Center for Tobacco Studies School of Public Health Rutgers, The State University of New Jersey 112 Paterson Street New Brunswick, NJ 08901

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1 Center for Tobacco Studies School of Public Health Rutgers, The State University of New Jersey 112 Paterson Street New Brunswick, NJ July 25, 2018 Food and Drug Administration Division of Dockets Management 5630 Fishers Lane, Rm 1061 Rockville, MD Re: Docket ID No: Regulation of premium cigars FDA-2017-N-6107 The Rutgers School of Public Health s Center for Tobacco Studies (CTS) submits this comment in response to the U.S. Food and Drug Administration (FDA) advance notice of proposed rulemaking (ANPRM) regarding premium cigars. While CTS opposes exempting premium cigars from FDA regulation, in the event FDA proceeds with an exemption, this comment provides guidance on an appropriate definition for premium cigars that creates a clear separation between premium cigars and other tobacco products subject to a FDA regulation. The FDA asserted regulatory authority over premium cigars, among other tobacco products, by issuing the socalled deeming rule on May 5, In issuing the deeming rule, FDA aptly concluded that: (1) All cigars pose serious negative health risks, (2) the available evidence does not provide a basis for FDA to conclude that the patterns of premium cigar use sufficiently reduce the health risks to warrant exclusion, and (3) premium cigars are used by youth and young adults. The fact that some premium cigar smokers might smoke such products infrequently or report that they do not inhale does not negate the adverse health effects of tobacco smoke or demonstrate that cigars do not cause secondhand smoke-related disease in others. Therefore, we find there is no appropriate public health justification to exclude premium cigars from the scope of the final deeming rule and that it is appropriate to deem them. 1 In CTS s view, there is a sound public health justification for FDA to regulate premium cigars. Nevertheless, we recognize the ANPRM references ongoing interest from many parties and sectors, such as industry and Members of Congress, in the regulatory status of premium cigars. As such, FDA requests relevant new and different information, data, and analysis not submitted in response to FDA's proposed deeming rule (79 FR 23142, discussed below) that could inform FDA's regulation of premium cigars. FDA specifically asks for comments regarding (1) the definition of premium cigars, (2) use patterns and (3) public health considerations associated with premium cigars. This comment focuses on the definition of premium cigars. Definition of Premium Cigars FDA has now offered factors to be considered for a definition of premium cigars in two separate ANPRMs. In 2014, FDA s proposed deeming regulations provided the following definition of a premium cigar: a cigar that: (1) is wrapped in whole tobacco leaf; (2) contains a 100 percent leaf tobacco binder; (3) contains primarily long filler tobacco; (4) is made by combining manually the wrapper, filler, and binder; (5) has no filter, tip, or non-tobacco mouthpiece and is capped by hand; (6) has a retail price (after any discounts or coupons) of no less than $10 per cigar (adjusted, as necessary, every 2 years, effective July 1st, to account for any increases in the price of tobacco products since the last price adjustment); (7) does not have a characterizing flavor other than tobacco; and (8) weighs more than 6 pounds per 1000 units F.R , (2016) F.R , (2014).

2 2 Instead of proposing a premium cigar definition in 2018, the ANPRM lists factors for FDA consideration. Those factors, set forth below, expand upon the 2014 proposal: a. Size (e.g., length, ring gauge, total weight). b. Tobacco filler type and minimum required percentages of each filler per cigar. c. Fermentation type. d. Wrapper and binder composition (e.g., whole leaf, reconstituted or homogenized tobacco leaf). e. Where the tobacco used for premium cigar filler or wrappers is grown, and whether differences in growing practices for that tobacco, as compared to tobacco used in other cigars, result in different health impacts. f. Presence or absence of a filter. g. Presence or absence of a mouthpiece. h. Manufacturing and assembly process (e.g., including any production by hand or by machine). i. Rate of production (e.g., produced at no more than [insert number] units per minute ). j. Presence or absence of flavor imparting compounds, flavor additives, or characterizing flavors other than tobacco. k. Presence or absence of any additives other than cigar glue. l. Nicotine content. m. Tar delivery amounts (and how this should be defined and measured). n. Carbon monoxide delivery amounts (and how this should be defined and measured). o. Retail price. p. Frequency with which price changes are initiated by particular levels in the distribution chain (retailers, manufacturers, importers, and/or distributors). q. Packaging quantity and size. r. Any action directed to consumers, by a retailer or manufacturer, such as through labeling, advertising, or marketing, which would reasonably be expected to result in consumers believing that the tobacco product is a premium cigar. 3 Premium Cigar Definition Affects the Risk of Substitution for Low-Nicotine Tobacco Products The timing of this ANPRM influences the potential impact of, and therefore, the analysis regarding the definition. On July 28, 2017, FDA announced a new comprehensive plan for tobacco and nicotine regulation. 4 As part of its plan, FDA subsequently issued an ANPRM contemplating a product standard to reduce nicotine of combusted cigarettes to minimally addictive levels. 5,6 While the proposal includes only cigarettes, FDA acknowledges that some number of addicted smokers could migrate to other similar combusted tobacco products to maintain their nicotine dose (or engage in dual use with other combusted tobacco products), potentially reducing the positive public health impact of such a rule. 7 Based on the idea that roll your own tobacco (RYO), pipe tobacco and mass produced cigars are highly likely to serve as substitutes for traditional cigarettes, FDA researchers modeled the impact of the low-nicotine standard using those products as cigarette substitutes. 8 The researchers did not consider hookah or premium cigars as substitutes. 9 If premium cigars are exempt from a low-nicotine product standard, making them one of the only available forms of high-nicotine combusted tobacco, they will almost certainly serve as a substitute for some smokers of traditional cigarettes and mass merchandise cigars. The critical question will be how many smokers will 3 21 C.F.R. Parts 1100, 1140, and 1143 (Mar. 26, 2018). 4 FDA News Release, FDA announces comprehensive regulatory plan to shift trajectory of tobacco-related disease, death, Jul. 28, 2017, accessed at F.R ; 21 C.F.R. 1130; Docket No. FDA-2017-N-6189 (Mar. 16, 2018). 6 CTS addresses the ANPRM regarding a low-nicotine standard to various deemed tobacco products in a separate comment on Docket No. FDA-2017-N Gottlieb S, Zeller M. A nicotine-focused framework for public health. N Engl J Med 2017;377(12): Apelberg BJ, Feirman SP, Salazar E, Corey CG, Ambrose BK, Paredes A, Richman E, Verzi SJ, Vugrin ED, Brodsky NS, Rostron BL. Potential Public Health Effects of Reducing Nicotine Levels in Cigarettes in the United States. N Engl J Med. 2018;378(18):

3 3 transition to premium cigars as a substitute. It is incumbent on FDA to define premium cigars in a way that minimizes the extent to which they are used as substitutes for traditional cigarettes and mass merchandise cigars, including, at a minimum, the factors described below. Moreover, if FDA decides to regulate premium cigars differently than mass merchandise cigars (e.g., flavor ban on mass merchandise cigars), it is essential that the FDA defines this class of cigars narrowly enough to exclude mass merchandise cigars given the industry s history of history manipulating tobacco products to exploit regulatory loopholes. 10 The Importance of Price According to the National Academies, the single most direct and reliable method for reducing [tobacco] consumption is to increase the price of tobacco products, thus encouraging cessation and reducing the level of initiation of tobacco use. 11 If cigarette prices increase at least 10%, adult consumption declines approximately 5%, and youth consumption declines approximately 7%. 12,13,14 The economic theory underlying this relationship, price elasticity of demand, also applies to tobacco products other than cigarettes (OTP), including premium cigars. 15 However, altering the retail prices of some tobacco products may shift demand to alternative products. A recent study predicted that if little cigars increased in price by 10%, demand for large cigars would increase by 8%. 16 Other evidence showed that a 10% increase in cigarette taxes was associated with a 1.5 percentage point increase in cigar use among adolescent males and a 0.7 percentage point increase among adolescent females. 17 Indeed, FDA identifies retail price as a potential factor in a definition for premium cigars. Given the influence of price on tobacco consumption and the risk of substitution with a low-nicotine product standard, the FDA s goal should be to define premium cigars with a minimum price that is sufficiently high to prevent cigarette and mass merchandise cigar smokers from considering them a substitute product. Existing cigar prices are instructive in finding an appropriate minimum price-point for premium cigars. The following table is a sample of the highest average retail prices for individual cigars sold in U.S. convenience stores as reported in the 2016 Nielsen C-Track data. Notably, these retail prices reflect national averages. Because tobacco taxes vary from state to state, due to taxes alone, any given type of cigar is likely to have significantly higher prices in states with high taxes in comparison to prices in states with lower taxes. Moreover, this data only captures convenience stores, excluding many vendors of premium cigars. As explained below, we recommend prohibiting convenience stores from selling premium cigars. 10 Delnevo CD, Hrywna M, Giovenco DP, et al. Close, but no cigar: certain cigars are pseudo-cigarettes designed to evade regulation. Tob Control 2017;26(3): Institute of Medicine and National Research Council Taking Action to Reduce Tobacco Use. Washington, D.C.: National Academies Press David T. Levy, Frank J. Chaloupka & Joseph Gitchell, The effects of tobacco control policies on smoking rates: a tobacco control scorecard. J Public Health Manag Pract 2004;10(4): (2004). 13 International Agency for Research on Cancer (IARC) handbook: IARC Handbooks of Cancer Prevention, Tobacco Control, Volume 14: Effectiveness of Tax and Price Policies in Tobacco Control. Lyon, France (2011). 14 Chaloupka FJ, Straif K, Leon ME, Working Group, International Agency for Research on Cancer. Effectiveness of tax and price policies in tobacco control. Tobacco Control 2011;20: Accessible at 15 Jawad M, Lee JT, Glantz S, Millett C, Price elasticity of demand of non-cigarette tobacco products: a systematic review and meta analysis, Tob Control, Published Online First: 23 January doi: /tobaccocontrol Accessible at 16 Zheng Y, Zhen C, Dench D, Nonnemaker JM. U.S. Demand for Tobacco Products in a System Framework, Health Econ, 2017 Aug;26(8): Hawkins SS, Bach N, Baum CF. Impact of tobacco control policies on adolescent smokeless tobacco and cigar use: a difference-indifferences approach. BMC Public Health Feb 15;18(1):154.

4 4 Average retail prices for individual cigars in the United States, 2016 Nielsen C-Track Name Average Price RUTGER CTS PROPOSED MINIMUM PRICE $20.00 Montecristo Vintage Connecticut $14.99 Dunhill Altamiras $12.99 Camacho $11.99 Montecristo White Toro $ FDA PROPOSED MINIMUM PRICE $10.00 Romeo Y Julieta Medallas de Oro Belicoso $9.99 Rocky Patel Toro $9.95 Macanudo Café Crystal $9.85 Acid Kuba Maduro $9.69 Romeo & Julieta Churchhill en Tubo $9.50 Romeo & Julieta Romeos $9.49 To minimize the risk of product substitution, it is also instructive to consider prices for a pack of cigarettes. Even though there is only a rough comparability between a pack of cigarettes and a single premium cigar, the price for a pack of cigarettes represents a standard price point at which someone can enter the tobacco market. Jurisdictions with high prices, like Chicago and New York City where an average pack costs more than $ Moreover, effective June 2018, NYC increased the minimum retail price for a pack of cigarettes to $13.00, and many packs commonly sell for more than $ These price points provide important benchmarks, in part, because a low-nicotine product standard should be impactful across the entire U.S. 19,20 If the difference in price were negligible between a low-nicotine pack of cigarettes, selling for $14.00 in New York City, and a fullnicotine premium cigar, a premium cigar may seem like a reasonable substitute, especially because unlike lownicotine cigarettes, it would be a source of nicotine. It would be regrettable if a low-nicotine product standard s impact were diluted by small price differentials in jurisdictions with high tobacco prices. To ensure that the premium cigar market has a separate price range from both cigarettes and mass merchandise cigars, we propose that the minimum price for a cigar to qualify as a premium cigar should be $20 per cigar, and that this price be automatically increased annually to account for inflation, applicable federal tax increases, or other laws that increase cigar prices. In addition, promotions providing discounts below that price point and give-aways should be prohibited. Setting an Appropriate Weight, Length and Width FDA should set a minimum weight for premium cigars contributes to the distinction between premium cigars and mass merchandise cigars. This is critically important given the cigar industry s history of manipulating 18 NYC Admin Code, Local Law 145, The combined taxes on a single pack of cigarettes in Chicago total $7.17 (Chicago $1.18, Cook County $3.00, Illinois $1.98, federal $1.01). In New York City, the combined tax is $6.86 ($1.50, $4.35, $1.01). At that tax rate in NYC, the average price was $ Subsequently, NYC passed a law establishing a minimum price of $13.00 per pack, which will elevate prices even more. NYC Admin Code, Local Law 145, NYC Community Health Survey, 2015.

5 their products to avoid higher taxation. 21 In 2014, FDA proposed weighs more than 6 pounds per 1000 units. As outlined in the following table, we believe that weight is too low as it captures many mass merchandise cigars as measured by our Center for Tobacco Studies. 5 Based on the products currently on the market, 15 lbs. per 1000 would be an appropriate weight to separate premium cigars from mass merchandise cigars. Weight of mass merchandise cigars from the US Marketplace Name Weight (Lbs. per 1000 cigars) Year measured Dutch Masters Palma Game (Garcia y Vega) Large Dutch Masters Large Garcia y Vega Game CTS PROPOSED WEIGHT White Owl Invincible Swisher Sweets Blunts Medium Dutch Masters Master s Collection Cigarillo Black and Mild Wood Tip Black and Mild Black and Mild Classic Medium While Owl Cigarillo Medium Swisher Sweets (plastic tip) Medium Garcia y Vega Game Cigarillo Dutch by Dutch Masters Cigarillo Medium Middleton's Black and Mild Cigarillo Large Backwoods FDA PROPOSED WEIGHT 6.00 Medium Middleton s Black & Mild (plastic tip) Swisher Sweets Cigarillo Black and Mild Wood Tip (without filter) Swisher Sweet Cigarillo Dutch Masters Palma Swisher Sweet Cigarillo Game (Garcia y Vega) Cigarillo Dutch Masters Deluxe Cigarillo Medium Swisher Sweets Cigarillo Consistent with this weight cut-off of 15 lbs. per 1000 cigars, FDA should select a corresponding minimum gauge and length, and establish that cigars that fail to meet a size requirement do not qualify as premium cigars. To satisfy the weight requirement, there are limits on the feasible ranges for cigar length and width. Nevertheless, given the risk and the industry s history of manipulating products to avoid regulations, an appropriate minimum length should be set at approximately 5 inches, and an appropriate minimum ring gauge should be approximately 32. Again, this will help to distinguish premium cigars, which will be relatively large, from mass merchandise cigars that generally range between the size of cigarettes and premium cigars. Wrapper and Binder Composition 21 Delnevo CD, Hrywna M, Giovenco DP, et al. Close, but no cigar: certain cigars are pseudo-cigarettes designed to evade regulation. Tob Control 2017;26(3):

6 6 As discussed above, a definition for premium cigars should be designed to create a clear distinction between premium cigars and mass merchandise cigars. Reconstituted tobacco (aka, homogenized sheet tobacco among other names) is composed of remnants of tobacco that would otherwise be discarded. It is processed to create sheets, and then it can be used as a component in various tobacco products, including as a cigar wrapper or binder. High quality cigars are made with wrappers and binders made from whole tobacco leaves. If FDA creates a premium cigar definition, it should require wrappers and binders to be composed of whole tobacco leaf not reconstituted tobacco. Presence or Absence of a Filter or Mouthpiece Filters are widely used with and associated with filtered cigars. Mouthpieces are typically used with mass merchandise cigarillos. If FDA creates a premium cigar definition, it should expressly state that cigars with a filter or mouthpiece do not meet the definition. Flavors In a separate ANPRM regarding the regulation of flavors in tobacco products, Docket No. FDA-2017-N-6565, FDA states that youth (under 18) and young adults (age 18 through 24) go through a period of heightened vulnerability to both the initiation of tobacco product use and the development of nicotine dependence. Furthermore, flavors in tobacco products increase the appeal of those tobacco products to youth, and promote youth initiation. Thus, the availability of tobacco products with flavors at these developmental stages attracts youth to initiate use of tobacco products and may result in lifelong use. 22 As the FDA s ANPRM recognizes, two-thirds of youth who have ever used cigars reported that the first product they ever used was flavored. 23 Moreover, established adult cigar smokers? who regularly opt for flavored cigars smoke mass merchandise cigars, including smokers of cigarillos (61%), filtered cigars (60%) and other mass merchandise cigars (53%). 24 In contrast, only 11.9% of premium cigar smokers purchase flavored cigars. 25 Because such a small segment of established adult cigar smokers use flavored premium cigars and considering that it would likely be substantially smaller than 11.9% under the restrictive premium cigar definition outlined by this comment FDA s definition of premium cigars should exclude cigars with a characterizing flavor. Retail Distribution and Storage in Humidors More than three-quarters of premium cigar purchasers buy their premium cigars at specialty tobacco stores (46.8%) or cigar bars (29.9%). 26 The next most common location where premium cigars are purchased are, collectively, convenience stores and gas stations. 27 Reducing the availability of full-nicotine premium cigars from retail outlets like convenience stores and gas stations frequented by youth, non-smokers, and former smokers is likely to yield significant public health benefits in two primary ways. First, easy access to tobacco retail outlets makes it harder for smokers to quit. 28,29 This phenomenon is more pronounced in low-income areas than higher-income areas, which is critically important because tobacco retail density is often highest in low-income areas with the greatest health disparities. 30 Second, studies show that high tobacco retail outlet density and the point-of-sale advertising that accompanies it contributes to higher youth smoking. One F.R , (Mar. 21, 2018); Docket No. FDA-2017-N-6565 (internal cites omitted) F.R. at (internal cites omitted). 24 Corey, CG, Holder-Hayes, E, Nguyen, AB, Delnevo, CD, et al., US Adult Cigar Smoking Patterns, Purchasing Behaviors, and Reasons for Use According to Cigar Type: Findings from the Population Assessment of Tobacco and Health (PATH) Study, , Nicotine & Tobacco Research, Sept. 15, Halonen, J. I., M. Kivimaki, et al. (2014). "Proximity to a tobacco store and smoking cessation: a cohort study." Tobacco Control 23(2): Reitzel, L. R., E. K. Cromley, et al. (2011). "The effect of tobacco outlet density and proximity on smoking cessation." American Journal of Public Health 101(2): Cantrell, J., A. Anesetti-Rothermel, et al. (2015). "The impact of the tobacco retail outlet environment on adult cessation and differences by neighborhood poverty." Addiction 110(1):

7 study showed the odds of experimenting with smoking over a 12 month period was 40% higher among youth exposed to retailers two or more times per week compared to those exposed less often Accordingly, to qualify for the premium cigar definition (and a regulatory exemption), exempt products should be required to be sold only in select locations. Those select locations should be tobacco specialty stores accessible only by adults who are 21 or older not convenience, gas or other retail outlets. FDA should also consider requiring vendors of premium cigars to store their cigars in a humidor at an industry standard of approximately 60-70% humidity. Such a regulation is consistent with the commercial reality that premium cigars are stored in specific conditions. Further, it would contribute to a separation between premium cigars, on one hand, and other tobacco products subject to a low-nicotine product standard, on the other hand. Conclusion As set forth above, we recommend that FDA decline to exempt premium cigars from its regulatory oversight. However, if FDA does create an exemption, we urge FDA to consider the factors take the steps outlined above to create a clear separation between premium cigars and tobacco products subject to a low-nicotine product standard. Sincerely, Cristine Delnevo, PhD, MPH Professor and Director Rutgers School of Public Health Center for Tobacco Studies Kevin R.J. Schroth, JD Associate Professor Rutgers School of Public Health Center for Tobacco Studies 31 Johns M, Sacks R, Rane M, Kansagra SM. (2013). Exposure to Tobacco Retail Outlets and Smoking Initiation among New York City Adolescents. Journal of Urban Health : Bulletin of the New York Academy of Medicine. 2013;90(6): doi: /s