "more extensive than is necessary to service that interest."

The U.S. Supreme Court has issued a series of decisions striking down government restrictions on commercial speech, including tobacco product advertising. In the 2001 case, Lorillard Tobacco Co. v. Reilly (2001), the Court found a number of Massachusetts state regulations restricting outdoor and point-of-sale advertising for cigars and smokeless tobacco products to be unconstitutional. The Court determined that the regulations restricted speech more than was reasonable to advance the state's interest in reducing underage (i.e., illegal) use of tobacco products and, thus, failed to meet the fourth part of the Central Hudson test. Banning all outdoor tobacco advertisements within 1,000 feet of a school or playground, in conjunction with other zoning restrictions, argued the Court, "would constitute a nearly complete ban on the communication of truthful information about smokeless tobacco and cigars to adult consumers." The Court found that the restrictions on outdoor advertising of cigars and smokeless tobacco were overbroad in that they prohibited advertising "in a substantial portion of the major metropolitan areas of Massachusetts," included oral communications, and imposed burdens on retailers with limited advertising budgets. The Court also upheld challenges by smokeless tobacco and cigar companies to the outdoor advertising restrictions on the grounds that adults have a right to information and the tobacco industry has a right to communicate truthful speech on legal products.

H.R. 1256 / S. 982 would require the HHS Secretary to publish the agency's 1996 rule as a final rule, with some changes, within 180 days after enactment. In developing the 1996 tobacco rule, FDA created a set of advertising restrictions aimed at reducing underage smoking and smokeless tobacco use that it hoped would withstand a constitutional challenge. Whether the FDA's 1996 rule would have passed the Central Hudson test remains unclear. In FDA v. Brown & Williamson , the Supreme Court confined itself to a review of the agency's interpretation of its authority under the FFDCA. The Court did not address the constitutionality of the rule's marketing restrictions. The FDA's 1996 rule would have limited advertisements in publications with a significant teen audience to black text on a white background. The 1996 rule also included a ban on outdoor advertising within 1,000 feet of a school or playground. As noted, in Lorillard , the Court found a similar provision in the Massachusetts regulations unconstitutional. S. 982 addresses this concern, as discussed below.

Analyzing this restriction on outdoor advertising in the context of Central Hudson , it does not appear that the 1996 rule's restriction on advertisements within 1,000 feet of a school or playground would survive the fourth step of the Central Hudson test—that the regulation cannot be "more extensive than is necessary" to serve the substantial government interest. In Lorillard , the Court stated that "[t]he broad sweep of the regulations indicates that the Attorney General did not 'carefully calculate the costs and benefits associated with the burden on speech imposed' by the regulations." The Supreme Court further explained that a "careful calculation of the costs of a speech regulation does not mean that a State must demonstrate that there is no incursion on legitimate speech interests, but a speech regulation cannot unduly impinge on the speaker's ability to propose a commercial transaction and the adult listener's opportunity to obtain information about products."

First, the Court noted that "the Attorney General did not seem to consider the impact of the 1,000 foot restriction on commercial speech in major metropolitan areas." Rather, the Attorney General imposed a 1,000 foot restriction that was identical to the FDA's restriction in the 1996 rule. The Court noted that suppression of speech or limits on speech tend to be case-specific. However, "the FDA's regulations would have had widely disparate effects nationwide. ... The uniformly broad sweep of the geographical limitation demonstrates a lack of tailoring." In the FDA's final 1996 rule, the agency took note of comments that focused on the impact of the rule in major metropolitan areas, including a survey that "showed that outdoor tobacco advertising would be prohibited in 94 percent and 78 percent of the respective land mass of Manhattan and Boston under the [1,000 foot] proposal." However, the FDA attributed "the possibility that its restrictions effectively outlaw outdoor advertising in most urban areas" to population density in cities. The agency then stated that its intent in establishing the 1,000 foot restriction was "to restrict the accessible and intrusive communications of information about cigarettes and smokeless tobacco to children and adolescents at school and at play." The rule explained that the FDA "considered the cost of its [1,000 foot] restriction but conclude[d] that a narrower restriction would not adequately advance its purpose of protecting young people from unavoidable advertising." The Lorillard Court's declaration that a 87 to 91 percent ban on tobacco advertising "would constitute nearly a complete ban on the communication of truthful information about smokeless tobacco and cigars to adult consumers" and the Court's statement that the 1,000 foot restrictions' "breadth and scope ... [did] not demonstrate a careful calculation of the speech interests involved," appear to indicate that Court would strike the 1,000 foot restriction if the 1996 final rule became effective.

Second, the Court stated that tailored restrictions on tobacco advertising and promotion "would involve targeting those practices [that appeal to children] while permitting others." The FDA stated in its responses to comments on the rulemaking:

The prohibition on outdoor advertising within 1,000 feet of schools and playgrounds is designed to address a different problem. The concern is not the appeal of the advertising. If the problem were only appeal, the 1,000 foot restriction would not be necessary because the text-only requirement would eliminate this concern. The concern is the nature of the billboards themselves. Billboards near schools and playgrounds ensure that children are exposed to their messages for a prolonged period of time.

Therefore, it does not seem likely that the Supreme Court would uphold the 1,000 foot restriction if, as the agency stated, it was not meant to target practices that appeal to children. Based on the Court's discussion in Lorillard , it does not appear likely that the 1996 FDA final rule's 1,000 foot restriction would survive a Central Hudson analysis. One approach would be for Congress to exclude the 1,000 foot restriction in the new final rule that would be published 180 days after the FDA tobacco legislation is enacted.

The House version of the Family Smoking Prevention and Tobacco Control Act specifies (in §102(a)(2) of H.R. 1256 ) the portions of the new final rule that will be different from the 1996 rule. The House's specified alterations do not include a change to the part of the FDA 1996 final rule that addressed the 1,000 foot restriction, which would be codified at 21 C.F.R. § 897.30(b). On the other hand, the Senate bill (§ 102(a)(2)(E) of S. 982 ) states that the new version of the FDA 1996 final rule must "include such modifications of section 897.30(b), if any, that the Secretary determines are appropriate in light of governing First Amendment case law, including the decision of the Supreme Court of the United States in Lorillard Tobacco Co. v. Reilly ."

Some public health law experts believe that the Supreme Court in its decisions on the regulation of commercial speech has left public health authorities with little room to craft tobacco advertising restrictions that meet both the third (effectiveness) and fourth (extensiveness) parts of the Central Hudson test. On the one hand, tobacco advertising restrictions that are narrowly tailored may not provide clear evidence of effectiveness, thus failing the third part of Central Hudson test. On the other hand, more sweeping (and potentially effective) restrictions may be viewed as too extensive and not reasonably related to the government's asserted interest, thus failing the fourth part of the Central Hudson test.

In the event that the advertising restrictions are challenged, H.R. 1256 contains a severability clause that states:

If any provision of this Act, the amendments made by this Act, or the application of any provision of this Act to any person or circumstance is held to be invalid, the remainder of this Act, the amendments made by this Act, and the application of the provisions of this Act to any other person or circumstance shall not be affected and shall continue to be enforced to the fullest extent possible.

Preemption of State and Local Regulation Regarding Labeling, Advertising, and Promotion

This section examines federal preemption of state law in the context of the FDA tobacco legislation. The Federal Cigarette Labeling and Advertising Act (FCLAA), which mandates health warnings on cigarette packaging and advertising, includes the following preemption provision:

(a) Additional Statements. No statement relating to smoking and health, other than the statement required by [the labeling provisions] of this Act, shall be required on any cigarette package.

(b) State Regulations. No requirement or prohibition based on smoking and health shall be imposed under State law with respect to the advertising or promotion of any cigarettes the packages of which are labeled in conformity with the provisions of this Act.

The FCLAA's introductory declaration of policy indicates that Congress did not want "commerce and the national economy ... impeded by diverse, nonuniform, and confusing cigarette labeling and advertising regulations.... " To that end, the act's preemption provision (1) prohibits additional health-related statements on the labels of cigarette packages that are properly labeled in accordance with the act, and (2) prevents states and localities from imposing any other "requirement or prohibition based on smoking and health" regarding the advertising and promotion of cigarettes.

The U.S. Supreme Court has issued three decisions regarding the FCLAA preemption provision. In these cases, the Court explored the constitutional questions that are raised when state statutes or common law causes of action impose requirements that conflict with federal laws that may preempt such state action (see box below).

In Cipollone v. Liggett Group Inc. , the U.S. Supreme Court held that certain types of tort actions that are brought against cigarette manufacturers under state common law are preempted by the FCLAA. In the case, the son of a woman who died of lung cancer caused by smoking cigarettes sued cigarette manufacturers for causing his mother's death. His claims were based on New Jersey common (i.e., court-made) law. The plaintiff claimed, among other things, that the defendants had failed to provide adequate warnings of the health consequences of smoking cigarettes, had made and breached express warranties that their cigarettes did not present any significant health consequences, had fraudulently—through their advertising—attempted to neutralize the federally mandated warning labels, had fraudulently concealed medical and scientific data indicating that cigarettes were hazardous to health, and had conspired to deprive the public of such medical and scientific data. The defendant cigarette manufacturers argued that the FCLAA preempted state law claims. In other words, the defendants argued that, having complied with the federal warning requirements, they could not be held liable for the plaintiff's mother's death, even if everything the plaintiff asserted was true.

The FCLAA contains two preemption provisions. It prohibits states from (1) requiring any statement, other than the warnings prescribed by the Act, to appear on any cigarette packages, and (2) imposing any requirement or prohibition based on smoking and health with respect to the advertising or promotion of cigarettes that are labeled in conformity with the federal statute. The Supreme Court treated the two preemption provisions separately. It construed the first, prohibiting the states from requiring additional statements on cigarette packages , to supersede "only positive enactments by legislatures or administrative agencies that mandate particular warning labels." In other words, the first provision did not preempt state courts from awarding damages and thereby in effect requiring additional warning labels. However, the Court construed the second provision, prohibiting states from imposing any requirement or prohibition with respect to cigarette advertising or promotion , as broader, and as intended to preempt some common law claims.

The Court then delineated which state law claims are preempted and which may be brought. Failure-to-warn claims are preempted to the extent that they would require additional, or more clearly stated, warnings in cigarette advertising or promotions, but are not preempted to the extent that they rely on the defendants' "testing or research practices or other actions unrelated to advertising or promotion." Breach of express warranty claims are not preempted because express warranties, whether set forth in advertisements or elsewhere, are not imposed by the state but arise from the manufacturer's voluntary statements. Fraudulent misrepresentation claims are preempted to the extent they are predicated on advertising statements that tended to neutralize the federally mandated warning labels, because the federal statute prohibits states from imposing prohibitions , not just requirements, with respect to cigarette advertising or promotion. However, fraudulent misrepresentations claims, and conspiracy claims, based on concealment of the hazards of smoking are not preempted insofar as they rely on a state law duty to disclose such facts through channels of communication other than advertising or promotion.

The Supreme Court next addressed FCLAA preemption in Lorillard Tobacco Co. v. Reilly . In addition to finding Massachusetts' regulations on smokeless tobacco and cigar advertising unconstitutional (discussed earlier), the Court in Lorillard ruled that the state's restrictions on cigarette advertising were preempted by the FCLAA. Specifically, the Court concluded that the regulations did relate to the "advertising or promotion" of cigarettes. It further concluded that the regulations, targeted at youth exposure to cigarette advertising, were "based on smoking and health" within the meaning of the FCLAA because "concern about youth exposure to cigarette advertising is intertwined with the concern about ... smoking and health." The fact that the regulations governed location rather than content of advertising did not remove them from the preemption language, which covers "all 'requirements' and 'prohibitions' imposed under state law." The Lorillard decision clarified that while the FCLAA preempts the ability of states to regulate the advertising and promotion of cigarettes, states retain the authority to regulate other aspects of tobacco use and sales. The FCLAA, for example, does not preempt state laws that prohibit sales to minors or restrict smoking in public places.

The Supreme Court examined the scope of the FCLAA once again in Altria Group, Inc. v. Good . In this case, the Court addressed whether the FCLAA preempted a state law claim that Philip Morris USA and its parent company Altria Group violated the Maine Unfair Trade Practices Act (MUTPA) by using "light" and "low tar" descriptors on cigarettes, thereby delivering the message that "light" cigarettes deliver less tar and nicotine to consumers than regular brands, while knowing such message to be untrue. The MUTPA makes it unlawful to use "[u]nfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce." To determine whether the respondents' claims under the MUTPA were preempted by the FCLAA, the Court used the "predicate-duty" test it developed in Cipollone . This test asks "whether the legal duty that is the predicate of the common law damages action constitutes a 'requirement or prohibition based on smoking and health ... with respect to ... advertising or promotion.'" The Court held that the respondents' claims were not expressly preempted by the FCLAA because their claims under the MUTPA were predicated on the general duty not to deceive.

The Court further rejected Philip Morris's argument that the state law claims were impliedly preempted because of its contention that the FTC has for decades promoted the development and consumption of low tar cigarettes and has encouraged consumers to rely on representations of tar and nicotine content in choosing among cigarette brands. In rejecting Philip Morris's implied preemption argument, the Court stated, "[i]n short, neither the handful of industry guidances and consent orders on which [Philip Morris] relies nor the FTC's inaction with regard to 'light' descriptors even arguably justifies the preemption of state deceptive practices rules like the MUTPA." While holding that lawsuits accusing cigarette-makers of fraudulent conduct under state law could proceed, the Court noted that the respondents "still must prove that the petitioners' use of 'light' and 'lowered tar' descriptors in fact violated the state deceptive practices statutes."

The public health community strongly supports the elimination of the FCLAA preemption language so that states could impose their own restrictions on tobacco labeling and advertising. The tobacco companies, on the other hand, oppose any such change, in part to preserve the uniform national standards currently in effect. However, the industry also is anxious to preserve the FCLAA's preemption provision in light of the U.S. Supreme Court's ruling in Cipollone. If Congress were to amend that provision, such legislation, depending on the language, could either increase or restrict the types of lawsuits that currently may be brought against cigarette manufacturers on the basis of the warning contained on cigarette packages.

H.R. 1256 / S. 982 appears to attempt to accommodate both sides by preserving the current language in the FCLAA preemption provision, while adding at the end the following:

(c) Exception. Notwithstanding subsection (b), a State or locality may enact statutes and promulgate regulations, based on smoking and health ... imposing specific bans or restrictions on the time, place, and manner, but not content, of the advertising or promotion of any cigarettes.

Thus, states would continue to be prohibited from adding their own warning labels to cigarette packages, but would be permitted to regulate certain aspects of cigarette advertising and promotion, subject to any First Amendment challenge. For the tobacco companies, the language in subsection (b) underlying Cipollone would remain intact. In addition to amending the FCLAA preemption provision, H.R. 1256 / S. 982 § 916 would include a general preemption provision in the new FFDCA language that would place certain restrictions on states (for example, with regard to tobacco product standards, adulteration, and misbranding) while allowing them to regulate the sale, advertising, and promotion of tobacco products (see Table 1 ).

Appendix. Tobacco Master Settlement Agreement

On November 23, 1998, attorneys general from 46 states, the District of Columbia, and the U.S. territories signed a contractual agreement (the Master Settlement Agreement, or MSA) with the major cigarette companies to settle state lawsuits to recover the costs, borne by Medicaid and other public programs, of treating smoking-related illnesses. The remaining four states — Mississippi, Florida, Texas, and Minnesota — had settled individually with the companies prior to the MSA. Under the terms of the MSA, the companies agreed to make annual payments totaling approximately $200 billion over the first 25 years and accept certain restrictions on tobacco product advertising, marketing, and promotion. Specifically, the MSA:

prohibited tobacco companies from targeting youth in the advertising, promotion, or marketing of their products; banned the use of cartoons in advertising; limited each company to brand-name sponsorship of one sporting or cultural event a year, excluding concerts, team sports, events with a significant youth audience, or events with underage contestants; banned public transit advertising; banned outdoor billboard advertising, excluding billboard advertising for brand-name sponsored events; limited advertising outside retail stores to signs no bigger than 14 sq. ft; banned company payments to promote tobacco products in various media, including movies and TV; banned non-tobacco apparel with brand-name logos except at brand-name sponsored events; banned gifts of non-tobacco items to youth in exchange for tobacco products; restricted the use of nationally recognized non-tobacco brand names for tobacco products; and limited free samples of tobacco products to adult-only facilities.