‘This runaway train has no brakes.’
Central London was the location for the latest gathering of stakeholders in the Next Generation Nicotine Delivery industry. ENDS manufacturers, big tobacco and support industries, including Broughton, were present to share experiences and information as this fast-paced disruptive industry navigates its way through its commercial and regulatory challenges.
Shifting sands was the title of the first presentation by Ronan Stafford, Lead Analyst at GlobalData Consumer. A whistle-stop tour of the latest commercial and regulatory updates ensued. From a regulatory perspective the current hot topics revolve around how to curb youth use of ENDS. For example, how to regulate flavours in recognition of the role they play in helping smokers quit while not allowing them to encourage youth use. It was interesting to note during the conference that Juul announced its decision to suspend sales of its main flavours in retail stores. Age verification is a related topic. If industry cannot find a solution that restricts the ability of youth buying these products, tough legislation is inevitable. We can be sure that technology solutions are high priority projects in the ENDS industry.
Ronan also gave his take on the future taxation outlook for the industry. High and differential tax rates are already appearing in the US and the EU is planning to make an announcement on this topic during early 2019. He suggested that consumer and medicinal ENDS products are likely to attract differential tax banding. At Broughton we have worked on a number of Medicinal Product projects and delivered the only MAA awarded to date in the UK.
Tim Phillips from E-Cig Intelligence was next on stage sharing data on ENDS global trends. Tim also talked about the squeeze on ENDS business profits. Taxation was again in the spotlight with its potential adverse impact on the ENDS category due to the greater price elasticity of ENDS products vs tobacco where price rises have limited impact on demand. Tim suggested that investing in building a brand was a way for the category to react. He gave the example that fine whisky brands command premium prices and maintain demand.
With the US regulatory landscape such a high-profile topic, Chris Allen, Managing Director at Broughton, gave an excellent presentation on the pathway to maintaining compliance in the US. His presentation covered the following:
- Submission of Harmful and Potentially Harmful Constituent (HPHC) data – Deadline 8th November 2019
- PMTA Submissions – Deadline 8th August 2022.
Chris gave insights into the strategy that has been developed at Broughton involving the application of science to achieve the optimum balance between maintaining compliance for its clients and managing cost. The work that our team of Principle Scientists undertake during the planning stage and engaging early with FDA were stated as key success factors. With testing industry capacity sure to be an issue, any ENDS companies serious about remaining in the US should be engaging with partners now or risk missing the boat. Chris gave his tips on what to look for when evaluating partner labs.
Patricia Kovacevic gave further information on the US market and suggested FDA updates are imminent on flavours and youth use. She also suggested that the current PMTA deadline could be brought forward. At Broughton we are ‘watching this space’ and will update industry as soon as there is further information to share.
It was also interesting to note during the conference the rise in importance of the Cannabinoid market. Increasing numbers of companies have identified this as the next big market and demand is on the rise.
In summary another great conference arranged by the team at Arena International. Delegates left the event better informed and wondering what the next 12 months has in store. Coming back to the first sentence in this blog - as an ex-colleague of mine based in the US used to say ‘This runaway train has no brakes’. So true.