New E-Cigarette Laws Risk Choking Innovation

Joanna Wilkinson
May 24, 2016

Electronic cigarettes are the butt of worldwide confusion. UK lawmakers have lauded them as a healthier alternative to conventional cigarettes, a tool to help smokers break their habit and a way to reduce secondhand smoke. Meanwhile, US regulators have cracked down on them, citing uncertainty over their safety and their adoption by non-smokers. But the debate could be cut short: new research shows consumers aren't satisfied with the products, while increased regulation threatens to suck the creativity out of the e-cigarette industry.

UK authorities recently introduced a raft of e-cigarette rules, requiring manufacturers to weaken their products, use plain packaging and include health warnings. They've also outlawed their sale to anyone under the age of 18. 

The US Food and Drug Administration (FDA) has introduced similar requirements. Complying will cost companies at least $2m (£1.4m) per product, said the head of the Smoke Free Alternatives Trade Association in a Forbes interview. That's more than seven times the FDA’s estimate of $330,000 per product in 2014. 

Reynolds American and other big tobacco corporations will be able to stomach the costs, as they already dominate the $3.7bn ‘vaping’ industry. But smaller players, who tend to be more innovative, will be hard-pressed to cough up the cash.

E-cigarettes heat nicotine-laced liquid into a vapour,  sparing users from breathing in the toxic fumes created by lighting a traditional cigarette. The UK's Royal College of Physicians recently released a 200-page report saying e-cigarettes could potentially save the lives of millions of people, and Public Health England said they’re 95% safer than regular cigarettes. But the devices may carry other health risks. For instance, some brands contain chemical compounds that aren't found in conventional cigarettes, while others have blown up in people's faces.

Small doses of nicotine can also stunt brain growth in adolescents, promote addiction and lead to sustained cigarette use. A recent CDC report posited that e-cigarettes could be encouraging the 2.5 million middle- and high-school students in America who use them to smoke conventional cigarettes.

Another worry for the industry might be that e-cigarettes aren’t enjoyable, according to a recent study. Researchers at the University of Georgia surveyed nearly 6,000 adults in 2014. They found that 58 percent of smokers found e-cigarettes unsatisfying and stopped using them. The study’s authors concluded that e-cigarettes need to up their game as a satisfying alternative if they are to ever realise their potential as a “disruptive technology”.

However, the costs of complying with greater regulation could force smaller e-cigarette companies to spend less on research and development, or even drive them out of business. That could prevent them from refining the product to make it safer and more attractive to smokers.

“Thousands of smaller businesses will close and tens of thousands of people will be unemployed,” the head of the American Vaping Association told Forbes, adding that the new laws would allow tobacco giants to tighten their grip on the market.

Regulators have a tough tightrope to walk. They should aim to keep manufacturers honest and protect and inform consumers, but still leave breathing room for innovation.