Testimony before the New Hampshire Senate Ways and Means Committee Regarding Modified Risk Tobacco Products

Taxpayers Protection Alliance

January 12, 2022

Testimony before the New Hampshire Senate Ways and Means Committee
Regarding Modified Risk Tobacco Products
Lindsey Stroud, Director, Consumer Center
Taxpayers Protection Alliance
January 12, 2022

Chairman Giuda, Vice Chairman D’Allesandro, and members of the Committee:

Thank you for your time today to discuss the issue of taxing less harmful tobacco products and incentivizing smokers to switch to FDA-authorized modified risk tobacco products. My name is Lindsey Stroud, and I am Director of The Taxpayers Protection Alliance’s (TPA) Consumer Center. TPA is a non-profit, non-partisan organization dedicated to educating the public through the research, analysis and dissemination of information on the government’s effects on the economy. TPA’s Consumer Center focuses on providing up-to-date information on adult access to goods including alcohol, tobacco and vapor products, as well as regulatory policies that affect adult access to other consumer products, including harm reduction, technology, innovation, antitrust and privacy.

As lawmakers attempt to regulate modified risk tobacco products (MRTP), it is imperative that they understand that the federal government recognizes that tobacco products exist on a spectrum of harm and, since 2009, has offered manufacturers the ability to provide information to market tobacco products as less harmful. As the federal government must give authority for products to be marketed in such a manner, state regulation and taxes should reflect the risk of tobacco product, and reduced risk products should be subject to less, if any, taxation.

Modified Risk Tobacco Products and Tobacco Product Regulation

In 2009, Congress gave the U.S. Food and Drug Administration the authority to regulate tobacco products under the Family Smoking Prevention and Tobacco Control Act (TCA). In addition to regulating tobacco products, the TCA authorizes the FDA to oversee manufacturing, distribution and marketing of tobacco products, including “specific restrictions on marketing tobacco products to children.” Under the TCA, companies manufacturing new tobacco products – those that were introduced to market after 2007 – are required to submit an application to the FDA for authorization to sell those products. 

In addition to regulations, the TCA addressed the then-growing product category of safer alternatives to cigarettes by requiring that “modified risk” claims are backed by robust evidence to show that they are less harmful than combustible cigarettes. 

Section 911 of the TCA defines modified risk tobacco products as “any tobacco product that is sold or distributed for use to reduce harm or the risk of tobacco-related disease associated with commercially marketed tobacco products.” 

The Secretary of Health and Human Services is responsible for issuing all modified risk tobacco product orders, provided that the manufacturer can demonstrate that the products will:

  • “significantly reduce harm and the risk of tobacco-related disease to individual tobacco users; and
  • benefit the health of the population as a whole taking into account both users of tobacco products and persons who do not currently use tobacco products.”

 In addition, companies must also submit additional findings before an order is issued, including: 

  • “the magnitude of the overall reductions in exposure to the substance or substances which are the subject of the application is substantial, such substances or substances are harmful, and the product as actually used exposes consumers to the specified reduced level of the substance or substances; 
  • the product as actually used by consumers will not expose them to higher levels of other harmful substances compared to the similar types of tobacco products then on the market unless such increases are minimal and the reasonably likely overall impact of use of the product remains a measurable reduction in overall morbidity and mortality among individual tobacco users; 
  • … issuance of an order with respect to the application is expected to benefit the health of the population as a whole taking into account both users of tobacco products and persons who do not currently use tobacco products. 
  • … the product as actually used by consumers will not expose them to higher levels of other harmful substances compared to the similar types of tobacco products then on the market unless such increases are minimal and the reasonably likely overall impact of use of the product remains a substantial and measurable reduction in overall morbidity and mortality among individual tobacco users;”

In essence, tobacco companies must provide robust evidence that the modified risk tobacco product reduces the harms associated with tobacco.

Further, the FDA is given ongoing oversight authority via postmarket surveillance data and studies, which are required in Section 911. After issuing a modified risk order, the applicant must “conduct postmarket surveillance and studies for such a tobacco product to determine the impact of the order issuance on consumer perception, behavior, and health … and to provide information that the Secretary determines is otherwise necessary regarding the use or health risks involving the tobacco product.” These results “shall be submitted to the Secretary on an annual basis.”

The FDA also has exclusive authority to withdraw the modified risk order marketing authorization at any time after the order has been issued. The FDA can remove the order for many reasons, including: 

  • “the applicant, based on new information, can no longer make the demonstrations required
  • … the application failed to include material information or included any unture statement of material fact; 
  • any explicit or implicit representation that the product reduces risk or exposure is no longer valid, including if
  • … any postmarket surveillance or studies reveal that the order is no longer consistent with the protection of the public health; 
  • the application failed to conduct or submit the postmarket surveillance and studies required…”

The TCA provides the FDA with a full range of authority to recognize and permit the marketing of tobacco products that have reduced harm. Not only must companies submit rigorous scientific evidence that proves the product is less harmful than current tobacco products, but it also must monitor those products. 

Should youth use become an issue, or perhaps long-term evidence indicates that the product may in fact not be less harmful, the FDA can withdrawal the modified risk order and the company must quit marketing the product as such.

To date, the FDA has only granted 14 modified risk orders for tobacco products. Eight of the modified risk orders were for smokeless tobacco products, and the remaining orders were for combustible and heated cigarette tobacco products. The agency has also refused to accept 10 other applications and has refused to file 11 applications. 

There are a very limited number of modified risk tobacco products that are legally marketed in the United States, and only one product is marketed in New Hampshire, as of January 2022.

Tobacco Harm Reduction 

The evidence of harm associated with combustible cigarettes has been understood since the 1964 U.S. Surgeon General’s Report that smoking causes cancer. Research overwhelmingly shows the smoke created by the burning of tobacco, rather than the nicotine, produces the harmful chemicals found in combustible cigarettes. There are an estimated 600 ingredients in each tobacco cigarette, and “when burned, [they] create more than 7,000 chemicals.” As a result of these chemicals, cigarette smoking is directly linked to cardiovascular and respiratory diseases, numerous types of cancer, and increases in other health risks among the smoking population.

For decades, policymakers and public health officials looking to reduce smoking rates have relied on strategies such as emphasizing the possibility of death related to tobacco use and implementing tobacco-related restrictions and taxes to motivate smokers to quit using cigarettes. However, there are much more effective ways to reduce tobacco use than relying on government mandates and “quit or die” appeals. 

During the past 30 years, the tobacco harm reduction (THR) approach has successfully helped millions of smokers transition to less-harmful alternatives. THRs include effective nicotine delivery systems, such as smokeless tobacco, snus, electronic cigarettes (e-cigarettes), and vaping.

Excise Taxes Are Meant to Deter, Policymakers Should Support Smokers Use of Less Harmful Tobacco Products

Policymakers often justify increasing tax rates on tobacco products in an attempt to incentivize persons to quit. Indeed, cigarette taxes are sin taxes and are used to deter persons from certain behaviors. 

Policymakers should refrain from enacting the same tax rate on products the FDA has determined to be less harmful than combustible cigarettes. In fact, such products should be subject to zero tax as they have a positive effect on creating former smokers. Moreover, excessive taxes could act as a barrier to use and keep persons smoking much more harmful combustible cigarettes.

Youth Use of Modified Risk Tobacco Products Is Non-Issue

As of January, 2022, seven states have reduced their state excise tobacco tax on products with modified risk orders, including Connecticut (2017), Kentucky (2018), North Carolina (2018), New Mexico (2019), Washington (2019), Utah (2020), and Colorado (2020). 

According to youth survey data from the Centers for Disease Control and Prevention in 2019, a lower tax rate on certain tobacco products, youth use of those products has not increased. For example, in Kentucky, among high school students, in 2017, 10.6 percent reported using smokeless tobacco. In 2019, and the year after the Bluegrass State permitted a reduced tax rate for products with modified risk orders, only 6.4 percent reported current smokeless tobacco use. Essentially, in the year after approving a reduced tax rate on certain smokeless tobacco products, youth use of those products in Kentucky decreased by 39.6 percent between 2017 and 2019.

There is no data on youth smokeless use for the other states, but nationally, youth use of smokeless tobacco products has declined. In 2017, 5.5 percent of U.S. high school students reported using smokeless tobacco products. In 2019 this had decreased by 31 percent, to 3.8 percent of high school students using a smokeless tobacco product on at least one occasion in the 30 days prior to the survey.

It is unlikely that New Hampshire high school students would increase their use of smokeless tobacco products with modified risk orders as it has not been seen in any other state, or nationally.

Policy Recommendations 

  • Modified risk tobacco product orders are a unique tool of the FDA that recognize the potential of reduced risk tobacco products to be useful to help smokers quit combustible cigarettes. 
  • As the nation’s leading health agency, the FDA alone determines if there is enough scientific evidence for a product to be less harmful, prior to the company marketing their product as a reduced risk product. 
  • The 2009 Family Smoking Prevention and Tobacco Control Act created a process for establishing regulations regarding less harmful tobacco products and allows the FDA to authorize modified risk tobacco product orders.
  • To date, only 14 orders have been granted. Only one company’s product is available for sale in New Hampshire.
  • To date, seven states have lower tax rates on modified risk tobacco products. 
  • There is no evidence of increased youth use of products with modified risk orders and reduced tax rates. 
  • By reducing the tax rate on products that have been deemed less harmful by the FDA, state lawmakers are helping to incentivize adult smokers in New Hampshire to switch. 

1 U.S. Food and Drug Administration, “Family Smoking Prevention and Tobacco Control Act – An Overview,” June 3, 2020, https://www.fda.gov/tobacco-products/rules-regulations-and-guidance/family-smoking-prevention-and-tobacco-control-act-overview. 

2 U.S. Food and Drug Administration, “Section 911 of the Federal Food, Drug, and Cosmetic Act – Modified Risk Tobacco Products,” January 7, 2018, https://www.fda.gov/tobacco-products/rules-regulations-and-guidance/section-911-federal-food-drug-and-cosmetic-act-modified-risk-tobacco-products. 

3 Brad Rodu, For Smokers Only: How Smokeless Tobacco Can Save Your Life, Sumner Books, 1995, p. 103.

4 American Lung Foundation, “What’s In a Cigarette?,” February 20, 2019, https://www.lung.org/stop-smoking/smoking-facts/whats-in-a-cigarette.html.  

5 Centers for Disease Control and Prevention, “Health Effects of Cigarette Smoking,” January 17, 2018, https://www.cdc.gov/tobacco/data_statistics/ fact_sheets/health_effects/effects_cig_smoking/index.htm.

6 Centers for Disease Control and Prevention, “High School YRBS,” 2019, https://nccd.cdc.gov/Youthonline/App/Default.aspx.