E-Cigarettes Spark New Smoking War

ELMHURST, Ill.—Victoria Vasconcellos, the petite founder of an Internet retailer in this Chicago suburb, is in the thick of a regulatory battle that could affect millions of American cigarette smokers.

Ms. Vasconcellos imports electronic cigarettes from a Chinese manufacturer and sells them on her website, Cignot.com, to 14,000 customers. The 48-year-old is part of a growing legion of e-cigarette purveyors who are defying the Food and Drug Administration, which contends the nascent nicotine products are drug devices that require pre-market approval and may pose their own health risks. The FDA began intercepting shipments of the products from China two years ago.

E-cigarettes are battery-powered tubes that turn nicotine-laced liquid into a vapor mist. Sellers say they are potentially less harmful than cigarettes because they don’t have the toxins of burning tobacco. A growing number of people who use them say they are an effective way to quit smoking.

The future of the fledgling industry—estimated at $100 million in annual sales and rising—may hinge on the outcome of a case scheduled for oral arguments before a federal appellate court in Washington, D.C., next month. The FDA is fighting to regulate the products as drug-delivery devices, similar to nicotine gums, patches or other nicotine-replacement products. Such a classification would subject e-cigarettes to lengthy and expensive trials to prove they are safe and effective.

But many e-cigarette companies argue that their products are designed to be recreational alternatives to cigarettes, not devices to wean people off nicotine. They say they couldn’t afford the high cost of clinical trials, and that any such mandate would drive many of them out of business or force the industry to go underground.

The standoff underscores a growing rift in the public health community about how to solve one of the country’s most vexing health problems. About 400,000 Americans die each year of smoking-related disease. Many public-health advocates, including the FDA, say e-cigarettes are unproven as a quit-smoking tool and could prompt nonsmokers to take up the nicotine habit.

But a number of public-health advocates, including the American Association of Public Health Physicians, argue that conventional policies for getting people off cigarettes have fallen short. These groups argue that encouraging smokers to switch to e-cigarettes and other smokeless tobacco products could sharply reduce tobacco-related disease in the U.S.

Dr. Joel Nitzkin, chairman of a tobacco control task force of the public physicians group, says e-cigarettes may prove to be the most promising smoking cessation product currently on the market. He thinks they should be regulated to ensure manufacturing standards are met. But he thinks the FDA’s tobacco regulations, rather than the more demanding drug device rules, provide the best framework.

Indeed, the FDA could regulate e-cigarettes under the landmark 2009 law that gave the agency broad power to regulate tobacco products. Under these rules, e-cigarette makers wouldn’t be required to go through lengthy and costly pre-market approvals, in most cases. But the FDA maintains that e-cigarettes are actually drug-delivery devices that aren’t subject to the tobacco regulations.

While the federal case is pending, sellers of e-cigarettes and “juice”—the nicotine-laced liquid that goes into the devices—continue to pop up online and in malls. 7-Eleven Inc. stores in California, New York, Texas and a handful of other states recently began selling an e-cigarette brand. Costco Wholesale Corp. in April stopped selling a version on its website because of concerns about the FDA’s stance. Wal-Mart Stores Inc. also briefly offered a product on its website this year but discontinued it because it didn’t attract much demand and the company was concerned about the FDA’s position, a spokesman said.

E-cigarettes have caught fire in part because they mimic the experience of smoking. When a user sucks on an e-cigarette, an atomizer turns the liquid inside into a vapor—which is why the practice is called “vaping” instead of smoking. Consumers typically pay $40 to $120 for a starter kit, and then pay smaller amounts for liquid refills.

E-cigarettes typically contain a solution of propylene glycol—a chemical used to make artificial smoke in theatrical productions—water, nicotine and flavorings such as “espresso” and “simply strawberry.” The amount of nicotine varies to accommodate different consumers’ preferences. Some e-cigarettes contain no nicotine.

Some scientists say e-cigarettes are probably less harmful than cigarettes because they don’t involve the burning of tobacco, which produces most of the toxins that cause cancer and other tobacco-related diseases.

However, no published, peer-reviewed studies have examined the long-term health risks of e-cigarettes. Some scientists are concerned that prolonged exposure to vaporized forms of propylene glycol—generally recognized by the FDA as safe for use in foods such as salad dressings, cake mixes and sodas—might cause harm.

“There are a lot of reasons to believe logically that e-cigarettes offer a safer profile, but I want data that demonstrates safety,” says Thomas Eissenberg, a psychology professor at Virginia Commonwealth University who studies nicotine addiction.

In a report released last year, the FDA said it conducted a preliminary review of a few e-cigarettes and found poor quality control. Some cartridges that claimed not to contain nicotine actually did, and one of the 18 samples had trace amounts of diethylene glycol, a chemical used in antifreeze that is toxic to humans. The FDA says the amount of nicotine delivered varies and isn’t standardized, which also raises safety concerns.

E-cigarettes were introduced in China in the mid-2000s and hit the U.S. in 2007, industry executives say. Some countries, such as Canada and Australia, effectively ban their sale, saying they have yet to be fully evaluated for safety and effectiveness. New Jersey and New York’s Suffolk County bar use of the product wherever regular cigarettes are prohibited.

The National Vapers Club, an advocacy group for e-cigarette users in Valley Stream, N.Y., estimates that at least 1 million people in the U.S. use the products. The group’s president, Spike Babaian, says the number of U.S. e-cigarette companies has ballooned to about 300 from roughly a dozen two years ago.

The FDA began detaining some shipments from China in June 2008 on the grounds that the products were unapproved drug devices aimed at treating nicotine addiction. Smoking Everywhere Inc., a Florida distributor of e-cigarettes, sued the agency in April 2009, claiming that the FDA had no jurisdiction over the products. Another purveyor, Sottera Inc. of Scottsdale, Ariz., later joined the case as a plaintiff.

While the case was pending, Congress, in an unrelated move, passed landmark legislation that gave the FDA authority to regulate tobacco products, which lawmakers broadly defined as “any product made or derived from tobacco that is intended for human consumption.” But the agency continued to maintain that e-cigarettes were drug devices, not a tobacco product like a pack of cigarettes or can of snuff.

Richard J. Leon, a judge in the U.S. District Court for the District of Columbia, issued a preliminary injunction against the FDA in January, ruling that Smoking Everywhere and Sottera generally marketed their e-cigarettes as recreational alternatives to cigarettes, rather than as quit-smoking aids. The judge called the FDA’s approach a “tenacious drive to maximize its regulatory power.” He noted that e-cigarettes contained nicotine derived from tobacco and said they appeared to fall under the provisions of the new tobacco law.

The FDA won a stay of Judge Leon’s ruling, pending an appeal to the U.S. Court of Appeals for the District of Columbia Circuit. The agency is still detaining and refusing entry of e-cigarettes, a spokeswoman says.

Several former cigarette smokers say they were able to kick their habit in a matter of days by switching to e-cigarettes. “My breathing is better, my sleeping is better,” says Greg Hester, 42, an information-systems worker in Atlanta who had smoked cigarettes for more than 20 years.

Ms. Vasconcellos, the Illinois entrepreneur, says she began smoking at 14 and eventually smoked two packs per day. She tried unsuccessfully to quit using nicotine patches and other products. In early 2009, she tried an e-cigarette and has been using them since.

Ms. Vasconcellos, who previously worked as a computer consultant, found e-cigarettes “so life-changing that I had to let other people know about it.” She began Cignot Inc. last year and says it has generated about $1.5 million in sales. Her company’s website makes no specific health claims, but calls e-cigarettes a “marvelous alternative to tobacco cigarettes.”

Ms. Vasconcellos says that she has lost tens of thousands of dollars on shipments from China that were blocked by the FDA and that the agency’s actions make it tough to do business. The FDA has refused to allow e-cigarette battery chargers and other products Ms. Vasconcellos has ordered from China and other countries, according to FDA documents reviewed by The Wall Street Journal. To try to stay under the radar, Ms. Vasconcellos orders shipments in smaller packages and has them sent to friends’ homes around the U.S.

The FDA spokeswoman says the agency has refused the entry of more than 700 shipments of e-cigarettes nationally since it began detaining and reviewing the products two years ago.

Steve McVey, owner of PureSmoker.com in Goodlettsville, Tenn., near Nashville, had $59,000 in shipments from China seized last year and has faced lengthy delays on other shipments as federal inspectors scrutinized them.

“We’ve almost closed up shop three or four times,” Mr. McVey says.

Nevertheless, Mr. McVey says his company, Pure Enterprises Inc., collected $1.3 million in revenue last year.

To counteract pressure from the FDA, the company has begun producing some products in the U.S. Mr. McVey hired 28-year-old Jeff Hildebrand, a biomedical sciences graduate from Texas A&M University, to brew e-cigarette juice in a small laboratory.

Several other companies are producing e-cigarette liquids in the U.S., partly because of the concern the FDA raised last year about quality control in Chinese factories.

Johnson Creek Enterprises LLC, a Wisconsin firm that makes its own “smoke juice,” says it lists all the ingredients on its packaging and uses childproof caps. (Nicotine, the main addictive ingredient in tobacco products, can be poisonous in high doses. It generally is thought to be noncarcinogenic, though it has been linked to high blood pressure.)

Christian Berkey, a former Apple Inc. assistant store manager who founded Johnson Creek Enterprises, says he would prefer to have the industry regulated as a tobacco product to create standards for quality and establish a level playing field.

Johnson Creek sells its juice for e-cigarettes to blu Cigs, one of the industry’s largest players. Jason Healy, president of blu Cigs, says the Charlotte, N.C., company’s sales are on pace to reach $30 million this year.

The FDA spokeswoman says the agency is aware that some companies are manufacturing e-cigarette liquids and other equipment in the U.S. but has taken no enforcement actions against them to date. She declines to elaborate on why.

Several advocates for tobacco control, including the American Lung Association and the American Legacy Foundation, say e-cigarettes require deeper study. These advocates are concerned the products could appeal to nonsmokers, especially youth, and encourage them to smoke regular cigarettes. Some tobacco-control advocates also worry that e-cigarettes are often sold online, where it is difficult to verify that a buyer is at least 18 years old.

Owners of U.S. e-cigarette companies say that any federal-court ruling allowing the FDA to treat the products as drug devices and require pre-market approval would drive many of them out of business and create a black market.

“If the government tries to suppress this, it will go underground,” says David Dettloff, 48, owner of FreedomSmokeUSA, a Tucson, Ariz., seller of e-cigarette juices. “Ninety percent of everyone who vapes is so glad to be off cigarettes that they would buy it in the drug market.”

By David Kesmodel

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