Sunday, April 21, 2013

Crony Watch: How the FDA is conspiring with Big Tobacco

In yet another wholly predictable result of government regulation, the FDA is using its new power to regulate tobacco to... line the pockets of Phillip Morris by cutting off competition!

The Tobacco Control Act of 2009 granted the FDA unprecedented authority to regulate cigarettes. Among its new powers is pre-market review: New cigarettes cannot be introduced without an order from the agency. The law provides two routes to approval. One route is for completely new tobacco products and requires a highly detailed review. The other is for products that are "substantially equivalent" to those already on the market.

The latter option has become a source of contention between applicants and the FDA. As first reported by Michael Felberbaum of the Associated Press, since 2009 the agency has received about 3,500 substantial equivalence reports. Approximately 115 employees work on reviewing them. And to date they have issued exactly zero rulings.

One might ask the obvious question: Are there less productive people on the entire planet than the 115 FDA employees assigned to review substantial equivalency? If we are going to use the government to protect Big Tobacco from nasty competition (and therefore its profit margins), why not save the taxpayers a little bit of coin and broom, say, 112 of the 115 cigarette reviewers?

Or, maybe, they should do their damned job.

Perhaps relevant disclosures: We (i) are resolutely opposed to anybody we care about smoking cigarettes, (ii) have no problem with anybody we do not care about smoking cigarettes, and (iii) have owned and profited handsomely from tobacco stocks.

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