FDA Tells Swisher Its Cigars Can Remain on Market Pending SE Reviews, Request Lawsuit Moves to D.C.

There have been a plethora of filings in the lawsuit filed by Swisher against the U.S. Food & Drug Administration (FDA) earlier this month, including one interesting development.

In a response filed this Monday in regards to Swisher’s motion for a preliminary injunction, FDA says that it currently plans on letting Swisher’s cigars remain on the market while the agency evaluates the company’s substantial equivalence filings for those products. The agency hopes that this declaration will invalidate Swisher’s request for a preliminary injunction, in which the company asked a court to prevent FDA from removing Swisher’s cigars from the market while its applications are still being decided by FDA.

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Note: The enforcement deadlines in this case currently do not apply to most cigars sold in humidors. Because of a Washington D.C. court’s orders, cigars that are “premium cigars” are currently not subject to the premarket approval requirements that are mentioned below. In this case, the definition used for “premium cigars” would apply to most cigars found in a humidor with notable exceptions being cigars that are flavored or machine-made.

This case could have effects on these cigars and the companies that sell them if “premium cigars” are subject to the same premarket approval requirements as other deemed tobacco products. As of now, that is indefinitely on hold until after FDA completes a review of whether it properly evaluated the regulations for “premium cigars,” something that is expected to be completed in 2022.

Earlier this month, Swisher—which makes billions of machine-made cigars under the Swisher Sweets name annually and also is the parent company of Drew Estate—filed a lawsuit in the U.S. District Court for the Middle District of Florida over an upcoming Sept. 9 enforcement deadline. Companies who sell cigars, e-cigarettes/vaping products, pipe tobacco, hookah tobacco, and other deemed tobacco products were required to file applications with FDA to continue selling those products in the U.S.

For more details about the Swisher lawsuit, click here.

While the deadline about when those applications needed to be submitted has been changed numerous times, the largest change came from a separate lawsuit, in which a federal judge in Maryland ordered that those products could remain on the market for one year after the application deadline while FDA reviews those applications. Originally, FDA’s plan was to allow for those products to remain on the market indefinitely while the agency reviewed the individual applications.

Now—because of the Maryland-based court’s ruling—FDA can begin to require companies to remove their products beginning Sept. 9.

In an Aug. 12 letter to Swisher’s attorneys, the Department of Justice—which represents FDA in legal matters like this—said that the agency has no current plans to request Swisher to remove its products while applications are still pending, and that if it did, FDA would give Swisher 60 days to respond to a removal request.

At present, FDA has no intention of initiating an enforcement action against any of Swisher’s products listed in Exhibit A of your July 6 letter on the ground that they are being marketed contrary to 21 U.S.C. § 387j (requiring premarket authorization of new tobacco products).

If FDA were to later seek to initiate an enforcement action regarding 21 U.S.C. § 387j as to any of those products, it would first send a warning letter to Swisher, consistent with the agency’s usual practice, and would afford Swisher 60 days to respond. The agency would then evaluate any arguments and evidence provided by Swisher in response to the warning letter before informing Swisher of any decision to initiate an enforcement action.

Given the arguments about supply chain hurdles and the potential costs associated with removing products from the market, it seems likely that Swisher would respond to this arguing—at the very least—that: a. the company should not be required to remove its products due to FDA’s own delays in reviewing applications, b. the threat of removal is still a massive burden for the company, c. that 60 days notice is not enough time for a company as large as Swisher to forecast potential product removals.

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The situation is a rather complex one because FDA neither created nor asked for the one-year enforcement period.

Rather, it was created as part of a 2019 decision that FDA lost over whether the agency was acting improperly when it previously delayed various enforcement deadlines regarding the deeming regulations.

A group of Maryland-based pediatricians and anti-tobacco groups sued FDA in a Maryland federal court, arguing that the agency did not have the authority to continue to delay these deadlines.

Judge Paul W. Grimm said that the new deadlines were necessary because of the “extraordinary circumstances of this case in which prompt action is necessary to combat the ‘epidemic-level rise in youth e-cigarette use,’ which undisputedly is a ‘mounting public health crisis.'” The plaintiffs and Grimm repeatedly mentioned that FDA’s delays in the issue were concerning because of youth access to e-cigarettes and vaping products.

As such, Grimm not only accelerated the timelines for when companies needed to submit requests for premarket product approvals to FDA from the then-August 2021 deadline to May 2020—eventually delayed until September 9, 2020 due to COVID-19—but also added a new wrinkle.

He ordered:

New Products for which applications have been timely filed may remain on the market without being subject to FDA enforcement actions for a period not to exceed one year from the date of application while FDA considers the application;

This was a major change to what would happen during the time period between when a company submitted a request for premarket product approval—commonly referred to as either “grandfathered products,” “substantial equivalence,” or “PMTA”—and when FDA concluded that the product had met the requirements for premarket approval.

Confusingly, the process is known as “premarket approval” even though these products are currently for sale. Furthermore, FDA uses the term “approved” to mean that the agency has confirmed that an application has all of the necessary information needed for FDA to evaluate the application, not that the agency has actually granted approval of the application. That action is termed as a “marketing order.”

Previously, FDA intended on letting those products remain on the market while the agency reviewed the applications. This is of particular importance given that FDA has taken years to grant marketing orders to products. In its lawsuit, Swisher mentioned that in regards to previous tobacco product applications, by April 2018 FDA had issued final orders for just 191 of the 3,600 substantial equivalence reports that were submitted in 2011.

Given FDA’s expanded tobacco regulation, the agency said that it received more than 7,100 substantial equivalence reports in 2020 as well as more than 6.5 million PMTA applications, which are far more complex applications.

Out of those 7,100 substantial equivalence reports, FDA issued orders for 321 (4.5 percent) of those products by July 28 and rejected 1,600 products (22.5 percent). It also rejected “approximately 4.5 million” PMTA submissions from a single company, though 1.4 million PMTA applications remain pending.

Mitch Zeller, director of FDA’s Center for Tobacco Products, said in a declaration that FDA has 285 full-time employees reviewing the PMTA applications and 55 full-time employees reviewing the substantial equivalence reports.

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Swisher’s lawsuit is not just related to the Sept. 9 deadline for potential product removal but also focuses on larger issues about whether FDA has the authority to regulate cigars.

FDA responded to those claims with a variety of arguments, including arguing that Swisher is prevented from filing these claims to the “doctrine of res judicata.”

In short, it argues that Swisher is making the same claims in two different lawsuits, including some claims that FDA argues have already been decided in a lawsuit that Swisher is part of because of its membership in the Cigar Association of America (CAA), a trade group. The CAA is one of three co-plaintiffs in Cigar Association of America et al. v. United States Food and Drug Administration et al., the lawsuit filed in 2016 by three cigar trade groups against FDA.

FDA has also requested that if this lawsuit is permitted to proceed, that it be moved to the U.S. District Court for the District of Columbia where it could be combined with the aforementioned Cigar Association lawsuit.