Vape companies try to galvanize Trump administration to ease FDA rules

By Jilian Mincer

Jan 18 (Reuters) - As tobacco and vaping companies focus on new smoking products that are potentially less harmful, the industry sees an opening for rolling back rules on these products under the Trump administration.

Donald Trump's surprise election victory in November, and his pledges to reduce federal regulations on business, led tobacco lobby groups to draft a new plan of action, according to company executives, lobbyists and consultants interviewed by Reuters.

The immediate goal is to delay implementation of new regulations on the latest generation of e-cigarettes and other vaping devices, which produce a vapor from liquid nicotine rather than burning tobacco.

Longer-term, they are setting their sights on repealing the 2016 law that treats these devices like cigarettes.

Lobbyists describe a cautious optimism as they approach lawmakers with their plans for products that they say can help traditional smokers quit and avoid the known dangers of tobacco. With U.S. sales of conventional cigarettes shrinking, Big Tobacco has made a major bet in recent years to dominate the e-cigarette industry.

On Tuesday, British American Tobacco Plc announced a $49-billion deal to take over rival Reynolds American Inc (NYSE: RAI - news) , uniting two major e-cigarette players in the United (Shenzhen: 000925.SZ - news) States and United Kingdom and becoming a bigger competitor to Philip Morris International Inc (IOB: 0M8V.IL - news) and U.S. partner Altria Group.

"Suddenly things that were not conceivable became something we thought we could do," said Cynthia Cabrera, former president and executive director for the Smoke-Free Alternatives Trade Association (SFATA). Cabrera now has her own industry consulting firm, the Cating Group.

In 2009, Congress allowed the U.S. Food and Drug Administration to extend its oversight to all tobacco products. New (KOSDAQ: 160550.KQ - news) regulations took effect last August that brought e-cigarettes, cigars, pipe tobacco and hookah tobacco in line with existing rules for cigarettes and smokeless tobacco. They require companies to submit e-cigarettes and other newer tobacco products for government approval, list their ingredients and place health warnings on packages and in advertisements.

Health advocacy groups hailed the regulations as the potential health risks and benefits of e-cigarettes are still being studied.

Industry officials said they would hurt small companies and cripple development. Opponents said the rule was especially unfair because it would apply to any products introduced after Feb. 2007, meaning that most e-cigarettes now on the market would require regulatory review.

On Tuesday, a coalition of 13 organizations, including libertarian-oriented tech groups, asked Congress to grandfather all products introduced by August 2016, when the rules took effect.

"The FDA's regulations threaten to kill an industry that has created tens of thousands of jobs by producing safer products that help many Americans quit smoking," the letter to Senate Majority leader Mitch McConnell and House Speaker Paul Ryan said.

Representative Tom Cole of Oklahoma wrote to incoming Vice President Mike Pence this month asking that all FDA deadlines on new tobacco products be delayed by a year as their fate is determined.

Public health advocates say they plan to fight any changes to the Tobacco Control Act, warning that fewer restrictions on e-cigarettes could hook a new generation on nicotine after years of efforts to prevent kids from smoking.

"We know e-cigarettes are the most commonly used tobacco product among kids," said Erika Sward, assistant vice president, National Advocacy for the American Lung Association, noting the appeal of flavored nicotine liquids used in the devices.

BAT makes the popular Vype brand in Europe, while Reynolds owns Vuse, the top selling brand in the United States. They have already collaborated on technology and licensing, but their merger is expected to speed up and simply innovation.

"Consumers are looking for alternatives that have the potential to reduce harm," said Susan M. Cameron, executive chairman of Reynolds American's board of directors.

Philip Morris and Altria aim to launch a promising, new technology called iQOS that heats tobacco but does not burn it, potentially preserving the qualities that smokers want with fewer health risks. The company submitted the product for FDA review in December.

"There is a much higher level of hope and a general belief that a new administration would be willing to take a new look and consider a harm reduction rather than abstinence only approach to nicotine," said Michael Hogan, a lobbyist who represents the vaping industry at the Alpine Group. (Reporting By Jilian Mincer; Editing by Michele Gershberg and Nick Zieminski)