Biden Administration Announces Regulatory Freeze, Includes Substantial Equivalence Updates Passed Earlier This Week

As is common for new presidential administrations, the Biden administration has announced a regulatory freeze on all new and pending rules introduced in the last part of the Trump administration. During this time, the Biden administration will determine whether it wants to move forward with these rules. That freeze will include new finalized rules for substantial equivalence (SE) and premarket tobacco product applications (PMTA) that were announced on Tuesday, the last full day of the Trump administration.

For the cigar industry, this freeze will have no immediate effect.

Because of an August court ruling, the U.S. Food & Drug Administration (FDA) is currently not evaluating substantial equivalence filings for “premium cigars” until after it completes a review of whether it should adopt different rules for “premium cigars.”

For cigars that weren’t deemed “premium cigars” by an FDA definition—which excluded both flavored cigars as well as some machine-made cigars—the substantial equivalence reports were required to be submitted by Sept. 9, 2020. That means the changes announced by FDA on Tuesday would have really only applied to future non-premium cigars and other tobacco products. Those future products will require FDA approval before they are legally allowed to be sold. Given the thousands of applications FDA received around the Sept. 9 deadline, it’s likely that manufacturers of cigars that didn’t meet the “premium” definition likely already applied for substantial equivalence for future products knowing the potentially long approval process that will likely apply for all applications turned in after Sept. 9.

The regulatory freeze does mean that the codified definition of “premium cigars”—the one that excludes flavored cigars—will not yet enter the federal record. However, FDA already submitted this definition to a federal court and is required to complete its review of a potential modification of rules for “premium cigars” before enforcing substantial equivalence requirements for “premium cigars.” This means that while the definition is not yet codified, it is already being used by the agency.

It’s entirely possible that the Biden administration could move forward with Tuesday’s new rules as written. Alternatively, because the finalized rules were not formally published in the federal record before the end of the Trump administration, the Biden administration could scrap the rules entirely.