Marlboro Onserts: Another Colorful Addition to the Tobacco Regulatory Landscape

Transcription

1 Marlboro Onserts: Another Colorful Addition to the Tobacco Regulatory Landscape by Stacy Ehrlich and Will Woodlee O n June 17, 2010, the Food and Drug Administration (FDA) sent Philip Morris USA, Inc., (Philip Morris) what is arguably the agency s first major tobacco enforcement letter. The letter concerned Philip Morris s use of on-pack notifications, called onserts, to alert customers that, in order to comply with the Family Smoking Prevention and Tobacco Control Act (Tobacco Control Act), Marlboro Lights would soon reappear on store shelves as Marlboro Gold. As FDA s letter demonstrates, it remains unclear whether companies may rebrand their products using color schemes and names associated with banned light, low, and mild tobacco products. The letter also raises an interesting proms. Ehrlich is a Partner at Kleinfeld Kaplan and Becker LLP in Washington, DC. 28 Update July/August 2010 cedural issue, in that, FDA required Philip Morris to submit extensive documentation related to the name change or face enforcement action. FDA had never before used its quasi-subpoena authority in response to an industry member s conduct, and the specter of the agency s routine use of this power now looms. This early skirmish in the tobacco industry s new regulatory era should draw added interest because it involves these novel and unsettled issues. Modified Risk Tobacco Products: the Law When enacting the Tobacco Control Act in 2009, Congress found that many smokers mistakenly believe that low tar and light cigarettes cause fewer health problems than other Mr. Woodlee is an Associate at Kleinfeld Kaplan and Becker LLP in Washington, DC.

2 Advertising & Promotion cigarettes. 1 Accordingly, the Tobacco Control Act requires that companies obtain FDA s authorization in order to introduce such modified risk tobacco products into interstate commerce.2 A modified risk tobacco product is one sold or distributed for use to reduce harm or the risk of tobacco-related disease associated with commercially marketed tobacco products. 3 The Tobacco Control Act deems products with labels, labeling, or advertising using the descriptors light, mild, low, or similar descriptors to meet this definition.4 FDA has not yet addressed what similar descriptors would cause a product to be considered a modified risk tobacco product. The legislation contained two effective dates regarding modified risk tobacco products.5 First, as of June 22, 2010, a company cannot manufacture a modified risk tobacco product for distribution or sale without FDA authorization. Second, as of July 22, 2010, a manufacturer cannot introduce into domestic commerce a modified risk tobacco product, regardless of the manufacture date, without FDA authorization. In a June 2010 guidance document, FDA confirmed that retailers may continue to sell products with labels, labeling, and advertising using the descriptors light, mild, low or similar descriptors, provided they were manufactured before June 22, 2010, and introduced into commerce by the manufacturer before July 22, Thus, unless a manufacturer obtains FDA authorization to use such a descriptor, the law requires them to fade slowly from the marketplace as retailers sell off their remaining supplies. The Issue: Marlboro Light Onserts In an apparent effort to aid existing customers in identifying their preferred product after the company ceased printing the light descriptor on the label, Philip Morris attached an onsert to individual packs of Marlboro Lights cigarettes sold to consumers. The onsert included the following statements: Your Marlboro Lights pack is changing. But your cigarette stays the same. In the future, ask for Marlboro in the gold pack The onsert also contained the following disclaimer: Terms such as Lights and UltraLights do NOT mean safer. These cigarettes will NOT help you quit smoking. The new Marlboro Gold packs retain the color scheme and design of Marlboro Lights packs except for the July/August 2010 Update 29

3 term Light. Other tobacco manufacturers have also apparently sought to link rebranded light products by simply retaining packaging color schemes and color names (e.g., R.J. Reynolds Tobacco Company with its Pall Mall line). FDA s Concerns and Requests In its June 17, 2010, letter, FDA expressed concern that the statements included in the onserts attached to the individual packs of Marlboro Lights may perpetuate the mistaken beliefs associated with [Philip Morris s] light cigarettes when marketed in the gold pack. In particular, FDA concluded that the onsert suggests that Marlboro in the gold pack will have the same characteristics as Marlboro Lights, including any mistaken attributes associated with the light cigarettes. Citing Congress s finding that disclaimers have been ineffective in eliminating mistaken beliefs regarding low tar and light cigarettes, the agency expressed concern that the onsert s disclaimers would likewise be ineffective in mitigating any potential mistaken beliefs that may be perpetuated by [the] onsert. Due to these concerns, FDA requested under section 904(b) of the Federal Food, Drug, and Cosmetic Act (FFDCA) a provision added by the Tobacco Control Act that Philip Morris submit several categories of documents within the company s possession, custody or control, in addition to documents in the possession of any agents of Philip Morris. Section 904(b) generally authorizes the agency to request documents relating to, among other subjects, marketing research involving the use of tobacco products or marketing practices and the effectiveness of such practices used by tobacco manufacturers and distributors. 7 The provision does not require that the agency articulate a reason or make any preliminary finding before making such a request. As FDA noted in the letter, failure to respond to a section 904(b) request is a violation of the FFDCA, which would expose a tobacco product manufacturer or importer to enforcement action by the agency. 8 Relying on this authority, the letter specifically requested: 1. All documents referring or relating to any onsert or other written materials for dissemination to consumers concerning the marketing or sale of Marlboro in the gold pack or any change in the packaging of Marlboro Lights, including all materials about market strategies, themes, concepts, creative recommendations, and dissemination strategies or plans. 2. All documents referring or relating to marketing research, regardless of whether qualitative, empirical, or otherwise, concerning Marlboro in the gold pack, including the onserts provided with the Marlboro Lights packs. Such documents include, but are not limited to, any documents relating to: a. consumers concerns, beliefs, perceptions, understandings, thoughts or impressions about: i. the marketing or sale of Marlboro in the gold pack; ii. any onsert included on or with Marlboro Light packages; iii. any other materials for dissemination to consumers concerning the marketing of Marlboro in the gold pack; iv. any correlations between the color or word gold and taste, the yields of tar, nicotine, or other tobacco constituents, or health risk or product harm; b. messages, communications, or beliefs intended to be conveyed about the marketing or sale of Marlboro in the gold pack or any onserts included on or with Marlboro Light packages or other written materials for dissemination to consumers concerning the marketing or sale of Marlboro in the gold pack. 3. All documents referring or relating to any written materials disseminated to any distributor or retailer concerning messages or communications these distributors or retailers should convey to consumers concerning the marketing or sale of Marlboro in the gold pack or any onsert included on or with Marlboro Lights packages. Philip Morris had 15 days from receipt of the letter to request an extension of the July 30, 2010, deadline for submitting its response. At this time, FDA has not announced whether Philip Morris has sought or the agency has approved such an extension. Section 904(b): FDA s New Investigation and Enforcement Tool At the outset, it is unclear whether Philip Morris will contend that FDA s section 904(b) request exceeded the limits of Congress s broad grant of authority. 9 Significantly, this was the first time FDA has issued a section 904(b) request in direct response to an industry member s activities. 10 While perhaps not as controversial an issue as the underlying substantive question, a broad document request could be a powerful tool for the agency to use while it develops and refines enforcement policies and strategies for its new area of responsibility. Nothing in FDA s letter indicates that the document request was intended as a punitive measure. However, the provision permits FDA to require companies to comply with hefty document requests or face enforcement action, and therefore could serve as a major deterrent for companies pursuing creative solutions to regulatory problems that, while not 30 Up d a t e July/August 2010

4 violating the letter of the law, may undermine its spirit. The deterrent effect could be greater still for smaller companies for which compliance with massive document requests would tax their already limited regulatory compliance resources. The Similar Descriptor Debate and the Uncertain Future In targeting Philip Morris s use of onserts, FDA has intensified debate about the limits and application of the descriptor ban. While FDA s letter repeatedly addressed the agency s concern about Philip Morris s eleventh-hour continuity campaign, it stopped short of stating that the onserts had run afoul of any particular legal requirement. As noted above, FDA has not yet determined how it will apply the similar descriptor catch-all provision when enforcing the descriptor ban. Among industry members, there is concern that the agency could attempt to extend the ban to color schemes or names (e.g., Marlboro Gold) that relate to products formerly identified as light, mild or low. There is also concern that FDA may take the position that companies retaining full flavor product lines impliedly market modified risk tobacco products if they also offer alternative products that they do not identify as full flavor. FDA s document request seems aimed, at least in part, at determining Philip Morris s intentions and predictions regarding the future of its Marlboro Light product after rechristening it as Marlboro Gold. In its January 2010 notice inviting comments on the similar descriptor issue, FDA opined that both colors and words that have associations with potency might qualify. 11 FDA s enforcement action against Philip Morris could signal that the agency is still considering a more liberal interpretation of the phrase similar descriptor. In addition, state and local governments have expressed concern about the use of color designations on cigarette packs. For example, the New York City Department of Health and Mental Hygiene has launched an educational campaign about the color coding of cigarettes packs that is intended to alert consumers to a deceptive marketing technique the tobacco industry is using to evade the federal ban on package labels such as light, low-tar and mild. 12 How FDA interprets and enforces the similar descriptor catch-all could significantly impact tobacco companies ability to communicate differences in their products, particularly with respect to product intensity. Whether FDA will view a product s flavor intensity level as different from its risk level will be a factor. Lacking the ability to communicate such distinctions, tobacco companies would have to decide whether discontinuing certain products would make more economic sense than marketing products with differences consumers cannot appreciate when selecting cigarettes for purchase. Recognizing these stakes, the tobacco industry will anxiously wait to see how Philip Morris responds and whether FDA will take further action against one of the industry s leaders. An Added Wrinkle: FDA s Ban on Color Notwithstanding FDA s similar descriptor determination, the outcome of an appeal pending before the United States Court of Appeals for the Sixth Circuit might significantly impact the color debate. In Commonwealth Brands, Inc. v. United States, 13 the U.S. District Court for the Western District of Kentucky permanently enjoined enforcement of FDA s regulatory ban on the use of color and graphics in labeling and advertising for cigarettes and smokeless tobacco. The provision in question current 21 C.F.R (a) was originally part of FDA s 1996 attempt to regulate tobacco products, which the Supreme Court struck down in The Tobacco Control Act required FDA to reissue its 1996 cigarette and smokeless tobacco regulations. 15 The government has appealed the court s determination that the regulation s blanket ban is insufficiently tailored to survive the plaintiffs First Amendment challenge. If the district court s decision is reversed, companies like Philip Morris might face an even greater challenge in communicating the provenance of products they formerly referred to as light. Whether companies would have to scrap their color names and conduct a second, more restrictive rebranding process would in part depend on how FDA defines labeling for purposes of the color ban. Some within the industry believe that, as used in the regulation, the term labeling does not include product packages. While the FFDCA s definition of the term includes the label affixed to the product s immediate container, 16 FDA s preamble to the 1996 Final Rule indicates that the agency never intended the ban on color to apply to labels on cigarette and smokeless tobacco packages. 17 More recently, during a July 19, 2010, tobacco retailer training session, the Acting Director of FDA s Center for Tobacco Products Compliance Office, Ann Simoneau, stated that the regulation does not apply to product packages. Nevertheless, the Commonwealth court discussed the provision as though it would apply to package labels. 18 FDA has also published Frequently Asked Questions regarding the cigarette and smokeless tobacco regulations in which the agency defines labeling us- July/August 2010 Up d a t e 31

5 ing the FFDCA s broader definition. 19 Were the regulation upheld, and were FDA to revise its informally stated position regarding the applicability of the color ban to packages, tobacco companies would have to abandon the use of package color to link their products to their light, low and mild predecessor brands. FDA therefore might have a second basis for objecting to Philip Morris s attempt to rebrand Marlboro Lights as Marlboro Gold. Regardless of whether the color ban applies to product packaging, if the provision is upheld on appeal, tobacco companies like Philip Morris might nevertheless choose to rebrand due to the difficulty of promoting color product lines using only black text on white backgrounds. More Questions than Answers As with many other areas of FDA s incipient tobacco regulation, there appears to be much uncertainty surrounding the scope of cigarette marketing restrictions. This may be because tobacco products are so different from other products regulated by FDA. Where there are no health benefits to balance against the risks, FDA is in unfamiliar regulatory territory. 1 Pub. L. No , 2(38) U.S.C. 387k(a) U.S.C. 387k(b)(1) U.S.C. 387k(b)(2)(A)(ii) U.S.C. 387k(b)(3). 6 FDA, Guidance for Industry and FDA Staff: Use of Light, Mild, Low, of Similar Descriptors in the Label, Labeling, or Advertising of Tobacco Products (2010), available at TobaccoProducts/GuidanceComplianceRegulatory- Information/UCM pdf U.S.C. 387d(b) U.S.C. 331(q)(1)(B), 387c(a)(10)(A). 9 On May 26, 2010, FDA issued identical section 904(b) requests to over 100 companies. The form letter requested certain documents and scientific information relating to menthol cigarettes. FDA issued the request to assist the Tobacco Products Scientific Advisory Committee in fulfilling its section 907(e) mandate to study, report about, and provide recommendations on the issue of the impact of the use of menthol in cigarettes on the public health, including such use among children, African-Americans, Hispanics, and other racial and ethnic minorities. 10 In February 1, 2010, letters to Star and R.J. Reynolds Tobacco Company, FDA requested information relating to their dissolvable smokeless tobacco products. The letters did not cite section 904(b), indicated that compliance was voluntary, and did not threaten enforcement action Fed. Reg (Jan. 19, 2010). 12 See New York City Department of Health and Mental Hygiene, Tobacco Control, doh/html/smoke/smoke.shtml (last visited July 11, 2010). 13 No. 1:09-CV-117-M (W.D. Ky. Jan. 4, 2010). 14 See 61 Fed. Reg. 44,396, 44,617 (Aug. 28, 1996); see also 75 Fed. Reg. 13,225, 13,232 (Mar. 19, 2010). 15 Congress required some changes but did not alter the requirement that labeling and advertising contain only black text on a white background. See Pub. L. No , The FFDCA defines labeling as all labels and other written, printed, or graphic matters (1) upon any article or any of its containers or wrappers, or (2) accompanying such article. 21 U.S.C. 321(m) Fed. Reg. 44,396, 44,463 (Aug. 28, 1996) ( The agency has considered extending the requirements of (text only, black on white background) to the package itself, but believes at this time these measures are not necessary considering the comprehensive nature of the regulatory scheme contained in this rule. Therefore, the agency is not extending the requirements applicable to advertising and labeling to the package itself. ). 18 Commonwealth Brands, Inc., No. 1:09-CV-117-M, slip op. at 6, 14 (describing the ban as applying to labels and suggesting that the regulation would apply to the color of Lorillard s Newport menthol cigarette packaging ). 19 FDA, Frequently Asked Questions: Protecting Kids from Tobacco; Regulations Restricting the Sale and Distribution of Cigarettes and Smokeless Tobacco to Protect Children and Adolescents, gov/tobaccoproducts/protectingkidsfromtobacco/ RegsRestrictingSale/ucm htm#Labeling (last visited July 11, 2010). 32 Up d a t e July/August 2010