41314 Federal Register / Vol. 60, No. 155 / Friday, August 11, 1995 / Proposed Rules

DEPARTMENT OF HEALTH AND achieve the reduction in the use of pediatric disease. Therefore, reducing HUMAN SERVICES tobacco products by young people. FDA the number of young people who is requesting comment regarding the regularly start to use tobacco products Food and Drug Administration type of additional measures that would will help to prevent future generations be most effective. of individuals from becoming addicted 21 CFR Parts 801, 803, 804, and 897 DATES: Written comments and to nicotine. [Docket No. 95N±0253] recommendations by November 9, 1995. The goal of the proposed rule is to ADDRESSES: Submit written comments help the country achieve one of the Regulations Restricting the Sale and and recommendations to the Dockets objectives of ‘‘Healthy People 2000,’’ Distribution of Cigarettes and Management Branch (HFA–305), Food which is to reduce the number of Smokeless Tobacco Products To and Drug Administration, rm. 1–23, children and adolescents who use Protect Children and Adolescents 12420 Parklawn Dr., Rockville, MD tobacco products by roughly one half by 20857. the year 2000. The agency has modified AGENCY: Food and Drug Administration, the goal to include a different FOR FURTHER INFORMATION CONTACT: HHS. measurement tool and established 7 Philip Chao, Office of Policy (HF–23), ACTION: Proposed rule. years after publication of the final rule Food and Drug Administration, 5600 as the goal’s endpoint. ‘‘Healthy People SUMMARY: The Food and Drug Fishers Lane, Rockville, MD, 20857, 2000’’ discussed national health 301–827–3380. Administration (FDA) is proposing new promotion and disease prevention regulations governing the sale and SUPPLEMENTARY INFORMATION: objectives in this country. It was distribution of nicotine-containing I. Introduction facilitated by the Institute of Medicine cigarettes and smokeless tobacco of the National Academy of Sciences, products to children and adolescents in Approximately 50 million Americans with the help of the U.S. Public Health order to address the serious public currently smoke cigarettes and another Service, and included almost 300 health problems caused by the use of 6 million use smokeless tobacco national membership organizations and 1 and addiction to these products. The products. These tobacco products are all State health departments.6 proposed rule would reduce children’s responsible for more than 400,000 To determine the most appropriate and adolescents’ easy access to deaths each year due to cancer, regulatory measures, the agency cigarettes and smokeless tobacco as well respiratory illnesses, heart disease, and reviewed the current patterns of use of as significantly decrease the amount of other health problems.2 Cigarettes kill tobacco products. According to the 1994 positive imagery that makes these more Americans each year than Surgeon General’s Report, ‘‘Preventing products so appealing to them. The acquired immune deficiency syndrome Tobacco Use Among Young People: A proposed rule would not restrict the use (AIDS), alcohol, car accidents, murders, Report of the Surgeon General’’ (the of tobacco products by adults. suicides, illegal drugs, and fires 1994 Surgeon General’s Report), more Specifically, the proposed rule would combined.3 On average, smokers who than 3 million American adolescents establish 18 years of age as the Federal die from a disease caused by smoking currently smoke cigarettes and an minimum age of purchase and would lose 12 to 15 years of life because of additional 1 million adolescent males prohibit cigarette vending machines, tobacco use.4 use smokeless tobacco.7 Every day, free samples, mail-order sales, and self- In a separate document,5 FDA is another 3,000 young people become service displays. It would also require addressing the issue of its jurisdiction regular smokers.8 U.S. data suggest that that retailers comply with certain over nicotine-containing cigarettes and anyone who does not begin smoking in conditions regarding sales of tobacco, smokeless tobacco products. The results childhood or adolescence is unlikely to especially verification that the of an extensive investigation and ever begin.9 Eighty-two percent of adults purchaser is at least 18 years of age comprehensive legal analysis support a who ever smoked had their first before a tobacco sale is made. Finally, finding at this time that the nicotine in cigarette before age 18, and more than the proposed rule would limit these products is a drug and that these half of them had already become regular advertising and labeling to which products are nicotine-delivery devices smokers by that age.10 Moreover, the children and adolescents are exposed to within the meaning of the Federal Food, younger one begins to smoke, the more a text-only format; ban the sale or Drug, and Cosmetic Act (the act). FDA likely one is to become a heavy distribution of branded non-tobacco proposes to regulate cigarettes and smoker.11 items such as hats and tee shirts; restrict smokeless tobacco products by Many young tobacco users become sponsorship of events to the corporate employing its restricted device addicted to nicotine, a chemical name only; and require manufacturers authority, which affords the most substance in tobacco. Although they to establish and maintain a national appropriate and flexible mechanism for believe that they will not become public education campaign aimed at regulating the sale, distribution, and use addicted to nicotine or become long- children and adolescents to counter the of these products. term users of tobacco products, they pervasive imagery and reduce the The primary objective of the proposed often find themselves unable to quit appeal created by decades of pro- rule is to reduce the death and disease smoking.12 In fact, among smokers aged tobacco messages and thus to help caused by tobacco products. Rather than 12–17 years, 70 percent already regret reduce young people’s use of tobacco banning tobacco products for the their decision to smoke and 66 percent products. millions of Americans who are currently state that they want to quit.13 Those who The objective of the proposed rule is addicted to them, this regulation focuses are able to quit experience relapse rates to meet the goal of the report ‘‘Healthy on preventing future generations from and withdrawal symptoms similar to People 2000’’ by reducing roughly by developing an addiction to nicotine- those reported in adults.14 half children’s and adolescents’ use of containing tobacco products. In Long-term addiction to nicotine can tobacco products. If this objective is not addition, the scientific evidence result in serious chronic diseases and met within seven years of the date of strongly suggests that nicotine addiction premature death. An adolescent whose publication of the final rule, the agency begins when most tobacco users are cigarette use continues into adulthood will take additional measures to help teenagers or younger and, thus, is a increases his or her risk of dying from Federal Register / Vol. 60, No. 155 / Friday, August 11, 1995 / Proposed Rules 41315 cancer, cardiovascular disease, or lung associate the ‘‘Joe Camel’’ cartoon figure The proposed rule would prohibit the disease.15 In addition, smokeless with cigarettes.24 Studies also show that distribution of free samples and would tobacco use has been linked to oral most young people buy the most heavily allow the exchange of coupons and cancer and other adverse effects.16 advertised cigarette brands, whereas other non-cash certificates only by Although most segments of the many adults buy generic or ‘‘value individuals 18 or older and only in face- American adult population have category’’ cigarette brands, which have to-face transactions. Currently, young decreased their use of cigarettes, the little or no image advertising.25 people, including children in prevalence of smoking by young people In proposing this regulation, FDA elementary school, are often able to has failed to decline for more than a examined many domestic and foreign obtain free samples despite industry- decade. Recently, smoking among young tobacco control statutes, regulations, imposed age restrictions on such people has begun to rise.17 Between and legislation, as well as numerous distributions. 1991 and 1994, the prevalence of studies and reports. FDA also reviewed The proposed rule would also smoking by eighth graders increased 30 recommendations from various public prohibit the sale of single cigarettes percent, from 14.3 percent to 18.6 health organizations, including the (‘‘loosies’’) and ‘‘kiddie packs (less than percent. Among 10th grade students, it World Health Organization, the Office of 20 to a pack) which, due to their increased from 20.8 percent to 25.4 the Surgeon General, the Centers for relatively low price and easy percent and for 12th grade students, it Disease Control and Prevention (CDC), concealment, have been shown to be rose from 28.3 percent to 31.2 percent.18 the National Cancer Institute (NCI), and particularly appealing to children and Between 1985 and 1994, smoking the Institute of Medicine (IOM). Two adolescents. among college freshmen increased from reports, the 1994 Surgeon General Further, the proposed rule would 9 percent to 12.5 percent.19 Report and the 1994 IOM Report prohibit manufacturers from using a Millions of American children and ‘‘Growing Up Tobacco Free: Preventing trade name or brand name of a non- adolescents can easily buy or obtain Nicotine Addiction in Children and tobacco product for a cigarette or cigarettes and smokeless tobacco Youths,’’ were especially helpful and smokeless tobacco product. This will products. The large number of young informative. prevent a manufacturer from people who use these products is The agency has examined many transferring the images, good will, and especially noteworthy because all States options for reducing tobacco use by appeal of a popular non-tobacco product prohibit the sale of tobacco products to children and adolescents, and believes to a tobacco product. persons under the age of 18, and a few that an effective program must address B. Labeling, Advertising and States prohibit cigarette sales to persons the following two areas: (1) Restrictions Educational Programs under the ages of 19 or 21.20 These State on cigarette and smokeless tobacco sales laws, however, are rarely enforced. It is that will make these products less Advertising that reaches children estimated that each year children and accessible to young people; and (2) would be in black and white, text-only adolescents consume between 516 restrictions on labeling and advertising format. Studies indicate that children million and 947 million cigarette to help reduce the appeal of tobacco and adolescents are very receptive to packages and 26 million containers of products to young people along with images and cartoons and less attentive smokeless tobacco products.21 requirements for a manufacturer- to texts. However, the proposed rule In addition to easy access to tobacco funded national education campaign would not affect advertising in products, advertising and promotional aimed at those under 18 years of age to publications with primarily adult activities can influence a young person’s help reduce the products’ appeal to readership—imagery and color would decision to smoke or use smokeless these young people. A brief description continue to be permitted in such tobacco products. Tobacco products are of the major provisions of the proposed publications. Finally, outdoor among the most heavily advertised rule follows. advertising of tobacco products located products in the United States.22 In 1993, within 1,000 feet of schools and the tobacco industry spent a total of $6.2 A. Sale and Distribution playgrounds would be banned. billion on the advertising, promotion, The proposed rule would restrict the Consequently, the proposed rule would and marketing of cigarettes and sale of cigarettes and smokeless tobacco help reduce the appeal of advertising to smokeless tobacco. Of that number, 31 products to individuals age 18 and children and adolescents without percent ($1.9 billion) was spent on older. This age restriction is based on affecting informational messages advertising and promotional activities; the fact that most adult smokers became conveyed to adults. 26 percent ($1.6 billion) was given to regular smokers before age 18. The proposed rule would prohibit the retailers in the form of cash allowances The proposed rule would require sale or distribution of brand identifiable or retailer items to facilitate and retailers to verify the age of persons who non- tobacco items and services, proof- enhance the sale of tobacco products, wish to buy cigarettes or smokeless of-purchase sales, games and contests, and finally, 43 percent ($2.6 billion) was tobacco products and would eliminate and sponsorship of events in the brand in the form of financial incentives (e.g. ‘‘impersonal’’ methods of sale that do name, as well as advertising for these coupons, cents off, buy one/get one free, not readily allow age verification, such items, services, and events. free samples) to consumers.23 as mail orders, self-service displays, and The proposed rule would require Tobacco product brand names, logos, vending machines. manufacturers to establish and maintain and advertising messages are pervasive, The proposed rule would make each a national educational campaign in appearing on billboards, on buses and manufacturer, distributor, and retailer of order to counter the pervasive imagery trains, in magazines and newspapers, tobacco products responsible for and reduce the appeal created by and on clothing and other goods. These complying with the proposed decades of pro-tobacco messages and, ubiquitous images and messages convey restrictions. Manufacturers would be thus, help reduce young people’s use of to young people that tobacco use is required to remove all manufacturer- tobacco products. Evidence exists that desirable, socially acceptable, safe, supplied or manufacturer-owned self- mass media antismoking campaigns healthy, and prevalent in society. One service displays, advertising, labeling, conducted nationally between 1967 and study found that 30 percent of 3 years and other items that do not conform to 1970, and more recently, in Vermont olds and 91 percent of six year olds the requirements in the proposed rule. and California, have had a sustained 41316 Federal Register / Vol. 60, No. 155 / Friday, August 11, 1995 / Proposed Rules effect on preventing teens from starting United States, 1990,’’ in ‘‘MMWR,’’ CDC, A Report of the Advisory Committee to the to smoke and on significantly reducing DHHS, vol. 42, no. 33, pp. 645–649 (1993). Surgeon General,’’ p. 32–47, Bethesda, Md., per capita cigarette consumption. 3. IOM, p. 3. Collectively, AIDS, alcohol, DHHS, PHS, NIH Publication No. 86–2874, car accidents, murders, suicides, illegal drugs April, 1986 (hereinafter cited as ‘‘1986 C. Healthy People 2000 Objective and fire combined cause nearly 251,000 SGR’’). deaths a year. Seven years after publication of the 17. ‘‘Cigarette Smoking Among Adults— 4. ‘‘Cigarette Smoking—Attributable United States 1991, ‘‘in ‘‘MMWR,’’ CDC, final rule, the agency would determine Mortality and Years of Potential Life Lost— DHHS, Vol. 42, no. 12, pp. 230–233, 1993; whether additional restrictions on United States, 1990, in ‘‘MMWR,’’ CDC, Johnston, L.D., P.M. O’Malley, and J.G. tobacco products are required by using DHHS, vol. 42, no. 33, pp. 645–649, 1993; Bachman, ‘‘National Survey Results on Drug outcome-based objectives modeled on Peto, R., et al., ‘‘Mortality from Tobacco in Use from The Monitoring the Future Study, the ‘‘Healthy People 2000’’ report. One Developed Countries: Indirect Estimation 1975–1993, Volume I: Secondary School of the goals for tobacco use established from National Vital Statistics,’’ The Lancet, Students,’’ Rockville, MD: U.S. Department vol. 339, pp. 1268–1278, 1992. of Health and Human Services, Public Health by that report is to reduce by roughly 5. ‘‘Nicotine In Cigarettes and Smokeless one half the percentage of young people Service, National Institute of Health, National Tobacco Products is a Drug and These Institute on Drug Abuse, NIH Pub. No. 94– using tobacco products by the year Products are Nicotine-Delivery Devices 3809, pp. 9, 19, 1994; The University of 2000. If this objective is not met within Under the Federal Food, Drug, and Cosmetic Michigan, News and Information Service, the time specified by the rule, FDA Act,’’ FDA, DHHS, August, 1995. July 20, 1995, ‘‘Smoking rates climb among would take additional measures to help 6. DHHS, ‘‘Healthy People 2000, ‘‘U.S. American teenagers, who find smoking achieve the reduction in young people’s Department of Health and Human Services, increasingly acceptable and seriously use of tobacco products. The proposed Public Health Service, Intro. pp. 1–8, underestimate the risks.’’ Table 1. September 1990. rule requests comment on which 18. Johnston, L.D., P.M. O’Malley, and J.G. 7. DHHS, ‘‘Preventing Tobacco Use Among Bachman, ‘‘National Survey Results on Drug additional measures should be adopted. Young People: A Report of the Surgeon The agency intends to adopt one or Use from the Monitoring the Future Study, General,’’ Atlanta, Georgia: DHHS, PHS, CDC, 1975–1993, Volume I: Secondary School more additional provisions only if the NCCDPHP, OSH, 1994 pp. 5 (hereinafter Students,’’ Rockville, MD: U.S. Department continued use of cigarettes and cited as ‘‘1994 SGR’’). of Health and Human Services, Public Health smokeless tobacco products by children 8. IOM Report p. 8. Service, National Institute of Health, National and adolescents indicates that the goal 9. 1994 SGR, pp. 5, 58, 65–67. Institute on Drug Abuse, NIH Pub. No. 94– 10. 1994 SGR, p. 65. of reducing tobacco use by young 3809, 1994; The University of Michigan, 11. Taioli, E., E.L. Wynder, ‘‘Effect of the News and Information Service, July 20, 1995, people by roughly half had not been Age at Which Smoking Begins on Frequency ‘‘Smoking rates climb among American met. of Smoking in Adulthood,’’ The New England teenagers, who find smoking increasingly The remainder of this discussion of Journal of Medicine, vol. 325, No. 13 pp. acceptable and seriously underestimate the the proposed rule (hereinafter 968–969, 1991; and L.G. Escobedo, et al., ‘‘preamble’’) is organized as follows: ‘‘Sports Participation, Age of Smoking risks.’’ Table 1. 19. ‘‘Washington Post,’’ January 9, 1995, at Chapter II examines the use of cigarettes Initiation, and the Risk of Smoking Among U.S. High School Students,’’ Journal of the p. A5, col. 3 (describing findings from a and smokeless tobacco products by survey of approximately 238,000 freshman children and adolescents, and the health American Medical Association, vol. 269, No. 11, pp. 1391–1395, 1993. conducted by the UCLA Higher Education consequences of using nicotine- 12. IOM Report, pp. 51–52. Research Institute) and UCLA, Health containing tobacco products; Chapter III 13. The George H. Gallup International Education Research Institute, ‘‘The American describes the provisions of the proposed Institute. ‘‘Teenage Attitudes and Behavior Freshman: National Norms for Fall 1994. rule and provides the rationale for each Concerning Tobacco,’’ at p. 54, September 20. Coalition on Smoking OR Health, of the requirements; Chapter IV reviews 1992. ‘‘State Legislated Actions on Tobacco the legal authority for these specific 14. Reasons for Tobacco Use and Issues,’’ at Appendix G, 1993. Symptoms of Nicotine Withdrawal Among 21. DiFranza, J.R., and J.B. Tye, ‘‘Who requirements, and Chapters V through Profits From Tobacco Sales to Children?’’ VIII provide analyses required by the Adolescent and Young Adult Tobacco Users—United States, 1993,’’ in ‘‘Morbidity Journal of the American Medical Association, Paperwork Reduction Act of 1980, and Mortality Weekly Report,’’ CDC, DHHS, vol. 263, No. 20, pp. 2784–2787, 1990; various Executive Orders, as well as vol. 43, No. 41, pp. 745–750, 1994; 1994 SGR, Cummings, K.M., T. Pechacek, and D. provides analyses of various economic p. 78. Shopland, ‘‘The Illegal Sale of Cigarettes to and environmental impacts. 15. McGinnis, J.M., and W.H. Foege, U.S. Minors: Estimates by State,’’ American ‘‘Actual Causes of Death in the United Journal of Public Health, vol. 84, No. 2, pp. References States,’’ Journal of the American Medical 300–302, 1994 (conservative estimates of 1. Substance Abuse and Mental Health Association, vol. 270, No. 18, pp. 2207–2212, cigarette use by teenagers in 1991 have Services Administration, ‘‘National 1993; see generally DHHS, ‘‘Reducing the teenagers smoking 516 million packs of Household Survey on Drug Abuse: Health Consequences of Smoking: 25 Years of cigarettes and spending $962 million (of Population Estimate 1993,’’ Rockville, MD: Progress, A Report of the Surgeon General.’’ which the industry gained a profit of $190 Department of Health and Human Services, DHHS, PHS, CDC, NCCDPHP, OSH. DHHS million); an estimated 255 million packs Public Health Service, Substances Abuse and Publication No. (CDC) 89–8411, p. 5, 1989 were sold illegally to minors). Mental Health Services Administration, (hereinafter cited as ‘‘1989 SGR’’); DHHS, 22. 1994 SGR, p. 160. Office of Applied Studies, DHHS Pub. No. ‘‘The Health Consequences of Smoking 23. Federal Trade Commission, ‘‘Report to (SMA) 94–3017, 1994, pp. 89, 95; ‘‘Cigarette Chronic Obstructive Lung Disease: A Report Congress for 1993, Pursuant to the Federal Smoking Among Adults—United States, of the Surgeon General, ‘‘DHHS, PHS, OSH, Cigarette Labeling and Advertising Act,’’ 1993,’’ in ‘‘Morbidity and Mortality Weekly 1984 (hereinafter cited as ‘‘1984 SGR’’); Table 3D (1995) and Federal Trade Report (MMWR),’’ CDC, Department of DHHS, ‘‘The Health Consequences of Commission, ‘‘Report to Congress, Pursuant Health and Human Services (DHHS), vol. 43, Smoking: Cardiovascular Disease, A Report to the Comprehensive Smokeless Tobacco No. 50, pp. 925–930, 1994; ‘‘Use of of the Surgeon General,’’ Public Health Health Education Act of 1986,’’ Table 4D Smokeless Tobacco Among Adults—United Service, OSH, DHHS, p. 76, 1983; DHHS, (1995). States, 1991,’’ in ‘‘MMWR,’’ CDC, DDS, vol. ‘‘The Health Consequences of Smoking— 24. Pierce, J.P., et al., ‘‘Does Tobacco 42, pp. 263–266, 1993; Unpublished data Cancer—A Report of the Surgeon General,’’ Advertising Target Young People to Start from the 1992 Youth Risk Behavior Survey, DHHS, PHS, OSH, p. 8, 1982 (hereinafter Smoking? Evidence from California,’’ Journal National Health Interview Supplement, CDC. cited as ‘‘1982 SGR’’). of the American Medical Association, vol. 2. ‘‘Cigarette Smoking—Attributable 16. 1994 SGR, p. 39; DHHS, ‘‘The Health 266, No. 22, pp. 3154–3158, 1991; See also Mortality and Years of Potential Life Lost— Consequences of Using Smokeless Tobacco: Fischer, P.M. et al., ‘‘Brand Logo Recognition Federal Register / Vol. 60, No. 155 / Friday, August 11, 1995 / Proposed Rules 41317 by Children Aged 3 to 6 Years, Mickey recent years among 8th and 10th grade found that high school students who Mouse and Old Joe Camel,’’ Journal of the students has risen significantly and smoked their first cigarette during American Medical Association, vol. 266, No. provides cause for great concern. For childhood smoked more often and in 22, pp. 3145–3148, 1991. example, among 8th grade students, greater amount than those who first 25. ‘‘Changes in Cigarette Brand Preference 21 of Adolescent Smokers, United States, 1989– 14.3 percent in 1991 and 18.6 percent in tried smoking during adolescence. 1993,’’ in ‘‘MMWR,’’ DHHS, CDC, vol. 42, 1994 were current smokers; among 10th The escalating use of smokeless No. 32, pp. 577–581, 1994; Teinowitz, I., grade students, 20.8 percent in 1991 and tobacco products by underage persons ‘‘Add RJR to List of Cigarette Price Cuts,’’ 25.4 percent in 1994 were current presents an additional and growing Advertising Age, pp. 3, 46, April 26, 1993. smokers.10 public health problem. Smokeless The 1994 Surgeon General’s Report tobacco products include chewing II. Cigarette and Smokeless Tobacco reviewed several different surveys and tobacco and snuff and are also known as Product Use Among Children and found that the estimated percentage of ‘‘spit tobacco’’ or ‘‘spitting tobacco.’’ In Adolescents adolescents who have ever smoked 1970, the prevalence of snuff use among Each year, the cigarette industry loses cigarettes ranged from approximately 42 males was lowest in those 17 to 19 years about 1.7 million customers in the percent (as reported by the 1991 of age and the highest use was by men United States; about 400,000 die from National Household Survey on Drug aged 50 or more. By 1985, a dramatic diseases caused by their smoking and Abuse) to 70 percent (as reported by the shift had occurred, and males between another 1.3 million quit smoking.1 To 1991 Youth Risk Behavior Survey).11 16 and 19 were twice as likely to use offset the sales lost to smokers who die The 1994 Surgeon General’s Report also snuff as men aged 50 and over.22 An or quit smoking, cigarette manufacturers found that 28 percent of high school estimated 3 million users of smokeless rely on young people as the primary seniors were current smokers.12 (The tobacco products were under the age of source of new customers. Each day, most recent data reported by the 21 in 1986,23 when Congress enacted approximately 3,000 young people Monitoring the Future Project indicates the Comprehensive Smokeless Tobacco become regular smokers,2 serving as the that in 1994 the number of high school Health Education Act (the Smokeless industry’s major domestic source of seniors who were current smokers had Act) (15 U.S.C. 4401). The Smokeless replacement smokers. risen to 31.2 percent.)13 Further, the Act required the Secretary of Health and A. Epidemiology of Tobacco Use Among 1994 Surgeon General’s Report states Human Services (the Secretary) to Children and Adolescents that seven to 13 percent of adolescents inform the public of the health dangers were frequent or heavy smokers, associated with smokeless tobacco use, In 1965, the year following the first consuming at least one-half pack daily required warning labels on packages, 3 Surgeon General’s Report describing or smoking 20 days or more of the 30 banned advertising on electronic media the relationship between smoking and days in a survey period.14 subject to the Federal Communications diseases such as lung cancer, chronic Approximately 3 million children Commission’s jurisdiction (such as bronchitis, and emphysema, 42.4 under the age of 18 are daily smokers.15 television and radio), and encouraged percent of the overall adult population One study found that children between States to make 18 years the minimum 4 in the United States smoked. By 1990, the ages of 8 and 11 who are daily age for purchasing smokeless tobacco the prevalence of smoking in the United smokers consume an average of 4 products. Despite the Smokeless Act 5 States had declined to 25.5 percent. cigarettes daily, and those who are and State laws prohibiting sales to The greatest reduction in adult smoking between the ages of 12 and 17 average minors, a high percentage of persons occurred from 1987 to 1990, when the nearly 14 cigarettes daily. The study under the age of 18 use smokeless prevalence of smoking declined by 1.1 also estimated that adolescents consume tobacco products. For example: percentage point annually, twice the an estimated 947 million packs of • 1991 school-based surveys rate of decline during the preceding 20 cigarettes and 26 million containers of estimated that 10.7 percent of U.S. high years.6 The prevalence of smoking smokeless tobacco annually and account school seniors and 19.2 percent of male among adults leveled off at 25.6 percent for annual tobacco sales of $1.26 9th to 12th grade students use in 1991 and was 26.5 percent in 1992. billion.16 Another study estimates that smokeless tobacco.24 This change was due to a change in the teenagers in 1991 smoked 516 million • A 1992 national household-based definition of current smokers, rather packs of cigarettes and spent $962 survey of U.S. children found that 11.9 than an increase in prevalence. The new million purchasing them.17 As stated percent of males 12–17 years of age definition incorporates some day (i.e., previously, these figures are especially were using smokeless tobacco.25 less than daily, occasional, or significant given that all States prohibit • Among high school seniors who infrequent) smoking.7 The estimate for the sale of tobacco to persons under the had ever tried smokeless tobacco, 73 1992 with the old definition was 25.6 age of 18 (with some States prohibiting percent did so by the ninth grade.26 percent—the same as in 1991. In 1993, sales to persons under the age of 19 and In some parts of the United States the under the new definition, prevalence one State, Pennsylvania, prohibiting rates are especially high. According to was 25.0 percent.8 cigarette sales to persons under the age the 1990–91 Youth Risk Behavior The long-term downward trend in of 21).18 Unfortunately, few States Survey, the smokeless tobacco product adult smoking contrasts with the trends successfully enforce their laws use rates among males in grades 9 in smoking among young people. The restricting tobacco sales to minors.19 through 12 were as high as 34 percent Institute of Medicine noted that the Studies have also suggested that the in Tennessee, 33 percent in Montana, 32 number of high school seniors who have age one begins smoking can greatly percent in Colorado, and 31 percent in smoked in the last 30 days remained influence the amount of smoking one Alabama and Wyoming.27 ‘‘basically unchanged since 1980,’’ at will engage in as an adult and will Native American youth are especially approximately 30 percent, and further ultimately influence the smoker’s risk of vulnerable to smokeless tobacco product reported that 16.7 percent of 8th grade tobacco related morbidity and mortality. use. The rates for both males and students were current smokers (that is, Those who started smoking by early females are extremely high, ranging had smoked within the past 30 days), adolescence were more likely to be from 24 percent to 64 percent, and at and 8.3 percent smoked daily.9 The heavy smokers than those who began rates that, in some areas, are 10 times prevalence of cigarette smoking in smoking as adults.20 Another study higher than those for non-Native 41318 Federal Register / Vol. 60, No. 155 / Friday, August 11, 1995 / Proposed Rules

Americans.28 Studies also suggest that 1. Health Effects of Cigarette Smoking these risk factors, however, may not Native Americans begin using Epidemiologic studies provide completely rule out confounding by smokeless tobacco products at much overwhelming evidence that smoking sexually-transmitted diseases. However, earlier ages than non-Native Americans. causes lung cancer.40 The risk of getting the findings that components of tobacco A 1986 survey at the Rosebud Sioux lung cancer may be more than 20 times smoke can be found in the cervical Reservation in South Dakota revealed greater for heavy smokers than mucus of smokers, that the mucus of that 21 percent of kindergarten children nonsmokers.41 The relationship smokers is mutagenic, and that former used smokeless tobacco products,29 and between smoking and lung cancer is due smokers have a lower risk of getting a survey of Native Americans in the to the numerous carcinogens in cigarette cervical cancer than current smokers are consistent with the hypothesis that state of Washington indicated that 33 smoke.42 Cigarette smoking caused an smoking is a contributing cause of percent of former users and 57 percent estimated 117,000 deaths from lung cervical cancer.56 of current users started using smokeless cancer in 1990.43 The 1982 Surgeon General’s Report tobacco products before the age of 10.30 The risk of getting lung cancer concluded that stomach cancer is increases with the number of cigarettes The recent and very large increase in associated with cigarette smoking.57 smoked and the duration of smoking, the use of smokeless tobacco products Studies show a slight increase in by young people and the addictive and decreases after cessation of 44 mortality from stomach cancer in nature of these products has persuaded smoking. Starting smoking at an smokers compared with nonsmokers.58 the agency that these products must be earlier age increases the potential years Smoking is a leading cause of heart included in any regulatory approach of smoking and increases the risk of disease. The 1964 Surgeon General’s 45 that is designed to help prevent future lung cancer. Studies have shown that Report noted that male cigarette generations of young people from lung cancer mortality is highest among smokers had higher death rates from becoming addicted to nicotine- adults who began smoking before the coronary heart disease than 46 containing tobacco products. age of 15. nonsmokers.59 Subsequent reports have Cigarette smoking also causes cancer concluded that cigarette smoking B. The Health Effects Associated With 47 of the larynx, mouth, and esophagus. contributes to the risk of heart attacks, Cigarettes and Smokeless Tobacco According to current estimates, 82 chest pain, and even sudden death.60 Products percent of laryngeal cancers are due to Overall, smokers have a 70 percent smoking and about 80 percent of the Over 400,000 Americans die each year greater death rate from coronary heart 10,200 deaths from esophageal cancer in 61 from smoking-related illnesses. This disease than nonsmokers. 1993 can be attributed to smoking.48 The Ischemic heart disease resulting from equates to more than one of every five risk of oral cancer among current deaths in the United States.31 If an cigarette smoking claimed nearly 99,000 smokers ranges from 2.0 to 18.1 times 62 adolescent’s tobacco use continues for a lives in 1990. One study estimates that the risk in people who have never 30 to 40 percent of all coronary heart lifetime, there is a 50 percent chance smoked and can be reduced more than that the person will die prematurely as disease deaths are attributable to 50 percent after quitting.49 The risk of 63 a direct result of smoking.’’ 32 Moreover, smoking. Smokers between the ages of esophageal cancer among current 40 and 64, who smoked more than one the earlier a young person’s smoking smokers ranges from 1.7 to 6.4 times the habit begins, the more likely he or she pack a day, were shown to have a risk risk in people who have never smoked of coronary heart disease that is 3.2 will become a heavy smoker and and can also be reduced by about 50 therefore suffer a greater risk of smoking times higher than people who do not percent after quitting.50 64 related diseases.33 Smoking is smoke. Epidemiologic studies demonstrate Several processes that are likely to responsible for about 30 percent of all that cigarette smoking contributes to the contribute to heart attacks are cancer deaths,34 including 87 percent of development of pancreatic cancer.51 The influenced or caused by smoking: all lung cancer deaths; 82 percent of reason for this relationship is unclear, atherosclerosis, thrombosis, coronary deaths from chronic obstructive but may be due to carcinogens or artery spasm, cardiac arrhythmia, and pulmonary disease (COPD); 35 21 metabolites present in the bile or reduced capacity of the blood to deliver percent of deaths from coronary heart blood.52 In 1985, the proportion of oxygen. The nicotine and carbon disease; 36 and 18 percent of deaths from pancreatic cancer deaths in the United monoxide in cigarette smoke are stroke.37 Further, a causal relationship States attributable to smoking was believed to be responsible for heart exists between cigarette smoking and estimated to be 29 percent in men and disease, but other components, such as cancers of the larynx, mouth, 34 percent in women.53 cadmium, nitric oxide, hydrogen esophagus, and bladder; and Cigarette smoking accounts for an cyanide, and carbon disulfide, have also atherosclerotic peripheral vascular estimated 30 to 40 percent of all bladder been implicated.65 Female smokers who disease, cerebrovascular disease cancers and is a contributing factor for also use oral contraceptives increase (stroke), and low-birth weight babies.38 kidney cancer.54 The increased risk of their risk of heart attacks tenfold.66 Cigarette smoking is also a probable kidney and bladder cancer may be Smoking also increases a person’s risk cause of infertility and peptic ulcer related to the number of cigarettes of atherosclerotic peripheral vascular disease and contributes to, or is smoked per day, and the risk decreases disease, especially if the smoker is associated with, cancers of the pancreas, following smoking cessation.55 diabetic.67 Complications of this disease 39 kidney, cervix, and stomach. Smoking appears to be a contributing include decreased blood delivery to the Much of the following brief factor for cancer of the cervix. The peripheral tissues, gangrene, and discussion is abstracted from several association between cigarette smoking ultimately loss of the affected limb. Surgeon General’s reports. The Surgeon and cervical cancer persists after control Smoking cessation is the most important General’s reports summarize thousands is made for risk factors, such as age at intervention in the management of of peer-reviewed scientific studies and first intercourse and the number of peripheral vascular disease.68 are themselves peer-reviewed and sexual partners, that predispose a Smoking is a cause of stroke.69 Stroke subjected to significant scientific woman to developing sexually- is the third leading cause of death in the scrutiny. transmitted diseases. The inclusion of United States.70 The association of Federal Register / Vol. 60, No. 155 / Friday, August 11, 1995 / Proposed Rules 41319 smoking with stroke is believed to be year. In addition, the meta-analysis Medical Association, vol. 261, No. 1, pp. 65– mediated by the mechanisms attributed approximately two-thirds of 65, 1989. responsible for atherosclerosis deaths from sudden infant death 3. U.S. Department of Health, Education (narrowing and hardening of the syndrome to maternal smoking during and Welfare, ‘‘Smoking and Health, Report of 88 the Advisory Committee to the Surgeon arteries), thrombosis, and decreased pregnancy. By another estimate, if all General of the Public Health Service,’’ HEW, 71 cerebral blood flow in smokers. pregnant women stopped smoking, PHS, 1964 (hereinafter cited as ‘‘1964 SGR’’). Female smokers who use oral there would be 4,000 fewer infant 4. National Center for Health Statistics, contraceptives are at an increased risk of deaths per year in the United States.89 Health United States 1993. Hyattsville, MD: having a stroke.72 DHHS, PHS, DHHS Pub. No. (PHS) 94–1232, Cigarette smoking is the leading cause 2. Health Effects of Smokeless Tobacco 1994. of chronic obstructive pulmonary Products 5. ‘‘Cigarette Smoking Among Adults- disease (COPD) in the United States. Smokeless tobacco use can cause oral United States, 1990,’’ in ‘‘MMWR,’’ CDC, Approximately 84 percent of the COPD cancer.90 The risk of oral cancer DHHS, Vol. 41, No. 50, pp. 354–355, 361–362 deaths in men and 79 percent of the increases with increased exposure to (1992). 6. id.; IOM Report, p. 7. COPD deaths in women are attributable smokeless tobacco products, 7. ‘‘Cigarette Smoking Among Adults— 73 to cigarette smoking. The risk of death particularly in those areas of the mouth United States, 1992, and Changes in the from COPD may depend on how many where smokeless tobacco products are Definition of Current Cigarette Smoking,’’ in cigarettes a person smokes daily, how used.91 The risk of cheek and gum ‘‘MMWR,’’ CDC, DHHS, vol. 43, No. 19, p. deeply the person inhales, and the age cancers is nearly 50 times greater in 342–6, 1994. when the person began smoking.74 The long-term snuff users than in 8. ‘‘Cigarette Smoking Among Adults— number of cigarettes smoked per day is nonusers.92 Snuff and chewing tobacco United States, 1993,’’ in ‘‘MMWR,’’ CDC, a strong indicator for the presence of the contain potent carcinogens, including DHHS, vol. 43, No. 50, pp. 925–930, 1994. principal symptoms of chronic 9. Johnston, L.D., P.M. O’Malley, and J.G. nitrosamines, polynuclear aromatic Bachman, ‘‘National Survey Results on Drug respiratory illness, including chronic hydrocarbons, and radioactive Use from The Monitoring the Future Study, cough, phlegm production, wheezing, polonium.93 1975–1993, Volume 1—Secondary School 75 and shortness of breath. Smokeless tobacco use can cause oral Students,’’ Rockville, MD: U.S. Department Smoking’s effects on lung structure leukoplakia, a precancerous lesion of of Health and Human Services, Public Health and function appear within a few years the soft tissue that consists of a white Service, National Institutes of Health, after cigarette smoking begins.76 patch or plaque that cannot be scraped National Institute on Drug Abuse, NIH Pub. Children who smoke suffer from off.94 One study of 117 high school No. 94–3409, pp. 9, 79, 1994. respiratory illnesses more than children students who were smokeless tobacco 10. Id., p. 9; The University of Michigan, who do not smoke. Adolescents who users revealed that nearly 50 percent of News and Information Services, July 20, smoke may experience inflammatory 1995, ‘‘Smoking rates climb among American these students had oral tissue teen-agers, who find smoking increasingly changes in the lung, reduced lung 95 alterations. There is a 5 percent acceptable and seriously underestimate the growth, and may not achieve normal chance that oral leukoplakias will risks,’’ Table 1. 77 lung function as an adult. transform into malignancies in 5 years.96 11. 199 SGR, p. 59. Cigarette smoking is a probable cause The leukoplakia appears to decrease or 12. Id.; p. 58. of peptic ulcer disease.78 Peptic ulcer resolve upon cessation of smokeless 13. The University of Michigan, News and disease is more likely to occur in tobacco use.97 Information Service, July 20, 1995, ‘‘Smoking smokers than in nonsmokers, and the Smokeless tobacco use causes oral rates climb among American teen-agers, who disease is less likely to heal, and more cancer and oral leukoplakia and may be find smoking increasingly acceptable and likely to cause death in smokers than associated with an increased risk of seriously underestimate the risk,’’ Table 1. 14. 1994 SGR, pp. 58–62. nonsmokers.79 Quitting smoking cancer of the esophagus. Smokeless reduces the chances of getting peptic 15. DiFranza, J.R. and J.B. Tye, ‘‘Who tobacco use has been implicated in Profits Tobacco Sales to Children?’’ Journal ulcer disease and is an important cancers of the gum, mouth, pharynx, of the American Medical Association, vol. component of effective peptic ulcer and larynx. Snuff use also causes gum 263, No. 20, pp. 2784–2787, 1990. treatment.80 recession and is associated with 16. Id., pp. 2785–2786. Studies also show that women who discoloration of teeth and fillings, 17. Cummings, K.M., T. Pechacek, and D. smoke have reduced fertility.81 One dental caries, and abrasion of the Shopland, ‘‘The Illegal Sale of Cigarettes to study showed that smokers were 3.4 teeth.98 U.S. Minors: Estimates by State,’’ American times more likely than nonsmokers to Journal of Public Health, vol. 84, No. 2, pp. take more than 1 year to conceive.82 References 300–302, 1994. Smoking’s severe detrimental effects 1. IOM Report, p. 115; ‘‘Cigarette Smoking- 18. Coalition on Smoking OR Health, during pregnancy are well Attributable Mortality and Years of Potential ‘‘State Legislated Actions on Tobacco Issues,’’ p. i, 1993. (Federal law requires documented.83 Women who smoke are Life Lost—United States, 1990,’’ in ‘‘MMWR,’’ CDC, DHHS, vol. 42, pp. 645–649, States to ban the sale or distribution of twice as likely to have low birth weight tobacco products to anyone under the age of 84 1993, reprinted in Chronic Disease and infants as women who do not smoke. Health Promotion Adapted from MMWR 18 by October 1, 1994, in order to receive Smoking also causes intrauterine growth Tobacco Topics 1990–1993, pp. 77–81; certain funds (42 U.S.C. 300x–26)). retardation of the fetus.85 Mothers who McGinnis, J.M., and W.H. Foege, ‘‘Actual 19. ‘‘Youth Access to Tobacco,’’ DHHS, smoke also have increased rates of Causes of Death in the United States,’’ Office of the Inspector General, Publication, premature delivery.86 Journal of the American Medical Association, No. OEI–02–91–00880, pp. 5–8, December Smoking may lead to premature infant vol. 270, No. 18, pp. 2207–2212, November 1992; Kusserow, R.P., ‘‘Youth Access to death. Babies of mothers who smoke are 10, 1993; Pierce, J.P., et al., ‘‘Trends in Cigarettes,’’ DHHS, Office of the Inspector more likely to die than babies born to Cigarette Smoking in the United States, General, Publication No. OEI–02–90–02310, pp. 3–5, May 1990. nonsmoking mothers.87 A recent meta- Projections to the Year 2000,’’ Journal of the American Medical Association, vol. 261, No. 20. Taioli, E., and E.L. Wynder, ‘‘Effect of analysis reported that use of tobacco 1, pp. 61–65, 1989. the Age at Which Smoking Begins on products by pregnant women results in 2. Pierce, J.P., et al., ‘‘Trends in Cigarette Frequency of Smoking in Adulthood,’’ The 19,000 to 141,000 miscarriages per year, Smoking in the United States, Projections to New England Journal of Medicine, vol. 325, and 3,100 to 7,000 infant deaths per the Year 2000,’’ Journal of the American No. 13, pp. 968–969, 1991. 41320 Federal Register / Vol. 60, No. 155 / Friday, August 11, 1995 / Proposed Rules

21. Escobedo, L.G., S.E. Marcus, D. 32. Peto, et. al., ‘‘Mortality From Smoking 56. 1989 SGR, p. 58; 1990 SGR, pp. 10, 166 Holtzman, and G.A. Giovino, ‘‘Sports in Developing Countries, 1950–2000. Indirect 57. 1982 SGR, p. 8. Participation, Age at Smoking Initiation, and Estimates from National Vital Statistics,’’ 58. 1989 SGR, p. 57. the Risk of Smoking Among U.S. High School Oxford, England: Oxford University Press, p. 59. U.S. Department of Health, Education, Students,’’ Journal of the American Medical A10, 1994. and Welfare, ‘‘Smoking and Health Report of Association, vol. 269, No. 11, pp. 1391–1395, 33. Taioli, E. and E.L. Wynder, ‘‘Effect of the Advisory Committee to the Surgeon March 17, 1993. the Age at Which Smoking Begins on General of the Public Health Service,’’ HEW, 22. ‘‘Spit Tobacco and Youth,’’ Office of Frequency of Smoking in Adulthood,’’ The PHS, p. 38, 1964 (hereinafter cited as ‘‘1964 Inspector General, DHHS, p. 3, December New England Journal of Medicine, vol. 325, SGR’’). 1992. No. 13, pp. 968–969, 1991; and Escobedo, 60. Bartecchi, C.E., T.D. MacKenzie, and 23. Connolly, G.N., et al., ‘‘The L.G., et al. ‘‘Sports Participation, Age at R.W. Schrier, ‘‘The Human Cost of Tobacco Reemergence of Smokeless Tobacco,’’ The Smoking Initiation, and the Risk of Smoking Use,’’ The New England Journal of Medicine, New England Journal of Medicine, vol. 314, Among U.S. High School Students, Journal of vol. 330, No. 13, pp. 907–912, March 31, No. 16, pp. 1020–1027, April 17, 1986. the American Medical Association, vol. 269, 1994, citing ‘‘Cigarette Smoking-Attributable 24. Kann, L., et al., ‘‘Results from the No. 11, pp. 1391–1395, 1993. Mortality and Years of Potential Life Lost- National School-Based 1991 Youth Risk 34. 1989 SGR, p. 97. United States, 1990,’’ in MMWR, CDC, DHHS, Behavior Survey and Progress Toward 35. Id., p. 157. vol 42, no. 33 (1993). Achieving Related Health Objectives for the 36. Id., p. 97. 61. 1990 SGR, p. 198. Nation,’’ Public Health Reports, vol. 108, 37. Id., p. 157. 62. Bartecchi, C.E., T.D. MacKenzie, and (Supp. 1), pp. 47–54, 1993. 38. Id., pp. 98–99; 1990 SGR, p. 10. R.W. Schrier, ‘‘The Human Cost of Tobacco 25. Division of Adolescent and School 39. 1989 SGR, pp. 98–99. Use,’’ The New England Journal of Medicine, Health, unpublished data from the 1992 40. See generally 1964 Surgeon General’s vol. 330, No. 13, pp. 907–912, March 31, Youth Risk Behavior Survey’’ supplement to Report. 1994, citing ‘‘Cigarette Smoking-Attributable the National Health Interview Survey, CDC. 41. 1989 SGR, pp. 44–48. Mortality and Years of Potential Life Lost- 26. 1994 SGR, p. 101. 42. See 1964 Surgeon General’s Report; United States, 1990,’’ in MMWR, CDC, DHHS, 27. ‘‘Spit Tobacco and Youth,’’ Office of 1989 SGR, p. 43, see, DHHS, ‘‘The Health vol 42, no. 33 (1993). Inspector General, p. 3, December 1992 Benefits of Smoking Cessation. A Report of 63. Fielding, J.E., ‘‘Smoking: Health Effects (citing the Youth Risk Behavior Survey). the Surgeon General 1990,’’ DHHS, PHS, and Control,’’ in ‘‘Public Health and 28. ‘‘Prevalence of Oral Lesions and CDC, OSH, DHHS Publication No. (CDC) 90– Preventive Medicine,’’ Appleton & Lange, p. Smokeless Tobacco Use in Northern Plains 8416, p. 107, 1990 (hereinafter cited as ‘‘1990 716, 1992. Indians,’’ in ‘‘MMWR,’’ DHHS, CDC, vol. 37, SGR’’). 64. 1983 SGR, p. 76. No. 39, pp. 608–611, October 7, 1988; See 43. ‘‘Cigarette Smoking-Attributable 65. 1990 SGR, p. 191. also Schinke, S.P., and R.F. Schilling, Mortality and Years of Potential Life Lost- 66. 1989 SGR, p. 197. ‘‘Pacific Northwest Native American Youth United States, 1990,’’ in MMWR, CDC, DHHS, 67. Id., p. 63; 1990 SGR, p. 243; Hughson, and Smokeless Tobacco Use,’’ International vol. 42, no. 33, pp. 645–649 (1993). W.G., J.I. Mann, and A. Garrod, ‘‘Intermittent Journal of the Addictions, vol. 22, No. 9, pp. 881–884, 1987 (a survey of 144 adolescent 44. 1990 SGR, p. 107. Claudication: Prevalence and Risk Factors,’’ Native Americans in Washington State and 45. 1994 SGR, p. 29; Escobedo, L.G., et al., British Medical Journal, vol. 1, pp. 1379– Alaska showed that 34 percent of adolescent ‘‘Sports Participation, Age at Smoking 1381, 1978. females and approximately 43 percent of Initiation, and the Risk of Smoking Among 68. 1990 SGR, pp. 243–244; 1989 SGR, p. adolescent males (mean age: 12.3 years) used U.S. High School Students,’’ The Journal of 63. smokeless tobacco weekly); Schinke, S.P., et the American Medical Association, vol. 269, 69. 1989 SGR, pp. 61–63. Wolf, P.A., et al., al., ‘‘Smokeless Tobacco Use Among Native no. 11, pp. 1391–1395, 1993. ‘‘Cigarette Smoking as a Risk Factor for American Adolescents’’ (letter to the editor), 46. 1989 SGR, p. 45. Stroke, The Framingham Study,’’ Journal of The England Journal of Medicine, vol. 314, 47. 1989 SGR, p. 56; Blot, W.J., et al., the American Medical Association, vol. 259, No. 16, pp. 1051–1052, April 17, 1986 (a ‘‘Smoking and Drinking in Relation to Oral No. 7, pp. 1025–1029, February 19, 1988; survey of 254 Native American adolescents and Pharyngeal Cancer,’’ Cancer Research, Abbott, R.D., et al., ‘‘Risk of Stroke in Male in Washington State (mean age: 13.8 years) vol. 48, pp. 3282–3287, 1988; Schottenfeld, Cigarette Smokers,’’ The New England showed that 24 percent used smokeless D., ‘‘Epidemiology of Cancer of the Journal of Medicine, vol. 315, No. 12, pp. tobacco weekly); Hall, R.L., and D. Dexter, Esophagus,’’ Seminars in Oncology, vol. 11, 717–720, September 18, 1986; Colditz, G.A., ‘‘Smokeless Tobacco Use and Attitudes No. 2, pp. 92–100, 1984; Elwood, J.M., et al., et al., ‘‘Cigarette Smoking and Risk of Stroke Toward Smokeless Tobacco Among Native ‘‘Alcohol, Smoking, Social and Occupational in Middle-Aged Women,’’ The New England Americans and Other Adolescents in the Factors in the Aetiology of Cancer of the Oral Journal of Medicine, vol. 318, No. 15, pp. Northwest,’’ American Journal of Public Cavity, Pharynx and Larynx,’’ International 937–941, April 14, 1988. Health, vol. 78, No. 12, pp. 1586–1588, Journal of Cancer, vol. 34, pp. 603–612, 1984. 70. 1989 SGR, p. 61. December 1988 (a survey of 1,180 sixth, 48. Bartecchi, C.E., T.D. MacKenzie, and 71. 1989 SGR, pp. 61–63. ninth, and eleventh graders in the State of R.W. Schrier, ‘‘The Human Cost of Tobacco 72. ‘‘Labeling Guidance Text for Washington showed that 34 percent of male Use,’’ The New England Journal of Medicine, Combination Oral Contraceptives Prescribing Native Americans and 24 percent of female vol. 330, No. 13, pp. 907–912, 1994. (p. 909) Information (PI) Physician Labeling,’’ FDA, Native Americans were current users of 49. 1990 SGR, pp. 147, 151. CDER, p. 7, August 1994. smokeless tobacco products). 50. Id., p. 152. 73. 1989 SGR, p. 156; Fielding, J.E., 29. ‘‘Prevalence of Oral Lesions and 51. 1989 SGR, pp. 56–57; Gordis, L., and ‘‘Smoking: Health Effects and Control,’’ in Smokeless Tobacco Use in Northern Plains E.B. Gold, ‘‘Epidemiology of Pancreatic ‘‘Public Health and Preventive Medicine,’’ Indians,’’ in ‘‘MMWR,’’ CDC, DHHS, vol. 37, Cancer,’’ World Journal of Surgery, vol. 8, pp. Appleton and Lange, p. 723, 1992. No. 39, p. 609, October 7, 1988. 808–821, 1984. 74. Lebowitz, M.D. and B. Burrows, 30. Hall, R.L. and D. Dexter, ‘‘Smokeless 52. 1989 SGR, p. 57. ‘‘Quantitative Relationships Between Tobacco Use and Attitudes Toward 53. 1990 SGR, p. 155. Cigarette Smoking and Chronic Productive Smokeless Tobacco Among Native 54. 1989 SGR, p. 56. Cough,’’ International Journal of Americans and Other Adolescents in the 55. Id.; McLaughlin, J.K., et al., ‘‘A Epidemiology, vol. 6, No. 2, pp. 107–113, Northwest,’’ American Journal of Public Population-Based Case-Control Study of 1977; Dean, G. et al., ‘‘Factors related to Health, vol. 78, No. 12, p. 1587, December Renal Cell Carcinoma,’’ Journal of the respiratory and cardiovascular symptoms in 1988. National Cancer Institute, vol. 72, No. 2, pp. the United Kingdom,’’ Journal of 31. McGinnis, J.M., and W.H. Foege, 275–284, 1984; Hartge, P., et al., ‘‘Changing Epidemiology and Community Health, vol. ‘‘Actual Causes of Death in the United Cigarette Habits and Bladder Cancer Risk: A 32, no. 2, pp. 86–96, 1978; Higgins, M.W., States,’’ Journal of the American Medical Case-Control Study,’’ Journal of the National J.B. Keller, and H.L. Metzner, ‘‘Smoking, Association, vol. 270, No. 18, pp. 2207–2212, Cancer Institute, vol. 78, No. 6, pp. 1119– Socioeconomic Status, and Chronic November 10, 1993. 1125, 1987. Respiratory Disease,’’ American Review of Federal Register / Vol. 60, No. 155 / Friday, August 11, 1995 / Proposed Rules 41321

Respiratory Disease, vol. 116, pp. 403–409, 84. 1980 SGR, p. 192; Fielding, J.E., regulations are being proposed pursuant 1977; Higenbottam, T., et al., ‘‘Lung Function ‘‘Smoking: Health Effects and Control,’’ in to the authority of section 520(e) of the and Symptoms of Cigarette Smokers Related ‘‘Public Health and Preventive Medicine,’’ act, which authorizes the agency to to Tar Yield and Number of Cigarettes Appleton and Lange, p. 725, 1992. regulate the sale, distribution, and use Smoked,’’ The Lancet, pp. 409–412, February 85. 1989 SGR, p. 72; Ounsted, M., V.A. 23, 1980; Schenker, M.B., J.M. Samet, and Moar, and A. Scott, ‘‘Risk Factors Associated of certain devices. Certain of the F.E. Speizer, ‘‘Effect of Cigarette Tar Content With Small-for-Dates and Large-for-Dates provisions in the regulation are also and Smoking Habits on Respiratory Infants,’’ British Journal of Obstetrics and being proposed pursuant to the Symptoms in Women,’’ American Review of Gynecology, vol. 92, No. 1, pp. 226–232, authority of sections 201, 502, 510, 701, Respiratory Disease, vol. 125, No. 6, pp. 684– March 1985; Shiono, P.H., M.A. Klebanoff, and 704 of the act. 690, June 1982. and GG. Rhoads, ‘‘Smoking and Drinking 75. 1994 SGR, p. 16. During Pregnancey—Their Effects on Pre- In brief, the proposed rule is intended 76. Id., p. 16–17; Bates, D.V., ‘‘Effects of term Birth,’’ Journal of the American Medical to support current State laws regarding Smoking and Environmental Pollutants,’’ in Association, vol. 225, No. 1, pp. 82–84, 1986. sales to minors by reducing the appeal ‘‘Respiratory Function in Disease,’’ pp. 152– 86. 1990 SGR, p. 386; Andrews, J., and J.M. of cigarettes and smokeless tobacco to, 155, W.B. Saunders Company, 1989. Holland, McGarry, ‘‘A Community Study of Smoking and limiting access by, persons under W.W. and A. Elliott, ‘‘Cigarette Smoking, in Pregnancy,’’ The Journal of Obstetrics and Respiratory Symptoms, and Anti-Smoking 18 years of age. The overall goal of the Gynecology of the British Commonwealth, proposed rule is to decrease the rates of Propaganda,’’ The Lancet, pp. 41–43, January vol. 79, No. 12, pp. 1057–1073, December 6, 1968; Seely, J.E., E. Zuskin, and A. 1972; Alameda County Low Birth Weight death and disease caused by tobacco Bouhuys, ‘‘Cigarette Smoking: Objective Study Group, ‘‘Cigarette Smoking and the products by substantially reducing the Evidence for Lung Damage in Teen-Agers,’’ Risk of Low Birth Weight: A Comparison in number of young people who begin Science, vol. 172, pp. 741–743, May 14, 1971; Black and White Women,’’ Epidemiology, using cigarettes or smokeless tobacco Rush, D., ‘‘Respiratory Symptoms in a Group vol. 1, No. 3, pp. 201–205, May 1990; van products. of American Secondary School Students: The den Berg, B.J. and F.W. Oechsli, Overwhelming Association with Cigarette ‘‘Prematurity,’’ in ‘‘Perinatal Epidemiology,’’ The proposed rule consists of five Smoking,’’ International Journal of Oxford University Press, p. 77, 1984; Meyer, subparts. Subpart A, General Provisions, Epidemiology, vol. 3, No. 2, pp. 153–165, M.B. B.S. Jonas, and J.A. Tonascia, ‘‘Perinatal would set forth scope and purpose 1974; Bewley, B.R., T. Halil, and A.H. Snaith, Events Associated with Maternal Smoking provisions and provide definitions. ‘‘Smoking by Primary Schoolchildren During Pregnancy,’’ The American Journal of Subpart B, Sale and Distribution to Prevalence and Associated Respiratory Epidemiology, vol. 103, No. 5, pp. 454–476, Symptoms,’’ Brit. J. prev. Soc. Med., vol. 27, Persons Under 18 Years of Age, would 1976. describe the responsibilities of pp. 150–153, 1973; Bewley, B.R., and J.M. 87. 1989 SGR, p. 73. Bland, ‘‘Smoking and Respiratory Symptoms 88 DiFranza, J.R., and R.A. Lew, ‘‘Effect of manufacturers, distributors, and in Two Groups of Schoolchildren,’’ Maternal Cigarette Smoking on Pregnancy retailers concerning the manufacture, Preventive Medicine, vol. 5, pp. 63–69, 1976. Complications and Sudden Infant Death sale, and distribution of cigarettes and 77. 1994 SGR, p. 29; Tager, I.B., et al., ‘‘The Syndrome,’’ Journal of Family Practice, vol. smokeless tobacco products. Subpart C, Natural History of Forced Expiratory 40, No. 4, pp. 1–10, April 1995. Labels and Educational Messages, Volumes: Effect of Cigarette Smoking and 89. 1989 SGR. p. 73. would require each manufacturer to Respiratory Symptoms,’’ American Review of 90. 1994 SGR, p. 39; 1986 SGR, pp. 33–47. Respiratory Disease, vol. 138, No. 4, pp. 837– establish and maintain a national public 91. 1986 SGR, p. 44. educational program, including major 849, October 1988; Tager, I.B., et al., ‘‘Effect 92. 1986 SGR, p. 40; Winn, D.M., et al., of Cigarette Smoking on the Pulmonary ‘‘Snuff Dipping and Oral Cancer Among reliance on television messages, in order Function of Children and Adolescents,’’ Women in the Southern United States,’’ The to combat the pervasive imagery and American Review of Respiratory Disease, vol. New England Journal of Medicine, vol. 304, appeal created by decades of pro- 131, No. 5, pp. 752–759, May 1985. No. 13, pp. 745–749, March 26, 1981. tobacco messages, and, thus, to 78. 1989 SGR, p. 76; Lane, M.R., and S.P. 93. 1986 SGR, pp. 58–69. discourage young people from using Lee, ‘‘Recurrence of Duodenal Ulcer After 94. 1994 SGR, p. 39; WHO Collaborating Medical Treatment,’’ The Lancet, pp. 1147– cigarettes and smokeless tobacco Centre for Oral Precancerous Lesions, 1149, May 21, 1988; Korman, M.G., et al., products. Subpart D, Labeling and ‘‘Definition of Leukoplakia and Related ‘‘Influence of Cigarette Smoking on Healing Advertising, would limit advertising Lesions: An Aid to Studies on Oral and Relapse in Duodenal Ulcer Disease,’’ and labeling to which children and Precancer,’’ Oral Surgery, Oral Medicine Oral Gastroenterology, vol. 85, No. 4, 871–874, Pathology, vol. 46, No. 4, pp. 518–539, adolescents are exposed to a text-only 1983. October 1978. format; ban the sale or distribution of 79. 1989 SGR, p. 76; Sontag, S., et al., 95. Greer, R.O., and T.C. Poulson, ‘‘Oral branded non-tobacco items such as hats ‘‘Cimetidine, Cigarette Smoking, and Tissue Alterations Associated With the Use and tee shirts; and restrict sponsorship Recurrence of Duodenal Ulcer,’’ The New of Smokeless Tobacco by Teen-Agers,’’ Oral England Journal of Medicine, vol. 311, No. of events to the corporate name only. 11, pp. 689–693, September 13, 1984. Surgery, Oral Medicine, Oral Pathology, vol. Finally Subpart E, Miscellaneous 80. Id. 56, No. 3, pp. 275–284, September 1983. Requirements, would describe the 81. Baird, D.C. and A.J. Wilcox, ‘‘Cigarette 96. 1994 SGR. p. 39. records and reports that must be Smoking Associated With Delayed 97. Id. submitted to FDA or made available for 98. Id., pp. 39–40; see generally 1986 SGR. Conception,’’ Journal of the American inspection, discuss the rule’s Medical Association, vol. 253, No. 20, pp. III. Description of the Proposed Rule relationship to State and local laws or 2979–2983, May 24/31, 1985. requirements, and require one or more 82. Id. The proposed rule would create a new 83. See generally, Surgeon General’s part 897 of Title 21 of the Code of additional measures to be taken if the Reports for the followings years: DHHS, ‘‘The Federal Regulations governing the prevalence of tobacco use is not Health Consequences of Smoking for Women, labeling, advertising, sale, and significantly reduced within seven years A Report of the Surgeon General,’’ DHHS, distribution of cigarettes and smokeless of the publication of the final rule. CDC, pp. v, vii, viii, 192, 1980 (hereinafter tobacco. The Commissioner has A. Subpart A—General Provisions cited as ‘‘1980 SGR’’); 1989 SGR, pp. 100, proposed that nicotine-containing 197; 1990 SGR, pp. i, viii, 11, 12, 371, 372, 373, 378, 381, 382, 387, 389, 410; Schramm, cigarettes and smokeless tobacco Subpart A would contain three W., ‘‘Smoking and Pregnancy Outcome,’’ products be regulated as restricted provisions that describe the rule’s scope Missouri Medicine, vol. 77, No. 10, pp. 619– devices within the meaning of section and purpose and provide definitions 629, October 1980. 520(e) of the act (21 U.S.C. 360j(e)). The that apply throughout part 897. 41322 Federal Register / Vol. 60, No. 155 / Friday, August 11, 1995 / Proposed Rules

1. Section 897.1—Scope pharmacological qualities. The agency’s senior high schools said they purchased 7 Proposed § 897.1(a) would state that investigation has focused primarily on their own smokeless tobacco products. part 897 is intended to establish cigarettes and smokeless tobacco Youth access restrictions have been conditions under which nicotine- products that contain nicotine, and FDA found to be effective in reducing illegal containing cigarettes and smokeless would therefore consider a cigarette-like sales and some studies have product that contains a tobacco products may be sold, demonstrated that efforts to reduce pharmacologically active or addictive distributed, or used. The proposed rule access have led to a decrease in tobacco substance in place of nicotine to be a would not apply to pipe tobacco or to use by young people. In Woodridge, IL, ‘‘new’’ drug delivery device that would cigars because the agency does not for example, a comprehensive be outside the scope of this regulation. currently have sufficient evidence that community intervention involving To be legally marketed, such a product these products are drug delivery devices retailer licensing, regular compliance would require premarket approval. under the act. FDA has focused its checks, and penalties for merchant investigation of its authority over B. Subpart B—Sale and Distribution to violations significantly reduced illegal tobacco products on cigarettes and Persons Under 18 Years of Age sales from 70 percent to less than 5 percent almost 2 years later. Further, smokeless tobacco products, and not on Subpart B would establish certain rates of experimentation and regular pipe tobacco or cigars, because young conditions or requirements for the sale smoking dropped by more than 50 people predominantly use cigarettes and and distribution of cigarettes and percent among seventh and eighth smokeless tobacco products. Proposed smokeless tobacco pursuant to section graders.8 § 897.1(b) would note that all references 520(e) of the act. These provisions are to regulatory sections in the Code of intended to reduce access to cigarettes In contrast, attempts to reduce sales to Federal Regulations are to Title 21 and smokeless tobacco products by young people by relying exclusively on unless otherwise noted. children and adolescents. Studies show educational programs for retailers were not nearly as effective. For example, one 2. Section 897.2—Purpose that it is easy for most young people to obtain tobacco products. The University study found that minors were able to Proposed 897.2(a) would state that of Michigan Monitoring the Future buy cigarettes in 73 percent of stores part 897 is intended to help prevent Study in 1993 reported that 75 percent receiving informational packages on 9 persons younger than 18 years of age of 8th graders and nearly 90 percent of preventing illegal sales to minors. After from becoming addicted to nicotine, 10th graders said it would be fairly easy a comprehensive retailer education thereby avoiding the life-threatening or very easy to get cigarettes.1 According program was conducted, illegal sales to consequences often associated with to a 1990 survey of 9th graders, 67 minors decreased to 68 percent of tobacco use. The proposed rule would percent of current smokers said they stores. However, after citations were accomplish this goal by reducing the usually buy their own cigarettes.2 issued to violative establishments, over- appeal of and access to cigarettes and Further, interviews conducted by the the-counter illegal sales dropped to 31 smokeless tobacco products by persons Department of Health and Human percent.10 under 18 years of age; it would preserve Services’ (DHHS) Office of the Inspector The proposed rule would prohibit the access to cigarettes and smokeless General in 1986 found that 94 percent sale and distribution of cigarettes and tobacco products by persons 18 years of of junior and high school students said smokeless tobacco products to age and older. Proposed § 897.2(b) that ‘‘it was either never or only rarely individuals younger than 18. This would add that the provisions are difficult’’ to buy smokeless tobacco restriction parallels the age restrictions intended to provide important products.3 established by almost all States. information about product use to users Most children and adolescents who Moreover, it is based on the fact that and potential users. smoke purchase their own cigarettes. A most people who become regular 1991 study showed that an estimated 3. Section 897.3—Definitions smokers do so at a young age. For 516 million packs are consumed by instance, the IOM reported that the Proposed 897.3 would establish young people every year; almost half of average age when people become definitions of terms used in the these packs are sold to minors.4 The ‘‘daily’’ smokers is 17.7 years.11 proposed rule, such as ‘‘cigarette’’ 1994 Surgeon General’s Report According to the National Household (897.3(a)) and ‘‘distributor’’ (897.3(c)). examined 13 studies of over-the-counter Surveys on Drug Abuse (1991), 53 In drafting the definitions, FDA sales and determined that percent of people who ever smoked examined existing definitions in Federal approximately 67 percent of minors are became regular smokers by the time laws and regulations and paid special able to purchase tobacco illegally. they were 18 years old.12 Further, 82 attention to existing definitions in other Moreover, successful cigarette percent of those who had ever smoked FDA regulations. These definitions are purchases by children and adolescents daily first tried a cigarette before the age contained in the proposed codified averaged 88 percent in studies of of 18.13 language. vending machines.5 Available data documenting the Proposed 897.3(e) contains the A significant percentage of young course of a young person’s ability to quit definition of ‘‘nicotine,’’which is based, people can also easily purchase smoking after initiating smoking in part, on the chemical name and smokeless tobacco products directly support the need for an age restriction. formula for nicotine in the ‘‘Merck from retailers. Studies examining A study tracking students from grades 6 Index’’(10th Edition). The agency also smokeless tobacco product purchases by to 12 in six Minnesota communities notes that, while the proposed rule young people suggest that direct noted a ‘‘striking pattern’’ that: defines ‘‘cigarette,’’ in part, as a product successful underage purchases range that ‘‘contains or delivers nicotine,’’ it is from 30 percent (for junior high school ** * once students become weekly smokers, they are unlikely to give up aware that some companies are trying to students) to 62 percent (for senior high cigarettes. Of the students who were current 6 develop chemical substances that are school students). Interviews conducted smokers, an increasing percentage remained pharmacologically active or are as by the DHHS’ Office of the Inspector smokers over the years of follow-up; they addictive as nicotine or that would be General in 1986 found that 90 percent were either unable or unwilling to quit used to enhance nicotine’s of smokeless tobacco users in junior and smoking. Of the self-reported quitters, 13% to Federal Register / Vol. 60, No. 155 / Friday, August 11, 1995 / Proposed Rules 41323

46% returned to weekly smoking by the next Shelf Plan for the R.J. Reynolds Tobacco acceptable are a driver’s license or a year’s measurement period.14 Co. specified that ‘‘ [t]he height of the college identification card. The proposal The study found that ‘‘students who top shelf cannot exceed 72 inches and would require an identification card smoke are increasingly unlikely to quit must have a height capacity of seven with a picture and a birth date because as they get older.’’ 15 cartons * * * ’’ and that the cigarette such identification cards are more Effectively prohibiting sales to people display or shelves ‘‘ * * * must be in reliable than other forms of younger than 18 years of age will total view of the consumer * * * ’’ and identification. FDA invites comment on therefore help reduce the number of ‘‘ * * * may not be placed more than 10 whether the final rule should contain adolescents and youths who become feet from point-of-purchase.’’ 17 Another more specific requirements concerning daily smokers. FDA also selected the age plan, titled ‘‘R.J. Reynolds Tobacco USA the types of identification that would limit of 18 to be consistent with the Savings Center Display Plan,’’ created comply with this provision. 1992 Alcohol, Drug Abuse, and Mental six different pay scales for retailers; the The agency has found strong support Health Administration (ADAMHA) retailers would receive more money if for the additional retailer Reorganization Act 16 that conditions they sold a large volume of cigarettes. responsibilities that this section would receipt of substance abuse grants on Under this plan, R.J. Reynolds would impose. According to a recent report States adopting laws prohibiting the sale also provide a ‘‘merchandiser’’ to endorsed by 26 State attorneys general, and distribution of cigarette and display its products, and the retailer industry training films and programs smokeless tobacco products to minors would agree to stock the ‘‘designated used by retailers regarding tobacco sales under age 18, and because the majority RJR shelf rows’’ ‘‘no less than five had little or no impact on preventing of States have set 18 as the age of cartons high,’’ and not alter the shelves illegal sales to minors and, in some purchase of these products. or reduce the amount allocated to R.J. retail sectors, high employee turnover Reynolds products.18 In both plans, the 1. Section 897.10—General rates complicated training efforts. retailer also agreed to permit R.J. Responsibilities of Manufacturers, Moreover, determining a young Reynolds representatives to ‘‘plan-o- Distributors, and Retailers customer’s age through visual gram, adjust, and divide its allocated examination alone proved to be Proposed 897.10 would describe the space as deemed necessary’’ and to difficult. Thus, the attorneys general general responsibilities of ‘‘make reasonable audits of performance recommended requiring proof of age of manufacturers, distributors, and and to inspect and rotate R.J.R’s anyone who does not appear to be at retailers, and would make 19 products in stores under contract.’’ least 26 years old.20 manufacturers, distributors, and Former sales representatives and Additionally, studies indicate that retailers responsible for ensuring that managers interviewed by FDA stated minors who are able to purchase the cigarettes and smokeless tobacco that manufacturers keep extremely cigarettes and other tobacco products products they manufacture, label, detailed records about each retailer. from stores are rarely asked to verify advertise, package, sell, distribute, or Some records noted whether the retailer their age. For example, in one study, 67 otherwise hold for sale comply with all should be visited weekly, biweekly, the applicable regulations under monthly, etc.; other entries included the percent of minors (mean age: 15 years) proposed Part 897. were asked no questions when they types of displays in the retailer’s 21 establishment. At least one company attempted to purchase cigarettes. Store 2. Section 897.12—Additional cashiers tried discouraging the minors Responsibilities of Manufacturers also gave portable computers to its representatives; the data entered into from buying cigarettes in only 7 percent Proposed 897.12 would provide that, these computers were downloaded of the spot checks conducted by the in addition to its other responsibilities, nightly and sent to company authors. In 14 percent of the cases, the each manufacturer would be responsible headquarters. These detailed contracts cashiers actually ‘‘encouraged the for removing all self-service displays, and records demonstrate that the minor’s purchase by offering matches, violative advertising, labeling, and other manufacturers are heavily involved in suggesting a cheaper brand, or offering manufacturer- or distributor-supplied establishing and maintaining retailers’ to make up the difference if the minor 22 items from each point of sale. Proposed displays and that the proposed rule’s was ‘short on cash’.’’ § 897.12(b) would require each requirements that each manufacturer be In another report, five minors between manufacturer to monitor, through visual responsible for removing violative the ages of 13 and 16 were sent to inspection on each visit to a point of advertising, labeling, and self-service various locations to buy cigarettes. sale (carried out in the normal course of displays, and for performing a visual Despite signs at some locations that the manufacturer’s business), to assure inspection on each subsequent business prohibited entry by persons under the the proper labeling, advertising, and call are both feasible and reasonable. age of 21, the minors were able to buy distribution of its products. This cigarettes, even when they admitted provision would not create a new 3. Section 897.14—Additional they were under 21. For smokeless responsibility or burden for companies Responsibilities of Retailers tobacco products, studies show that half (typically the smaller ones) who do not Proposed 897.14 would establish of the stores examined were willing to visit retail locations as part of their additional responsibilities for retailers. sell smokeless tobacco products to usual business practice. The obligation Proposed 897.14(a) would require the minors.23 In contrast, in Everett, WA, to inspect exists only for those retailer or the retailer’s employees to where a local ordinance required proof companies (typically the larger ones) for verify that people who intend to of age if the prospective buyer did not whom visits are part of their usual purchase cigarettes or smokeless appear to be of legal age to purchase business practice. tobacco products are legally entitled to cigarettes, over 60 percent of students Further, because there are detailed do so. Verification would be by direct between the ages of 14 and 17 reported contracts between the larger cigarette visual inspection of each prospective being asked for proof of age when they manufacturers and retailers, proposed purchaser and, if necessary, would attempted to buy cigarettes, and tobacco 897.12 should not impose a significant include the use of a photographic use, among 14 to 17-year-olds, declined burden on these manufacturers. For identification card with a birth date. from 25.3 percent to 19.7 percent example, a Non-Self-Service Carton Examples of documents that would be overall.24 41324 Federal Register / Vol. 60, No. 155 / Friday, August 11, 1995 / Proposed Rules

Proposed § 897.14(b) would prevent that this provision is necessary to only in a direct, face-to-face exchange the retailer or an employee of the prevent manufacturers from between the retailer or the retailer’s retailer from using any electronic or circumventing the purpose of this employees and the consumer. The mechanical device in providing proposed rule. As discussed elsewhere, proposal would prohibit specifically cigarettes or smokeless tobacco products the imagery associated with tobacco cigarette vending machines, self-service to the purchaser. Requiring the retailer’s products is an important factor in why displays, mail-order sales, and mail- employees to hand cigarettes or young people smoke. This provision order redemption of coupons. smokeless tobacco products to would prevent tobacco manufacturers i. Vending Machines. Studies indicate customers, after checking identification, from capitalizing on the imagery of that a significant percentage of has the practical effect of making access other consumer products by using the adolescents are able to obtain their to such products more difficult for brand name of those products for cigarettes from vending machines and young people. tobacco products. that such purchases occur regardless of Proposed § 897.14(c) would prohibit b. Minimum package size. Proposed locks, warning signs, and other the retailer or an employee of the § 897.16(b) would make 20 cigarettes the restrictions. In 1994, CDC examined 15 retailer from opening a cigarette, minimum package size for cigarettes. recent tobacco inspection surveys to cigarette tobacco, or smokeless tobacco FDA selected 20 because the vast investigate underage sales to minors. product package to sell or distribute a majority of cigarette packs in the United While 73 percent of over-the-counter cigarette, or cigarettes (often referred to States contain 20 cigarettes. The outlets made illegal sales to children as ‘‘singles’’ or ‘‘loosies’’) or any proposal is intended to preclude firms and adolescents, 96 percent of vending quantity of cigarette tobacco or of a from manufacturing packages that machine sales were successful.35 smokeless tobacco product from that contain fewer than 20 cigarettes; these A 1989 survey of 10th grade students package. The agency is proposing this packs, sometimes referred to as ‘‘kiddie’’ in Minnesota indicated that 71 percent restriction because the primary market packs, usually contain a small number had purchased tobacco from vending for ‘‘loosies’’ is children and of cigarettes, are easier to conceal, and machines.36 Another 1989 report found adolescents. One California study found are less expensive than full-size packs. that, in California, minors between the that 101 of 206 stores sold single (Young people, who generally have little ages of 14 and 16 were able to purchase cigarettes to minors and adults, and disposable income, can be particularly cigarettes from vending machines 100 more stores sold single cigarettes to sensitive to the price of cigarettes and percent of the time.37 A 1992 study in minors than to adults.25 A survey in may choose not to smoke as the price Minnesota involving minors between Nashville, TN, found that one-quarter of increases.30) Further, FDA is aware that the ages of 12 and 15 reported a 79 the stores sold single cigarettes.26 Lorrilard Tobacco Company is offering a percent success rate in purchasing Additionally, the IOM noted that the pack containing only 10 cigarettes of its cigarettes from vending machines.38 sale of single cigarettes is attractive to Newport brand for sale and that another Children in the Washington, D.C. area, children due to the low costs, could firm is experimenting with single New York, Colorado, and New Jersey make children more willing to cigarettes packed in individual tubes.31 who were sent to purchase cigarettes experiment with tobacco products, and One study showed that 56.3 percent from vending machines achieved 100 that single cigarettes may be easier for of all 14 to 15 year old adolescent percent success rates.39 The 1994 children to shoplift.27 Consequently, the smokers surveyed in one urban area of Surgeon General’s Report examined IOM advocated banning the sale of Australia had purchased kiddie packs in nine studies on cigarette purchases from single cigarettes.28 Several States, the month prior to the survey, compared vending machines and found that including Mississippi, Oklahoma, South with only 8.8 percent of adult smokers. underage persons were able to purchase Dakota, Tennessee, and Washington, The study concluded, ‘‘If we fail to take cigarettes 82 to 100 percent of the time, already restrict the sale of unpackaged strong action against the well targeted with a weighted-average rate of 88 tobacco products, and a working group marketing methods of tobacco percent.40 of State attorneys general recently companies then the adolescent smoking Moreover, younger children use recommended that single cigarette sales rates recorded in this study are likely to vending machines to purchase cigarettes be prohibited.29 remain high.’’ 32 more often than older adolescents. A The Nova Scotia Council on Smoking study commissioned by the vending 4. Section 897.16—Conditions of and Health reported that 49 percent of machine industry revealed that 22 Manufacture, Sale and Distribution tobacco users in the sixth grade percent of 13-year olds who smoke a. Restrictions on product names. purchased kiddie packs of 15 reported purchasing cigarettes from Proposed 897.16(a) would prohibit cigarettes.33 Another study of Australian vending machines ‘‘often’’ compared prospectively the use of a trade or brand schoolchildren reported that 30 percent with only 2 percent of 17-year olds. name for a non-tobacco product as the of the 12-year olds preferred packages Twenty-two percent of 13- to 17-year- trade or brand name for a cigarette or containing 15 cigarettes compared to 11 olds who smoke report purchasing smokeless tobacco product. The agency percent of the 17-year olds.34 The cigarettes from vending machines is aware of three brands of cigarettes Australian study, however, also ‘‘often’’or ‘‘occasionally.’’41 that have used this strategy: Harley- reported that older children preferred FDA is aware that some jurisdictions Davidson, Cartier, and Yves St. cigarette packages that contained 25 have attempted to place locks, post Laurent’s Ritz cigarettes. In the final cigarettes. Consequently, even though warning signs, or restrict placement of rule, the agency intends to exempt those FDA has no evidence that firms intend vending machines to curtail access by brands that already use the trade or to market cigarette packages that contain young people. These efforts have had brand name of a non-tobacco product. more than 20 cigarettes, the agency only limited success. A 1992 report This provision would complement the invites comment as to whether proposed examining vending machines in St. requirements in proposed subpart D § 897.16(b) should also state the Paul, MN, indicates the limitations of (regarding labeling and advertising) that maximum package size for cigarettes. requiring locking devices on vending would reduce the appeal of cigarettes c. Impersonal modes of sale. Proposed machines. Despite a 1990 city ordinance and smokeless tobacco products to § 897.16(c) would permit cigarettes and requiring locking devices on vending people younger than 18. FDA believes smokeless tobacco products to be sold machines, the rate of noncompliance by Federal Register / Vol. 60, No. 155 / Friday, August 11, 1995 / Proposed Rules 41325 merchants was 34 percent after 3 machines 56 percent of the time have enacted restrictions or bans on months and 30 percent after 1 year.42 (thereby making vending machines the cigarette vending machines, machines Underage buying increased from 30 most common source of cigarettes for are being produced that can be percent 3 months after the ordinance young people.50) Therefore, if access converted to dispense other products.62 had been enacted to 48 percent after 1 restrictions are imposed such as Furthermore, according to the National year.43 Further, in those locations where requiring retailers to verify age, it is Automatic Merchandising Association, locking devices were not placed on likely that vending machines may the association representing the vending vending machines, underage buying was become an even more important source machine industry, virtually no new successful 91 percent of the time.44 The of cigarettes for young people. shipments of cigarette vending study concluded that the use of locking Because minors, especially very machines have been made since 1990, devices on vending machines was less young children who try smoking, rely compared with 32,065 shipments in effective than a vending machine ban. on vending machines to purchase 1976.63 In 1994, CDC examined minors’ tobacco products, and because State and ii. Self-service displays. Proposed access to cigarette vending machines in local laws restricting placement of, or § 897.16(c) would also prohibit self- Texas. CDC noted that Texas law requiring locking devices on, vending service displays. Self-service displays requires cigarette vending machine machines appear to be ineffective, the enable young people to quickly, easily, owners to post signs on their machines agency believes that the only practical and independently obtain tobacco stating that sales to persons under the approach to curtailing young people’s products. This restriction is intended to age of 18 are illegal. Despite these laws, access to such products is to eliminate prevent young people from helping minors between the ages of 15 and 17 vending machines and other impersonal themselves to tobacco products and to successfully bought cigarettes from modes of sale. Moreover, government increase the direct interaction between vending machines 98 percent of the enforcement of vending machine the sales clerk and the underage time.45 locking devices would entail a greater customer. This restriction is also Laws restricting placement of vending regulatory burden than enforcing a consistent with the 1994 IOM Report’s machines also appear to be ineffective. complete ban because authorities would recommendation. IOM reviewed surveys In one study, 14-year-old children were need to ensure the devices were of grade school students in New York, able to purchase cigarettes from vending installed and operating properly, and and Wisconsin, and noted that many machines 77 percent of the time despite that store employees were using them students—over 40 percent of daily State laws requiring the machines to be correctly.51 smokers in Erie County, NY and Fond ‘‘in the immediate vicinity, plain view Consequently, proposed § 897.16(c) du Lac, WI—shoplifted cigarettes from and control of an employee’’ and to bear would require retailers to hand the self-service displays.64 IOM found that signs concerning illegal purchases by product to the consumer. This proposed eliminating self-service displays would minors.46 Six surveys conducted in bars, requirement would have the added make it more difficult for children to taverns, private clubs, and liquor stores effect of preventing persons younger obtain cigarettes, especially if the in five states found that minors were than 18 from evading the proposed children had to purchase the cigarettes able to successfully purchase cigarettes rule’s age requirement by shifting their from a store clerk (as would be required in vending machines between 70 purchasing patterns from stores to under this proposal). IOM further noted percent and 100 percent of the time, vending machines or mail orders. that ‘‘placing the products out of reach about the same rate as elsewhere.47 In Further, the agency notes that this reinforces the message that tobacco these surveys, the sales rates for ‘‘adult aspect of the proposed rule is consistent products are not in the same class as only’’ locations were similar to the rates with recommendations from the IOM,52 candy or potato chips.’’ 65 for vending machine cigarette sales the Public Health Service,53 a working A California study compared smoking located elsewhere in the communities, group of State attorneys general,54 and prevalence among minors in five indicating that restricting cigarette findings by the Office of the Inspector counties before and after the institution vending machines to places such as bars General, DHHS.55 of ordinances prohibiting self-service and liquor stores does not serve as an Finally, data from the vending merchandising (display and sale) and impediment to young people buying machine industry show that cigarettes requiring only vender-assisted sales. cigarettes. Additionally, according to account for a small and declining The rate of tobacco sales to minors in the vending machine industry’s portion of total vending machine the five counties dropped 40 to 80 research, 77.5 percent of all cigarette revenues.56 Using industry data from percent and the decrease was still in vending machines are already in 1993, calculations indicate that daily evidence 2 years after the survey. ‘‘adult’’ areas such as bars, lounges, sales from cigarette vending machines Moreover, the study found that the ban offices, college campuses, and industrial average approximately $10 per on self-service significantly increased plants.48 Therefore, it is likely that machine/per day.57 In 1993, cigarettes the checking of young purchasers’ restricting cigarette vending machines to comprised 4.7 percent of total vending identification by retail clerks and, in these areas would have a minimal effect machine revenues compared to 45.5 particular, discouraged younger on reducing sales to young people. percent in 1960.58 Between 1992 and adolescents from attempting to buy Studies also have shown that the use 1993, vending machine revenues from tobacco.66 of vending machines by young people cigarettes dropped 25 percent.59 While iii. Mail-order sales. In addition to appears to be highest in those areas with total revenues from cigarette vending prohibiting the sale of tobacco products strong access restrictions. In Santa Fe, machines have been decreasing, in vending machines and the use of self- New Mexico, where selling to minors revenues from most other product service displays, proposed § 897.16(c) was not against the law, vending categories sold in vending machines, would prohibit mail-order sales and machines were used 18 percent of the such as juice and other cold drinks, rose redemption of mail-order coupons. time by teen smokers.49 By contrast, in dramatically.60 Further, the number of Mail-order sales provide no face-to-face Vallejo, California, where local cigarette vending machines decreased interaction to verify the age of the merchants were actively requiring significantly from 373,800 to 181,755 consumer. The current industry practice photographic identification, a survey between 1988 and 1993.61 Recognizing merely requires that the customer found that teen smokers used vending that more and more states and localities provide a birth date or check a box on 41326 Federal Register / Vol. 60, No. 155 / Friday, August 11, 1995 / Proposed Rules the mail-order card to verify, for ‘‘* * * reported having seen free messages and, thus, to discourage young example, that he/she is 21. The agency cigarettes given to children and people from using cigarettes and concludes that proposed § 897.16(c) adolescents.’’ 76 In another survey, one- smokeless tobacco products, pursuant to would significantly reduce access to third of approximately 500 New Jersey sections 201, 502, and 520(e) of the act. cigarettes and smokeless tobacco high school students who were current 1. Section 897.24—Established Names products by persons younger than 18. or former smokers reported receiving for Cigarettes and Smokeless Tobacco The ban of mail-order sales is free cigarette samples before the age of Products recommended by the IOM 67 and Philip 16.77 Morris recently announced that it would The distribution of free samples to Proposed § 897.24 would provide the discontinue mail-order sales in order to minors occurs despite the industry’s ‘‘established name’’ for cigarettes, reduce access to young people.68 voluntary code against distributing cigarette tobacco, and smokeless tobacco d. Free samples. Proposed § 897.16(d) cigarettes to persons under the age of 21. products. This provision is intended to would prohibit manufacturers, The recent IOM report noted several implement section 502(e)(2) of the act, distributors, and retailers from problems with the industry’s voluntary which states that a device shall be distributing free samples of tobacco code, stating that ‘‘distribution to deemed misbranded if its label fails to products. The agency is proposing this minors appears to be nearly display the established name for the restriction because many young people, inevitable.’’ 78 While the voluntary code device ‘‘in type at least half as large as including elementary school children, instructs employees distributing that used thereon for any proprietary receive free samples.69 Free samples are samples to ask for identification and ask name or designation for such device.’’ often distributed at ‘‘mass intercept other questions if they suspect a Section 502(e)(4) of the act, in turn, locations’’ such as street corners and potential recipient to be under age, explains that the ‘‘established name’’ for shopping malls, and events such as distribution of samples to minors occurs a device is the applicable official name music festivals, rock concerts, and anyway because the samplers are often of the device designated under section baseball games. They have been placed in crowded places and 508 of the act (21 U.S.C. 358), the distributed at zoos, at bars and constrained by time: official title in a compendium if the restaurants where entertainers perform device is recognized in an official and promote the product, and through There is a significant time constraint in compendium but has no official name, the mail.70 Free samples give young asking for proof of age from all young-looking or ‘‘any common or usual name of such individuals who solicit samples, not to people a ‘‘risk-free and cost-free way to mention the time required for the myriad of device.’’ satisfy their curiosity’’ about tobacco other questions which samplers are In this case, no official names have products and, when distributed at instructed to ask. Samplers are often been designated under section 508 of cultural or social events, may increase surrounded on all sides by those soliciting the act, and no compendium provides social pressure on young people to samples and a dozen or more outstretched an established name for these products. accept and use the free samples.71 arms waiting (or grabbing) for samples * ** Consequently, proposed § 897.24 would For smokeless tobacco products, those passing out samples are usually quite consider ‘‘cigarettes,’’ ‘‘cigarette distribution of free samples to young young themselves. These youthful tobacco,’’ and the common or usual people has been a foundation of the distributors may lack the psychological names for smokeless tobacco products growth strategy of the UST (makers of wherewithal to request proof of age and (such as ‘‘moist snuff’’ or ‘‘loose leaf refuse solicitations from those in their own Skoal, Copenhagen, Happy Days, and peer group.79 chewing tobacco’’) as established other smokeless tobacco products).72 In names. 1992 and 1993, the smokeless tobacco Consequently, the ineffectiveness of the industry spent nearly $16 million industry’s voluntary code and the fact 2. Section 897.29–Educational Programs annually on the distribution of free that State laws that ban or restrict the Concerning Cigarettes and Smokeless samples. The industry’s largest distribution of free samples are rarely Tobacco Products expenditure in 1993 was on coupons enforced led IOM to recommend The Surgeon General’s 1994 Report and retail value-added articles to prohibiting distribution of free samples suggested that ‘‘a nationwide, well- encourage trial use ($32 million).73 in public places and through the mail.80 funded antismoking campaign could Despite industry-imposed age The National Cancer Institute reached a effectively counter the effects of restrictions on the distribution of similar conclusion in 1991, and stated, cigarette advertising in its currently samples, underage persons are able to ‘‘The offer of free cigarettes and permitted media forms.’’ 82 IOM also obtain samples either by lying about smokeless tobacco products is recommended that ‘‘counter-tobacco their age or by enlisting older friends reminiscent of the drug pusher who advertisements should be intensified to and relatives to obtain samples for gives the first sample free to get his reverse the image appeal of pro-tobacco them.74 The lure of free samples can customer hooked.’’ 81 The proposed rule messages, especially those that appeal to also be quite attractive; one advertising is consistent with IOM’s and NCI’s children and youths.’’ 83 campaign offering a sample pack of recommendations. FDA’s proposal is consistent with the Skoal Bandits reportedly generated Surgeon General’s and IOM’s findings. C. Subpart C—Labels and Educational 400,000 responses in a 3-month Proposed 897.29 would require each Programs period.75 manufacturer to establish and maintain Even elementary school children are Proposed subpart C would provide a national public educational program, able to obtain free cigarette samples the established name for cigarettes and including major reliance on television easily. One survey examined five smokeless tobacco products that is messages, to combat the effects of the schools in Chicago and a sample of required by sections 502 of the act. In pervasive and positive imagery that has students at DePaul University. Four addition, it would require that cigarette for decades helped to foster a youth percent of the elementary school and smokeless tobacco manufacturers market for tobacco products. students reported receiving free samples fund a national program including FDA based proposed 897.29, in part, of cigarettes themselves. Nearly half of educational messages in order to undo on historical experience. From July 1, the elementary and high school students the effects of young people’s near 1967 to December 31, 1970, the Federal and one-quarter of the college students constant exposure to pro-tobacco Communications Commission, as part of Federal Register / Vol. 60, No. 155 / Friday, August 11, 1995 / Proposed Rules 41327 the ‘‘Fairness Doctrine,’’ required health education and counter- accomplish the goal of creating an broadcasters to provide a significant advertising campaigns can be effective. effective national program that would amount of time for antismoking There have been numerous research correct and combat the effects of the messages on television and radio. Thus, and demonstration projects evaluating pervasive positive imagery in one antismoking message appeared for the effectiveness of counter-advertising advertising and, thus, help reduce every three or four industry-sponsored, and mass-media smoking cessation young people’s use of tobacco products prosmoking advertisements. This programs.88 As the research designs or whether additional or different amounted to approximately $75 million have evolved, more has been learned requirements would be preferable. The (in 1970 dollars) in commercial air time about which types of programs are program would be national in scope and for antismoking messages annually, effective and under what conditions. could require that the companies until a ban on prosmoking Most recently, well-evaluated studies of purchase certain times and places on advertisements on television and radio programs in Vermont, California, and television programming (referred to in became effective on January 1, 1971. elsewhere suggest that mass-media and the industry as a ‘‘buy’’). For example, Thus, for several years, the American counter-advertising campaigns can have a television buy could: (1) Devote at public was exposed to both pro- and a sustained effect on both preventing least 80 percent of its resources to antismoking messages. teens from starting to smoke and in television messages, both on network During this time, per capita cigarette helping smokers quit. and on cable television, during prime consumption declined 7 percent, from In Vermont, researchers tested the time hours (between the hours of 8 p.m. 4,280 in 1967 to 3,985 in 1970. Most of effect of mass-media and school health and 11 p.m.), early fringe time (between 89 the 7 percent decline (6.2 percent) was education programs. Students exposed the hours of 4 p.m. and 6 p.m.), and attributable to the anti-smoking to both school and media interventions access time (time that is allocated to messages.84 This was the first time since were 35 percent less likely to have local broadcasting stations); (2) be the early 1930’s that per capita smoked in the past week than students directed to persons between the ages of consumption declined consecutively for exposed only to the school program, and 12 and 17 years; and (3) be national in 3 years and was one of the largest this preventive effect persisted for at scope. Moreover, the buy could include declines ever recorded. Additionally, a least 2 years following the completion of advertising time in at least 50 percent of study of nearly 7,000 adolescents found the intervention program. The decrease television programs rated by a national that adolescent smoking rates declined occurred even in students who were rating service as being in the top 20 for 85 during this period. The greatest considered to be at slightly higher risk persons between the ages of 12 and 17 decline occurred in the first year that of becoming smokers because of and corresponding to the demographic the antismoking messages appeared. A demographic considerations (lower profile of underage tobacco users by 1972 econometric analysis confirmed family income). gender, racial, and ethnic There have been similar results in that the antismoking messages had up to characteristics, and the remaining helping smokers interested in quitting. a 5.6 times greater effect on cigarette percentage in programs with either high In California, the Department of Health consumption than promotional cigarette concentration or high coverage to young advertising.86 When the antismoking Services has been conducting a $26 million multi-year media campaign to people. The buy could ensure that the messages ended on television and radio manufacturer reach an average of 70 to (due to the Federally-mandated ban on prevent teens from starting to smoke and help adult smokers quit. In a 90 percent of all persons between the advertising on television and radio, ages of 12 and 17 years five to seven thereby ending the application of the preliminary study of the campaign’s times per 4-week period. (The 4-week Fairness Doctrine), per capita cigarette effectiveness, researchers found that the period is often referred to as a ‘‘flight.’’) consumption began to rise. state media campaign ‘‘had a negative A similar experience occurred in impact on cigarette consumption, while Such requirements would help to Greece during the late 1970’s.87 In an industry advertising had a positive ensure that the educational messages effort to reduce cigarette consumption, impact on cigarette consumption.’’ The reach large numbers of young people the Greek government launched an authors concluded that ‘‘[t]his suggests, and are consistent with the way in antismoking campaign and, in 1978, as one would expect, that increasing which advertising is typically banned cigarette advertising on state media expenditures and decreasing purchased. In addition, to ensure that television and radio. In 1979, the Greek industry advertising are both effective the messages change over time and Government intensified its antismoking ways to deter smoking.’’ 90 According to remain novel and of interest to young effort by adding television and radio a recent evaluation, the media people, each message could be limited counter-advertising as well as a campaign’s advertisements directly in use so that each message would be community-based print education influenced 7 percent (33,000) of presented no more than 15 times per campaign. This enhanced campaign Californians who quit smoking in 1990 quarter to the top two-fifths (referred to lasted 2 years but was discontinued to 1991, and contributed to the quitting as top two quintiles) of television following a change in government, with of another 173,000.91 The California viewers between the ages of 12 and 17 the ban on television and radio media program has also resulted in high and who watch the most television. advertising remaining. Evaluation of levels of awareness among young The industry members could select this experience revealed that, during the people,92 and may have contributed to from a variety of messages maintained counter-advertising phase, the annual stopping the rise in teen smoking that by FDA. FDA could collect and increase in per capita tobacco had been occurring in California prior to maintain a file of messages developed consumption dropped to zero, the campaign.93 by states with active tobacco control compared to the pre-campaign FDA has proposed general criteria in programs (such as California and advertising ban rate of 6 percent the codified language. The following Massachusetts), from voluntary health increase in consumption. When the describes one set of requirements for organizations (as was done by campaign ended, the annual rate of such a program that the agency is broadcasters during the Fairness increase in tobacco consumption considering requiring in a final rule. Doctrine period), and from other quickly increased to earlier levels. This FDA is soliciting comments on whether appropriate sources, including messages experience suggests that intensive the described program would developed and submitted by the tobacco 41328 Federal Register / Vol. 60, No. 155 / Friday, August 11, 1995 / Proposed Rules companies. FDA could determine which of money to the corrective educational Briefly, the proposed regulations messages would be appropriate in program proportionate to its share of the would require that advertising in any consultation with other entities and total advertising and promotional publication with a youth readership of offices within the Department of Health expenditures of the cigarette and more than 15 percent (youth being and Human Services, such as CDC’s smokeless tobacco industry. Thus, a defined as under 18) or more than 2 Office on Smoking and Health; with company whose expenditures equal 40 million children and adolescents under other federal agencies with expertise in percent of total industry expenditures 18 be limited to a text-only format in consumer behavior and marketing, such would be required to allocate an amount black and white. Advertising in any as the Federal Trade Commission; and equal to 40 percent of the total monies publication that is read primarily by with consultants and contractors who required. The agency calculated the adults would be permitted to continue are expert in communications theory amount of money that would be to use imagery and color. Pursuant to and practice. FDA, in consultation with allocated to the initial corrective section 502(r), the proposed regulations other federal agencies and other experts, educational program by looking at the would require that cigarette advertising could review the messages to ensure period of time when the Fairness contain a statement of the product’s that their language and imagery are Doctrine was in effect. It was estimated established name, intended use, and a effective with 12- to 17-year olds. Each that, at that time, approximately $75 brief statement regarding relevant message would be evaluated to million a year in air time was provided warnings, precautions, side effects, and determine if it were designed to by broadcasters for anti-smoking contradictions. In addition, brand influence those beliefs and attitudes of messages, which translates to $290 identifiable non-tobacco items, such as 12- to 17- year olds that are most likely million in 1994 dollars. In order to hats and tee shirts, and brand to affect the initial decision to smoke (or ensure an effective program, the agency identifiable sponsorship of events, such to start using smokeless tobacco is proposing that approximately half as the Virginia Slims Tennis products), the decision to continue that amount, or $150 million a year, be Tournament or a sponsored event using smoking (or continue to use smokeless allocated initially. Under this proposal, a tobacco product logo or symbol, tobacco products), and/or the decision the agency could determine each would be prohibited. to quit. Examples of appropriate manufacturer’s proportionate share of Section 201(m) of the act (21 U.S.C. messages include those addressing the overall advertising and promotional 321(m)) defines ‘‘labeling’’ as ‘‘all labels addiction, weight control, effective ways expenditures of the cigarette or and other written, printed, or graphic to refuse a cigarette and other social smokeless tobacco industry by referring matter’’ that are on an article or its influences that are related to youth to the most recent figures reported to the containers or wrappers, or smoking. FTC under the Cigarette Act or the ‘‘accompanying such article.’’ In Moreover, an appropriate educational Smokeless Act. This provision is interpreting the phrase ‘‘accompanying program could require each intended to ensure that the corrective such article,’’ the Supreme Court has manufacturer to submit, on a quarterly educational programs are adequately held that it is not necessary for the basis, analyses of every television buy funded in proportion to each labeling to physically accompany the by time period on network television manufacturer’s overall reported product (see Kordel v. United States, (referred to as ‘‘day part’’), cable, and advertising and promotion expenses. 338 U.S. 345, 350 (1948)). Thus, labeling other media, prepared and executed by includes traditional promotional items, the party or parties responsible for the D. Subpart D—Labeling and Advertising such as booklets, calendars, movies, advertising. This requirement could etc., and also less obvious types of fulfill the manufacturer’s responsibility 1. Introduction labeling, such as clocks, coffee mugs, 94 to report on the effectiveness of the Proposed subpart D would establish desktop toys, and even tee shirts. FDA program. certain requirements for cigarette and would, therefore, consider non-tobacco In addition, each manufacturer could smokeless tobacco product labeling items distributed by cigarette and conduct tracking studies of persons (excluding product labels) and smokeless tobacco companies with the between the ages of 12 and 17. This advertising pursuant to sections 520(e), product’s brand name or product would enable the manufacturers to 502(q), and 502(r) of the act. The identification printed on them (e.g., tee determine how effective their proposal would apply similar shirts, hats, pens, golf tees) to be educational programs and buys were. requirements to labeling and advertising ‘‘labeling,’’ and these would be The studies could be performed twice in print media because both are used to prohibited. per year and would need to meet Subpart D is based, in part, on the convey information about the product; recognized industry standards for recommendations of major U.S. and to promote consumer awareness, tracking studies, such as measuring world health organizations and on interest, and desire; to change or shape recall and recognition of the televised current efforts by other countries to consumer attitudes and images about messages. These studies could be given reduce tobacco use. These organizations the product; and/or to promote good to FDA, which could review the results and countries support advertising will for the product. Therefore, FDA has of the industry’s testing in consultation restrictions as an essential part of any decided to place the labeling provisions with other experts as needed, in order comprehensive program to reduce or with the advertising requirements rather to help the agency refine its selection eliminate smoking by young people. than place the labeling provisions with criteria for messages. The American Medical Association, Finally, the remaining 20 percent of those pertaining to product labels. American Heart Association, American the messages could be placed in other Regulating cigarette and smokeless Cancer Society, American Lung media, with emphasis on radio and tobacco product labeling and Association, American Academy of outdoor advertising. Consideration advertising is essential to decrease Family Physicians, the World Health should be given to ensuring that these young people’s use of tobacco products. Assembly, and the World Health messages appear in media that are Proposed subpart D would preserve the Organization have recommended heavily used by young people. informational component of labeling restrictions on advertising and Under proposed § 897.29, each and advertising while decreasing their promotion including a total ban of all manufacturer would devote an amount appeal to children and adolescents. promotional and advertising activities.95 Federal Register / Vol. 60, No. 155 / Friday, August 11, 1995 / Proposed Rules 41329

Additionally, the recent IOM report the smokeless tobacco market declined belonging, independence, responsibility, and recommended that, to ensure that one during that period.102 approval from others. Product usage is a clear message about the health risks of In addition to spending large amounts significant medium to express these needs.107 tobacco use is disseminated, the on advertising, the cigarette and For example, adolescent males often government should see to it that the smokeless tobacco product industries use ‘‘such ’macho’ products as cars, ‘‘contradictory message [minimizing the have disseminated a variety of clothing, and cologne to bolster risk] now conveyed by the tobacco advertising and promotional messages developing and fragile masculine self- industry’’is stopped.96 The report that have had an enormous impact upon concepts.’’ 108 recommended many restrictions that are young people’s attitudes towards Adolescents view cigarettes as a similar to those in the proposed rule. smoking. In summarizing its analysis of symbol to be used in helping to create For example, the report recommended the industry’s advertising practices, a desired self image and to that advertising either be banned IOM stated: communicate that image to others. entirely or restricted to a text-only The images typically associated with Cigarette advertising reinforces this 97 format. The IOM said that such an advertising and promotion convey the symbolism and links smoking to approach would ‘‘eliminate all the message that tobacco use is a desirable, success, social acceptance, images that imply that tobacco use is socially approved, safe and healthful, and sophistication, and a desirable lifestyle. beneficial and make it attractive, and widely practiced behavior among young The rugged and masculine Marlboro that encourage young people to use adults, whom children and youths want to Man conveying, in the words of the tobacco products.’’ 98 emulate. As a result, tobacco advertising and Chief Executive Officer and President of The proposed labeling and advertising promotion undoubtedly contribute to the Philip Morris, ‘‘elements of adventure, regulations are also based upon multiple and convergent psychosocial freedom, being in charge of your own numerous studies and reports. The first influences that lead children and youths to destiny,’’ 109 and the cool Joe Camel, begin using these products and become and most compelling piece of evidence addicted to them.103 giving humorous dating tips, provide supporting restrictions on cigarette and imagery that adolescents can accept as smokeless tobacco product labeling, The pervasiveness and magnitude of identifying badges. Not surprisingly, advertising, and promotion is that these the labeling and advertising for these these brands are among the most products are among the most heavily products create an atmosphere of popular with young people. One advertised products in America. ‘‘friendly familiarity’’ 104 that affects and Canadian tobacco company described Between 1970 (1 year before Federal law shapes a young person’s views towards its ‘‘masculine’’targeting in these words: tobacco products. Thus, FDA’s decision prohibited cigarette advertisements on Since 1971, [the company’s] marketing television and radio) and 1993, cigarette to propose stringent regulations for strategy has been to position [a cigarette advertising and promotional labeling and advertising is based upon brand] as a ‘‘masculine trademark for young expenditures increased from $361 compelling evidence that advertising males.’’ It has been our belief that lifestyle million to $6 billion, a 1,562 percent and labeling play an important role in imagery conveying a feeling of increase.99 These messages were shaping a young person’s attitude independence/freedom should be used to towards, and willingness to experiment trigger the desire for individuality usually disseminated in print media, on 110 billboards, at point of sale, by direct with, cigarettes and smokeless tobacco felt by maturing young males. mail, on specialty items (hats, tee shirts, products. Advertising for cigarette brands lighters), at concerts and sporting targeted to women have proven 2. Advertising, Labeling, and successful in attracting young female events, in direct mail solicitations, as Adolescents sponsorships on television, and in other smokers. One study correlated trends in media. FDA is concerned that the Products may be advertised and rising smoking initiation rates among amount of advertising, its attractive promoted for their symbolic or fanciful girls with the introduction of several imagery, and the fact that it appears in attributes. Advertising utilizing this brands targeted at women. Some of so many forums, overwhelms the technique tries to convey that these campaigns utilized themes government’s health messages. consumption of the product will thought to be appealing to women (e.g. Advertising and promotion of enhance the user’s self image 105 or liberation and feminism, images of smokeless tobacco products, although a image in the community. Consumers slimness and sophistication). The much smaller market than cigarettes, purchasing products for these symbolic advertising campaigns preceded a rapid also increased over the years. The attributes hope to acquire the image as increase in smoking initiation rates largest increase in advertising well as the product itself.106 This among girls under 18 that was not expenditures for smokeless tobacco psychosocial consumer phenomenon is accompanied by any increase in products occurred for moist snuff. particularly descriptive of adolescent smoking rates for women, boys, or men. U.S.Tobacco (UST), the market leader in consumer behavior. As one consumer Thus, advertising can play an moist snuff, increased its television psychologist remarked: important role in a youth’s decision to advertising expenditures from $800,000 [adolescence] create[s] a lot of uncertainty use tobacco. Many researchers, in 1972 to $4.6 million in 1984,100 an about the self, and the need to belong and to including those within the cigarette increase of 485 percent. By 1993, total find one’s unique identity as a person industry, have advanced a stage-based advertising and promotional becomes extremely important. At this age, model of smoking uptake.111 The first, expenditures for smokeless tobacco choices of activities, friends, and preparatory stage is when a child or products exceeded $119 million. This ‘‘looks’’often are crucial to social acceptance. adolescent starts forming his or her increase was largely attributable to the Teens actively search for cues from their attitudes and beliefs about smoking, and advertising of moist snuff ($71.4 peers and from advertising for the ‘‘right’’way sees smoking as a coping mechanism, as million).101 This increase in to look and behave.* * * Teens use products a badge of maturity, as a way to enter to express their identities, to explore the expenditures corresponds to the growth world and their new-found freedoms in it, a new peer group, or as a means to 112 of the moist snuff portion of the and also to rebel against the authority of their display independence. During this smokeless tobacco market, from 36 parents and other socializing agents. stage, pervasive advertising imagery that million pounds in 1986 to 50 million Consumers in this age sub-culture have a glamorizes tobacco use may be an pounds in 1993. All other segments of number of needs, including experimentation, important factor in shaping beliefs. The 41330 Federal Register / Vol. 60, No. 155 / Friday, August 11, 1995 / Proposed Rules middle, trying and experimenting stages because they will not become addicted. Once company memoranda suggest that the occur when the first cigarette is smoked, addiction does take place, it becomes target population included high school often at the urging of a peer, and necessary for the smoker to make peace with students. For example, on January 10, the accepted hazards. This is done by a wide becomes repeated but irregular. It is range of rationalizations.118 1990, a manager in Sarasota, Florida, important to note that those who issued a memorandum asking cigarette experiment often, or begin smoking at 3. Industry’s Marketing Practices sales representatives to identify stores: an early age, are much more likely to Industry documents indicate that ** * that are heavily frequented by young become regular smokers.113 Therefore, cigarette manufacturers have conducted adult shoppers. These stores can be in close age of initiation is important. extensive research on smoking behavior proximity to colleges [,] high schools or areas The final stage, nicotine dependence and attitudes in young people and how where there are a large number of young and addiction, is characterized by a advertisements should be made to adults [who] frequent the store.122 physiological need for nicotine. At this appeal to young people. Documents On May 3, 1990, when the ‘‘Wall stage, the adolescent develops a from Philip Morris’ files indicate that Street Journal’’ published this tolerance for nicotine and can the company did, at least on one memorandum, the cigarette firm stated experience withdrawal symptoms (such occasion, conduct research about the that the memorandum was a ‘‘mistake’’ as dysphoric or depressed mood, smoking habits of young people, and violated company policy by insomnia, irritability, frustration or questioning people in Iowa, including targeting high schools.123 anger, anxiety, and difficulty teen-agers as young as 14.119 More Yet, on April 5, 1990, a manager in concentrating) if he or she attempts to specifically, research conducted for a Moore, OK, issued a similar quit. However, of those who try to quit, Canadian affiliate of one U.S. cigarette memorandum regarding the YAS few succeed without help, and there is firm focused on the need to attract program asking sales and service a high probability of relapse.114 young consumers, stating: representatives to identify what was In the early stages of smoking, i.e., at Ads for teenagers must be denoted by a termed ‘‘Retail Young Adult Smoker initiation, psychosocial factors are lack of artificiality, and a sense of honesty. Retailer Accounts.’’One criterion for decisive, and those factors are most Attempts at use of celebrities ***do not seem identifying a YAS account included often capitalized on in the themes used to really click. If freedom from pressure and facilities ‘‘located across from, adjacent in tobacco product advertising. In the authority can also be communicated, so to are [sic] in the general vicinity of the final stage, as smoking takes hold, much the better.120 High Schools or College Campus physiological factors (and even health Research conducted by an American [sic].’’ 124 This second memorandum concerns) dominate. A document cigarette firm, and confirmed by other suggests that promotions aimed at high prepared by Imperial Tobacco Ltd. tobacco companies, revealed another school students were part of the stated: significant behavior: most smokers company’s marketing strategy. At a younger age, taste requirements and continue to purchase the brand they Sales figures suggest that the YAS satisfaction in a cigarette are thought to play smoked when they became regular program was extremely effective. Camel a secondary role to the social requirements. smokers. Brand loyalty is seen in many quickly became one of the most popular Therefore taste, until a certain nicotine consumer products (such as toothpaste, cigarette brands among people under dependence has been developed, is coffee, and automobiles) but is age 18. Prior to the introduction of the somewhat less important than other Joe Camel campaign, Camel cigarettes things.115 particularly strong for tobacco products. A 1989 ‘‘Wall Street Journal’’article commanded no more than 3 or 4 percent Many behavioral and personal showed cigarettes as having the highest of the youth market. One year into the characteristics influence an adolescent’s percentage of brand loyalty among campaign, the youth share rose to 8.1 decision to use cigarettes or smokeless consumers of any consumer product, at percent and by 1991 it was at least 13 tobacco products, including: 71 percent.121 percent.125 rebelliousness; risk-taking personality; Knowledge about brand loyalty While not all advertising campaigns use of other legal or illegal drugs; belief among cigarette smokers, coupled with are so blatantly directed at juveniles, in the perceived utility of smoking (to the fact that most smokers began campaigns using more universal themes cope with stress, control weight, or smoking before the age of 18, may can be as effective with young people. improve one’s self-image); low self- explain why cigarette manufacturers According to an advertising executive esteem or depression; disbelief of or have focused advertising and with the advertising agency that created discounting health risks; and poor promotional efforts on younger people. the Marlboro cowboy, ‘‘The Marlboro academic achievement.116 Cognitive R.J. Reynolds devised what it called a cowboy dispels the myth that in order factors specific to children and ‘‘Young Adult Smokers’’ (‘‘YAS’’) to attract young people, you’ve got to adolescents also play a role in the early program that was apparently designed show young people.’’ The cowboy decision to smoke. Children and to appeal specifically to young smokers, theme of independence can be adolescents often focus on present 18 to 24 year olds, and more narrowly translated into other venues that have needs and concerns, and ignore risks to 18 to 20 year olds. An element of that appeal for young people and be sold as that might exist in the future. They program, known as FUBYAS, an an appropriate and desirable image. exhibit a sense of personal acronym for First Usual Brand Young According to John Landry, the Philip invulnerability that permits them to act Adult Smokers, captured the concept Morris executive credited with as if they were immortal.117 Tobacco that a smoker’s first regular brand is the designing the Marlboro campaign, the advertising plays on these feelings and brand a smoker will stay with for years. Marlboro theme sells because it fits exploits these adolescent This program featured the use of young people’s desires. In 1973, Philip vulnerabilities. As one report, created promotional items, such as hats and tee Morris sponsored the Marlboro Cup for for a Canadian cigarette company, shirts bearing the Camel brand name, the first time. Landry recalls that stated: the cartoon Joe Camel, and imagery, that ‘‘Secretariat [the winning horse] became Starters no longer disbelieve the dangers of appealed to young people. Although a hero to young people. Youth were smoking, but they almost universally assume these programs were ostensibly directed reaching out for something, and these risks will not apply to themselves at people between the ages of 18 and 24, someone they could identify with * ** Federal Register / Vol. 60, No. 155 / Friday, August 11, 1995 / Proposed Rules 41331

‘Marlboro Country’ fit these desires, this wouldn’t dare to go to school, even if he overwhelmingly people in their teens, is search people were going through.’’ doesn’t use the product, without a can regarded by the industry as essential to ‘‘Something young people could in his Levis’.’’ 132 a company’s continuing economic trust.’’A candid appraisal of the purpose UST distributes free samples of low viability. One document acquired from of the Marlboro theme was provided by nicotine-delivery brands of moist snuff Imperial Tobacco Limited (ITL) of the marketing director with Philip and instructs its representatives not to Canada, a sister company of the Brown Morris in Argentina, ‘‘Marlboro magic— distribute free samples of higher & Williamson Company in the United people using things with [the] Marlboro nicotine-delivery brands. The low States, states: nicotine-delivery brands also have a logo * * * was projected to other If the last ten years have taught us products around it and when those kids disproportionate share of advertising anything, it is that the industry is dominated who were playing with Marlboro relative to their market share. For by the companies who respond most merchandise 5 to 10 years ago—when example, in 1983, Skoal Bandits, a effectively to the needs of younger they start smoking they’ll smoke starter brand, accounted for 47 percent smokers.’’138 126 Marlboro.’’ of UST’s advertising dollars, but To further this goal, ITL hired a With regard to smokeless tobacco accounted for only 2 percent of the consulting research company to products, the U.S. Tobacco Company market share by weight. In contrast, investigate attitudes about smoking (UST) successfully revived a declining Copenhagen, the highest nicotine- among people aged 15 years and older. market by targeting young people, delivery brand, had only 1 percent of The purpose of the research, i.e., how especially young men, in its promotion the advertising expenditures, but 50 best to recruit new smokers, is indicated and advertising. In 1970, the segment of percent of the market share. This in the following statement: the population with the highest use of advertising focus is indicative of UST’s these products was men over age 50, ‘‘graduation process’’ of starting new It is no exaggeration to suggest that the and young males were among the smokeless tobacco product users on low tobacco industry is under siege. The smoker lowest. Fifteen years later, there had nicotine-delivery brands and having base is declining, primarily as a function of successful quitting. And the characteristics of been a 10-fold increase in the use of them graduate to higher nicotine- new smokers are changing such that the smokeless tobacco products among delivery brands as a method for future starting level may be in question.139 young males, whose use was double that recruiting new, younger users.133 of men over age 50.127 Tobacco companies deny any youth- Similar attitudinal research was done The increased use of smokeless directed advertising and promotion for R.J.R.-MacDonald, Inc., the Canadian 140 tobacco products by young people was activities.134 Moreover, the industry subsidiary of R.J. Reynolds. A report precisely the objective of a marketing claims that advertising plays no role in entitled YOUTH 1987 closely examined strategy of UST set in motion almost 30 a person’s decision to start smoking; the lifestyles and value systems of years ago. In 1968, officials at UST held that tobacco advertising is designed ‘‘young men and women in the 15–24 a marketing meeting where, according to solely to capture brand share from age range.’’ The report said the research the ‘‘Wall Street Journal,’’ the vice- competitors and maintain product would: president for marketing said, ‘‘We must loyalty. The industry further claims that provide marketers and policymakers with sell the use of tobacco in the mouth and the tobacco market is a ‘‘mature’’ market an enriched understanding of the mores and appeal to young people * * * we hope in which awareness of the product is motives of this important emerging adult to start a fad.’’ 128 Another official who universal and overall demand is either segment which can be applied to better attended the meeting was quoted as stable or declining.135 In a mature decision making in regard to products and programs directed at youth.141 saying, ‘‘We were looking for new market, the industry contends, users—younger people who, by advertising functions to merely shift A similar research objective was reputation, wouldn’t try the old customers from one brand to another, described in a 1969 research paper products.’’ 129 When a rival company but does not act as a stimulus to new presented to the Philip Morris Board of developed a smokeless tobacco product customers to enter the market. Directors.142 The paper stated that one that 9-year-old children began using, a One purpose of cigarette advertising of its objectives was to probe ‘‘[w]hy do UST regional sales manager reported to may be to encourage or discourage 70 million Americans * * * smoke UST’s national sales manager that the brand switching among current tobacco despite parental admonition, doctors’’ product was mostly used by children users. Some experts believe, however, warnings, governmental taxes, and and young adults ‘‘from 9 years old and that this same advertising encourages health agency propaganda?’’ 143 The up’’ and noted that this age was ‘‘four new consumers to begin using these paper continues: 136 or five years earlier than we have products. Tobacco advertising, There is general agreement on the answer reached them in the past.’’ 130 promotion, and marketing, on which the to the first [question—why does one begin to Responding to a question years later industry spends over $6 billion each smoke.] The 16 to 20-year old begins smoking about why so many young males were year, may serve both purposes largely for psychosocial reasons. The act of smoking buying smokeless tobacco, Louis F. out of market necessity. Market is symbolic; it signifies adulthood, he smokes Bantle, then chairman of the board of expansion, in the sense of new to enhance his image in the eyes of his UST said, ‘‘I think there are a lot of customers entering the market, must peers.144 reasons, with one of them being that it occur to maintain total tobacco sales Cigarette manufacturers are also is very ‘macho’.’’ 131 Playing to this and avoid a significant market decline. aware of the difficulties young people ‘‘macho’’ perception of smokeless ‘‘[T]he cigarette industry has been encounter when they try to quit tobacco by young males, advertisements artfully maintaining that cigarette smoking. Studies prepared for a for smokeless tobacco products have advertising has nothing to do with total Canadian affiliate of a U.S. cigarette traditionally used a rugged, masculine sales * * * [T]his is complete and utter company state: image and have been promoted by well- nonsense. The industry knows it is However intriguing smoking was at 11, 12, known professional athletes. UST’s nonsense,’’ wrote a former cigarette or 13, by the age of 16 or 17 many regretted successful penetration into the youth advertising executive.137 their use of cigarettes for health reasons and market is indicated in a statement by Evidence indicates that acquiring a because they feel unable to stop smoking Mr. Bantle: ‘‘In Texas today, a kid portion of the ‘‘starter’’ market, when they want to.145 41332 Federal Register / Vol. 60, No. 155 / Friday, August 11, 1995 / Proposed Rules

Another document declares: Other studies show that children who smoking status have found that [T]he desire to quit seems to come earlier smoke are more likely to correctly overestimating smoking prevalence now than before, even prior to the end of identify cigarette advertisements and appears to be a very strong predictor of high school. In fact, it often seems to take slogans in which the product names smoking initiation and progression to hold as soon as the recent starter admits to have been removed than are non- regular smoking.158 The 1994 Surgeon himself that he is hooked on smoking. smokers.152 One study surveyed a group General’s Report found that young However, the desire to quit, and actually of U.S. high school students and found people overestimate the prevalence of carrying it out, are two quite different things, a positive relationship between smoking cigarette smoking 159 and that as the would-be quitter soon learns.146 level and cigarette advertisement advertising’s pervasiveness plays a role Thus, these documents and reports recognition. Regular smokers recognized in this misconception. One unpublished suggest that cigarette manufacturers 61.6 percent of the tobacco study cited in the Surgeon General’s know that young people are vital to advertisements while non-smokers Report supports this finding. The study their markets and that they need to recognized 33.2 percent.153 found that children in Los Angeles develop advertising and other Another study measured cigarette (where cigarette advertising and promotional activities that appeal to advertising exposure among adolescents promotional campaigns are prevalent) young people. They also suggest that by determining which magazines they were nearly three times more likely to cigarette manufacturers know that once read and the number of cigarette overestimate the prevalence of peer those young people become regular advertisements in each magazine. The smoking than were children in Helsinki, smokers, that they, like adult smokers, study found that two factors, advertising Finland (where there has been a total find quitting smoking to be very exposure and whether a friend or ban on advertising since 1978).160 difficult, and most young people fail in friends smoked, were predictive of Moreover, adolescent smokers are more their attempts to quit. smoking status or intention to smoke. likely to overestimate the prevalence 161 4. Empirical Research on the Effects of The authors contended that the findings than adolescent non-smokers. Cigarette Advertising Activities on are consistent with the theory that Overestimating smoking prevalence, as Young People cigarette advertising successfully well as self-reported exposure to represents, through attractive imagery, advertising, have both been positively The 1994 Surgeon General’s Report that smoking is a facilitator for acquiring correlated with the intention to concluded that ‘‘[a] substantial and a desired characteristic or goal.154 smoke.162 growing body of scientific literature has These studies raised the question of Additional evidence indicates that reported on young people’s awareness whether smoking causes a person to children smoke many fewer brands than of, and attitudes about, cigarette recognize advertisements or whether a adults and that their choices, unlike advertising and promotional activities.’’ person’s exposure to or recognition of adults, are directly related to the The report also found that ‘‘[c]onsidered advertisements leads to smoking or amount and kind of advertising.163 CDC together, these studies offer a increases the likelihood that a person recently reported that 86 percent of compelling argument for the mediated will smoke. One study designed underage smokers who purchase their relationship of cigarette advertising and specifically to address this issue 155 own cigarettes purchase one of three adolescent smoking.’’ 147 The Surgeon showed that causality flowed in both brands: Marlboro (60 percent), Camel General’s Report and the Institute of directions: experimentation with (13.3 percent) and Newport (12.7 Medicine’s report 148 find that there is cigarettes prompted subjects to attend to percent).164 These three brands were sufficient evidence to conclude that and retain information from cigarette also the three most heavily advertised advertising and labeling play a advertisements (smoking status brands in 1993.165 While Marlboro has significant and important contributory determined whether the child attended long been the most popular brand role in a young person’s decision to use to advertising) and the amount of among young people, Camel’s share of cigarettes or smokeless tobacco information retained by each subject the youth market increased from around products. from cigarette advertisements predicted 3 percent to 13.3 percent as a result of a. Studies of advertising recall, the subjects’ experimentation with the invigorated Joe Camel campaign. approval of advertising, and young cigarettes (causality).156 Adult preferences, on the other hand, people’s response to advertising. Many Another study attempted to address are more dispersed. The three most studies have shown that young people the issue of causality by questioning commonly purchased brands among all are aware of, respond favorably to, and Glasgow school children at two different smokers (as measured by market share) are influenced by cigarette times, 1 year apart. The study asked 640 accounted for only 35 percent of the advertising.149 Even relatively young Glasgow children between the ages of 11 overall market share. (Camel had children are aware of cigarette and 14 about their intention to smoke approximately 4 percent of the market advertisements and can recall salient and their recognition of cigarette and its market share did not change as portions. A recent Gallup survey found advertising. Children who were more a result of the Joe Camel advertising.) that 87 percent of adolescents surveyed inclined to smoke between the time Furthermore, the most popular ‘‘brand’’ could recall seeing one or more tobacco when the two interviews were of cigarette among adult smokers was no advertisements and that half could conducted tended to be more aware of brand at all: 39 percent of all cigarettes identify the brand name associated with cigarette advertising at the first sold in the first quarter of 1993 were one of four popular cigarette slogans.150 interview than children who were less from the ‘‘price value market’’ which One study found that over 34 percent of inclined to smoke. The study concluded includes private label, generics, and 12- to 13-year-old California children that cigarette advertising has plain-packaged products.166 These surveyed could name a brand of predisposing, as well as reinforcing, brands typically rely on little or no cigarettes that was advertised, despite effects on children’s attitudes towards advertising and little or no imagery on the fact that Federal law bans cigarette smoking and their smoking their packaging. and smokeless tobacco product intentions.157 These studies present evidence that advertising on both radio and television, Other studies relating children’s advertising plays a significant role in the usual medium of information for misperceptions about the prevalence of children’s smoking behavior. There are, children and adolescents.151 smoking to advertising exposure and in addition, individual case studies that Federal Register / Vol. 60, No. 155 / Friday, August 11, 1995 / Proposed Rules 41333 illustrate the profound effect that certain 1988 and Joe Camel was introduced.171 c. Direct quantitative studies. There cigarette advertising campaigns can By 1989, Camel’s share of the youth are many direct quantitative studies of have on the youth market. market had risen to 8.1 percent,172 and the relationship between advertising b. The effect of selected advertising by 1992, 13 to 16 percent.173 During this and tobacco use and of the effects of campaigns, which were effective with same period, Camel’s share of the adult advertising restrictions and bans on children. Two American studies and market barely moved from its 4 percent consumption. These studies provide one British study analyzed alleged level.174 insight into the effects of advertising on youth-oriented campaigns to determine The other American study used data the general appeal of and demand for what effect they had on the underage from the National Health Interview cigarettes and smokeless tobacco market. One U.S. study examined the Survey to study trends in smoking products. They also provide evidence effect on the youth market of R.J. initiation among 10- to 20-year-olds confirming advertising’s effects on Reynolds’ advertising campaign for from 1944 through 1980. The study consumption and the effectiveness of Camel brand cigarettes. In the mid found that initiation rates for 18- to 20- advertising restrictions on reducing 1980’s, R.J. Reynolds sought to revitalize year-old women peaked in the early youth smoking. its Camel brand cigarettes. It gave its 1960’s and steadily declined thereafter. A large, multinational study symbol, the Camel, a new, more hip Initiation rates for girls under 18, commissioned by the New Zealand personality. It transformed the symbol however, increased abruptly around Government examined consumption into ‘‘Joe Camel,’’ an anthropomorphic 1967. This was the same period when trends in 33 countries between 1970 and ‘‘spokescamel.’’ The campaign featured brands specifically intended for women 1986.178 Controlling for income, price, Joe as a humorous figure in history, as were introduced and heavily advertised. and health education, the study found an advisor to young adults with The initiation rate was particularly that the greater a government’s degree of ‘‘smooth moves’’ and eventually as one steep for women who did not attend control over tobacco promotion, the of a gang of hip camels (‘‘the hard pack’’ college. The initiation rate for girls greater the annual average fall in band and the gang at the watering hole under the age of 18 peaked in 1973— tobacco consumption and in the rate of bar). The study analyzed 1990 data from about the same time that sales for these decrease of smoking among young the California Tobacco Survey which brands (Virginia Slims, Silva Thins, and people.179 One of the report’s most consisted of a telephone survey of Eve) peaked. Between 1967 and 1973, relevant conclusions was that, among 24,296 adults and 5,040 children under smoking initiation rates increased the 18 countries with data on youth the age of 18. The study found that around 110 percent for 12-year-old girls, smoking, there is evidence of a teenagers were twice as likely as adults 55 percent for 13-year-olds, 70 percent relationship between stringent to identify Camel cigarettes as one of the for 14-year-olds, 75 percent for 15-year- government restrictions on tobacco two most advertised brands.167 olds, 55 percent for 16-year- olds, and promotion and reduced uptake of One study explored the power of the 35 percent for 17-year-olds.175 smoking among young people. The Joe Camel campaign to penetrate the In contrast, initiation rates for men report concluded that there appeared to youth market. The study found that declined from 1944 to 1949 and did not be a greater decrease in smoking uptake children as young as 3 years old could decline again until the middle to late in those countries with the most identify Joe Camel as a symbol for 1960’s. Initiation rates for boys under 16 stringent measures compared with those smoking. This recognition ranged from showed little change during the entire countries where advertising had not 30 percent of 3 year olds, to 91 percent study period. The study concluded that been affected.180 of 6 year olds. In fact, the recognition advertising for women’s brands during Other studies that have looked at rates for Joe Camel surpassed the rates this period was positively associated populations in general provide evidence for certain children’s products, cereals, with increased smoking uptake in girls that restrictions can have an important computers, and network television under 18 years of age.176 effect on total consumption and provide symbols.168 A similar study funded by The British study looked at a inferential evidence of similar positive R.J. Reynolds found that 72 percent of campaign featuring a flippant and effects on youth smoking. One such 6 year olds and 52 percent of children humorous character named ‘‘Reg.’’ The study conducted by the Chief Economic between the ages of 3 and 6 could study found that 91 percent of 11- to 15- Advisor of the Department of Health of identify Joe Camel. These rates year-olds recognized the ads, compared the Government of Great Britain found exceeded the recognition rates for with 52 percent of 33- to 55-year-olds. that advertising tends to increase Ronald McDonald, which were 62 Teenagers who liked the advertisements consumption of tobacco products and percent of the 6 year olds and 51 were more likely to smoke. In fact, it that restrictions on advertising tend to percent of children between the ages of was one of the two brands that most decrease tobacco use beyond what 3 and 6.169 The higher recognition rates children smoked. During the period in would have occurred in the absence of for Joe Camel are remarkable because, which Reg was advertised, smoking by regulation.181 After performing an in- unlike Ronald McDonald who appears 11- to 15-years-olds in northern England depth analysis of data from the four in television commercials during increased from 8 percent to 10 percent, countries (Norway, Finland, Canada, children’s viewing hours, Federal law but the rate for this same age group in and New Zealand) which had varying prohibits cigarette advertisements on southern England, where the degrees of tobacco advertising television. advertisements did not appear, restrictions and for which data exist, the Data collected by researchers for the remained stable at 7 percent.177 The study concluded that restrictions, State of California found that in 1990, government, pursuant to the industry’s including bans on some forms of 23.1 percent of the under age 18 market voluntary code, later requested that the advertising or on all advertising, in California purchased Camel as their company discontinue the advertising resulted in an overall decrease in brand. This represented a 230 percent campaign because of its consumption. The study suggests that increase over its pre-‘‘Joe Camel’’ 1986 disproportionate appeal to children. Norway’s restrictions on all advertising, rate. The same growth rate did not occur These studies provide compelling sponsorship, and indirect advertising for adults.170 Nationally, Camel had less evidence that promotional campaigns produces a 9 to 16 percent reduction in than 3 percent of the youth market can be extremely effective with young consumption over the long run.182 before the brand was repositioned in people. Finland’s ban on advertising and 41334 Federal Register / Vol. 60, No. 155 / Friday, August 11, 1995 / Proposed Rules restrictions on other nonadvertising Studies that assessed the response of would prohibit proof of purchase gifts measures reduced cigarette smoking by large population groups to changes in and games of chance and contests; and 6.7 percent.183 advertising generally confirm a finding § 897.34(c) would prohibit sponsorship Canada’s Tobacco Products Control that advertising has a positive effect on of events that are identified with a Act, which became effective on January consumption. The most recent cigarette or smokeless tobacco product 1, 1989, banned most print advertising, comprehensive analysis of existing brand name or other identifying restricted sponsorship, and forbade studies on the effect of advertising characteristics. Proposed § 897.36 indirect advertising (e.g., use of trade expenditures on consumption rates was would address false and misleading names on non-tobacco items). Although done in the English study, discussed labeling and advertising. These sections advertising restrictions often take time above. Among other things, the study are discussed more fully below. to be fully effective, the study found looked at the effect of yearly The proposed rule would establish that in only 2 years following the fluctuations in advertising expenditures different labeling and advertising institution of government regulation, within several countries, but principally requirements for cigarettes and consumption was reduced 2.8 percent within the United States and United smokeless tobacco products. These more than would have been expected Kingdom. The result was that the differences result from different Federal had there been no advertising ‘‘preponderance of positive results preemption provisions contained in the 184 restrictions. points to the conclusion that advertising two Federal laws requiring warning Another study looked at tobacco does have a positive effect on labels on those products. Briefly, FDA consumption per adult in the 22 consumption.’’ 188 Individual, smaller believes that the Cigarette Act only countries of the Organization for studies 189 have examined the same preempts FDA’s authority to require Economic Cooperation and question and confirmed a finding of additional statements about smoking 190 Development between 1960 and effect of advertising on consumption. and health on cigarette packages, while 1986.185 The report reaffirmed the New the Smokeless Act prohibits FDA from Zealand Board’s conclusion that, as a 5. Summary of Evidence requiring additional information about group, countries prohibiting tobacco The agency concludes that the health and tobacco use in advertising as advertising in most or all media preponderance of quantitative and well as on the package of smokeless experienced more rapid percentage falls qualitative studies of cigarette tobacco products. For a more complete in consumption than the group of advertising suggests: (1) A causal discussion, see section IV.C. below. countries which permitted relationship between advertising and promotion.186 youth smoking behavior, and (2) a b. Proposed § 897.30—permissible Other studies try to measure the effect positive effect of stringent advertising forms of labeling and advertising. that advertising has on the general level measures on smoking rates and on Proposed § 897.30 would set forth the of consumption in a country. youth smoking. Moreover, industry permissible forms of labeling and Advertising can have an increased effect statements indicate the importance of advertising for cigarettes and smokeless on consumption, even in those the youth market segment to the tobacco products. Labeling and countries where the smoking rate has industry’s continued success. Actions advertising are used throughout this been falling. The analyses are able to taken by industry members to attract subpart to include all commercial uses determine whether consumption would young smokers have also resulted in of the brand name of a product (alone have fallen at a greater rate but for the attracting children and adolescents. or in conjunction with other words), advertising, and ascribe that difference Finally, examples of specific campaigns logo, symbol, motto, selling message, or (the slowed rate of decline) to directed at young people support the any other indicia of product advertising. hypothesis that cigarette advertising and identification similar or identical to that One New Zealand study provides promotion play an important role in used for any brand of cigarette or evidence that changes in advertising encouraging young people to start smokeless tobacco product. However, expenditures can have an effect on smoking, to sustain their smoking habit, labeling and advertising would exclude youth smoking behavior. The study and to increase consumption. Therefore, package labels, which would be covered analyzed the total sales of cigarettes sold the agency finds that stringent under proposed subpart C. In brief, by New Zealand supermarkets over a 42 restrictions on advertising are essential § 897.30(a) of the proposed rule would week period. The study design included if smoking by adolescents is to be define permissible outlets for labeling advertising that had recently been reduced. and advertising as newspapers, modified to contain newly-mandated, magazines, periodicals, billboards, strong, varied disease warnings that 6. Proposed Subpart D—Labeling and posters, placards, entries and teams in occupied 15 percent of the Advertising sponsored events, promotional advertisement. Moreover, no human a. General overview. Proposed subpart materials, audio and/or video formats, form could be displayed in the D would establish regulations on the and delivered at the point of sale. advertising except a hand and forearm, labeling and advertising of cigarettes Proposed § 897.30(b) would prohibit and one color apart from black was and smokeless tobacco products. outdoor advertising of tobacco products usually used. The results indicated that Proposed subpart D consists of four from appearing outside of buildings advertising for upscale brands of sections. Proposed § 897.30 would within 1,000 feet of an elementary or cigarettes did not raise cigarette establish the scope of permissible forms secondary school or playground. These consumption, but that consumption of of labeling and advertising. Proposed are places where children and an inexpensive brand with a heavy § 897.32 would set forth the format and adolescents spend a great deal of time youth appeal did increase with content requirements. Proposed and should therefore be free of increased advertising. Moreover, the § 897.34(a) would prohibit the sale and advertising for these products. The study found that the advertising for the distribution of non-tobacco items and agency believes that this a reasonable new, inexpensive brand had the services that are identified with a restriction and notes that the cigarette additional effect of recruiting young cigarette or smokeless tobacco product industry’s voluntary ‘‘Cigarette smokers and increasing the market brand name or other identifying Advertising and Promotion Code,’’ base.187 characteristics; proposed § 897.34(b) revised in 1990, contains a similar Federal Register / Vol. 60, No. 155 / Friday, August 11, 1995 / Proposed Rules 41335 provision concerning schools and young people, the agency requests Environment of the House Committee playgrounds. comment on the appropriateness of the on Energy and Commerce,’’ R.J. These labeling and advertising proposed regulations and whether other Reynolds, to the Honorable Edolphus requirements are an effort to control the alternatives would be more appropriate Towns (Reynolds’ text-only proliferation of promotional messages or effective. advertisement about youth smoking). that attract young people. As discussed Under proposed § 897.32(a), cigarette Several studies show how strongly above, advertising and promotion can and smokeless tobacco product labeling images appeal to young people. play a significant role in young people’s and advertising, as described in § 897.30 Photographs, pictures, cartoons, and smoking behavior. The agency finds that (a), and (b), would be required to use other graphics allow the advertiser to restricting the permissible forms of black text on a white background and encode its sales message in a way that media would help prevent young people nothing else. This text-only requirement makes the advertisement more from starting to use cigarettes and is intended to reduce the appeal of compelling and memorable.191 Imagery smokeless tobacco products and cigarette and smokeless tobacco product ties the products to a positive visual becoming addicted to those products. labeling and advertising to persons image that can be used consistently in Proposed § 897.30 (a) would describe younger than 18 without affecting the all advertising media as well as on the the range of known labeling and informational message conveyed to product package itself.192 advertising media currently used by adults. Adding visual images to a text cigarette and smokeless tobacco product However, FDA believes that advertisement can produce greater recall companies. advertising in publications that are read and a more positive product rating.193 It is important to note that the primarily by adults should be allowed Not surprisingly, studies have shown proposal would not affect any other to use imagery and color because the that children and adolescents react more limitations on labeling or advertising, effect of such advertising on young positively to advertising with pictures such as the radio and television people would be nominal. Therefore, and other depictions than to advertising advertising bans placed on cigarette and advertisements in publications with (or packaging) that contains only print smokeless tobacco product advertising primarily adult readership would not be or text.194 (the Cigarette Act, 15 U.S.C. 1331, 1334 restricted to a text-only format. The One study examined 243 seventh and and the Smokeless Act, 15 U.S.C. 4401, agency proposes to define such eighth grade students in Chicago to 4402(f)) nor any other actions taken by publications as those: (a) Whose readers determine the appeal (likability) of Federal agencies (e.g., FTC’s age 18 or older constitute 85 percent or different types of cigarette advertising. ‘‘Regulations Under the Comprehensive more of the publication’s total The study compared a Joe Camel Smokeless Tobacco Health Education readership, or (b) that is read by two advertisement, an advertisement with a Act of 1986,’’ 16 CFR Part 307 (1994)). million or fewer people under age 18, model, and a text-only advertisement. c. Proposed § 897.32—format and whichever method results in the lower The results indicated that adolescents content requirements for labeling and number of young people. The found advertisements containing advertising. Proposed § 897.32 would readership of a publication is the total pictures and cartoons to be significantly describe the format and content number of people that read any given more appealing than advertisements requirements for cigarette and copy of that publication. It should be with human models; advertisements smokeless tobacco product labeling and measured according to industry with any imagery were more appealing advertising. This section would standards and at a minimum by asking than text-only advertisements. These establish requirements in three a nationally projectable survey of people results are particularly compelling principal areas: text-only format, the what publications they read or looked at because a study by the Advertising product’s established name, and a brief during any given time. A reader is one Research Foundation found that an statement of the risks of using cigarettes. who said that he/she read the last issue advertisement’s ‘‘likability’’ is the best i. Text-only advertising. The agency of a publication. Prior to disseminating predictor of product sales.195 considered various options available to advertising containing images and In arriving at its proposal, FDA control advertising’s influence on young colors, it would be the company’s considered other options, including people, from a full ban on all obligation to establish that the banning all advertising or restricting the advertising and promotion, to publication meets the criteria for a type of imagery used.196 FDA believes restrictions on advertising and primarily adult readership. that the evidence detailed above would promotional practices that children The concept of text-only advertising justify a ban on all or most advertising actually view. FDA’s proposed rule requirements is not new. The cigarette and promotion of tobacco products. The would address the need to eliminate industry has employed text-only studies cited and industry statements advertising’s influence on young people advertisements in the past, particularly and actions already discussed in this and, at the same time, preserve when it sought to inform or educate proposal indicate the positive effect that advertising’s informative aspects—that consumers about company policies or advertising can have on young people’s is, to provide useful information to important issues. See, e.g., ‘‘In the smoking behavior, while other studies consumers legally able to purchase Matter of R.J. Reynolds Tobacco Co.,’’ establish that bans on cigarette these products. Therefore, the agency 111 F.T.C. 539 (D. 9206) (1988) (a text- advertising can help reduce overall agrees with the IOM’s recommendation only advertisement that disputed that consumption and youth initiation. that advertising and labeling should cigarette smoking was related to Given the extremely grave health appear in text-only format because this coronary heart disease); ‘‘Washington consequences of a lifetime of smoking, format would reduce the attraction and Post,’’ October 18, 1994, at p. A11; actions taken that would help achieve a appeal that cigarette and smokeless ‘‘Washington Post,’’ October 20, 1994, at lower initiation rate among young tobacco product advertising have for p. A17; ‘‘Time,’’ 144(19): 42(1994) people would be authorized as a matter young people. Recognizing that it is (Philip Morris text-only advertisement of law and justified as a matter of public difficult to draw the line between which discussed environmental tobacco health policy. advertising that should be restricted or smoke); ‘‘Tobacco Control and Moreover, young people are currently regulated and advertising that does not Marketing: Hearings Before the exposed to billions of dollars worth of pose an unreasonable risk of influencing Subcommittee on Health and the tobacco advertising and promotion that 41336 Federal Register / Vol. 60, No. 155 / Friday, August 11, 1995 / Proposed Rules use attractive imagery and do not rely advantageous placement of products in participated, and 28.4 percent of non- on objective product claims. The retail outlets, get products into a smokers participated. The report industry’s claims that this advertising prospective consumer’s hand through concluded that there is an association exists solely to maintain brand loyalty the use of coupons and samples, and between participating in promotions or induce smokers to switch. However, provide gifts, contests, and other non- and a person’s susceptibility to tobacco as noted previously, tobacco advertising tobacco items and gifts to create special use. It also noted that participation in and promotion appear to have a more appeal and reduce real price.198 promotions has the same ability to profound effect on brand choices by Proposed § 897.34(a) would pertain to predict susceptibility to tobacco use as young people (86 percent of young non-tobacco items and services (other does use by a household member.202 people smoke the three most advertised than cigarettes or smokeless tobacco These proposed provisions would brands) than on adults, whose choice is products) that the tobacco companies eliminate these items and therefore more often based on price (39 percent of market, license, distribute, or sell. would prevent young people from the market is comprised of generic and Manufacturers often provide branded, wearing such items and becoming discount products.) Furthermore, brand non-tobacco items as an inducement to ‘‘walking advertisements.’’ 203 loyalty runs higher for cigarettes than purchase cigarettes or generate Proposed § 897.34(b) would prohibit for any other product. Thus, significant purchases through the use of proof-of- all proof of purchase sales or gifts of expenditures would not appear to be purchase coupons. Both R.J. Reynolds non-tobacco items as well as all necessary to retain loyal consumers and and Philip Morris utilize this popular contests, lotteries, or games of chance would appear to be excessive and technique by providing either a coupon that are linked to the purchase of, or in wasteful if they are expended merely to with each package (Camel cash) or consideration for the purchase of a get people to switch brands. indicating that each package was worth tobacco product. Because contests and While a total ban on advertising, a number of credits towards a purchase lotteries are usually conducted through therefore, would likely be justified, FDA (Marlboro miles). Each company also the mail, the agency has not been able believes that limiting advertisements printed glossy catalogues with items to devise regulations that would reduce and labeling to which children are and gifts that could be purchased using a young person’s access to contests or exposed to a text-only format is less ‘‘cash’’ or credits. Either method creates lotteries. burdensome and would effectively an incentive to purchase the tobacco Proposed 897.34(c) would also reduce the appeal of tobacco products to product by reducing the product’s real prohibit a sponsored event from being children and adolescents. Further, while price; the consumer gets the product identified with a cigarette or smokeless some have suggested prohibiting only and the non-tobacco ‘‘gift.’’ tobacco product brand name or any youth-oriented images, the agency has The IOM found that this form of other brand identifying characteristic. been unable to define the subset of advertising is particularly effective with Entries and teams in sponsored events advertising and labeling directed to young people.199 Young people have are to be treated as labeling under young people based upon the media relatively little disposable income, so § 897.30 and § 897.32 and would be selected or the location of the promotions are appealing because they required to be in text-only, black and advertising. For example, billboards are represent a means of ‘‘getting something white format. Any other athletic, always visible to young people, and for nothing.’’ In many cases, the items— musical, artistic, or other social or there are few, if any, publications that tee shirts, caps, and sporting goods—are cultural event would be permitted to be children and adolescents cannot see. particularly attractive to young people. sponsored in the name of the tobacco Thus, the proposed text-only Some items, when used or worn by company. However, the event would not requirement would offer the most young people, also create a new be permitted to include any brand name protection for children and adolescents advertising medium—the ‘‘walking (alone or in conjunction with any other while still enabling informative billboard’’—which can come into words), logo, symbols, motto, selling advertising to reach persons aged 18 and schools or other locations where message, or any other indicia of product older. Given the complexities of this advertising is usually prohibited. A identification similar or identical to subject, however, FDA invites comment 1992 Gallup survey found that about those used for any brand of cigarettes or on other potential methods that may half of adolescent smokers and one smokeless tobacco products. The exist for curtailing advertising’s appeal quarter of non-smokers owned at least corporation in whose name the to young people. one of these items.200 Similar data were sponsorship would be permitted, would ii. Non-tobacco items and reported for a group of ninth graders be required to have been in existence on sponsorship. Proposed § 897.34(a) from New York State. Among these January 1, 1995. This latter provision is would prohibit the sale or distribution ninth-graders, 48 percent of occasional intended to prevent manufacturers from of all non-tobacco items that are smokers and 28 percent of non-smokers circumventing this restriction by identified with a cigarette or smokeless reported owning branded clothing.201 incorporating separately each brand that tobacco product brand name or other A recent report found that tobacco they manufacture for use in identifying characteristic. As noted companies spent $600 million on sponsorship. above, advertising expenditures have programs that provide promotional Sponsorship by cigarette and risen dramatically in the past two items in exchange for proofs-of- smokeless tobacco companies associates decades, and the distribution of the purchase (usually by catalogue). tobacco use with exciting, glamorous, or marketing expenditures represents a Although the tobacco industry states fun events, such as car racing and major shift in marketing trends. In 1970, that these items are meant for rodeos. It provides an opportunity for the amounts spent on traditional individuals over the age of 20, many what sponsorship experts call advertising represented 82 percent of teens report participating in ‘‘embedded advertising’’204 that actively total spending, but, by 1991, this figure promotional activities, with creates a ‘‘friendly familiarity’’ between had fallen to approximately 17 participation ranging from 25.6 percent tobacco and sports enthusiasts, many of percent.197 The remaining funds of 12- to 13-year-olds and 42.7 percent whom are children and adolescents. devoted to marketing cigarettes are of 16- to 17-year-olds owning a Those watching a sponsored event, spent on a variety of promotional promotional item. The report found that including children and adolescents, activities designed to assure 68.2 percent of current smokers repeatedly see the sponsor’s brand or Federal Register / Vol. 60, No. 155 / Friday, August 11, 1995 / Proposed Rules 41337 corporate name linked with an event Companies often choose to sponsor called Kids Korner with puzzles and they enjoy. For example, sponsoring a events in order to heighten their games for children.223 race car, motorcycle, or boat enables visibility, shape consumer attitudes, Sponsorship’s impact can be manufacturers to place cigarette brand communicate commitment to a measured by the amount of ‘‘free’’ names and logos on the vehicles and particular lifestyle, and to drive sales.215 advertising that appears on television. drivers’ uniforms; by sponsoring the The IEG reports that sponsorship offers The amount and financial value of event itself, the manufacturers may also several advantages over traditional television exposure gained by a firm can place cigarette brand names and logos advertising. According to the IEG, be substantial. According to one study, on the event and on official’s clothing. sponsorship is generally more effective Marlboro cigarette’s sponsorship of a IEG, the leading source in the United in ‘‘establishing qualitative attributes, Championship Auto Racing Team in the States for sponsorship information and such as shaping consumers’ image of a 1989 season gave Marlboro nearly 3 1⁄2 consulting services, is also the only brand, increasing favorability ratings hours of television exposure and 146 company that tracks and analyzes and generating awareness.’’216 IEG also mentions of the brand name. This sponsorship of sporting and other states that companies with huge exposure had a value of $8.4 million. In events and causes. It publishes the IEG advertising budgets and high consumer the Indianapolis 500, Marlboro received Sponsorship Report, an international awareness (such as tobacco companies), more than $2.6 million in advertising biweekly newsletter on sponsorship, as ‘‘are looking to the event to have a rub- exposure. In the Marlboro Grand Prix, well as an industry report titled, ‘‘IEG’s off effect on their image and ultimately race officials wore Marlboro Grand Prix Complete Guide to Sponsorship: their sales.’’217 One marketing executive shirts and caps, and the Marlboro logo Everything you need to know about of a company that sponsors professional or name appeared 5,933 times during sports, arts, event, entertainment and beach volleyball said, ‘‘Consumer the broadcast.224 cause marketing.’’205 In this primer for attitudes are the hardest thing to change Another study used the ‘‘Sponsor’s companies considering sponsorship, it ** * the more our brand is part of Report’’ to estimate the value of all defines sponsorship as ‘‘a cash and/or events that are part of a consumer’s product exposure for most U.S. auto in-kind fee paid to a property (typically lifestyle, the more we can affect his or races. In 1992, 354 motorsport in sports, arts, entertainment, or causes) her attitude toward the product.’’218 broadcasts were measured. These programs had a total viewing audience in return for access to the exploitable Image compatibility is listed by IEG as of 915 million people, of whom 64 commercial potential associated with the number one factor in determining that property.’’206 According to the IEG, million were children and adolescents. which events to sponsor. IEG ‘‘[s]ponsorship, the fastest growing form Exposure value for all sponsors was encourages companies to consider of marketing, is unregulated in the $830 million. Tobacco products whether the event offers the imagery it U.S.’’207 In North America, total accounted for 8.2 percent ($68 million) is trying to establish and whether it sponsorship grew from $850 million in of the total. The impact of sponsoring depicts a lifestyle with which the 1985 to more than $4.2 billion in 1994 televised events such as these company wants to be associated.219 A and is done by thousands of automobile races is perhaps most senior Philip Morris executive companies.208 The IEG further notes apparent when one realizes that over 10 explained how the sponsorship of that for the cost of a 30-second spot on million people attended these events, racing car events by Marlboro is the Super Bowl telecast, a company can while 90 times that number viewed sponsor a NASCAR Winston Cup car consistent with the cowboy imagery them on television.225 and receive more than 30 hours of associated with Marlboro: ‘‘We perceive Sponsorship’s effectiveness also can television coverage.209 Formula One and Indy car racing as be measured by a change in consumer The report states that companies can adding, if you will, a modern-day awareness of or attitudes toward a link sponsorship directly to product dimension to the Marlboro Man. The product or company. Evidence usage or sales.210 The Chairman and image of Marlboro is very rugged, regarding sponsorship’s impact on CEO of R.J. Reynolds summed up the individualistic, heroic. And so is this young people is somewhat limited, but underlying purpose of sponsorship for style of auto racing. From an image reports indicate that cigarette his company by saying, ‘‘We made it standpoint, the fit is good.’’220 manufacturers’ sponsorship of sporting clear from the day we announced our The tobacco industry’s sponsorship of events can lead young people to sponsorship of the Grand National events also can lead to associations associate brand names with certain life Division that we were in the business of (often referred to as ‘‘tie-ins’’) with styles or activities or can affect their selling cigarettes, not the racing youth-oriented items that extend the purchasing decisions. business.’’211 imagery. A sponsored event ‘‘can bring One study of children in Glasgow The cigarette 212 and smokeless excitement, color, and uniqueness to a found that one-third of the 10- and 11- tobacco industry 213 has been involved [point-of-purchase] display and can be year-old children surveyed correctly in sponsorships for many years and was merchandised weeks or months in matched cigarette brands to the sports at one time one of the dominant advance.’’ 221 For example, auto racing’s that their manufacturers sponsored. sponsors of events. More recently other popularity with children led one toy Many children between the ages of 6 industries have become increasingly manufacturer to sponsor a Sprint car and 17 surveyed could specify a brand involved in sponsoring events and team in the 1991 ‘‘World of Outlaw’’ and the sponsored sport or game, and causes and today the packaged goods, series, sponsored principally by UST. nearly half of the children associated a retail, and financial service industries The toy company made toy racing cars life style or image (such as ‘‘excitement’’ are the leading sponsors of events. with Marlboro and Camel decals. and ‘‘fast racing cars’’) to cigarette Although the tobacco industry accounts Another toy company made toy cars brands, even when the cigarette for only 4 percent of all sponsored with Copenhagen and Skoal decals; advertisement made no reference to the events,214 FDA has concluded that Copenhagen and Skoal are the two sport.226 Another study also found an sponsored events are a significant part major smokeless tobacco product brands increase in awareness of the sponsored of the successful marketing of tobacco for UST.222 Additionally, ‘‘Inside brands and concluded that even fairly products and that sponsorship should Winston Cup Racing Sports Club brief exposure to tobacco-sponsored be regulated under this proposal. Magazine’’ reportedly included a page sports on TV may increase considerably 41338 Federal Register / Vol. 60, No. 155 / Friday, August 11, 1995 / Proposed Rules the levels of brand awareness as long as any restricted device, that all ‘‘ABOUT 1 OUT OF 3 KIDS WHO it is linked to well-publicized images. advertising or other descriptive printed BECOME SMOKERS WILL DIE FROM 227 material contain ‘‘a true statement of the THEIR SMOKING.’’ In Australia, the percentages of device’s established name * * * printed FDA will include in the final rule the children in four different States between prominently and in type at least half as exact language for any and all brief the ages of 12 and 14 who smoked were large as that used for any trade or brand statements to ensure that this important similar. However, their cigarette brand name thereof.’’ The agency has information is conveyed accurately and purchases mirrored the brands that had determined that the established names effectively. In addition, the agency sponsored sporting events in their for these products are the common and requests comment on what other respective States. For example, more usual names: ‘‘cigarettes,’’ ‘‘cigarette information should be included in the than 44 percent of children in New tobacco,’’ ‘‘loose leaf chewing tobacco,’’ brief statements concerning relevant South Wales and Queensland smoke ‘‘plug chewing tobacco,’’ ‘‘twist chewing warnings, precautions, side effects, and Winfield, the sponsor of the Queensland tobacco, ‘‘moist snuff,’’ and ‘‘dry snuff.’’ Rugby League, whereas, in South contraindications. (These names would be codified at Support for the proposed brief Australia, about 44 percent of children proposed § 897.24.) statement comes from the European smoke Escort, which sponsors the South Union’’s report on the labeling of Australia’s Australian Rules Escort Cup. The product’s established name This study demonstrates the would be followed by the words, ‘‘a tobacco products. The report states that effectiveness of sports sponsorship in Nicotine-Delivery Device.’’ Under ‘‘[t]he warnings which are perceived as influencing children’s choice of section 502(r)(2) of the act, a restricted being the most credible are, in general, cigarettes.228 device is misbranded unless all those which draw attention to the risk Finally, a study was conducted in advertising contains ‘‘a brief statement of death, the risk of illness and to the which approximately 100 boys in a of the intended uses of the device.’’ The addiction caused by smoking. secondary school were shown a 15- agency finds that it is necessary to Credibility is reinforced when the minute videotape containing an require that the product’s established message is felt to apply personally to the advertisement promoting a cigarette name and intended uses be placed on reader or which describes a risk which company’s sponsorship of a sporting all advertising, under section 520(e) of may be felt by the reader to concern event while another 100 boys were the act, as a measure which them personally.’’ 230 shown the same video with an affirmatively identifies the products to During the comment period for this advertisement of a non-tobacco persons reading the advertising. proposed rule, FDA intends to perform company’s sponsorship of a sporting extensive focus group testing on the iv. The brief statement. Under proposed brief statement[s]. The testing event. Exposure to the advertisement for proposed § 897.32(c), cigarette the tobacco-sponsored event did not will evaluate the content and various advertising (permitted under formats for the brief statement[s] to significantly change the boys’ general § 897.30(a)) would contain information attitudes to smoking. However, non- determine if the warnings are regarding relevant warnings, communicated effectively. The agency smoking students who saw the tobacco precautions, side effects, and sponsorship advertisement had a will base the design, the format and contraindications. This brief statement content of the brief statement[s] on the significantly higher level of agreement is required under section 502(r)(2) of the with the statement that ‘‘smoking results of this testing and the comments act. Section 502(r)(2) does not require received to the proposed rule. doesn’t harm people if they play sports’’ that labeling contain a brief statement than did nonsmokers who were not FDA is not proposing that advertising and the agency does not intend to place list cigarette ingredients, but FDA is exposed to this advertisement. such a requirement on labeling (e.g., According to the study’s authors: ‘‘Our aware that several surveys and studies vehicles, entries or teams in sponsored show that cigarette users would like to study suggests that advertising of events). Because of the products’ serious sponsorships reinforces existing know more about the ingredients in, or ‘‘potentiality for harmful effect,’’ the behaviors, and has the potential to the chemical constituents of, smoke proposal would specify the text of the increase the rate at which young males delivered by cigarettes. In a survey of brief statement. This would ensure that smoke by negating the ill-effects 2,345 adults, 93 percent agreed that all advertisements contain the same, associated with smoking. We also tobacco companies should be required required information in a manner that is conclude that these promotions do to list additives on package labels the consistent, readable, clear and affect those under the age of 18 by way food and drug companies are conspicuous, and not misleading to the creating associations with events, teams required to list ingredients.231 Those reader. or personalities with whom they surveyed believed that in order to identify.’’ 229 FDA is generally responsible for inform consumers about the risks The proposed rule is intended to approving information in the brief involved in smoking, more break the link between tobacco statement to ensure that the appropriate comprehensive information about company-sponsored events and use of risks and benefits are communicated. In cigarette ingredients and combustion tobacco. These provisions are intended this case, the risks associated with by-products should be provided to the to reduce the so-called ‘‘friendly cigarettes are much greater than those consumer. familiarity’’ that sponsorships and items for any other consumer product on the Section 502(r)(2) of the act (21 U.S.C. generate among young people. market, and hundreds of different 352(r)(2)) states that ‘‘in the case of iii. Established name and intended cigarette brands exist. The proposed specific devices made subject to a use. Proposed § 897.32(b) would require rule, therefore, would provide, as an finding by the Secretary after notice and each piece of advertising for cigarettes, example, the following text for one of opportunity for comment that such cigarette tobacco, or smokeless tobacco the brief statements to ensure that action is necessary to protect the public products, permitted under § 897.30(a), important information is communicated health,’’ a restricted device shall be to state the product’s established name in an informative manner to young misbranded unless its advertising and and give a statement of its intended use. people and that the information is other descriptive printed matter include Section 502(r)(1) of the act requires, for consistent for all cigarette brands: ‘‘a full description of the components of Federal Register / Vol. 60, No. 155 / Friday, August 11, 1995 / Proposed Rules 41339 such device or the formula showing produce a range of tar, nicotine, and message, while decreasing the quantitatively each ingredient of such carbon monoxide ratings for each brand likelihood that any one message would device to the extent required in to better reflect the intensity with which become so familiar and so overexposed regulations which shall be issued * ** each cigarette can be smoked; and (2) that its effectiveness would ‘wear after an opportunity for a hearing.’’ the range of ratings for each brand out.’’’ 238 The report concluded that However, the Cigarette Act and the should be communicated to consumers. quarterly rotated messages would assist Smokeless Act both require submissions The Ad Hoc Committee recognized that in maintaining the novelty of the of reports or lists of ingredients to the designing the new test and determining message, thus enhancing Secretary (see 15 U.S.C. 1335a and how to convey the information to noticeability.239 Additionally, the report 4403) that must be kept confidential. consumers would require the concluded that shorter messages which The agency tentatively concludes that involvement of many agencies, are rotated are specific and concrete and these provisions may preclude FDA including the National Institutes of are more easily converted into mental from requiring components or Health, FDA, and CDC, and would also images. These messages are recalled ingredients to be listed in all advertising take time. The Ad Hoc Committee more readily.240 and other printed matter. Therefore, recommended against measuring other The Centre for Behavioural Research FDA has decided, at this time, not to smoke constituents, but suggested that on Cancer in Australia described a require a description of components or smokers be informed of ‘‘other process of ‘‘habituation’’ that occurs ingredients, but invites comment on hazardous smoke constituents’’ in with warnings and health messages. whether it should initiate proceedings packages and in advertising. Under this process, a person’s response to determine whether the agency should The FTC is considering whether and to a warning or health message declines require a listing of the component parts how to implement these as that person increases his or her or ingredients of these restricted devices recommendations. Until that occurs, exposure to the warning or health and the impact of the Cigarette Act’s FDA will not propose any requirements message.241 It found that habituation is and the Smokeless Act’s provisions on concerning tar, nicotine, and carbon greater as the frequency of exposure the agency’s authority. monoxide ratings, but the agency increases and is reduced if exposure to IOM recently recommended that a requests comment on whether it should the stimulus is stopped for a period of ‘‘regulatory agency should take steps to implement one of the recommendations time,242 as can be the case if the inform consumers about the meaning of of the Ad Hoc Committee by proposing messages are dissimilar and rotated. statements regarding tar and nicotine to require manufacturers to provide The proposed regulation requires that yields.’’ 232 Some manufacturers information about these substances the brief statement be readable, clear, voluntarily disclose the quantities of tar through a package insert and/or to conspicuous, prominent, and and nicotine, as determined by the FTC provide information about nicotine in contiguous to the current Surgeon method, in their labeling or advertising, labeling and advertising. General’s warning. FDA requests and one Surgeon General’s warning In considering the design of the comments on the text and design of the states, ‘‘Cigarette Smoke Contains warning, FDA notes that research brief statements, particularly in its Carbon Monoxide.’’ indicates that novel formats for ability to reach young people, and/or Consumers are aware that cigarettes warnings are most likely to capture the whether and what design specifications 234 produce tar and carbon monoxide and viewer’s attention. The FTC reported should be established. Specifically, it that they contain nicotine. Most in 1981 on the noticeability of messages requests comment on how best to insure consumers, however, do not understand inside a rectangle, octagon, circle and that the statement will be clear, 235 the FTC rating numbers or the health arrow, and enlarged rectangle. The conspicuous, and prominently implications of each constituent.233 The report concluded that the circle and displayed. d. False or misleading labeling and proposed rule would not explain the arrow and octagon were noticed and advertising. Proposed § 897.36 would FTC ratings because of the controversy recalled more often. Recall of the declare the labeling or advertising of surrounding the FTC method for message in the circle and arrow was 64 cigarettes and smokeless tobacco determining tar, nicotine, and carbon percent, whereas recall of the same products to be false or misleading if the monoxide. message in a rectangle (the shape used In December 1994, a conference was in current cigarette advertising) was labeling or advertisement contains ‘‘any 236 held under the auspices of an Ad Hoc only 28 percent. Other studies express or implied false, deceptive, or misleading statement, omits important Committee of the President’s Cancer describe the importance that format has information, lacks fair balance, or lacks Panel (the Ad Hoc Committee) to in conveying the information and substantial evidence to support any consider the continuing usefulness of ensuring that it is sufficiently 237 claims made for the product.’’ This the FTC method. Although the full processed. Factors such as print size, provision would implement section report is not yet available, the Ad Hoc color, contrast, graphic design, 201(n) of the act, which states that Committee’s relevant conclusions were: positioning (e.g. at the top of each page of advertising), shape, spacing, font labeling or advertising may be The smoking of cigarettes with lower style, and highlighting are all important misleading based on ‘‘representations machine-measured yields has a small effect considerations for effectively made or suggested by statement, word, in reducing the risk of cancer caused by design, device, or any combination smoking, no effect on the risk of communicating information, cardiovascular diseases, and an uncertain particularly to young people. thereof, but also the extent to which the effect on the risk of pulmonary disease. In addition, FDA notes that several labeling or advertising fails to reveal *** studies have demonstrated that rotating facts material in the light of such The FTC test protocol does not accurately messages assists in maintaining their representations or material with respect reflect actual human smoking, which is not noticeability. FTC concluded, in its to consequences which may result from standardized, but is characterized by wide 1981 investigation of cigarette the use of the article,’’ and section variations. advertising practices, that a ‘‘rotational 502(q)(1) of the act, which declares a The Ad Hoc Committee warning system would provide restricted device to be misbranded if recommended, among other things, that: sufficient repetition of each message to ‘‘its advertising is false or misleading in (1) The FTC protocol be changed to contribute to long term recall of that any particular.’’ FDA emphasizes that 41340 Federal Register / Vol. 60, No. 155 / Friday, August 11, 1995 / Proposed Rules proposed § 897.36 is meant to be Evaluation and Research (CDER). Thus, If a State or local government is illustrative rather than exhaustive. proposed § 897.40(a) reflects the uncertain whether section 521(a) of the There may be other ways in which statutory requirement in section 510(j) act preempts a particular law or labeling or advertising would be ‘‘false and would direct copies of labels to the regulation, proposed § 897.42(b) would or misleading.’’ For example, Documents and Records Section in permit the State or local government to advertising or labeling that stated that a CDER. Proposed § 897.40(b) would easily and expeditiously request and study showed that smoking can cure authorize FDA employees to inspect receive an advisory opinion from FDA. emphysema would be false and records, particularly for purposes of Regulations governing applications for misleading. review, copying, or any other use exemptions from Federal preemption of The agency’s regulations concerning related to the enforcement of the act. State and local requirements applicable prescription drug advertising provide This requirement is similar to the to devices can be found at 21 CFR part great specificity as to what constitutes inspection authority under the medical 808. violative advertising, 21 CFR part 202. device tracking regulations at 21 CFR FDA is aware of several recent court The agency has decided that this same 821.50 and implements the agency’s decisions construing section 521 of the degree of specificity is not practical in inspection authority contained in act to preempt certain common law tort the case of a widely used consumer section 704 of the act. actions with respect to medical device product. Tobacco advertising contains products. FDA does not believe that an unlimited variety of claims that make 2. Section 897.42—State and Local section 521 should be read to give any categorization difficult. Therefore, the Requirements preemptive effect to these proposed agency has tentatively concluded that it Proposed § 897.42 would address regulatory requirements over tort will provide general guidance for the preemption of State and local actions with respect to tobacco types of advertising claims that will be requirements. Section 521(a) of the act products. FDA specifically invites considered violative, rather than to (21 U.S.C. 360k(a)) states that: comment on this issue. attempt to identify every possible type ** * no State or political 3. Additional Regulatory Measures of false and misleading claim. subdivision of a State may establish or continue in effect with respect to a FDA is also proposing that additional E. Subpart E—Miscellaneous device intended for human use any provisions aimed at further reducing the Requirements requirement— appeal of tobacco advertising and thus Proposed subpart E would consist of (1) which is different from, or in discouraging young people from using three provisions. These provisions addition to, any requirement applicable cigarettes or smokeless tobacco products would provide record and report under this Act to the device, and be required if, seven years from the date requirements, describe the rule’s (2) which relates to the safety or the final rule is published, FDA finds relationship to state and local laws, and effectiveness of the device or to any that the percentage of young people require additional measures if the other matter included in a requirement under the age of 18 who smoke, or the prevalence of tobacco use is not applicable to the device under this Act. percentage of young men who use dramatically reduced within seven years Proposed § 897.42(a) would require smokeless tobacco, has not decreased of the date the final rule is published. manufacturers, distributors, and roughly by 50 percent. This goal could retailers to comply with any more be measured using data of national 1. Section 897.40—Records and Reports stringent State or local requirements tobacco use rates of children and Proposed § 897.40 would address relating to the sale, distribution, adolescents. One method would be: reports and records. In brief, proposed labeling, or advertising of cigarettes and 1. For cigarette manufacturers, the § 897.40(a) would require each smokeless tobacco products provided percentage of daily cigarette smokers manufacturer to submit to FDA copies that the State or local requirement does among 12th graders is at least 50 percent of all labels and labeling, and a not conflict with FDA regulations. less than it was in 1994 as measured by representative sample of its advertising These more stringent state requirements an objective, scientifically valid, and for enforcement purposes. The proposal would, therefore, be part of the generally accepted program such as the would also permit a manufacturer to regulatory scheme and would not be Monitoring the Future Project (MTFP) submit a representative sample of its preempted. For example, the proposal for both the reference (1994) and target labels if they would be similar for would not preempt a State law raising years (seven years from the date of the multiple packages or products. the minimum age for purchasing publication of the final rule); or Proposed § 897.40(a) would direct cigarettes to 21 or prohibiting cigarette 2. For smokeless tobacco product manufacturers to send information and or smokeless tobacco product manufacturers, the percentage of male reports to the Document and Records advertisements on billboards located regular smokeless tobacco product users Section, 12420 Parklawn Dr., Rockville, near schools. (any use in the past 30 days) among MD 20857, with each section plainly FDA is aware that many States and 12th graders is at least 50 percent less marked, i.e., ‘‘Labels,’’ or ‘‘Labeling and local governments have enacted than it was in 1994 as measured by an Advertising,’’ whichever is appropriate. innovative and effective laws and objective, scientifically valid, and This provision is the minimum regulations pertaining to cigarettes and generally accepted program for both the required by section 510(j) of the act (21 smokeless tobacco products, and the reference (1994) and target years (seven U.S.C. 360(j)), which requires agency encourages future activity in years from the date of the publication of submission to FDA of labels, labeling, these areas. Moreover, because the the final rule) and the percentage of and a representative sample of proposed rule addresses only the sale, female regular smokeless tobacco advertising for restricted devices. As distribution, labeling, and advertising of product users among 12th graders is no explained elsewhere in this document, cigarettes and smokeless tobacco greater than it was in 1994 as measured the agency intends to regulate cigarettes products, State and local requirements in both the reference (1994) and target and smokeless tobacco products as in other areas are not affected. For years. restricted devices rather than as drug example, the proposal clearly would not The Institute for Social Research at products, but will assign all of such preempt State laws regarding licensing, the University of Michigan collects and products to the Center for Drug taxes, or smoking in public areas. maintains the data from the MTFP. The Federal Register / Vol. 60, No. 155 / Friday, August 11, 1995 / Proposed Rules 41341 project is funded through the National time frame is different, the proposed within a relatively short period of time Institute on Drug Abuse. The survey regulation would use data as it measures after the federally imposed electronic utilizes both a cross-sectional and a actual usage by high school seniors, a media ban became effective, the longitudinal design, with self- group closer in age to the relevant age cigarette industry redirected the funds administered surveys in a sample of group. The prevalence of daily cigarette spent on television and radio selected schools. Data for daily smoking smoking among high school seniors was advertising to traditional print and by 12th graders have been collected 19.4 percent in 1994. Calculating from outdoor media. Over time, more annually since 1976. Smokeless data for 1994, daily smoking prevalence among nontraditional forms of advertising any use within past 30 days are high school seniors must be reduced by emerged, including using non-tobacco available for the years 1986 to 1989 and half to 9.7 percent seven years after date items (e.g., tee shirts and hats) that 1992 to 1994 for 12th graders. (Twelfth of the final publication of the rule. Any served as ‘‘walking billboards,’’ placing graders are a suitable surrogate for the major changes in the methodology of products in movies, creating massive upper age of the prohibited smoking age this survey would require a lists of smokers to target by direct mail, because twelth graders are 17–18 years reassessment of the objective in light of publishing magazines with articles as old.) The MTFP is one of the more the influences of the changes on the well as advertising, creating ‘‘friendly consistent and complete data sets survey’s prevalence estimates. familiarity’’ and good will for tobacco available on young people and provides The ‘‘Healthy People 2000’’ smokeless products by sponsoring sporting and a stable and reliable basis for measuring tobacco goals are to reduce use in 12- to artistic events and by having its the proposed reductions. FDA is 17-year-old males by 39.4 percent in 12 sponsored events appear on television requesting comment on the years—from 6.6 percent in 1988 to 4.0 (in spite of the television advertising appropriateness of using this data set, percent in the year 2000 and for 18- to ban).243 In addition, in Canada, the including whether the methodology 24-year-old males by 55.1 percent—from cigarette companies evaded a ban on used by MTFP is appropriate for this 8.9 percent in 1987 to 4.0 percent by the sponsorship in the name of a brand purpose or on whether other measures year 2000. The proposed rule also variety (but not in the company’s would be more reliable and enforceable. modifies the ‘‘Health People 2000’’ goal corporate name), by creating corporate FDA derived its outcome-based reflecting the different time frame. The identities for relevant brands. These objectives from the ‘‘Healthy People objectives also will use data for the new corporations could then legally 2000’’ objectives. ‘‘Healthy People nation’s high school seniors to monitor sponsor events.244 2000’’ discusses national health progress in reducing the prevalence of Therefore, to guard against this promotion and disease prevention smokeless tobacco use. Since high possibility, and to provide for an objectives in this country. This report school seniors are 17- to 18-years-old, additional incentive for the companies was facilitated by IOM of the National the percent reduction for high school to take appropriate actions, the agency Academy of Sciences, with the help of seniors should be about midway is proposing that one or more additional the U.S. Public Health Service, and between that required for males 12- to measures would be imposed in the included almost 300 national 17-years-old (i.e., 39.4 percent) and 18- event that the outcome-base objectives membership organizations and all State to 24-years-old (i.e., 55.1 percent). Thus, provided in proposed § 897.44 are not health departments. The report was the a 50 percent reduction would be achieved. product of eight regional hearings and required to be in compliance with this At the time a final rule is published, testimony from more than 750 proposed regulation. Smokeless tobacco FDA intends to propose specific individuals and organizations. use rates (once in 30 days) for senior additional measures. The agency invites Contributors included the CDC, the high school boys was 20.3 percent in public comment on what regulatory National Institutes of Health, the 1994. Therefore, the goal would be 10.2 measures(s) should be considered. The American Academy of Pediatrics, the percent. (Failure to reach these agency reiterates that additional American Heart Association, the objectives would justify the imposition measures would become operational American Medical Association, the of additional regulatory requirements on only if the outcome-based objectives are American Cancer Society, the American the sale, distribution, and use of not achieved. Lung Association, the Blue Cross and cigarettes and smokeless tobacco Finally, the agency requests comment Blue Shield Association, the American products. Recognizing that smokeless on what would be the appropriate College of Physicians, and the tobacco use by young girls is not schedule for implementing the Federation of American Societies for extensive (2.6 percent in 1994), the provisions of the final rule. It is likely Experimental Biology. agency believes that an additional goal that the final rule would contain some Recognizing that reducing cigarette might be considered—that smokeless provisions that could not be complied smoking by youth is an important tobacco use by young females not with immediately following the date national priority, the ‘‘Healthy People increase. This goal would help prevent that the final rule becomes effective. 2000’’ report established a basic goal for the development of a new market for FDA is seeking comment on, and the year 2000 to reduce by half the smokeless tobacco products. information about, such matters as size initiation of cigarette smoking by While the agency finds that the of inventories, manufacturing practices, children and youth and to reduce by proposed rule is a comprehensive retooling, useful life of equipment, and 39.4 and 55.1 percent the use of approach that should prove effective in other similar business considerations. smokeless tobacco by young men. regulating these products, it recognizes The agency will take the information The ‘‘Healthy People 2000’’ objectives that additional measures might be provided on these issues into account for cigarettes required the smoking necessary because many different when it established the implementation prevalence among young people (ages factors may affect a young person’s schedule for the final rule. 20 to 24) to be cut in half in 13 years— decision to start smoking or use from 30 percent in 1987 to 15 percent smokeless tobacco products. F. Other Amendments by the year 2000. The proposed Additionally, the tobacco industry has The proposed rule would also make regulation takes as its premise the type shown its ability to find new outlets for two minor amendments to existing of outcome established in ‘‘Healthy promoting its products when regulations. The proposal would exempt People 2000.’’ However, because the restrictions are imposed; for example, cigarettes and smokeless tobacco 41342 Federal Register / Vol. 60, No. 155 / Friday, August 11, 1995 / Proposed Rules products from the Statement of Identity Recommendations of Working Group of State 39. ‘‘Strategies to Control Tobacco Use in requirements for over-the-counter Attorneys General, p. 28, December 1994. the United States: A Blueprint for Pubic devices at 21 CFR 801.61 and from the 21. Erickson, A.D., et al., ‘‘A Baseline Health Action in the 1990’s, ’’ National reporting requirements at 21 CFR parts Assessment of Cigarette Sales to Minors in Cancer Institute, NIH Publication No. 92– San Diego, California,’’ Journal of 3316, p. 235, October 1991. 803 and 804. Section 801.61 stems, in Community Health, Vol. 18, No. 4, pp. 213– 40. 1994 SGR, p. 249. part, from the Fair Packaging and 224, 1993. 41. Response Research, Inc., ‘‘Study of Labeling Act, and Tobacco products are 22. Id., p. 220. Teenage Cigarette Smoking and Purchase exempt from the statute’s requirements. 23. 1994 SGR, p. 141. Behavior,’’ for the National Automatic Therefore, the proposed rule would 24. Hinds, M.W., ‘‘Impact of a Local Merchandising Association, Chicago, p. 23, exempt cigarettes and smokeless Ordinance Banning Tobacco Sales to June/July 1989. tobacco products for 21 CFR 801.61. Minors,’’ Public Health Reports, vol. 107. No. 42. Forster, J.L., M. Hourigan, and S. 3, pp. 355–358, 1992. Kelder, ‘‘Locking Devices on Cigarette Parts 803 and 804 pertain to the 25. Klonoff, E.A., et al. ‘‘The Problem and Vending Machines: Evaluation of a City reporting of deaths, serious injuries, and Sociocultural Context of Single-Cigarette Ordinance,’’ American Journal of Public malfunctions associated with devices. Sales,’’ Journal of the American Medical Health, vol. 82, No. 9, pp. 1217–1219 (Table FDA is proposing to exempt cigarettes Association, vol. 271, No. 8, pp. 618–620, 1), 1992. and smokeless tobacco products from 1994. 43. Id., p. 1219 (Table 2). 26. Archibald, C., ‘‘Sale of Individual 44. Id. these reporting requirements because 45. ‘‘Minors’ Access to Cigarette Vending the adverse health effects attributable to Cigarettes: A New Development,’’ Letters to the Editor, Pediatrics, vol. 91, No. 4, p. 851, Machines—Texas,’’ in ‘‘MMWR,’’ DHHS, cigarettes and smokeless tobacco 1993. CDC, vol. 43, No. 34, pp. 625–627, 1994. products are extensive and well- 27. IOM Report, pp. 215–216. 46. Cismoski, J. And M. Sheridan, documented, and the agency sees little 28. Id., p. 216. ‘‘Availability of cigarettes to Under-Age benefit in requiring manufacturers and 29. ‘‘No Sale: Youth, Tobacco and Youth in Fond du Lac, Wisconsin,’’ distributors of these products to report Responsible Retailing,’’ Findings and Wisconsin Medical Journal, vol. 92, No. 11, such information to FDA. Recommendations of a Working Group of pp. 626–630, 1993. State Attorneys General, pp. 29–30, 47. Forster, J.L., M. Hourigan, and P. References December 1994. McGovern, ‘‘Availability of Cigarettes to 1. Institute of Medicine, ‘‘Growing up 30. Lewit, E.M., D. Coate, and M. 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Economics, and Operational Research 160. 1994 SGR. pp. 192–193. 174. ‘‘Changes in the Cigarette Brand Division, London, 1992, p.16 (Draft). 161. Sherman, S.J., et al., ‘‘The False Preference of Adolescent Smokers, U.S. 189. One study looked at the effect of Consensus Effect in Estimates of Smoking 1989–1993,’’ in ‘‘MMWR,’’ CDC, DHHS, vol. variations in advertising expenditures for Prevalence, Underlying Mechanisms,’’ 43, No. 32, pp. 577–581, 1994. low-tar cigarettes. The study found that Personality and Social Psychology Bulletin 175. Pierce, J., L. Lee, and E.R. Gilpin, increased advertising expenditures for low vol. 9, No. 2, pp. 197–207, 1983. ‘‘Smoking Initiation by Adolescent Girls, tar cigarettes did not increase the advertiser’s 162. See Botvin, G., et al., ‘‘Smoking 1944 Through 1988,’’ Journal of the brand share, but instead benefitted all Behavior of Adolescents Exposed to Cigarette American Medical Association, vol. 271, No. cigarette manufacturers by increasing overall Advertising,’’ Public Health Reports, vol. 8, pp. 608–611, 1994. cigarette consumption. Roberts, M.J., and L. 108, No. 2, pp. 217–224, 1993; Sherman, S.J., 176. Id. Samuelson, ‘‘An Empirical Analysis of et al., ‘‘The False Consensus Effect in 177. Hastings, G.B., et al., ‘‘Cigarette Dynamic, Nonprice Oligopolistic Industry,’’ Estimates of Smoking Prevalence: Underlying Advertising and Children’s Smoking: Why Rand J Econ, vol. 19, No. 2, pp. 200–220, Mechanisms,’’ Personality and Social Reg Was Withdrawn,’’ British Medical 1988. Psychology Bulletin, vol. 9, No. 2, pp. 197– Journal, vol. 309, pp. 933–937, 1994. 190. A study of the complete New Zealand 207, 1983. 178. ‘‘Health or Tobacco—An End to market found that there was a positive 163. ‘‘Changes in the Cigarette Brand Tobacco Advertising and Promotion,’’ Toxic relationship between cigarette consumption Preferences of Adolescent Smokers-United Substances Board Wellington, New Zealand, and cigarette advertising over the period States, 1989–1993,’’ in ‘‘MMWR,’’ CDC, May 1989. 1973–1985 in New Zealand; for every one DHHS, vol. 43, No. 32, pp. 577–581, 1994. 179. Id. at pp. xx, xxiv. percent change in advertising, there was a .07 See also Goldstein, A.O., et al., ‘‘Relationship 180. Highlights of the report’s other percent change in consumption. Moreover Between High School Student Smoking and findings are: the effect lasted for a year after change in Recognition of Cigarette Advertisements,’’ • Tobacco advertising bans for health advertising. Chetwynd, J., et al., ‘‘Impact of The Journal of Pediatrics, vol. 110, No. 3, pp. reasons are, on average, accompanied by falls Cigarette Advertising on Aggregate Demand 488–491, 1987. in tobacco consumption four times faster for Cigarettes in New Zealand,’’ British 164. ‘‘Changes in the Cigarette Brand than in partial ban countries. Journal of Addiction, vol. 83, pp. 409–414, Preferences of Adolescent Smokers-United • In countries where tobacco has been 1988. The New Zealand Toxic Substances States, 1989–1993,’’ in ‘‘MMWR,’’ CDC, promoted virtually unrestricted in all media, Board reanalyzed the data and confirmed the DHHS, vol. 43, No. 32, pp. 577–581, 1994. consumption has markedly increased (+1.7 conclusion that variations in advertising 165. Id. percent per year). expenditures did have an effect upon 166. Teinowitz, I., ‘‘Add RJR to List of • In countries where advertising has been consumption but found that advertising Cigarette Price Cuts,’’ Advertising Age, pp. 3, totally banned or severely restricted, the might have a greater effect on consumption 46, April 26, 1993. percentage of young people who smoke has than the earlier study. Harrison R., J. 167. Pierce, J., et al., ‘‘Does Tobacco decreased more rapidly than in countries Chetwynd, and R.J. Brodie, ‘‘The Influence of Advertising Target Young People to Start where tobacco promotion has been less Advertising on Tobacco Consumption: A Smoking? Evidence from California,’’ Journal restricted. Reply to Jackson & Ekelund,’’ British Journal of the American Medical Association, vol. • When the results of this study of of Addiction,, vol. 84, pp. 1251–1254, 1989; 266, No. 22, p. 3145–3148, 1991. promotion/consumption trends in 33 Raftery, J., ‘‘Advertising and Smoking—A 168. Fischer, P.M., et al., ‘‘Brand Logo countries between 1970 and 1986 are put Smoldering Debate, British Journal of Recognition by Children Aged 3 to 6 Years. alongside the evidence from econometrics Addiction’’, vol 84, pp. 1241–1246, 1989. 41346 Federal Register / Vol. 60, No. 155 / Friday, August 11, 1995 / Proposed Rules

Not all studies show a decrease in cigarette cause marketing,’’ IEG Inc., Chicago, IL., p. 5, Warning Information,’’ Center for Consumer consumption in areas that ban advertising. 1995 (hereinafter cited as ‘‘IEG Guide’’). Research, University of Florida, p. 12, For example, one study asserts that 205. IEG Guide. November 1980. advertising bans have not been followed by 206. Id., p. ii. 235. Myers, M.L. et al., Public Version of significant changes in tobacco consumption. 207. Id., p. 33. the Federal Trade Commission, ‘‘Staff Report Boddewyn, J.J., ‘‘Tobacco Advertising Bans 208. Id., pp. 2–3. on the Cigarette Advertising Investigation,’’ and Consumption in 16 Countries,’’ 209. Id., p. 10. pp. 5–17 and 5–19, May 1981. International Advertising Association, 1986. 211. Chapman, S., ‘‘The Dying Trade,’’ 236. Id. 191. Hendon, D.W., ‘‘How Mechanical International Organization of Consumers 237. Biehal, G. and D. Chakravarti, Factors Affect Ad Perception,’’ Journal of Unions, The Hague, The Netherlands, p. 53, ‘‘Information-Presentation Format and Advertising Research, vol. 13, No. 4, pp. 39– September 1985. Learning Goals as Determinants of 45, 1973. 212. ‘‘Federal Trade Commission Report to Consumers’ Memory Retrieval and Choice 192. Callcott, M.F., and P.A. Alvey, ‘‘Toons Congress For 1993, Pursuant to the Federal Processes,’’ Journal of Consumer Research, Sell . . . and Sometimes They Don’t.’’ An Cigarette Labeling and Advertising Act,’’ vol. 8, pp. 431–441, March 1982; Beltramini, Advertising Spokes-Character Typology and Federal Trade Commission, 1995. R. ‘‘Perceived Believability of Warning Label Exploratory Study,’’ Proceedings of the 1991 213. ‘‘Federal Trade Commisison Report to Information Presented in Cigarette Conference of the American Academy of Congress for 1993, Pursuant to the Advertising,’’ Journal of Advertising, pp. 26– Advertising, pp. 44–52, 1991. Comprehensive Smokeless Tobacco Health 32, 1988; Bettman, J.R., J.W. Payne, and R. 193. Rossiter, J. and L. Percy, ‘‘Attitude Education Act of 1986,’’ Federal Trade Staelin, ‘‘Cognitive Considerations in Change Through Visual Imagery in Commission, 1995. Designing Effective Labels for Presenting Risk Advertising,’’ Journal of Advertising, vol. 9, 214. IEG Guide, p. 14. Information,’’ Journal of Public Policy & No. 2, pp. 10–16, 1980; Lutz, K., and R. Lutz, 215. Id., pp. 10–12. Marketing, vol. 5, pp. 1–28, 1986. ‘‘Effect of Interactive Imagery on Learning: 216. Id., p. 40. 238. Myers, M.L. et al., Public Version of Application to Advertising,’’ Journal of 217. Id., p. 10. the Federal Trade Commission, ‘‘Staff Report Applied Psychology, vol. 62, No. 4, pp. 493– 218. Id. on the Cigarette Advertising Investigation,’’ 498, 1977; Rossiter, J. and L. Percy, ‘‘Visual 219. Id., p. 15. pp. 5–31 and 5–32, May 1981. Imaging Ability As a Mediator of Advertising 220. 1994 SGR, p. 179 (citing Business of 239. Id. p. 5–32. Response’’ in ‘‘Advances in Consumer Racing, p. 5A, 1989.) 240. Id. Research,’’ vol. 5, Association for Consumer 221. IEG Guide, p. 11. 241. ‘‘Health Warnings and Contents Research, p. 621–629, 1978. 222. Blum, A., ‘‘Sounding Board, The Labelling on Tobacco Products,’’ Centre for 194. Rossiter, J., ‘‘Visual and Verbal Marlboro Grand Prix: Circumvention of the Behavioural Research in Cancer, p. 42, 1992. Memory in Children’s Product Information Television Ban on Tobacco Advertising,’’ The 242. Id. Utilization’’ in ‘‘Advances in Consumer New England Journal of Medicine, vol. 324, 243. ‘‘Wall Street Journal,’’ December 27, Research,’’ vol. 3, Association for Consumer No. 13, pp. 915–916, March 28, 1991. 1994, at p. B5. Research, p. 523–527, 1976 (children use 223. Id., p. 916. 244. Sweanor, D.T., ‘‘Measures Adopted by non-verbal, visually stored information 224. Id., pp. 914, 916. the Tobacco Industry to Circumvent Canada’s differently than adults). 225. Slade, J., ‘‘Tobacco Product Tobacco Products Control Act,’’ p. 3, August 195. Huang, P., et al., ‘‘Black-White Advertising During Motorsports Broadcasts: 1994. Differences in Appeal of Cigarette A Quantitative Assessment,’’ presentation at Advertisements Among Adolescents,’’ 9th World Conference on Tobacco and IV. Legal Authority Tobacco Control, vol. 1, No. 4, pp. 249–255, Health, October 10–14, 1994. A. Regulation of Nicotine-Containing 1992. 226. Aitken, P.P., D.S. Leathar, and S.I. Tobacco Products 196. FDA recognizes that requiring text- Squair, ‘‘Children’s Awareness of Cigarette only advertising is not a total panacea and Brand Sponsorship of Sports and Games in As more fully described in ‘‘Nicotine that not all advertising containing cartoons or the UK,’’ Health Education Research, Theory In Cigarettes And Smokeless Tobacco figures will be popular with young people and Practice, vol. 1, No. 3, pp. 203–211, Products Is A Drug And These Products (e.g., popular cartoon characters advertising 1986. Are Nicotine-Delivery Devices Under life insurance or home insulation). Some 227. Ledworth, F., ‘‘Does Tobacco Sports The Federal Food, Drug, And Cosmetic advertisements that contain only words will Sponsorship on Television Act as Act,’’ the Food and Drug Administration be attractive (e.g., the words ‘‘win free Advertising to Children,’’ Health Education tickets’’ to a concert or event). However, the Journal, vol. 43, no. 4, 1984. has conducted an extensive agency finds that the effect of imagery is 228. Memorandum from Gray, N., (Anti- investigation and comprehensive legal powerful and that the proposal represents the Cancer Council of Victoria), to All Members analysis. The results of that inquiry best approach regarding labeling and of the Federal Parliament, December 15, support a finding at this time that the advertising that appeal to young people. 1989. nicotine in cigarettes and smokeless 197. IOM Report, pp. 107–108. 229. Hoek, J., P. Gendall, and M. Stockdale, tobacco products is a drug within the 198. Id. ‘‘Some Effects of Tobacco Sponsorship meaning of the act because it is 199. Id., p. 108. Advertisements on Young Males,’’ intended to affect the structure or 200. ‘‘Teen-Age Attitudes and Behavior International Journal of Advertising, vol. 12, function of the body and it achieves its Concerning Tobacco—Report of the No. 1, January 1993. Findings,’’ The George H. Gallup 230. ‘‘The Labelling of Tobacco Products in intended effects through chemical International Institute, Princeton, N.J., pp. 17, the European Union,’’ European Bureau for action within the human body. Based on 59, September 1992. Action on Smoking Prevention, p. 5, 1993. the evidence now before the agency, 201. ‘‘Survey of Alcohol, Tobacco and Drug 231. Strouse, R., and J. Hall, ‘‘Robert Wood cigarettes and smokeless tobacco Use Among Ninth Grade Students in Erie Johnson Foundation Youth Access Survey: products are drug delivery systems County, 1992,’’ Roswell Park Cancer Results of a National Household Survey to whose purpose is to deliver nicotine to Institute, Buffalo, N.Y., p. 26, 1993. Assess Public Attitudes About Policy the body in a manner in which it can 202. Slade, J., D. Altman, and R. Coeytaux, Alternatives for Limiting Minor’s Access to be most readily absorbed by the ‘‘Teenagers Participate in Tobacco Tobacco Products,’’ p. 42, December 1994. consumer and, hence, are devices. Promotions’’ Presented at the 9th World 232. IOM Report, P. 249. Thus, these products are combination Conference on Tobacco and Health, October 233. Gori, G., ‘‘Cigarette Classification as a 10–14, 1994. Consumer Message,’’ Regulatory Toxicology products within the meaning of 21 203. IOM Report, p. 110. & Pharmacology, vol. 12, pp. 253–262, 1990. U.S.C. 353 (g) and 21 CFR 3.2(e) that the 204. ‘‘IEG’s Complete Guide to 234. Cohen, J.B., and T.K. Srull, agency has the discretion to regulate Sponsorship: Everything you need to know ‘‘Information Processing Issues Involved in using drug authorities, device about sports, arts, events, entertainment, and the Communication and Retrieval of Cigarette authorities, or a combination of both Federal Register / Vol. 60, No. 155 / Friday, August 11, 1995 / Proposed Rules 41347 authorities. The agency proposes to v. An Undetermined Number of these combination products include make these products subject to Unlabeled Cases, 21 F.3rd 1026, 1028 contrivances containing drugs, such as regulation pursuant to the act’s device (10th Cir. 1994); United States v. 22 pre-filled syringes, transdermal patches, authorities. The remainder of this Rectangular Devices, 714 F. Supp. 1159, and metered-dose inhalers. Id. CDER discussion explains the regulatory 1162 n.7 (listing additional examples), has primary jurisdiction over the framework for combination products; 1164–65 (D. Utah 1989); see, e.g., United regulation of such products, and has the why nicotine-containing cigarettes, States v. 23, More or Less, Articles, etc. authority to use drug provisions, device loose tobacco, and smokeless tobacco 192 F.2d 308, 309 (2d Cir. 1951) provisions, or a combination of drug products are drug/device combination (phonograph records used in treating and device provisions to regulate products; and why the agency can insomnia). particular drug delivery systems. Id. exercise its discretion to regulate them Because the act’s definition of device Cigarettes and smokeless tobacco only under the act’s device provisions. is a statutory term of art, it encompasses products function like drug delivery Finally, this section discusses a number a very wide assortment of items. systems in that they contain a drug, of other legal issues raised by the Obvious examples of devices are simple nicotine; are used to deliver the drug to provisions of the proposed rule. medical implements such as the site at which the drug will be thermometers or tongue depressors and absorbed into the body, the mouth or 1. The Federal Food, Drug, and more complicated electronic products lungs; and after the drug has been Cosmetic Act and Combination Products such as X-ray machines or cardiac pace- delivered, the delivery system, the As part of the Medical Device makers. Less obvious examples of cigarette butt or smokeless tobacco Amendments of 1976, Congress devices include in vitro reagents and material, depleted of nicotine, remains established, for the first time, a other products used for diagnostic and must be discarded. Only the premarket approval mechanism for purposes, such as culture media made nicotine delivered by these products certain devices. Congress also expanded from snake venom (21 CFR 864.8100, achieves its primary intended purpose the act’s device definition to expressly 864.8950) and animal and human sera by chemical action in or on the body. include items such as implements, (21 CFR 864.2800). FDA also regulates The subsections below explain in machines, implants, and in vitro many organic substances as devices. For greater detail why these products are reagents. ‘‘Device’’ was defined as: example, a simple plant product that drug delivery systems. consists of nothing more than a. Cigarettes. Cigarettes are drug an instrument, apparatus, implement, machine, contrivance, implant, in vitro coagulated tree sap, gutta percha, which delivery systems consisting of a drug, reagent, or other similar or related article, is used to fill the root canal in a tooth, nicotine, and device components that including any component, part, or accessory, is a device (21 CFR 872.3850). All of include the tobacco itself, the paper the which is— these articles are devices because they tobacco is rolled in and, in the case of (1) recognized in the official National are instruments, apparatuses, filter cigarettes, the filter. A cigarette is Formulary, or the United States implements, machines, contrivances, analogous to a metered-dose inhaler, an Pharmacopeia, or any supplement to them, implants, in vitro reagents, or another instrument that converts a drug into an (2) intended for use in the diagnosis of similar or related article with uses or aerosolized form for inhalation and disease or other conditions, or in the cure, effects encompassed by the act. delivery to the lungs for absorption into mitigation, treatment, or prevention of disease, in man or other animals, or Therefore, understanding what can the bloodstream. (3) intended to affect the structure of any properly be regarded as a device for Although lighting a cigarette appears function of the body of man or other animals, purposes of the act requires a statutory, to be a simple action, there is, in fact, and which does not achieve any of its not a lay, understanding of the term. a complex process taking place within principal intended purposes through The following discussion identifies the the cigarette. A cigarette consists of chemical action within or on the body of man parts of cigarettes, loose cigarette carefully blended and treated nicotine- or other animals and which is not dependent tobacco, and smokeless tobacco that are containing rolled tobacco. The blended upon being metabolized for the achievement devices, and explains why these and treated tobacco is wrapped in paper of any of its principal intended purposes. products are drug delivery systems. that is precisely treated so that the Pub. L. No. 94–295 (1976). entire tobacco rod burns in a controlled The act was amended by the Safe 2. Cigarettes, Smokeless Tobacco manner. Attached to the tobacco rod (in Medical Devices Act of 1990, among Products, and Loose Tobacco Are Drug 95 percent of U.S. cigarettes) is a filter other reasons, to recognize and provide Delivery Systems with many possible design features, for the regulation of products that Because drugs cannot be administered including vents and chambers. The constitute a combination of a drug, in pure chemical form, drug delivery primary purpose of parts of the device, or biological product (21 U.S.C. systems are designed and used to cigarette, and the cigarette itself, a 353(g)). The Safe Medical Devices Act deliver drugs into the body’s circulatory consciously engineered and, in the also modified the act’s drug and device system or to specific target sites in the industry’s own words, ‘‘highly- definitions to conform them to the new body at predetermined, controlled engineered’’ 2 product, is to effectuate section regarding primary jurisdiction rates.1 FDA considers articles such as the delivery of a carefully controlled over combination products. (See S. Rep. instruments, machines, contrivances, amount of the nicotine to a site in the 101–513). Among these modifications is implants, or other similar or related human body where it can be absorbed. that the definition of ‘‘drug’’ no longer articles, whose primary purpose is the The drug, nicotine, is generally excludes devices or their components, delivery of a drug, and that are contained within the treated rolled thereby eliminating the notion that distributed with a drug product to be tobacco. The delivery system, the ‘‘drug’’ and ‘‘device’’ are mutually drug delivery systems. Intercenter nicotine-containing cigarette, must be lit exclusive terms. Agreement Between the Center for Drug to have its intended effect on the In light of the act’s public health Evaluation and Research and the Center structure or function of the body and, protection purposes, the agency has for Devices and Radiological Health, once lit and used, is discarded. consistently construed the device Section VII.A.1.(b) (October 31, 1991). In this manner, an average American definition broadly, and courts have These articles are often called ‘‘pre- cigarette yields approximately 1.0 mg of upheld this interpretation. United States filled delivery systems.’’ Examples of nicotine, although the smoker can adjust 41348 Federal Register / Vol. 60, No. 155 / Friday, August 11, 1995 / Proposed Rules this yield by the manner in which the Smokeless tobacco products function In determining which statutory cigarette is smoked, e.g., by puffing like temporary implants or infusion authority to apply to these products, more or less frequently, by inhaling devices that deliver a controlled amount FDA has carefully considered the more or less deeply, or by covering, of nicotine to the cheek and gum tissue regulatory schemes for human drug with the fingers holding the cigarette or for absorption into the bloodstream. The products and devices, as well as the the lips, the vent holes that may be part device element of smokeless tobacco differing effects of these regulatory of the filter. products is the tobacco, which contains schemes on the millions of Americans As discussed in ‘‘Nicotine In the drug nicotine and delivers the who use these products. If FDA were to Cigarettes And Smokeless Tobacco nicotine to the cheek and gum tissue for regulate cigarettes, cigarette tobacco, Products Is A Drug And These Products absorption into the body, but is not and smokeless tobacco under the drug Are Nicotine-Delivery Devices Under intended to be consumed. Instead, in authorities of the act, the new drug The Federal Food, Drug, And Cosmetic normal use, most of the tobacco is provisions would be applied, and each Act,’’ there is significant evidence now extruded from the mouth after nicotine-containing cigarette, cigarette before the agency that the manufacturers absorption of the nicotine. This tobacco, and smokeless tobacco product of cigarettes intend, as a primary extrudable portion of the product does would either have to: (a) be shown to be purpose of these products, to deliver the not achieve its primary intended not a ‘‘new drug’’ because it is generally drug nicotine to consumers. That purpose through chemical action in the recognized as safe and effective (21 evidence supports a finding at this time mouth, but allows nicotine to be U.S.C. 321(p)); or (b) be the subject of that part of a cigarette, the nicotine, is extracted from the tobacco by the user’s an approved new drug application a drug under the act. However, as saliva and: (a) mechanically holds the containing, among other things, described above, cigarettes are not nicotine in a form that is palatable, adequate tests of the safety and simply packaged nicotine. Rather, they thereby allowing sufficient time for substantial evidence of the effectiveness are carefully engineered, complex absorption of nicotine through the cheek of the product. (See 21 U.S.C. 355.) In products that are designed to deliver a and gum tissue; and (b) delivers light of the accumulated data on the controlled amount of nicotine to the chemical agents, primarily alkalines, to adverse health effects of tobacco, neither consumer using such device increase the pH within the oral cavity, of these outcomes can be viewed as a components as the tobacco, the paper, to affect the rate of absorption of realistic possibility in currently and the filter. nicotine through the cheek and gum marketed products. The products would Nicotine-containing loose cigarette tissue. be unapproved new drugs, and as such, tobacco is used by smokers who roll FDA could require their removal from their own cigarettes usually with paper 3. FDA May Exercise Its Discretion to the market. (See 21 U.S.C. 331(d), made for that purpose. The evidence Regulate Cigarettes and Smokeless 355(a).) before the agency supports a finding at Tobacco Products Under the Device The agency does not believe that their this time that the processed loose Provisions of the Act sudden and total withdrawal from the cigarette tobacco product is a device for market would provide the best means of the same reasons that the tobacco in As explained above, the agency’s protecting the public health. The factory-made cigarettes to be a device: it factual and legal inquiry supports a nicotine in tobacco products is highly contains within it the drug intended to finding at this time that nicotine- addictive and is the principal reason be consumed and is not dependent containing cigarettes and smokeless adults continue to use tobacco products upon being metabolized for the tobacco products are drug/device in the face of clear evidence of harm. achievement of its principal intended combination products, namely, drug Major recent studies reveal that the vast purpose, i.e., the delivery of nicotine, delivery devices. Under the majority of the Nation’s more than 50 and must be lit and burned in order for combination product authority of million cigarette and smokeless tobacco the nicotine to be released in a form in section 503 of the act, FDA must users are addicted to the nicotine in which it can be absorbed by the body. designate a component of FDA to these products. Surveys also show that b. Smokeless Tobacco Products. Four regulate combination products based on while as many as 70 percent of current principal kinds of smokeless tobacco are a determination of the product’s smokers would like to quit, only a tiny manufactured in the United States: ‘‘primary mode of action.’’ In the case of percentage are able to quit permanently. loose leaf, plug, twist or roll, and oral cigarettes and smokeless tobacco, the Studies on smokeless tobacco users snuff. Loose leaf chewing tobacco primary mode of action is that of a drug, show a similar pattern of persistent consists of tobacco leaves that have been due to the nicotine, and, therefore, attempts to quit with extremely low heavily treated with licorice and sugars. primary jurisdiction over these products success rates.5 Plug tobacco is made from tobacco that belongs in CDER. CDER’s primary Because of the high addiction rates is immersed in a mixture of licorice and jurisdiction over cigarettes and and the difficulties smokers experience sugar and then pressed into a plug. smokeless tobacco is not determinative, when they attempt to quit, there may be Twist tobacco is produced from leaves however, of which provisions of the act adverse health consequences for many that are flavored and twisted to apply. Rather, the agency has the individuals if the products were to be resemble a rope. Oral snuff is available discretion to regulate these drug withdrawn suddenly from the in both dry and moist varieties. Dry delivery systems using drug authorities, marketplace. Our current health care snuff consists of powdered tobacco that device authorities, or a combination of system and available pharmaceuticals contains flavor and aroma additives. both authorities. (See 21 CFR may not be able to provide adequate or Moist snuff is fine particles of tobacco 3.2(e)(1994); 56 FR 58754 at 58754 and sufficiently safe treatment for such a that hold considerable moisture; many 58755 (November 21, 1991); Intercenter precipitous withdrawal. Moreover, types are made with a variety of Agreement, Section VII.A.1.(b).) It is banning all tobacco products may not flavorings such as wintergreen or mint.3 within FDA’s discretionary power to achieve the primary health objective Chewing tobacco and snuff are treated determine which, if any, of the available addressed in this regulation, i.e. by the manufacturer to achieve an regulatory authorities it will employ in reducing the number of children and alkaline pH that facilitates absorption of the regulation of a product. See Heckler adolescents who become addicted to nicotine.4 v. Chaney, 470 U.S. 821 (1985). these products. Given the long, Federal Register / Vol. 60, No. 155 / Friday, August 11, 1995 / Proposed Rules 41349 widespread use of these products in this of tobacco products, however, tobacco In the situation presented by country, it is not unreasonable to products present special problems not widespread addiction to cigarettes and assume that a black market and/or ordinarily associated with devices. As smokeless tobacco, where restrictions smuggling would develop to supply discussed in the preceding section, in on supply would not be effective, the addicted users with the products they the case of cigarettes and smokeless goals of the statute can best be achieved require. The products that would be tobacco products, a ban would not be in by preventing future users from available through a black market could the best interest of the public health. becoming addicted to tobacco products. very well be more dangerous (e.g., While premarket approval of a device Restrictions on the sale and distribution cigarettes containing more tar or has generally been regarded as the of cigarettes and smokeless tobacco nicotine, or more toxic additives) than regulatory control that provides the products to young people, as well as products currently on the market. Thus, greatest assurance of safety and restrictions on advertising that fosters FDA believes that a ban on all tobacco effectiveness, on occasion the agency appeal and creates a demand for tobacco products would not eliminate smoking has chosen not to use premarket products among young people, are and would not be in the best interest of approval for critical devices that therefore the appropriate tools to attain the public health at this time. potentially raise significant safety and the goal of reasonable assurance of Given the dangerous health efficacy issues. For example, the agency safety and effectiveness for cigarettes consequences of the continued use of has announced that it will no longer and smokeless tobacco products, even if cigarettes and smokeless tobacco enforce premarket approval the goal can only be reached over one products, however, the agency believes requirements for heart valve allografts. or more generations.6 that some strong action is necessary to See the Federal Register of October 14, The agency believes that the measures protect the public health. As explained 1994 (59 FR 52078). FDA took this proposed in this regulation will reduce in the next section, FDA has chosen to action after concluding that other the exposure of children and regulate these combination products regulatory controls would be more adolescents to the health risks using the Act’s device provisions, rather appropriate than premarket approval to associated with tobacco use; will greatly than the drug provisions, because provide reasonable assurance of the reduce the number of individuals who application of the device authorities safety and effectiveness of these are now, or may in the future become, would allow the continued marketing of products. See also Heckler v. Chaney, addicted to nicotine in these products; the affected products under certain 470 U.S. 821 (1985) (upholding agency’s and, from an epidemiological prescribed conditions established under decision not to enforce premarket perspective, the combined effects of the notice and comment rulemaking approval requirements for use of proposed measures will, under the procedures. prescription drugs for lethal injection). unique circumstances of these products, The Medical Device Amendments of As discussed above, the primary provide the most reasonable assurance jurisdiction over these combination 1976 and the Safe Medical Devices Act of their safety. products within FDA lies in CDER. This of 1990 provide the agency with The Medical Device Amendments designation is appropriate because of considerable flexibility in identifying provide authority to restrict the sale and CDER’s expertise in pharmacology and the most appropriate scheme for distribution of products, like tobacco, drug delivery; addiction, the disease regulating products. These device for which there cannot otherwise be associated with tobacco use; and the provisions authorize the agency to use reasonable assurance of safety and regulation of pre-filled drug delivery the regulatory tools that most effectiveness. Section 520(e) of the act, systems. CDER, however, has the appropriately protect the public from which authorizes FDA to restrict the authority to use drug provisions, device unsafe or ineffective devices. Moreover, sale and distribution of certain devices, provisions, or a combination of drug these device provisions permit the provides regulatory tools that would and device provisions in regulating agency to tailor the regulatory controls enable FDA to achieve the goal of these products. authorized under the statute to address the specific risks associated with reducing demand for tobacco products. 4. Regulation of Cigarettes and individual devices. The following tools, Therefore, FDA is proposing to declare Smokeless Tobacco Under the Device among others, may be used to help cigarettes and smokeless tobacco Authorities provide reasonable assurance of safety products ‘‘restricted devices’’ and to As currently marketed, cigarettes and and effectiveness for individual devices: impose restrictions on the underage sale smokeless tobacco products are not safe special controls (section 514 of the act); and distribution of these tobacco and effective. Chronic use of tobacco premarket approval (section 515 of the products, pursuant to section 520(e) of products causes disease and premature act); product development protocols the act. death in a significant proportion of (section 515 of the act); notification and 5. Restricted Device Authority Under users. recall (section 518 of the act); device Section 520 of the Act Both the Medical Device tracking (section 519(e) of the act); Amendments of 1976 and the Safe custom devices (section 520(b) of the Section 520(e)(1)(B) of the act Medical Devices Act of 1990 were act); restrictions on sale, distribution, authorizes FDA to issue regulations designed to provide an array of and use (section 520(e) of the act); and restricting the sale, distribution, or use regulatory tools that could provide postmarketing surveillance (section 522 of a device: reasonable assurance of the safety and of the act). Where the public cannot be if, because of its potentiality for harmful effectiveness of devices. Since tobacco appropriately protected from a effect or the collateral measures necessary to products are plainly not safe, one hazardous device using the tools on its use, the Secretary determines that there regulatory tool available under the which the agency might otherwise rely cannot otherwise be reasonable assurance of statute is to ban the products, making for a device posing a substantial risk, its safety and effectiveness. their sale illegal. The legal basis for such FDA has discretion to employ other, Because of the potentiality for harmful a ban would be that tobacco products more appropriate regulatory controls effects from cigarettes and smokeless present an unreasonable and substantial provided by the Medical Device tobacco products, there cannot be risk of illness or injury. See section 516 Amendments of 1976 and the Safe reasonable assurance of the safety and of the act. Because of the addictiveness Medical Devices Act of 1990. effectiveness of these products short of 41350 Federal Register / Vol. 60, No. 155 / Friday, August 11, 1995 / Proposed Rules additional restrictions designed to eliminate or substantially reduce the those under age 18. If a manufacturer prevent new users from becoming initiation of cigarettes and smokeless advertises its tobacco products in such addicted to nicotine-containing tobacco tobacco use by children and a way that it has the effect of products and to provide information to adolescents, there cannot be reasonable encouraging underage individuals to current users on how to quit. assurance of the safety of these purchase these products, the restriction As discussed earlier in this document, products. on the sale of the product would be cigarettes and smokeless tobacco Advertising. For the many reasons significantly undermined. In such a products have substantial ‘‘potentiality described in this document, advertising case, section 520(e) of the act provides for harmful effect’’ because they are plays a role in influencing a young the agency the additional authority to both addictive and pose a significant person’s decision to purchase and use curtail the advertising practices that risk to the health of users. The most these products. This advertising is threaten the effectiveness of its sale effective way to provide reasonable particularly attractive to persons under restrictions. assurance of the safety and effectiveness the age of 18. Sections 502 (q) and (r) Just as restrictions must be placed on of tobacco products is to prevent future of the act give the agency specific young people’s access to tobacco generations from using and becoming authority over the advertising of products in order to limit their ability to addicted to these products in the first restricted devices to ensure that it is purchase these products, it is equally instance, and as explained elsewhere in truthful, nonmisleading, and contains important to place restrictions on the this document, tobacco use is typically important information about the risks marketing practices (including initiated during childhood and associated with the use of the product. advertising and promotion) of the adolescence. The mean average age Thus, section 502(q) of the act declares tobacco industry. Certain advertising when people become daily smokers is misbranded any restricted device whose and promotional practices of the 17.7 years of age.7 Moreover, those who advertising is ‘‘false or misleading in tobacco industry play a significant and start smoking in childhood are more any particular’’ (see proposed § 897.36) important contributory role in a young likely to become heavier smokers than and section 502(r) requires that ‘‘all person’s decision to use cigarettes and those who start smoking in adolescence, advertisements and other descriptive smokeless tobacco products. and those who start as adolescents are printed matter’’ associated with a As detailed more fully in Chapter III, more likely to become heavier smokers restricted device must contain certain subpart D, individual studies illustrate than those who start as adults. Thus, the specified information, including a brief the profound effect that certain tobacco age at which an individual starts statement of ‘‘relevant warnings, campaigns have had upon the youth smoking is an important factor that precautions, side effects, and market. Moreover, studies have influences the intensity of that person’s contraindications’’ (see proposed indicated that comprehensive smoking as an adult, and consequently § 897.32). restrictions on advertising can help his or her ultimate health risks. These In addition, the agency has proposed reduce children’s demand for these facts are echoed in one of the major restrictions on the sale of these products. conclusions of the 1994 Surgeon products, specifically to prohibit all Restrictions on advertising are General’s Report: ‘‘Nearly all first use of sales to those under the age of 18. necessary in order to reduce the demand tobacco occurs before high school Advertising with attractive imagery, for tobacco products by young people graduation; this finding suggests that if brand identifiable non-tobacco items, and therefore their desire to purchase adolescents can be kept tobacco-free, and sponsorship of events are appealing these products. Accordingly, placing most will never start using tobacco.’’ 8 to young people under age 18 and are restrictions on certain marketing and The proposed restrictions on sale and effective in influencing their decision to advertising practices of the tobacco distribution of tobacco products are use tobacco products. The advertising industry is necessary to restrict the therefore designed to substantially techniques that would be prohibited by ‘‘sale, distribution, or use’’ of these reduce the number of children and the proposed rule encourage an products. adolescents who become addicted to unauthorized use of these products and Information and Educational tobacco. The proposed regulations thus cause them to be misbranded. Messages. FDA has determined that an would restrict young people’s access to Most importantly, FDA also has been educational program about cigarettes tobacco (see proposed §§ 897.12, 897.14, granted broad authority in section and smokeless tobacco products is a and 897.16), decrease the allure of the 520(e) of the act, under which the restriction that is necessary because of advertising and promotion of these agency may place restrictions on the the ‘‘potentiality for harmful effect’’ of products (see proposed §§ 897.30, sale, the distribution, or the use of these products. As discussed above, it is 897.32, 897.34, and 897.36), and certain devices where the potentiality necessary to impose restrictions to provide educational messages aimed at for harm makes these restrictions discourage children and adolescents young people to combat pervasive pro- necessary. The broad sweep of this from using and becoming addicted to tobacco messages and thus to help them language implies authority to regulate these products and to provide important resist tobacco use (see proposed many aspects of the commercialization health information to those who are § 897.29). of a restricted device. FDA is currently addicted to these products to Access. Although State and local laws interpreting this section to authorize allow them to decrease or cease their impose certain restrictions on the access restrictions on the product’s use of these products. The brief of young people to tobacco, over a distribution, its offering for sale statements that would be mandated by million children and adolescents (including inducements to sale), the sale the proposed rule will be designed to continue to become regular tobacco itself, and the consumer’s use (including provide some information for current users each year. Unless additional the product’s misuse). This reading of users, but are not specifically addressed measures are imposed to substantially section 520(e) of the act is required if to, nor narrowly targeted to, the reduce this number, cigarettes and the agency is to have the ability to adolescent nonuser. Consequently, smokeless tobacco will continue to regulate restricted devices effectively given the effect of the pervasive and cause disease and death in each and avoid having its efforts undercut. long standing pro-tobacco messages on subsequent generation. Thus, without For example, the agency is proposing to young people, FDA is proposing an additional restrictions designed to prohibit the sale of tobacco products to educational campaign, national in scope Federal Register / Vol. 60, No. 155 / Friday, August 11, 1995 / Proposed Rules 41351 and specifically directed to adolescent labeling or advertising is false or with that contained in Webster’s Third New nonusers. The goal of this effort is to misleading in any particular. Section Int’l Dictionary (1976), is that it involves any combat the attractive imagery fostered 201(n) of the act directs FDA, in action to ‘‘call public attention to a [a by decades of tobacco advertising, in determining whether the labeling or product] * * * so as to arouse a desire to order to reduce the number of buy.’’ At the most basic level this is surely advertising of an article is misleading, to what smokeless tobacco companies are doing individuals, especially children and examine the representations made or when they splash their brand logos and adolescents, who will become addicted suggested in the labeling or advertising selling messages across T-shirts and other to the nicotine in these products. as well as ‘‘the extent to which the promotional items. In addition, company-financed labeling or advertising fails to reveal Id. at 1554 (modifications in original). educational messages are not an facts material in the light of such Government approved messages that uncommon remedy. FDA has imposed a representations or material with respect seek to discourage young people from similar educational requirement for to consequences which may result from using tobacco are intended to have the hearing aids, which are also regulated as the use of the article * * *.’’ The opposite effect of advertising as defined restricted devices under section 520(e) proposed educational message in Public Citizen and, therefore, do not of the act. The agency requires that a requirement is consistent with these constitute advertising. User Instructional Brochure be statutory provisions because it is distributed to each prospective hearing Information for current smokers. FDA intended to help ensure that cigarette has carefully tailored these restrictions aid user. In addition to providing and smokeless tobacco product directions for the safe and effective use to aspects of the sale and distribution of advertising and labeling is not false or tobacco products that create a demand of this product, this brochure describes misleading and to counteract the appeal the adverse reactions, side effects, for these products among children and of these products previously created by adolescents and that permit their warnings, and limitations associated advertising, thereby providing with the hearing aid. It also encourages continued access to tobacco products important, material information despite State and local laws against sale prospective users to seek medical regarding the consequences of cigarette evaluation by a licensed physician to young people. The most effective or smokeless tobacco product use by regulatory tool available to FDA to help before purchasing the product. The young people in a manner that is agency requires that specified user current smokers stop using tobacco appropriate for that age group. FDA’s products is to require that information information be provided to educate interpretation of sections 502(a)′ and consumers about the risks of other FDA- be provided through advertising. FDA is 201(n) of the act and its authority to therefore proposing to require a brief regulated products such as Shiley heart require the dissemination of information valves, silicone breast implants, and statement in cigarette advertising giving to persons who use human drug the health risks of tobacco use. (See certain childhood immunizations. products has been upheld in federal Finally, FDA regulations provide § 897.32(c)). court. (See Pharmaceutical specific language for certain disclosures Manufacturers Association v. Food and 6. Conclusion in prescription and over-the-counter Drug Administration, 484 F.Supp. 1179 drug labeling, see ‘‘Pregnancy—Nursing Without the restrictions contained in (D.Del.), aff’d, 634 F.2d 106 (3rd Cir. Warning’’ for aspirin and aspirin- this proposed rule designed to prevent 1980) (per curiam) (upholding FDA’s containing products, 21 CFR 201.63; future generations from becoming authority to require mandatory patient ‘‘Disclosure of Drug Efficacy Study addicted to tobacco products, there package inserts)). Evaluations in Labeling, and cannot be reasonable assurance of the Finally, although the Cigarette and Advertising,’’ 21 CFR 201.200; warning safety and effectiveness of cigarettes and Smokeless Tobacco Acts 9 concerning ‘‘Isoproterenol Inhalation prohibit smokeless tobacco products. FDA seeks Preparations,’’ 21 CFR 201.305; and advertising for cigarettes and smokeless the most rational regulatory structure for warning concerning ‘‘Drugs with tobacco in specified communications cigarettes, cigarette tobacco, and Thyroid Hormone Activity,’’ 21 CFR media, including television and radio, smokeless tobacco products permitted 201.316. they do not prohibit all discussions of under the act to achieve an important Unlike the users of other restricted cigarettes and smokeless tobacco on public health goal, and simultaneously, devices, however, the youthful potential television. Specifically, they do not to avoid what might be widely regarded users of tobacco products are not easily prevent broadcasters from airing public as an unwanted and ultimately identified. Because tobacco products service announcements regarding the unsuccessful result. and tobacco advertising are distributed dangers of tobacco use and they The agency’s comprehensive so widely, and have been so effective at likewise would not prohibit tobacco investigation and legal analysis support creating positive images of tobacco use, manufacturers from purchasing air time a finding at this time that cigarettes, educational information cannot to broadcast government mandated and cigarette tobacco, and smokeless tobacco realistically be specifically targeted to approved educational messages to are subject to regulation on the basis of those particular individuals susceptible young people to encourage them not to their nicotine content and intended use. to taking up smoking. Therefore, the smoke or use smokeless tobacco. Each of these products employs a device most effective way to reach the target Although the required messages component to achieve its effect on the audience is to mandate a widespread would concern smoking and smokeless body, and therefore each is a drug/ educational campaign as described in tobacco use, they do not constitute device combination product. As such, § 897.29 of the proposed rule. ‘‘advertising’’ within the meaning of FDA may, in its discretion, regulate The proposed provision on those acts. The U.S. Court of Appeals for them using the act’s device provisions. educational messages is also authorized, the District of Columbia in Public The device provisions permit the in addition to section 520(e) of the act, Citizen v. FTC, 869 F. 2d 1541 (D.C. Cir. continued marketing of the affected under sections 502(a), 502(q), and 1989), gave a common sense definition products under certain prescribed 201(n) of the act (21 U.S.C. 352(a), of the word ‘‘advertising’’ in its recent conditions designed to substantially 352(q), and 321(n)). Sections 502 (a) and interpretation of the Smokeless Act: reduce the number of young people who (q) of the act state that a device shall be Our understanding of the common become addicted to tobacco products deemed to be misbranded if either its meaning of the term ‘‘advertising,’’ consistent and thereby to break the cycle of 41352 Federal Register / Vol. 60, No. 155 / Friday, August 11, 1995 / Proposed Rules addiction and disease fostered by requirements for devices at 21 CFR part promotion of any cigarettes the packages of tobacco products. 801 (excluding § 801.62); establishment which are labeled in conformity with the provisions of this Act. References registration and device listing requirements at 21 CFR part 807; and 15 U.S.C. 1334. The proposed rule takes 1. Smolen V.F., and L. Ball, eds., ‘‘Controlled good manufacturing practice into account the Federal preemption Drug Bioavailability,’’ John Wiley & provision of the Cigarette Act and is Sons, New York, vol. 1, p. 3; id. vol. 3, requirements at 21 CFR part 820. preface at p. xi, 1984. Under section 502(q)(2) of the act, a consistent with this statutory 2. FDA Docket No. 94P–0069/CPI, 94P–0077/ restricted device that is sold, prohibition. CPI, Response of R.J. Reynolds Tobacco distributed, or used in violation of The preemption provision of the Company to the Petitions Filed by regulations prescribed under section Cigarette Act regarding advertising and Action on Smoking and Health and the 520(e) of the act shall be deemed to be promotion applies only to State action. Coalition on Smoking OR Health, p. 78, misbranded. Therefore, nicotine- Hence, because the proposed rule would November 2, 1994. containing cigarettes and smokeless impose Federal, not State, requirements, 3. Institute of Medicine, ‘‘Growing Up tobacco products that are marketed in the proposed rule’s labeling and Tobacco Free: Preventing Nicotine violation of the proposed rule would be advertising requirements are Addiction in Children and Youths,’’ pp. permissible under 15 U.S.C. 1334(b). 60–61, 1994. regarded by FDA as misbranded. It is already the case under the laws of all 50 In addition to being permissible under 4. Benowitz, N., ‘‘Nicotine and Smokeless the Cigarette Act, the proposed rule Tobacco,’’ CA–A Cancer Journal for States that retailers are liable when a Clinicians, vol. 38, No. 4, pp. 244–247, sale of cigarettes or smokeless tobacco would actually further Congressional 1988. products is made to an underage intent to protect cigarette packages from 5. Severson, H.H., ‘‘Enough Snuff: St individual. Perhaps the most significant diverse, nonuniform, and confusing Cessation from the Behaviorial Clinical, effect of the proposed rule with regard cigarette labeling and advertising and Public Health Perspectives,’’ in to potential legal liability is that regulations. The proposal would require ‘‘Smokeless Tobacco or Health, An manufacturers, as well as retailers and inclusion of certain information in International Perspective,’’ Smoking and distributors, could be held responsible cigarette advertisements, and these Tobacco Control Monograph 2, DHHS, requirements would apply to cigarettes PHS, NIH, NIH Publication No. 93–3461, for violations of the regulations. As with other violative manufacturer activities sold and distributed throughout the pp. 281–282; Glover, E.D., ‘‘Conducting United States. Under this scheme, States Smokeless Tobacco Cessation Clinics,’’ under the act, such a finding could American Journal of Public Health, vol. result in various sanctions, including: could not impose ‘‘diverse, nonuniform, 76, No. 2, p. 207, 1986; Hatsukami, D., fines, injunctions, civil money and confusing’’ labeling or advertising R. Nelson, and J. Jensen ‘‘Smokeless penalties, product seizure, and requirements, Cigarette Act, Public Law Tobacco: Current Status and Future prosecution. 89–92, as amended by Public Law 91– Directions, British Journal of Addiction, 222 (April 1, 1970) and Public Law 93– vol. 86, pp. 559–563, 1991; Glover, E.D. C. Preemption Under the Federal 109 (September 21, 1973); 15 U.S.C. and P.N. Glover, ‘‘Smokeless Tobacco Cigarette Labeling and Advertising Act 1331 (1973). Cessation and Nicotine Reduction and the Comprehensive Smokeless Two recent cases support the Therapy,’’ in ‘‘Smokeless Tobacco or Tobacco Health Education Act interpretation that the Cigarette Act Health, An International Perspective, Although sections 502(q), 502(r), and does not establish an absolute Smoking and Tobacco Control,’’ prohibition against Federal action. In Monograph 2, DHHS, PHS, NIH, NIH 520(e) of the act give FDA authority to Publication No. 93–3461, pp. 291–295; regulate the sale, distribution, and use Cipollone v. Liggett Group, Inc., the Ary, D.V., et al., ‘‘An In-Depth Analysis of a restricted device and to impose Supreme Court considered whether the of Male Adolescent Smokeless Tobacco certain requirements on all Cigarette Act preempted an action by an Users: Interview with Users and Their advertisements and other descriptive individual against a cigarette Fathers,’’ Journal of Behavioral printed matter, both the Cigarette Act manufacturer for breach of express Medicine, vol. 12, pp. 449–467, 1989. and the Smokeless Act contain warranty that cigarettes ‘‘did not present 6. The Medical Device Amendments also any significant health consequences,’’ provide authority to remedy unsafe provisions that limit the exercise of Federal, State, and local authorities. The failure to warn consumers about health products by forcing corrections in their hazards, fraudulent misrepresentation of design. See sections 514 and 518 of the agency has reviewed its statutory Act. FDA has determined, however, that authority in light of these two statutes health hazards to consumers, and there are insufficient data available at and concludes that neither the Cigarette conspiracy to ‘‘deprive the public of this time to permit the conclusion that Act nor the Smokeless Act preclude medical and scientific information modifications in cigarettes and FDA from regulating these products or about smoking.’’ 112 S. Ct. 2608, 2613– smokeless tobacco products would make enacting each of the provisions in the 14 (1992). The Court examined the them safe or even substantially safer. proposed regulation. preemption provision in the Cigarette 7. 1994 SGR, p. 67. Act and the amendments contained in 8. 1994 SGR, p. 5. 1. The Cigarette Act the Public Health Cigarette Smoking Act 9. 15 U.S.C. 1335 and 15 U.S.C. 4402(f). The Cigarette Act requires, among and stated that, B. Other Requirements other things, specific warning notices on When Congress has considered the issue of cigarette packages and advertisements. pre-emption and has included in the enacted As explained above, FDA is proposing The Cigarette Act contains express legislation a provision explicitly addressing to regulate cigarettes and smokeless language regarding other Federal and that issue, and when that provision provides tobacco products as devices and, in State regulation: a ‘‘reliable indicium of congressional intent accordance with section 520(e) of the with respect to state authority,’’ * * * ‘‘there act, is proposing to restrict their sale, (a) No statement relating to smoking and is no need to infer congressional intent to health, other than the statement required by distribution, and use. As devices, the pre-empt state laws from the substantive [15 U.S.C. 1333], shall be required on any provisions’’ of the legislation * ** products would also be subject to cigarette package. Congress’’ enactment of a provision defining various pre-existing requirements in the (b) No requirement or prohibition based on the pre-emptive reach of a statute implies statute and the regulations. These smoking and health shall be imposed under that matters beyond that reach are not pre- regulations include the general labeling State law with respect to the advertising or empted. Federal Register / Vol. 60, No. 155 / Friday, August 11, 1995 / Proposed Rules 41353

Id. at 2618 (citations omitted) (emphasis Federal program for cigarette labeling appear on any package or in any added). and advertising, the court disagreed, advertisement (unless the advertisement is an The Court found that the preemption stating, outdoor billboard advertisement) of a smokeless tobacco product. provisions ‘‘merely prohibited state and State law prohibitions against federal rulemaking bodies from advertisements targeting minors do not 15 U.S.C. 4406(a). The proposal would mandating particular cautionary require Reynolds to adopt any particular not require any messages in advertising statements on cigarette labels’’ and held label or advertisement ‘‘with respect to any because the Smokeless Act’s preemption that the preemption provisions did not relationship between smoking and health;’’ provision is broader than the constitute an absolute prohibition rather, they forbid any advertisements preemption provision in the Cigarette against all Federal and State action. Id. soliciting unlawful purchases by minors. The Act and preempts any Federal (as well prohibitions do not create ‘‘ ‘diverse, The Supreme Court in Freightliner as State) action mandating health/safety Corp. v. Myrick, 115 S. Ct. 1483 (1995) nonuniform, and confusing’’ standards. Unlike state law obligations concerning the messages in advertising. clarified its language in Cipollone. The warning necessary to render a product Thus, given these statutory Court stated ‘‘[t]he fact that an express ‘reasonably safe,’ state law proscriptions’’ restrictions and court precedent, FDA definition of the preemptive reach of a against advertisements targeting minors ‘rely has determined that neither the statute ‘‘implies’’—i.e., supports a on a single, uniform standard:’’ ’ do not target Cigarette Act nor the Smokeless Act reasonable inference—that Congress did minors. preempts any aspect of the proposed not intend to pre-empt other matters Id. at 80 (quoting 112 S.Ct. at 2624). rule. does not mean that the express clause Consequently, the court held that, entirely forecloses any possibility of D. Constitutional Issues—Regulation of It is now asserted that plaintiff’s effort to Speech and the First Amendment implied preemption.’’ Id. at 1488 tread upon Tobacco Road is blocked by the (emphasis added.) The Court noted that nicotine wall of congressional preemption. The proposed rule’s restrictions on it would still be appropriate to conduct The federal statute does not support such a commercial speech are consistent with the proper analysis to determine if view. Congress left the states free to exercise the First Amendment’s protection of preemption should be implied. Having their police power to protect minors from freedom of expression. The Supreme said that, the Court stated that such an advertising that encourages them to violate Court distinguishes between analysis had been done in Cipollone. the law. Plaintiff may proceed under that commercial speech and other forms of Finally, the Court found no implied aegis. speech with respect to First Amendment preemption in Freightliner even in the Id. at 83. The Supreme Court later rights. Traditionally, commercial speech absence of federal regulation. denied R.J. Reynolds’ petition for a writ was not granted any protection under The California Supreme Court, in of certiorari. See 115 S.Ct. 577 (1994). the Constitution. More recently, the Mangini v. R.J. Reynolds Tobacco Co., Although Mangini concerned Supreme Court has granted commercial 875 P.2d 73 (Cal. en banc), cert. denied, preemption of State action, the speech limited constitutional 115 S.Ct. 577 (1994), considered California Supreme Court’s decision and protection. See Ohralik v. Ohio State whether the Cigarette Act precluded an the U.S. Supreme Court’s denial of Bar Ass’n, 436 U.S. 447, 456, reh’g action under California law for engaging certiorari indicate a judicial intent not denied, 439 U.S. 883 (1978); Virginia in an ‘‘unlawful, unfair, or fraudulent to extend the Cigarette Act’s preemption State Board of Pharmacy v. Virginia business act or practice’’ by using provisions beyond its literal terms. Citizens Consumer Council, Inc., 425 ‘‘unfair, deceptive, untrue, or Thus, restrictions on cigarette U.S. 748 (1976); Bigelow v. Virginia, 421 misleading advertising.’’ The petitioner companies allegedly targeting children U.S. 809, 818 (1975). The Supreme claimed that R.J. Reynolds had illegally are not restrictions based on ‘‘smoking Court, in Edenfield v. Fane, 113 S. Ct. targeted minors in its Joe Camel and health.’’ See also Banzhaf v. Federal 1792 (1993), stated: advertising campaign. R.J. Reynolds Communication Commission, 405 F.2d [c]ommercial speech [ ] is ‘‘linked asserted that its cigarettes were properly 1082, 1089 (D.C. Cir. 1968), cert. denied, labeled and, therefore, that California inextricably’’ with the commercial 396 U.S. 842 (1969) (preemption arrangement that it proposes, * * * so the could not impose any regulation provision of the 1965 Cigarette Act did State’s interest in regulating the underlying regarding cigarette advertising if the not bar the Federal Communication transaction may give it a concomitant interest regulation were based on smoking and Commission from requiring radio and in the expression itself. * * * For this health. It added that a prohibition television stations to broadcast anti reason, laws restricting commercial speech, against selling cigarettes to minors was smoking messages: ‘‘Nothing in the Act unlike laws burdening other forms of based on underlying health concerns indicates that Congress had any intent at protected expression, need only be tailored in a reasonable manner to serve a substantial and that only the Federal Government all with respect to other types of could prevent advertisements that urge state interest in order to survive First regulation by other agencies—much less Amendment scrutiny. minors to smoke. The California that it specifically meant to foreclose all Supreme Court applied the analysis in such regulation.’’ (footnote omitted)) Id. at 1798 (citations omitted). Cipollone and held that, while the Applying these cases to FDA’s It is undisputed that the ‘‘Constitution petitioner’s action would prohibit proposed rule, the agency believes that ** * affords a lesser protection to cigarette advertising directed at minors, the proposed requirement for a brief commercial speech than to other the underlying legal duty for the statement about smoking and health is constitutionally guaranteed expression.’’ petitioner’s action was not based on not preempted. United States and Federal smoking and health. The California Communication Commission v. Edge Supreme Court held that, ‘‘The 2. The Smokeless Act Broadcasting Co., 113 S.Ct. 2696, 2703 predicate duty is to not engage in unfair For smokeless tobacco products, the (1993) (citations omitted). Accord, City competition by advertising illegal Smokeless Act states in part: of Cincinnati v. Discovery Network, Inc., conduct or encouraging others to violate 113 S.Ct. 1505, 1513 (1993); Board of (a) Federal action the law.’’ Id. at 80. As for the argument No statement relating to the use of Trustees of the State University of New that allowing state law claims to smokeless tobacco products and health, other York v. Fox, 492 U.S. 469, 475, mot. proceed would violate congressional than the statements required by [this title,] denied, 493 U.S. 887 (1989); Central policy favoring a comprehensive shall be required by any Federal agency to Hudson Gas and Electric Corp. v. Public 41354 Federal Register / Vol. 60, No. 155 / Friday, August 11, 1995 / Proposed Rules

Service Commission, 447 U.S. 557, 563 492 U.S. 469 (1989); Metromedia Inc. v. legislated on the premise that the advertising (1980); Ohralik, 436 U.S. at 455–56. City of San Diego, 453 U.S. 490, 507–08 of gambling serves to increase the demand for Therefore, although commercial speech (1981). National Council for Improved the advertised product. Congress clearly was Health v. Shalala, Memorandum entitled to determine that broadcast of is protected, the government has promotional advertising of lotteries latitude to regulate commercial speech Decision and Order, Civil No. 94–C– undermines North Carolina’s policy against in ways it could not regulate other forms 5090 (June 30, 1995) (U.S. District Court gambling, even if the North Carolina of expression. Friedman v. Rogers, 440 for the district of Utah rejected claim audience is not wholly unaware of the U.S. 1, 10 n.9 (1979) (‘‘When dealing that FDA’s regulation of dietary lottery’s existence. Congress has, for with restrictions on commercial speech supplements violated First Amendment example, altogether banned the broadcast we frame our decisions narrowly, protection.) In this instance, the advertising of cigarettes, even though it could ‘‘allowing modes of regulation [of proposed rule’s labeling and advertising hardly have believed that this regulation restrictions and mandated educational would keep the public wholly ignorant of the commercial speech] that might availability of cigarettes. otherwise be impermissible in the realm campaign would reduce the use of of noncommercial expression.’’ (citation cigarettes and smokeless tobacco Edge, 113 S.Ct. at 2707 (citations omitted). products by those young individuals omitted). Accord, Posadas, 478 U.S. at In Central Hudson Gas & Electric who are the most vulnerable to 341–42 (Puerto Rican legislature’s belief Corp. v. Public Service Commission of addiction and, perhaps, the least that advertising of casino gambling New York, the Supreme Court capable of deciding whether to use the aimed at Puerto Rican residents would established a four-prong test to products. Decreased use of these increase demand for it was a reasonable determine whether restrictions on products will reduce the risk of tobacco- one); Dunagin v. City of Oxford, Miss., commercial speech are unconstitutional. related illnesses and deaths. The 718 F.2d 738, 748 n.8 (5th Cir. 1983) The first prong states that for proposed rule, therefore, reflects a (‘‘whether there is a correlation between commercial speech to come within the substantial government interest in advertising and consumption is a protection of the First Amendment the public health. legislative and not an adjudicative fact speech must concern lawful activity. The proposed rule also meets the question’’), cert. denied, 467 U.S. 1259 (1984). The other prongs relevant to an analysis third prong of the Central Hudson test The proposed rule’s requirement that of restrictions on commercial speech by directly advancing the government’s substantial interest. The Supreme Court the manufacturers provide funds for a are: media-based educational campaign is (2) The government interest that is has stated that, when determining whether an action advances the similarly supported by ample evidence asserted to justify the proposed that such educational campaigns have limitation must be substantial; governmental interest, it is willing to defer to the ‘‘common-sense judgments’’ been very effective in reducing (3) The proposed limitation must initiation and prevalence of tobacco use directly advance the government’s of the regulatory agency as long as they are not unreasonable. Metromedia, 453 by young people. The proposed rule interest; and directly addresses the serious public (4) The proposed limitation should be U.S. at 509 (‘‘We likewise hesitate to disagree with the accumulated, health problem caused by tobacco use no more extensive than is necessary to by young people in a manner that ‘‘will serve that interest. common-sense judgments of local lawmakers and of the many reviewing in fact alleviate [the harm] to a material Central Hudson, 447 U.S. 557, 566 courts that billboards are real and degree.’’ Edenfield, 113 S.Ct. at 1800. (1980). substantial hazards to traffic safety.’’) Unlike the advertising restrictions Since Central Hudson, the Supreme The agency’s proposed restrictions on (text-only format, ban on promotional Court has taken a permissive view of the advertising and labeling are based on its items, and restrictions on sponsorship), government’s regulation of commercial review of the evidence that shows that which would help reduce the appeal of speech and has upheld several advertising plays an important role in future advertising to young people, the restrictions on commercial speech. FDA young people’s decisions to use tobacco proposed education campaign is believes that the proposed restrictions products. Such evidence, consisting of necessary to address the widespread on the labeling and advertising of numerous published studies, reports, misconceptions about tobacco use cigarettes and smokeless tobacco and recommendations by the industry, among young people that have in part products, and the requirement that health professionals, consumer groups, been created by the ubiquitous manufacturers fund and disseminate a and public health organizations, advertising and promotional practices of media-based educational campaign, also demonstrates how advertising and the tobacco industry. For example, the would withstand any First Amendment labeling may make young people more industry currently spends nearly $2 challenge. receptive to using cigarettes and billion creating appealing imagery and The Central Hudson analysis begins smokeless tobacco products and how sponsoring and advertising events that with the second prong. The proposed the regulatory approach proposed by associate their products with lifestyles rule meets the requirements of the FDA may reduce the potential harm to that are attractive and popular with second prong because it serves the young people. See Florida Bar v. Went young people. substantial government interest of for It, 63 U.S.L.W. 4644 (1995) The amount of advertising, the variety protecting the public health. The (anecdotal record sufficient to meet of its format (e.g. advertisements, on Supreme Court has held that the third prong of Central Hudson). The hats, at concerts, on televised sponsored government’s ‘‘interest in the health, Supreme Court has specifically deferred events), and the appeal of its messages safety, and welfare of its citizens to the government’s conclusion that compete effectively with the health constitutes a ‘substantial’ governmental advertising increases consumption of a messages of the government and health interest.’’ Posadas de Puerto Rico product. In Edge, the Court stated: authorities. One consequence is that Associates v. Tourism Company of many young people believe that tobacco Within the bounds of the general Puerto Rico, 478 U.S. 328, 341 (1986) protection provided by the Constitution to products are an important part of (Court upheld restrictions on commercial speech, we allow room for growing up and being ‘‘cool.’’ Another advertising of casino gambling to legislative judgments. Here, as in Posadas de consequence is that young people residents of Puerto Rico). Accord, Fox, Puerto Rico, the Government obviously remain ignorant of the strength of the Federal Register / Vol. 60, No. 155 / Friday, August 11, 1995 / Proposed Rules 41355 addiction to tobacco products and the This holding is consistent with the lottery State); Posadas de Puerto Rico relevance to them of the long-term Supreme Court’s earlier decisions Associates, 478 U.S. 328 (1986) health risks. In the short run, the regarding the overbreadth doctrine. The (upholding ban of advertising of casino educational messages would help Supreme Court has held that the gambling directed to Puerto Rican counter these information deficits and, overbreadth doctrine—which permits an citizens); Capital Broadcasting Co. v. in the long run, they would provide attack on a statute on the basis that it Mitchell, 333 F.Supp. 582 (D.D.C. 1971), young people with appropriate might be applied unconstitutionally in affd. mem, 405 U.S. 1000 (1972) information to help them resist tobacco circumstances other than those before a (upholding broadcast ad ban on use. court—applies weakly, or not at all, to cigarette advertising); nothing in Rubin The agency gathered enough evidence commercial speech. v. Coors Brewing Company, 63 U.S.L.W. regarding the association between Since advertising is linked to commercial 4319 (April 19, 1995) is to the contrary promotion and use of cigarettes and well-being, it seems unlikely that such (statutory prohibition against statements speech is particularly susceptible to being smokeless tobacco products and the of alcohol content of beer on labels or crushed by overbroad regulation. Moreover, in advertising failed completely to efficacy of an appropriately designed concerns for uncertainty in determining the educational campaign to tentatively scope of protection are reduced; the advance the governmental interest conclude that the proposed rule’s advertiser seeks to disseminate information asserted of preventing ‘‘strength wars’’ restrictions on commercial speech about a product or service that he provides, among brewers). would alter young people’s smoking and presumably he can determine more The agency believes that, because it behavior. Therefore, the restrictions can readily than others whether his speech is could have banned the sale or be said to ‘‘directly advance’’ the truthful and protected. distribution of the product, or banned legitimate government goal of Bates v. State Bar of Arizona, 433 U.S. certain of the marketing and decreasing the use of these harmful 350, 381 (citations omitted), reh’g promotional practices of the tobacco products. (For a discussion of the denied 434 U.S. 881 (1977). industry, the lesser steps of regulating evidence, see the discussion pertaining As with the third prong, the Supreme labeling and advertising and requiring to proposed Subpart D, ‘‘Labeling and Court has expressed a willingness to manufacturers to fund a government Advertising.’’) defer this determination to the approved educational campaign are Finally, the proposed rule meets the regulating body. Since Fox, the courts reasonable. As the Supreme Court has fourth prong of the Central Hudson test, have applied the ‘‘reasonable fit’’ stated: which the Court has modified to require standard to uphold the regulation of [I]t is precisely because the government that the governmental regulation of commercial speech. See Edge, 113 S.Ct. could have enacted a wholesale prohibition commercial speech not be over broad. at 2705 (upholding restrictions on the of the underlying conduct that it is The Supreme Court has made it clear broadcast of lottery advertisements); permissible for the government to take the less intrusive step of allowing the conduct, that this prong does not require a ‘‘least South-Suburban Housing Center v. Greater South Suburban Bd. of Realtors, but reducing the demand through restrictions restrictive means test,’’ but rather that on advertising. there be a ‘‘reasonable fit’’ between the 935 F.2d 868, 892 (7th Cir. 1991) government’s regulation and the (upholding restrictions on the mailing of Posadas, 478 U.S. at 346 (emphasis in substantial governmental interest sought solicitations to people who had original). More specifically, the Court to be served. Fox, 492 U.S. at 4774– registered with the municipality their stated: 4780. The Supreme Court stated: desire not to receive them, as Legislative regulation of products or ‘‘reasonable fit’’ with the desire to What our decisions require is a fit between activities deemed harmful, such as cigarettes, protect residential privacy), cert. alcoholic beverages, and prostitution, has the legislature’s ends and the means chosen denied. 502 U.S. 1074, 112 S.Ct. 971 to accomplish those ends,’’—a fit that is not varied from outright prohibition on the one necessarily perfect, but reasonable; that (1992); Puerto Rico Tele-Com, Inc. v. hand. * * * to legalization of the product or represents not necessarily the single best Ocasio Rodriguez, 747 F.Supp. 836, 845 activity with restrictions on stimulation of disposition but one whose scope is ‘‘in (D.P.R. 1990) (upholding a cease and demand on the other hand. * * * To rule out proportion to the interest served,’’ that desist order by the Puerto Rico the latter, intermediate kind of response employs not necessarily the least restrictive Department of Consumer Affairs would require more than we find in the First Amendment. means but, as we have put it in other (DACO) prohibiting a long-distance contexts discussed above, a means narrowly phone carrier from using a price study Id. at 346–347 (citations omitted). This tailored to achieve the desired objective. in a deceitful or misleading way as ‘‘a analysis applies not only to the Within those bounds we leave it to reasonable ‘fit’ between DACO’s orders restrictions on the type of advertising governmental decisionmakers to judge what manner of regulation may best be employed. against plaintiff and its mandate to permitted (text-only), but also the protect consumers’’); Central American requirement that the manufacturers Id. at 480 (citations omitted) (emphasis Refugee Center v. City of Glen Cove, 753 fund and disseminate a government added). Accord, Edenfield, 113 S.Ct. at F.Supp. 437, 440 (E.D.N.Y. 1990) approved educational campaign. The 1798 (‘‘[L]aws restricting commercial (upholding ordinance prohibiting Supreme Court has stated that the speech, unlike laws burdening other solicitation of employment from a government may dictate the form of, and forms of protected expression, need vehicle or by a pedestrian on a public information in, commercial speech. only be tailored in a reasonable manner street as a ‘‘reasonable fit’’ with the Virginia Pharmacy, 425 U.S. at 771 n.24 to serve a substantial state interest in governmental interest in protecting (‘‘They may also make it appropriate to order to survive First Amendment vehicle passengers and people crossing require that a commercial message scrutiny.’’); Zauderer v. Office of the street). Moreover, the Court has appear in such a form, or include such Disciplinary Counsel, 471 U.S. 626, 651 granted greater leeway and upheld additional information, warnings, and (1985) (‘‘[W]e hold that an advertiser’s reasonable regulations of commercial disclaimers, as are necessary to prevent rights are adequately protected as long speech with regard to socially harmful its being deceptive.’’); In re R.M.J., 455 as disclosure requirements are activities. Edge, 113 S.Ct. 2696 U.S. 191, 201 (1982) (‘‘warning or reasonably related to the State’s interest (upholding Federal prohibition of disclaimer might be appropriately in preventing deception of consumers.’’) lottery advertising on radio in non required* * *in order to dissipate the 41356 Federal Register / Vol. 60, No. 155 / Friday, August 11, 1995 / Proposed Rules possibility of consumer confusion or In conclusion, the agency believes The title, description, and respondent deception’’); Bates, 433 U.S. at 384. that the evidence would support a ban description of the information collection As noted above, on several occasions on all advertising and, therefore, that requirements are shown below with an the agency has imposed similar the more limited restrictions imposed estimate of the annual reporting and educational requirements—e.g., user by this proposed rule are reasonable as recordkeeping burden. Included in the instructional brochures—in order to proportionate to the agency’s desired estimate is the time for reviewing reduce consumer confusion or to goal—to reduce tobacco-related illnesses instructions, searching existing data prevent the misuse of a device. In those and deaths by helping to prevent young sources, gathering and maintaining the circumstances, the agency has required people from becoming addicted to the data needed, and completing and that the company use agency approved nicotine in cigarettes and smokeless reviewing the collection of information. language. Courts have approved of tobacco products. The requirements Title: Regulations Restricting the Sale similar ‘‘corrective’’ or ‘‘coerced’’ proposed here serve to prevent and Distribution of Cigarettes and speech ordered by other federal distribution of these products to young Smokeless Tobacco Products to Protect agencies. See Warner-Lambert Co. v. people, to reduce the effectiveness of Children and Adolescents. FTC, 562 F.2d 749 (D.C. Cir. 1977), cert. advertising and promotion on young denied, 435 U.S. 950 (1978) (corrective people, and to ensure that an Description: The proposed rule would advertising is appropriate where appropriate educational campaign is collect information from manufacturers company has engaged in a long history aimed at young people. Thus, the means and retailers of cigarettes and smokeless of deceptive advertising and the chosen are a reasonable fit to the tobacco products. The proposed rule misperceptions continue even in the substantial interest and, consequently, would require such persons to: use absence of current advertising); United pass the final prong of the Central established names for cigarettes and States v. Frame, 885 F.2d 1119 (3rd Cir. Hudson test. smokeless tobacco products; establish 1989) (court upheld legislation that and maintain educational programs; required beef producers, including those V. Paperwork Reduction Act of 1980 observe certain format and content who objected, to pay an assessment to The proposed rule contains requirements for labeling and fund pro-beef commercials written and information collections which are advertising; and submit labels, labeling, disseminated by a quasi-government subject to review by the Office of and advertising to FDA. board), cert. denied, 493 U.S. 1094 Management and Budget (OMB) under Description of Respondents: (1990). the Paperwork Reduction Act of 1980. Businesses.

ESTIMATED ANNUAL REPORTING AND RECORDKEEPING BURDEN

Annual Annual CFR Section No. of re- Annual Average burden per burden sponses frequency response hours

897.24 ...... 1,000 1 40 hours ...... 40,000 897.29 ...... 1,000 1 1,000 hours ...... 1 million 897.32 ...... 200,000 1 20 minutes ...... 66,667 897.40 ...... 200,000 1 20 minutes ...... 66,667

Total ...... 1,173,334

The agency has submitted a copy of VI. Executive Orders cigarettes and smokeless tobacco the proposed rule to OMB for its review products. The pervasive promotion and A. Executive Order 12606: The Family of these information collections. easy availability of these products, Interested persons are invited to send Executive Order 12606 directs Federal despite existing laws in all 50 States comments regarding this burden agencies to determine whether policies prohibiting their sale to children, estimate or any other aspect of this and regulations may have a significant severely hinder the individual family collection of information, including any impact on family formation, from carrying out this function by itself. maintenance, and general well-being. of the following subjects: (1) The Section 1(g) of Executive Order 12606 necessity and utility of the proposed FDA has analyzed this proposed rule in accordance with Executive Order 12606, requires that FDA assess the proposed information collection for the proper and has determined that it has no rule in light of the message, if any, it performance of the agency’s functions; potential negative impact on family sends to young people ‘‘concerning the (2) the accuracy of the estimated formation, maintenance, and general relationship between their behavior, burden; (3) ways to enhance the quality, well-being. their personal responsibility, and the utility, and clarity of the information to FDA has determined that this rule norms of our society.’’ The proposed be collected; and (4) the use of will not affect the stability of the family, rule would, if finalized, help reduce the automated collection techniques or and particularly, the marital conflict between the anti-smoking other forms of information technology to commitment. It will not have any messages issued by Federal and State minimize the information collection significant impact on family earnings. authorities and the pro-tobacco burden. Comments should be sent to The proposed rule would not impede messages seen in advertising. This FDA’s Dockets Management Branch the parental authority and rights in the would enable young people to (address above) and to the Office of education, nurture, and supervision of understand how prevalent tobacco use Information and Regulatory Affairs, children. Rather, the proposed rule is in society and also appreciate how OMB, rm. 3208, New Executive Office, would, if finalized, help the significant their decisions regarding cigarette and Washington, DC 20503, Attn: Desk majority of American families that seek smokeless tobacco use can affect their Officer for FDA. to discourage their children from using health. Federal Register / Vol. 60, No. 155 / Friday, August 11, 1995 / Proposed Rules 41357

Although Executive Order 12606 does flexibility in designing their C. Executive Order 12630: not require that individuals or enforcement programs. By imposing the Governmental Actions and Interference organizations be permitted to participate explicit obligations on manufacturers, With Constitutionally Protected Property in proposed rulemaking proceedings, distributors, and retailers to control Rights FDA expressly requests all such access by children and adolescents to Executive Order 12630 directs Federal interested parties to submit comments nicotine-containing cigarettes and agencies to ‘‘be sensitive to, anticipate, and suggestions regarding this rule’s smokeless tobacco products, the FDA and account for, the obligations effect on the family. proposals will help States achieve their imposed by the Just Compensation goals under their substance abuse B. Executive Order 12612: Federalism Clause of the Fifth Amendment in programs. FDA therefore believes that planning and carrying out governmental Executive Order 12612 requires the two programs complement each Federal agencies to carefully examine actions so that they do not result in the other. imposition of unanticipated or undue regulatory actions to determine if they The proposed rule would establish additional burdens on the public fisc.’’ would have a significant effect on uniform minimum standards with Section 3(a). Section 3(c) of the order federalism. Using the criteria and respect to the labeling, advertising, sale, states that actions taken to protect the principles set forth in the order, FDA and distribution of nicotine-containing has considered the proposed rule’s cigarettes, cigarette tobacco, and public health and safety ‘‘should be impact on the States, on their smokeless tobacco products. The undertaken only in response to real and relationship with the Federal proposed rule would expressly provide, substantial threats to public health and Government, and on the distribution of however, that these regulations do not safety, be designed to advance power and responsibilities among the preempt State and local laws, significantly the health and safety various levels of government. FDA regulations, and ordinances that purpose, and be no greater than is concludes that this proposal is establish higher standards with respect necessary to achieve the health and consistent with the principles set forth to these products, or affect these safety purpose.’’ Additionally, section in Executive Order 12612. products in areas not covered by the 4(d) requires, as a prerequisite to any Executive Order 12612 states that proposed rule, e.g., environmental proposed action regulating private agencies formulating and implementing smoke. property use for the protection of public policies are to be guided by certain The proposed regulation of nicotine- health and safety, each agency to: (1) federalism principles. Section 2 of containing cigarettes, cigarette tobacco, Clearly identify the public health or Executive Order 12612 enumerates and smokeless tobacco is narrowly safety risk created by the private fundamental federalism principles. drawn. First, it focuses on reducing property use that is the subject of the Section 3 states that, in addition to these methods of promotion that are either proposed action; (2) establish that the fundamental principles, executive expressly designed to appeal to proposed action substantially advances departments and agencies shall adhere, American youths, or that are designed the purpose of protecting the public to the extent permitted by law, to without regard to their appeal to health and safety against the identified certain listed criteria when formulating American youths. Second, it focuses on risk; (3) establish, to the extent possible, and implementing policies that have reducing the easy access of these that the restrictions imposed on private federalism implications. Section 4 lists nicotine containing products by property are not disproportionate to the special requirements for preemption. American youths. extent to which the use contributes to Executive Order 12612 recognizes that The agency concludes that the policy the overall risk; and (4) estimate, to the Federal action limiting the discretion of proposed in this document: Has been extent possible, the potential cost to the State and local governments is assessed in light of the principles, government should a court later appropriate ‘‘where constitutional criteria, and requirements in Executive determine that the action constitutes a authority for the action is clear and Order 12612; is not inconsistent with taking. certain and the national activity is that Order; will assist States in fulfilling The agency has considered whether necessitated by the presence of a their obligation under the Substance the proposed rule would result in a problem of national scope’’ (section Abuse Prevention and Treatment block ‘‘taking’’ of private property. The 3(b)). The constitutional basis for FDA’s grant program; will not impose proposed rule would, if finalized, authority to regulate drugs and devices additional costs or burdens on the restrict outdoor advertising from being is well established. States; and will not affect the States’ placed within 1,000 feet of any Moreover, in developing the ability to discharge traditional State elementary or secondary school or provisions of this proposed rule, the governmental functions. playground, eliminate cigarette vending agency carefully considered the Section 4 of Executive Order 12612 machines and self-service displays, ban provisions of the proposed rule states that an executive department or all brand identifiable non-tobacco items, implementing section 1926 of the Public agency proposing to act through such as hats and tee shirts, prohibit the Health Service Act, the Substance rulemaking to preempt State law is to use of a trade name of a non-tobacco Abuse Prevention and Treatment block provide all affected States notice and item for any tobacco product, and grant program. As a condition of receipt opportunity for appropriate require established names and a brief of such grants, a State must have in participation in the proceedings. As statement on labels, labeling, and/or place a law that prohibits the sale or required by the Executive Order, States advertising. In addition, the proposed distribution of any tobacco product to have, through this notice of proposed rule would require that all sponsored individuals under age 18 and enforce rulemaking, an opportunity to events be carried out only in the the law in a manner that can reasonably participate in the proceedings (section corporate name. While these be expected to reduce the extent to 4(e)). Consistent with Executive Order requirements might affect private which tobacco products are available to 12612, FDA requests information and property, they do not constitute individuals under the age of 18. The comments from interested parties, ‘‘takings.’’ statute prescribes random, including but not limited to State and In determining whether a unannounced inspections, but local authorities, on these issues of governmental action has resulted in a otherwise allows the States considerable federalism. ‘‘taking,’’ recent court decisions have 41358 Federal Register / Vol. 60, No. 155 / Friday, August 11, 1995 / Proposed Rules generally required either a physical governmental authority or do not deny businesses and one advertising invasion of the property or a denial of all economically viable uses of the association claimed that the FTC’s rule all economically beneficial or property. See Sign Supplies of Texas, would impose economic burdens on productive use of the property (other Inc. v. McConn, 517 F.Supp. 778, 782 them, but felt that such claims were than real property), and have examined (S.D. Tex. 1980) (city ordinance on sign unsubstantiated. The FTC quoted an the degree to which the governmental and billboard size, height, and location authority in consumer product action serves the public good, the did not constitute a taking and was a regulation as stating that firms that economic impact of that action, and valid regulation of injurious and produce these ‘‘utilitarian items’’ must whether the action has interfered with unlawful acts). In this instance, the be ‘‘adaptable and flexible to meet ‘‘reasonable investment-backed proposed restriction against outdoor different needs of changing marketplace expectations.’’ See Lucas v. South advertising represents an exercise of the demands’’ and that they are able to Carolina Coastal Council, lll U.S. agency’s statutory authority to restrict transfer resources to other potential lll, 112 S.Ct. 2886, 2893 (1992); certain devices and permit labeling and customers with only short term sales Andrus v. Allard, 444 U.S. 51, 65 (1979) advertising to continue under certain transaction costs. See 56 FR 11653, at (reduction in value is not necessarily a conditions. 11661 (Mar. 20, 1991); see also Georgia- taking); Golden Pacific Bancorp v. Neither would the proposed rule Pacific Corp. v. United States, 640 F.2d United States, 15 F.3d 1066, 1071–73 effect a taking of vending machines or 328, 360 (Ct. Cl. 1980) (‘‘It is settled that (Fed. Cir. 1994) (heavily regulated bank self-service displays. Although vending not all losses suffered by the owner are could not have developed a historically machines would no longer be permitted compensable under the fifth rooted expectation of compensation so to be used to sell cigarettes or smokeless amendment. The government must pay Federal take-over did not require tobacco products, they would continue only for what it takes, not for compensation), cert. denied, 115 S.Ct. to have economic value if they were opportunities which the owner may 420 (1994); Midnight Sessions, Ltd. v. modified for other uses. FDA notes that have lost.’’) (citation omitted). FDA also City of Philadelphia, 945 F.2d 667 (3rd a recent issue of Vending Times stated notes that, until a final rule becomes Cir. 1991) (denial of license to operate that cigarette vending sales declined in effective, firms could easily adjust their an all-night dance hall did not 1993 and that: business practices to adapt to the constitute a taking because it did not Many traditional machines were modified proposed regulations or to phase out deny all economically viable use of the to sell both full-value and generic/subgeneric utilitarian items and, therefore, not have property), cert. denied, 503 U.S. 984 styles at two prices, and glass-front machines such items in stock when the rule (1992); Elias v. Town of Brookhaven, gained favor as cigarette merchandisers becomes effective. because of their high selectivity, flexible Finally, prohibiting the use of non- 783 F.Supp. 758 (E.D.N.Y. 1992) (loss of pricing, attractive display, and convertibility profit or the right to make the most tobacco names on tobacco products and to other uses if cigarette vending becomes requiring labels, labeling, and profitable use does not constitute a illegal. advertising to carry the product’s taking); Nasser v. City of Homewood, ‘‘Vending Cigarettes,’’ Vending Times, 671 F.2d 432 (11th Cir. 1982) established name and a brief statement Census of the Industry Issue, 1994 at p. would represent too slight a ‘‘taking’’ to (deprivation of most beneficial use of 42 (emphasis added). land or severe decrease in property warrant constitutional concern. With This statement indicates that respect to the prohibition against the value does not constitute a taking). compliance with this regulation would Indeed, in Andrus v. Allard, the use of non-tobacco names, the non- not result in a ‘‘taking’’ of vending tobacco product firm would lose its Supreme Court wrote, machines. Similarly, self-service ability to license its name to any tobacco Suffice it to say that government displays, in many instances, could be company, but it would be free to exploit regulation—by definition—involves the moved, adapted, or locked to comply its trade name with any other industry. adjustment of rights for the public good. with the requirement of direct transfer There have been very few instances Often this adjustment curtails some potential from retailers to consumers. Thus, like for the use or economic exploitation of (such as ‘‘Harley- Davidson’ cigarettes) private property. To require compensation in vending machines, self-service displays of tobacco companies licensing a non- all such circumstances would effectively would retain their utility rather than tobacco trade name. The agency compel the government to regulate by losing their value. recognizes that these brands might still purchase. ‘‘Government hardly could go on Non-tobacco items that bear the brand be in the marketplace and would apply if to some extent values incident to property name, logo, symbols, mottos, selling this provision prospectively only. could not be diminished without paying for messages, or any other indicia of a Nevertheless, even if the agency’s every such change in the general law.’’ cigarette or smokeless tobacco product proposed actions could constitute a Andrus, 444 U.S. at 65 (emphasis in are often given away free as promotional ‘‘taking,’’ FDA finds that the actions are original; citations omitted). items or packaged with tobacco consistent with section 4(d) of the order. Here, the proposed rule would not products as incentives to purchase the The labels, labeling, and advertising for require the government to physically product. Banning brand identifiable cigarettes and smokeless tobacco invade or occupy private property, so non-tobacco items as a marketing tool products convey images of status, the first inquiry is whether the proposed and limiting sponsorship of events sophistication, maturity, and adventure rule, if finalized, would deny all would not constitute a taking because, or excitement that are particularly economically beneficial or productive like vending machines and self-service appealing to young people. Their use of property. The proposal would displays, they can be modified or effectiveness at attracting young people prohibit outdoor advertising from being adapted to fit other needs. FDA notes is reflected in studies showing that located within 1,000 feet of any that the FTC, in 1991, had to consider young people tend to smoke the most elementary or secondary school or whether its proposal to require warning heavily advertised brands and that very playground. However, cases involving messages on ‘‘utilitarian objects’’ young children are able to recognize advertising restrictions illustrate that bearing the names, logos, or selling brand logos and imagery. The appeal restrictions on the size and placement of messages of smokeless tobacco product generated by labels, labeling, and advertising may be acceptable if they firms or brands constituted a taking. The advertising, coupled with easy access, represent a valid exercise of FTC acknowledged that small creates the risk that young people will Federal Register / Vol. 60, No. 155 / Friday, August 11, 1995 / Proposed Rules 41359 smoke cigarettes or use smokeless As for the estimated potential cost to principles set in the Executive Order tobacco products, thereby exposing the government in the event that a court and in these two statutes. In addition, themselves to the long-term health risks finds a taking to exist, FDA is unable to this document has been reviewed by the associated with those products. provide an approximate figure. There is Office of Management and Budget as an Consequently, FDA has carefully drafted little publicly available and precise data economically significant regulatory the proposed rule to convey information or information on each activity that action under Executive Order 12866. regarding warnings, precautions, side would arguably be the subject of a The estimated benefits of the effects, and contraindications in order to regulatory taking, and section 704 of the proposed rule were based on FDA’s inform consumers about the use of these act prohibits FDA from requiring finding that compliance with the products. The advertising requirements financial, sales, or pricing data during proposed requirements would help to in proposed subpart D are also narrowly an inspection. Consequently, the agency achieve the Department’s ‘‘Healthy drafted to allow advertising to continue would appreciate receiving information People 2000’’ goals. Each year, an under certain conditions rather than to enable it to determine the potential estimated 1 million adolescents begin to prohibit all advertising. This will enable cost to the government if a court found smoke cigarettes. This analysis adults to continue receiving advertising the actions described in this proposed calculates that at least 24 percent of messages while decreasing the rule to be a taking. these youngsters will ultimately die advertisements’ appeal to young people. from causes related to their nicotine VII. Environmental Impact Vending machines and self-service habit. (Other epidemiological studies displays offer young people easy access The agency has determined under 21 suggest even higher rates of excess to cigarettes and smokeless tobacco CFR 25.24(a)(8), (a)(11), and (e)(6) that mortality. For example, CDC projections products even though State laws this action is of a type that does not indicate that 1 in 3 adolescents who prohibit cigarette sales to minors and individually or cumulatively have a smoke will die of smoking-related some States or localities require locking significant effect on the human disease.) As a result, FDA projects that devices on or specific placement of environment. Therefore, neither an the achievement of the ‘‘Healthy People vending machines. Thus, the environmental assessment nor an 2000’’ goals would prevent well over requirement that retailers physically environmental impact statement is 60,000 early deaths, gaining over provide the product to the consumer required. 900,000 future life-years for each year’s substantially advances the purpose of cohort of teenagers who would VIII. Analysis of Impacts otherwise begin to smoke. At a 3 percent protecting the public health by discount rate, the monetary value of eliminating easy, unmonitored access to A. Introduction and Summary these benefits are projected to total from such products by underage persons. FDA has examined the impacts of the about $28 to $43 billion per year and are This requirement is not proposed rule under Executive Order comprised of about $2.6 billion in disproportionate to the risk presented 12866, under the Regulatory Flexibility medical cost savings, $900 million in by vending machines and self-service Act (Pub. L. 96–354) and under the productivity gains from reduced displays because many studies Unfunded Mandates Reform Act (Pub. morbidity, and $24.6 to $39.7 billion per demonstrate how easily minors can L. 104–4). Executive Order 12866 year in willingness-to-pay values for purchase cigarettes from vending directs agencies to assess all costs and averting premature fatalities. (Because machines, and other documents indicate benefits of available regulatory of the long periods involved, a 7 percent that shoplifting is another method alternatives and, when regulation is discount rate reduces total benefits to young people use to acquire these necessary, to select regulatory about $9.1 to $10.4 billion per year.) In products. approaches that maximize net benefits addition, the proposed rule would Non-tobacco items and sponsored (including potential economic, prevent numerous serious illnesses events that bear the brand name, logo, environmental, public health and safety, associated with the use of smokeless symbols, mottos, selling messages, or and other advantages; distributive tobacco products. any other indicia of a cigarette or impacts and equity). The Regulatory The full realization of this goal would smokeless tobacco product act like Flexibility Act requires agencies to require the active support and advertising, conveying images of status, analyze regulatory options that would participation of State and local sophistication, maturity, and adventure minimize any significant impact of a governments, civic and community or excitement that appeal to young rule on small entities. The Unfunded organizations, tobacco manufacturers, people. Reports demonstrate that many Mandates Reform Act requires (in and retail merchants. Even if only a young people, even those under the Section 202) that agencies prepare an fraction of the goal were achieved, the legal age, possess these items or seek assessment of anticipated costs and benefits would be substantial. For coupons or certificates to obtain these benefits before proposing any rule that example, as shown in Table 1, halting items. The items, in conjunction with may result in an annual expenditure by the onset of smoking for only 1⁄20 of the labeling, other advertising activities, State, local and tribal governments, in 1 million adolescents who become new and sponsored events, create the the aggregate, or by the private sector, of smokers each year would provide impression that smoking or smokeless $100,000,000, (adjusted annually for annual benefits valued at from $2.9 to tobacco product use is more prevalent inflation). That Act also requires (in $4.3 billion a year. and acceptable in society than it Section 205) that the agency identify To comply with the initial actually is and, as a result, increase the and consider a reasonable number of requirements of the rule, FDA projects risk that young people will smoke regulatory alternatives and from those that manufacturers and retailers of cigarettes or use smokeless tobacco alternatives select the least costly, most tobacco products would incur one-time products and expose themselves to the cost-effective or least burdensome costs ranging from $26 to $39 million long-term health risks associated with alternative that achieves the objective of and annual operating costs of about those products. Thus, banning tobacco the rule. The following analysis, in $227 million (see Table 2). promotions on non-tobacco items and in conjunction with the remainder of this Manufacturers would be responsible for conjunction with sponsored events is preamble, demonstrates that this about $15 to $28 million of the one-time appropriate. proposed rule is consistent with the costs and $175 million of the annual 41360 Federal Register / Vol. 60, No. 155 / Friday, August 11, 1995 / Proposed Rules costs (mostly for educational programs). discount rate over 15 years, costs for tobacco manufacturers to restrict youth In addition, they would face significant these initial requirements total about access to tobacco products. Moreover, advertising restrictions. Retailers would $230 million (also about $230 million at FDA plans to propose additional pay $11 million in one-time costs and a 7 percent discount rate). Achieving the requirements that would become $52 million in annual costs. On an ‘‘Healthy People 2000’’ goals, however, effective only if these goals were not annualized basis, using a 3 percent could demand still further efforts by met.

TABLE 1ÐANNUAL ILLNESS-RELATED BENEFITS OF ALTERNATIVE EFFECTIVENESS RATES [Undiscounted lives and life-years; 3% discount rate for monetary values]

Morbidity- Mortality-related will- Total benefits Fewer related ingness-to-pay Fraction of teenage cohort de- adult Lives Life-years Medical productiv- terred smok- saved saved savings ity sav- Life-years Lives Low High ers ** ings saved saved

(No.) (No.) (No.) ($bils.) ($bils.) ($bils.) ($bils.) ($bils.) ($bils.)

1¤2 * ...... 250,000 60,200 905,300 2.6 0.9 24.6 39.7 28.1 43.2 1¤3 ...... 167,000 40,100 603,600 1.8 0.6 16.4 26.4 18.8 28.8 1¤5 ...... 100,000 24,100 362,100 1.1 0.4 9.9 15.9 11.4 17.4 1¤10 ...... 50,000 12,000 181,100 0.5 0.2 4.9 7.9 5.6 8.6 1¤20 ...... 25,000 6,000 90,500 0.3 0.1 2.5 4.0 2.9 4.3 * Estimate used in analysis. ** Assumes 50% of adolescents who are deterred from smoking refrain as adults.

TABLE 2ÐINDUSTRY COSTS FOR CORE PROVISIONS [$mils.]

Annual Total Requirements by sector * One-time operating annualized costs costs costs **

Tobacco Manufacturers ...... 15±28 175 177 Visual Inspections ...... 24 24 Training ...... 1 1 Label Changes ...... 4±17 1 Self-Service Ban ...... 11 1 Educational Programs ...... 150 150 Retail Establishments ...... 11 52 53 Training ...... 10 10 I.D. Checks ...... 28 28 Self-Service Ban ...... 11 14 15 TOTAL ...... 26±39 227 230 * Advertising restrictions are considered under distributional effects. ** Sum of one-time costs annualized over 15 years at 3 percent and annual operating costs.

Consumers would incur costs to the individual industries would be affected. tobacco advertising outlays declined, extent that they lose positive utility Tobacco manufacturers and suppliers various service agencies and received from the imagery embodied in would face increasingly smaller sales, communications media (including product advertising campaigns. because reduced tobacco consumption suppliers of retail counter and other Consumers would also lose the by youth would lead, over time, to display space) would need to attract convenience offered by the use of reduced tobacco consumption by adults. replacement sponsors. Similarly, cigarette vending machines. Costs for The impact of this trend on industry vending machine operators would need these compliance activities were based revenues would be extremely gradual, to find substitute products to replace on the agency’s best estimate of the requiring over a decade to reach an that portion of their revenue that is resources that would be needed to annual decrease of even 4 percent, currently derived from the sale of establish effective programs for substantially mitigating the costs cigarettes. Many of these adjustments decreasing the incidence of lifelong associated with any resource would occur quickly (e.g., TV networks addictions to nicotine-containing dislocation. Also, if State excise tax reportedly recouped advertising cigarettes and smokeless tobacco rates on tobacco products remain at revenues within 1 year of the 1971 ban), products. current levels, State tax revenues would but others could create short-term In addition to the costs described decrease slowly over time, falling by disruptions as businesses moved to above, the proposal would create $252 million by the tenth year. replace lost product lines. distributional and transitional effects. Tobacco manufacturers spent $6.2 In sum, FDA finds that compliance While the overall impact of these billion on advertising, promotional, and with this proposed rule would impose changes on the national economy would marketing programs in 1993, and about some economic costs on the tobacco be small, because dollars not spent on 30 percent would be substantially industry and short-term costs on several tobacco-related expenditures would be altered to reflect the various ‘‘text only’’ other industry sectors. With regard to spent on other goods or services, several restrictions or other prohibitions. If small businesses, most impacts would Federal Register / Vol. 60, No. 155 / Friday, August 11, 1995 / Proposed Rules 41361 be small or transitory. For a small retail to the problem of teenage tobacco educated individuals support the a convenience store not currently addiction, the agency also believes that priori expectation that these groups complying with this proposal, the the proposed regulatory action could be behave myopically.’’ 7 additional first year costs could reach justified even in the absence of a A further market failure would exist $320. For those convenience stores that traditional market failure. As noted if the use of tobacco imposed external already check customer identification, above, the implications of the market or spillover costs on nonusers. Many these costs fall to $35. Moreover, the failure logic are rooted in a basic studies have attempted to calculate the proposed rule would not produce premise of the standard economic societal costs of smoking, but few have significant economic problems at the welfare model—that each individual is addressed these externalities. The most national level, as the gradual the best judge of his/her own welfare. detailed research on whether smokers displacement in tobacco-oriented However, FDA is convinced that this pay their own way is the 1991 study by sectors would be largely offset by principle does not apply to children and Manning, et al., ‘‘The Cost of Poor increased output in other areas. Thus, adolescents. Even steadfast defenders of Health Habits,’’ 8 which develops individual choice acknowledge the pursuant to the Unfunded Mandates estimates of the present value of the Act, FDA concludes that the substantial difficulty of applying the ‘‘market lifetime external costs attributable to benefits of this regulation would greatly failure’’ criterion to non adults. smoking. This study examines exceed the compliance costs that it Littlechild, for example, adds a footnote differences in costs of collectively would impose on the U.S. economy. In to the title of his chapter on ‘‘Smoking financed programs for smokers and addition, the agency has considered and Market Failure’’ 2 to note that ‘‘[t]he nonsmokers, while simultaneously other alternatives and determined that economic analysis of market failure controlling for other personal the current proposal is the least deals with choice by adults.’’ FDA finds characteristics that could affect these burdensome alternative that would meet this statement consistent with its view costs (e.g., age, sex, income, education, the ‘‘Healthy People 2000’’ goals. that even if many children make and other health habits, etc.). The rational choices,3 the agency’s B. Statement of Need for Proposed regulatory determinations must reflect authors found that nonsmokers Action the societal conviction that children subsidize smokers’ medical care, but The need for action stems from the under the age of legal consent cannot be smokers (who die at earlier ages) agency’s determination to ameliorate the assumed to act in their own best subsidize nonsmokers’ pensions. On enormous toll on the public health that interest.4 balance, they calculated that before is directly attributable to the In particular, FDA finds that the accounting for excise taxes, smoking consumption by adolescents of imagery used in industry advertising creates net external costs of about $0.15 cigarettes and smokeless tobacco and promotional programs obscures per pack of cigarettes in 1986 dollars products. According to the nation’s adolescent perceptions of the ($0.33 per pack adjusted to 1995 dollars most knowledgeable health experts, significance of the associated health by the medical services price index.) tobacco use is the most important risks and the strength of the addictive While acknowledging that these preventable cause of morbidity and power of tobacco products. The estimates ignored external costs premature mortality in the United preceding sections of this preamble associated with lives lost due to passive States, accounting each year for over describe numerous studies on the smoking, perinatal deaths due to 400,000 deaths (approximately 20 shortcomings of the risk perceptions smoking during pregnancy, and deaths percent of all deaths). Moreover, these held by children. Although most and injuries caused by smoking- related morbidity and mortality burdens do not youngsters acknowledge the existence of fires, the authors concluded that there is spare middle aged adults—with the tobacco-related health risks, the no net externality, because the sum of average smoking-related death abridged time horizons of youth make all smoking-related externalities is responsible for the loss of up to 15 life- them exceptionally vulnerable to the probably less than the added payments years.1 powerful imagery advanced through imposed on smokers through current In its guidelines for the preparation of targeted industry advertising and Federal and State cigarette excise taxes. Economic Impact Analyses, OMB asks promotional campaigns. In effect, these A Congressional Research Service report that Federal regulatory agencies conditions constitute an implicit market to Congress examined estimates of the determine whether a market failure failure that has not been adequately potential magnitude of the omitted costs exists and if so, whether that market remedied by government action. and concurred with this finding.9 failure could be resolved by measures Moreover, the agency does not view other than new Federal regulation. The these results as inconsistent with the C. Regulatory Benefits basis for this request derives from growing economic literature based on 1. Prevalence-Based Studies standard economic welfare theory, the Becker and Murphy models of which by assuming that each individual ‘‘rational addiction.’’ 5 Although several The benefits of the proposed is the best judge of his/her own welfare, empirical studies have demonstrated regulation include the costs that would concludes that perfectly competitive that, for the general population, be avoided by eliminating the adverse private markets provide the most cigarette consumption is ‘‘rationally health effects associated with the efficient use of societal resources. addictive’’ in the sense that current consumption of tobacco products. Most Accordingly, the lack of perfectly consumption is affected by both past research on the costs of smoking-related competitive private markets (market and future consumption,6 Chaloupka illness has concentrated on the medical failure) is frequently used to justify the notes that this ‘‘rationality’’ does not costs and productivity losses associated need for government intervention. hold for younger or less educated with the prevalence of death and illness Common causes of such market failures persons, for whom past but not future in a given year. These prevalence-based include monopoly power, inadequate consumption maintains a significant studies typically measure three information, and market externalities or effect on current consumption. He components: (1) The contribution of spillover effects. concludes, ‘‘[t]he strong effects of past smoking to annual levels of illness and While FDA believes that various consumption and weak effects of future death, (2) the direct costs of providing elements of market failure are relevant consumption among younger or less extra medical care, and (3) the indirect 41362 Federal Register / Vol. 60, No. 155 / Friday, August 11, 1995 / Proposed Rules costs, or earnings foregone due to consumption would decrease the on average, tobacco sales to minors smoking-related illness or death.10 number of premature deaths and lost dropped 40 percent to 80 percent.17 In a recent statement, the U.S. Office life-years In the August 26, 1993, Federal of Technology Assessment (OTA) • An exploration of various means of Register, the Substance Abuse and declared that ‘‘the greatest ’costs’ of estimating the monetary value of the Mental Health Services Administration smoking are immeasurable insofar as expected health improvements. (SAMHSA) proposed a program of State- they are related to dying prematurely The annual benefits of the proposed operated enforcement activities that and living with debilitating smoking- regulation are measured as the present would restrict the sale or distribution of related chronic illness with attendant value of the lifetime benefits gained by tobacco products to individuals under poor quality of life.’’ Nonetheless, OTA those youngsters, who in the absence of 18 years of age. FDA strongly supports calculated that in 1990 the national cost the proposed regulation, would have the basic objectives of this program, but of smoking-related illness and death become new smokers. believes that their full achievement amounted to $68 billion and included would demand a broad arsenal of $20.8 billion in direct health care costs, 3. Reduced Incidence of New Young controls; including industry programs to $6.9 billion in indirect morbidity costs, Tobacco Users complement and fortify the new State and $40.3 billion in lost future earnings Each year, an estimated 1 million inspectional programs, together with 11 from premature death. More recently, youngsters become new smokers. The restrictions on industry advertising and the CDC estimated the 1993 smoking- proposed regulation targets this group promotions to counter the influence of attributable costs for medical care, by restricting youth access to tobacco ongoing marketing activities. While 12 alone, at $50 billion. Unfortunately, products and by limiting advertising quantitative estimates of the these prevalence-based studies do not activities that affect adolescents. Several effectiveness of these activities cannot answer many of the most important communities have demonstrated that be made with certainty, FDA believes questions related to changes in access restrictions are extremely that, if aggressively implemented and regulatory policy, because they present effective when vigorously applied. supported by both industry and public the aggregate cost of smoking-related Woodridge, IL, for example, achieved a sector entities, comprehensive programs illness in a single year, rather than the compliance rate of over 95 percent. designed to discourage youthful tobacco lifetime cost of illness for an individual Moreover, 2 years after that law was consumption could reasonably achieve smoker. As noted in the 1992 Report of enacted, a survey of 12 to 14 year-old the ‘‘Healthy People 2000’’ goal of the Surgeon General, most prevalence- students indicated that overall smoking halting the onset of smoking for at least based studies fail to consider issues rates were down by over 50 percent half, or 500,000, of the 1,000,000 concerning ‘‘the economic impact of youngsters who presently start to smoke (over 2⁄3 for regular smokers).14 decreased prevalence of cigarette each year. The proposed advertising and smoking, the length of time before The agency acknowledges the promotional restrictions would augment economic effects are realized, the imposing size of the required effort and these efforts to limit the attraction of economic benefits of not smoking, and understands that the performance goals tobacco products to underage a comparison of the lifetime illness may not be fully attainable if the consumers. As discussed in detail in the costs of smokers with those of affected industry sectors choose to preamble above, no one study has nonsmokers.’’ 13 In effect, although these ignore the new incentives established by definitively quantified the precise studies are designed to measure the the proposed regulation. After all, the impact of advertising or of advertising smoking-related draw on societal industry’s long- term profits hinge on restrictions. Nevertheless, the majority resources, they are not well-suited for attracting new customers. Nonetheless, of the relevant research indicates that analyzing the consequences of FDA is confident that the combined advertising restrictions would reduce regulatory-induced changes in smoking effect of the proposed restrictions on consumer demand. For example, behavior. advertising and promotion, prohibition according to the 1989 report of the of self-service tobacco products 2. FDA’s Methodology Surgeon General, ‘‘The most (including vending machines), new An alternative methodology, termed comprehensive review of both the direct labeling information and educational incidence-based research, compares the and indirect mechanisms concluded programs, and age verification lifetime survival probabilities and that the collective empirical, obligations for retailers would expenditure patterns for smokers and experiential, and logical evidence makes significantly diminish the allure as well nonsmokers. As this approach models it more likely than not that advertising as the access to tobacco products by the individual life-cycle consequences and promotional activities do stimulate youth. Moreover, if the performance 15 of tobacco consumption, FDA has relied cigarette consumption.’’ Similarly, goals are not met 7 years after the on these incidence-based studies to after a careful examination of available effective date of the final rule, value the beneficial effects of the studies, Clive Smee, Chief Economic additional requirements would enhance proposed rule over the lifetime of each Adviser to the UK Department of Health the effectiveness of these activities. new cohort of potential smokers. The determined that, ‘‘the balance of Thus, this study projects regulatory methodology incorporates the following evidence thus supports the conclusion benefits on the presumption that the steps: that advertising does have a positive ‘‘Healthy People 2000’’ goals would be • A projection of the extent to which effect on consumption.’’ 16 met, but also presents results for the rule would reduce the incidence, or In Northern California, 24 cities and effectiveness levels that are the annual number of new adolescent unincorporated areas in 5 counties considerably smaller. users of tobacco products adopted local youth tobacco access • A projection of the extent to which ordinances that prohibit self-service 4. Reduced Rate of Lifetime Tobacco the reduced rates of adolescent tobacco merchandising and point-of-sale tobacco Use consumption would translate to reduced promotional products in retail stores. As part of its regulatory proposal, rates of lifetime tobacco consumption Survey measures of the impact of these SAMHSA assumed that its new • A projection of the extent to which ordinances by the Stop Tobacco Access monitoring program would significantly the reduced rates of lifetime tobacco for Minor Project (STAMP) found that, reduce the amount of underage Federal Register / Vol. 60, No. 155 / Friday, August 11, 1995 / Proposed Rules 41363 smoking, but its methodology did not unlikely to start using tobacco products who would be deterred from starting to project these reduced smoking rates into as an adult. Evidence from SAMHSA smoke each year. Accordingly, FDA has adult years. SAMHSA acknowledged suggests that this percentage will be calculated the annual benefits of the the conservative nature of its estimate high as most smokers become daily proposed rule from the lifetime health and noted the likelihood that the cigarette smokers before the age of 18. gains associated with preventing majority of the cost savings would The 1994 Surgeon General’s Report 250,000 adolescents from ever smoking accrue over long time spans, ‘‘as each indicates that 82 percent of persons as an adult. cohort of non-smoking youth ages into (aged 30 to 39) who ever smoked daily non-smoking adults.’’ Nevertheless, began to smoke before the age of 18. 5. Lives Saved SAMHSA did not quantify these That report concludes that ‘‘if lifetime benefits, ‘‘because there are so adolescents can be kept tobacco-free, FDA calculated the number of many uncertainties as to future most will never start using tobacco.’’ smoking-related deaths that would be outcomes.’’ While agreeing that long FDA agrees with that assessment, but averted by the 250,000 lifetime term benefit projections are uncertain, notes that the above percentage may not nonsmokers (who in the absence of the FDA is convinced that estimates based reflect the ultimate demand for tobacco proposed regulation would be smokers) on valid assumptions can provide consumption that may occur if from age-specific differences in the reasonable approximations of future adolescent access is effectively limited. probability of survival for smokers and cost savings. Thus, to account for this possibility, nonsmokers. The probability of survival The major beneficiaries of the FDA conservatively assumed that this data for the agency’s estimate were proposed rule are those individuals who proposed regulation would prevent the derived from the American Cancer would otherwise become addicted to use of tobacco as an adult for only one Society’s Cancer Prevention Study II, as tobacco early in life, but who are half of the estimated 500,000 youngsters shown in Table 3.

TABLE 3ÐPROBABILITY OF SURVIVAL BY AGE, SEX, AND SMOKING STATUS [Probabilities of a 17-Year-Old Surviving to Age Shown]

Age Male Male Female Female (years) neversmokers all smokers neversmokers all smokers

35 ...... 1 1 1 1 45 ...... 0.986 0.966 0.988 0.984 55 ...... 0.951 0.893 0.962 0.939 65 ...... 0.867 0.733 0.901 0.831 75 ...... 0.689 0.466 0.760 0.630 85 ...... 0.336 0.159 0.453 0.289 Source: Thomas Hodgson, ``Cigarette Smoking and Lifetime Medical Expenditures,'' ``The Milbank Quarterly,'' vol. 70, no. 1, 1992, p. 91. Based on data from the American Cancer Society's Cancer Prevention Study II.

FDA initially compared the People 2000’’ performance goal would and non-smokers. In each 10-year life probability of death for smokers versus prevent about 60,200 smoking-related span, the number of years lived for each nonsmokers within each 10-year period. fatalities among each year’s cohort of cohort of persons who would have been Differences in the probabilities of death potential new smokers.20 smokers but who were deterred was were then multiplied by the number of The economic assessment of health- compared to the number of years that smokers remaining at the start of each related variables requires discounting would have been lived by that same 10-year period. Excess deaths among the value of future events to make them cohort if they had been smokers. The smokers in all age groups totaled almost commensurate with the value of present difference between these two measures 28 percent of the 250,000 cohort. events. For this analysis, a 3 percent is the life-years saved for that 10-year Because these data do not account for discount rate was used to calculate the period.21 Deducting the 13 percent potentially confounding variables, such present value of the projections. (Most lifestyle adjustment indicates that over as alcohol consumption, or other health-related cost-effectiveness studies the full lifetime of each cohort, the lifestyle differences, FDA adjusted the use rates of from 3 to 5 percent. FDA proposed regulation would gain an presents summary estimates below for mortality estimate to 24 percent to estimated 905,000 life-years, or about 15 rates of both 3 and 7 percent.) On the reflect findings by Manning et al.18 that years per life saved. On a discounted assumption that it would be 20 years such nontobacco lifestyle factors may basis, the proposed rule would save an before each year’s cohort of new adults estimated 211,391 life-years annually. account for 13 percent of excess medical reached the midpoint of the 35 to 45 age care expenditures. FDA recognizes that bracket and 60 years to reach the 75 to 7. Monetized Benefits of Reduced this 24 percent mortality estimate may 85 age bracket, these calculations Tobacco Use be too low. For example, Peto, et al. indicate that, on a present value basis, found that about half of all adolescents the proposed rule would save 15,863 There is no fully appropriate means of who continue to smoke regularly will lives per year. assigning a dollar figure to represent the eventually die from smoking-related attendant benefits of averting thousands disease.19 Moreover, CDC projects that 6. Life-Years Saved of tobacco-induced illnesses and up to 1 in 3 adolescent smokers may die The number of life-years that would fatalities. However, to quantify prematurely. Nevertheless, for this be saved by preventing each year’s important components of the expected analysis, FDA relied on the probabilities cohort of 250,000 adolescents from economic gains, FDA has developed shown in Table 3, corrected by the 13 acquiring a smoking addiction was estimates of the value of the reduced percent lifestyle influence adjustment, calculated from the same age-specific medical costs and the increased worker to project that achieving the ‘‘Healthy survival differences between smokers productivity that would result from 41364 Federal Register / Vol. 60, No. 155 / Friday, August 11, 1995 / Proposed Rules fewer tobacco-related illnesses. In prevalence and incidence-based costs the-job-injury risks.28 FDA therefore has addition, since productivity measures are due to discounting.24 Consequently, conservatively used $2.5 million per do not adequately value the avoidance FDA has adopted Hodgson’s method to statistical life, which is towards the low of premature death, FDA has adopted a develop a rough approximation of end of the research findings, to estimate willingness-to-pay approach to value incidence-based costs from an available society’s willingness-to-pay to avert a the benefits of reduced tobacco-related prevalence-based estimate of morbidity fatal smoking-related illness. Thus, the fatalities. costs. annual benefits of avoiding the Rice et al. 25 found that lost wages due discounted number of 15,863 premature 8. Reduced Medical Costs to tobacco-related work absences in the fatalities would be $39.7 billion. On average, at any given age, smokers United States amounted to $9.3 billion An alternative method of measuring incur higher medical costs than in 1984. This equates to $12.3 billion in willingness-to-pay is to calculate a value nonsmokers. However, nonsmokers live 1994 dollars when adjusted by the for each life-year saved. This approach, longer and therefore continue to incur percentage change in average employee which is intuitively appealing because it medical costs over more years. Several earnings since 1984. Although FDA places a greater value on the avoidance analysts have reported conflicting does not have a precise estimate of the of death at a younger than at an older estimates of the net outcome of these life-cycle timing of these morbidity age, is the traditional means of assessing factors, but the most recent research is effects, the relevant latency periods the cost-effectiveness of medical the incidence-based study by would certainly be shorter than for interventions. Nevertheless, there have Hodgson,22 who found that lifetime mortality effects. Thus, to account for been few attempts to determine the medical costs for male smokers were 32 the deferred manifestation of smoking- appropriate value of a life-year saved. percent higher than for male related morbidity effects, FDA assumed OMB suggests several approaches, neversmokers and lifetime medical costs that they would occur over a time including annualizing with an for female smokers were 24 percent horizon equal to 80 percent of that appropriate discount rate the estimated higher than for female neversmokers. previously measured for mortality value of a statistical life over the average Hodgson determined that the present effects. Further, because the long-term expected life-years remaining. For value of the lifetime excess costs were decline in smoking prevalence has example, at a 3 percent discount rate, a about $9,400 in 1990 dollars (future exceeded the growth in population, the $2.5 million value per statistical life for costs discounted at 3 percent).23 As estimated incidence-based costs were an individual with 35 years of noted earlier, the incidence-based study reduced by another 20 percent. At a 3 remaining life-expectancy translates to by Manning et al., implies that about 13 percent discount rate, this methodology about $116,500 per life year. Since the percent of the excess medical costs are implies that the incidence-based cost of proposed regulation would save 211,391 attributable to factors other than smoking-related morbidity, or the discounted life-years annually, this smoking. Accounting for this reduction present value of the future costs to one approach yields annual benefits of $24.6 and adjusting by the consumer price year’s cohort of 1,000,000 new smokers, billion. FDA notes that this approach index (CPI) for medical care raises the is about $3.5 billion. Based on FDA’s does not attribute any value to lost present value of Hodgson’s excess estimate that the proposed regulation consumer utility from tobacco product medical cost per new smoker to $10,590 would prevent 250,000 youths per year consumption and solicits public in 1994 dollars. Thus, those 1,000,000 from smoking as adults, the estimated comment on this methodology. young people under the age of 18, who annual benefits from reduced morbidity 11. Reduced Fire Costs currently become new smokers each amount to about $879 million. year, are responsible for excess lifetime Every year lighted tobacco products medical costs measured at a present 10. Benefits of Reduced Mortality Rates are responsible for starting fires which value of $10.6 billion (1,000,000 x From a societal welfare perspective, cause millions of dollars in property $10,590). Since FDA projects that the OMB advises that the best means of damage and thousands of casualties. In proposed regulation would prevent valuing benefits of reduced fatalities is 1992, fires started by lighted tobacco 250,000 of these individuals from to measure the affected group’s products caused 1,075 deaths and $318 smoking as adults, the medical cost willingness-to-pay to avoid fatal risks. million in direct property damage.29 A savings attributable to the proposed Unfortunately, the specific willingness- reduction in the number of smokers, regulation is estimated at $2.6 billion to-pay of smokers is unknown, because and the coinciding number of cigarettes per year. institutional arrangements in the smoked, would result in a drop in the markets for medical care obscure direct number of fires over the years. If the 9. Reduced Morbidity Costs measurement techniques.26 number of fires fell by the same An important cost of tobacco-related Nevertheless, many studies have percentage as the expected reduction in illness is the value of the economic examined the public’s willingness-to- cigarette sales, this would imply present output that is lost while individuals are pay to avoid other kinds of life- value savings due to fewer fires of $203 unable to work. Thus, any future threatening risks, especially workplace million for the value of lives saved and reduction in such lost work days and transportation hazards. An EPA- $24 million for the value of averted contributes to the economic benefits of supported study 27 found that most property damage, totaling $227 million the proposed regulation. Several studies empirical results support a range of $1.6 annually over a 40-year period. have calculated prevalence-based to $8.5 million (in 1986 dollars) per Moreover, these estimates do not estimates of U.S. productivity losses due statistical life saved, which translates to include costs for nonfatal injuries or for to smoking-related morbidity, but FDA $2.2 to $11.6 million in 1994 dollars. providing temporary housing. knows of no incidence-based estimates. However, the uncertainty surrounding Hodgson, however, has shown that in such estimates is substantial. Moreover, 12. Summary of Benefits certain situations, incidence measures Viscusi has shown that smokers, on The discussion above demonstrates can be derived from available average, may be willing to accept greater the formidable magnitude of plausible prevalence measures. For example, he risks than nonsmokers. For example, estimates of the economic benefits demonstrates that in a steady-state smokers may accept about one-half the available from smoking reduction model, the only difference between average compensation paid to face on- efforts. As described, FDA forecasts Federal Register / Vol. 60, No. 155 / Friday, August 11, 1995 / Proposed Rules 41365 annual net medical cost savings of $2.6 publishes product line data for only the 700,000 retail outlets would continue to billion and annual morbidity-related 1.5 million retail establishments with sell tobacco products. productivity savings of $900 million. payroll. Of these, about 275,000 report 1. Costs to Manufacturers From a willingness-to-pay perspective, sales for the broad merchandise line of the annual benefits of reduced tobacco- ‘‘Cigars, cigarettes, and tobacco.’’ FDA a. Core requirements. Under the related disease mortality range from does not know how many of the proposed regulation, manufacturers of $24.6 to $39.7 billion. As a result, the nonpayroll outlets sell tobacco tobacco products would incur value of the annual disease-related products. There were about 215,000 compliance costs for the following benefits of achieving the ‘‘Healthy nonpayroll outlets among the most requirements: visual inspections of People 2000’’ goal is projected to range likely establishment types (grocery retail outlets, training manufacturers’ from $28.1 to $43.2 billion. (Following stores, service stations, drug stores, representatives, changing package Hodgson, this analysis uses a 3 percent liquor stores, drinking places, general labels, assisting self-service bans, and discount rate. A 7 percent rate reduces merchandise, and eating places.) If all of financing consumer education these benefits to a range of $9.1 to $10.4 these nonpayroll stores sold tobacco programs. billion.) These totals do not include the products (an unreasonably high estimate b. Visual inspections. The benefits expected from fewer fires (over considering that only 34 percent of manufacturer is responsible for $200 million annually), reduced passive those with payroll reported sales of removing all items that do not comply smoking, or decreased use of smokeless tobacco merchandise), the total number with the requirements of this proposal tobacco products. Moreover, while FDA of retail establishments selling over-the- and for visually inspecting each retail believes these effectiveness projections counter tobacco products would be establishment during any visit to such are plausible, much lower rates would 275,000 + 215,000, or 490,000. establishment, to ensure that the still yield impressive results. Table 1 Moreover, these data may overstate the products are appropriately labeled, above summarized the disease-related number of outlets operating at any one advertised, and sold, or distributed. health benefits and illustrates that youth time, because they represent the number Thus, manufacturer inspections would deterrence rates as small as 1/20, which of establishments in business at any be required during every business visit would prevent the adult addiction of at time during the year and outlet turnover to a tobacco-selling outlet by a least 25,000 of each year’s cohort of is significant. The figure may be manufacturer’s representative. As 1,000,000 new adolescent smokers, understated, however, if a substantial manufacturers’ representatives routinely would provide annual benefit values number of nonpayroll stores that sell visit most retail outlets selling their measured in the billions of dollars. tobacco products are classified among products, the proposed requirement Moreover, the higher risk estimates other establishment types. would provide a periodic scrutiny of suggested by Peto, et al. could Alternatively, New Jersey issued retail tobacco operations without significantly increase these values. about 18,300 retail cigarette sales imposing additional travel costs. FDA licenses in 1988, but the census estimate cannot project these costs precisely, as D. Regulatory Costs for the number of retail establishments the intensity of the audit would vary OMB guidelines for Regulatory Impact with payroll selling tobacco products in with the characteristics of the retail Analysis direct that agency cost that state was only about 6,000. This operation, but the agency believes that estimates reflect the opportunity costs of implies that over twice as many most manufacturers’ representatives the proposed alternative (i.e., the value nonpayroll outlets sell tobacco products would need little incremental time to of the benefits foregone as a as outlets with payrolls. If the New conduct routine audits. On average, consequence of that alternative.)30 Jersey licensing data, which imply about FDA estimates that each audit would be According to these guidelines, estimates 2.4 cigarette licenses per 1,000 accomplished by a relatively quick should include ‘‘private-sector population, were extrapolated to the assessment that would take no more compliance costs, government United States, they project to about than 2 to 3 minutes. The assumption of administrative costs, and costs of 600,000 such outlets nationwide. an additional 3 minutes per visit reallocating workers displaced as a However, this estimate also may implies a total of 30 minutes a day for result of the regulation * * * Such costs overstate the current number of a manufacturer’s representative who may include the value (opportunity establishments selling tobacco products may visit an average of 10 outlets daily. cost) of benefits foregone, losses in at any one time, because of the high At a labor cost of $25 per hour, the consumers’ or producers’’ surpluses, failure rate among small businesses annual cost of the additional one-half discomfort or inconvenience, and loss of obtaining licenses (i.e. more licenses hour spent daily on monitoring would time.’’31 Accordingly, FDA finds that issued than establishments surviving). be $3,250 per employee. the proposed rule would impose new Neither the census nor the New Jersey FDA does not know how many burdens on the manufacturers of data account for those outlets that may manufacturers’ representatives currently tobacco products and less stringent convert cigarette vending machine sales make sales calls on tobacco product requirements on retailers of tobacco to over-the-counter sales once vending retailers, but preliminary results from products. In addition, certain other machines are banned as proposed in the 1992 U.S. Census of Manufacturers industry sectors would experience lost this regulation. Industry estimates of the indicate that cigarette manufacturers sales and employment, but these effects number of cigarette vending machines employ about 7,300 nonproduction would be largely offset by gains to other in operation in 1993 vary from workers. Thus, if all nonproduction sectors, as discussed in section VIII.E. of 182,000 32 to 480,000 33. FDA does not workers were engaged in retail sales, the this document. know how many of these operations industry monitoring costs would A critical variable underlying several would convert to over-the-counter sales, approach $24 million per year ($3,250 × of the cost estimates is the number of but for this study, the agency has 7,300). However, many nonproduction retail outlets that sell tobacco products. assumed that about 100,000 employees serve in management or According to the Retail Trade Census, a establishments would initiate new over- clerical positions. Moreover, the above total of 2.4 million retail trade the-counter operations to replace lost cost estimate fails to account for the establishments operated in 1987. vending machine sales. Thus, FDA likely relationship between the total Unfortunately, the Retail Trade Census estimates that a maximum of about time needed for a manufacturers’ 41366 Federal Register / Vol. 60, No. 155 / Friday, August 11, 1995 / Proposed Rules representative to visit a retail outlet and compliance period would be industry’s stated views on this issue, the type of promotional activities approximately $4 million. particularly with respect to the impact permitted. For instance, the ban on self- The second approach was to use cost of advertising and promotional service displays may cause information provided in the regulatory programs on youth. Nevertheless, FDA manufacturers’ representatives to spend impact analysis of a roughly comparable does not consider it appropriate to less time conducting display Canadian regulation.36 The Canadian count as a societal cost the voluntary inspections. Thus, FDA suspects that Government estimated a cost of $30 reduction in the consumption of tobacco the above cost estimate may be high. million to change labels for about 300 products that would result from reduced c. Training. Each manufacturer’s cigarette varieties. Most Canadian advertising outlays. Although industry representative would have to receive cigarettes are sold in two sizes and sales would fall, consumer dollars no training on the requirements of the about 20 percent are also sold in flip top longer used on tobacco products would regulation and the new monitoring packages.37 Canadian labels, however, be redirected to other more highly responsibilities of their position. FDA are typically printed using a gravure valued areas. Thus, for the most part, estimates that this training could be method; which, according to RTI, is the resulting reduction in industry sales accomplished in about 8 hours. Thus, about 3.5 times as expensive as the and profits would not be societal costs, assuming that the 7,300 estimate for the lithography process used in the United but rather distributional effects, as number of manufacturers’ States. Adjusting the Canadian estimate discussed below under that heading. representatives adequately accounts for upward, to account for the larger Moreover, as shown in that section, any normal employee turnover, the annual number of cigarette and smokeless short-term frictional or relocation training costs would total about $1 tobacco varieties; and downward, for impacts would be significantly million. the smaller number of packages per moderated by the gradual phase-in of d. Label changes. The proposed variety and the smaller cost of the the economic effects. As there are regulation requires that the tobacco lithography printing process, provides a different views regarding the product package contain the established $17 million estimate for the total cost of appropriate methodology for assessing name of the tobacco product in a these label changes. these advertising consequences, FDA specified size. FDA has estimated the e. Self-service ban. The proposed asks for public comment on the correct compliance costs for printing new labels regulation would ban the use of self- approach. in the event that new labels would be service displays by requiring vendors to h. Producer surplus. Although needed. physically provide the regulated tobacco voluntary decreases in the sale of Approximately 933 varieties of product to all purchasers. An estimated tobacco products would not impose cigarettes are currently produced in the one-time cost of $22.5 million for substantial long-term societal costs, United States.34 FDA does not have effecting this change is derived below in mandatory restraints on the access of information on the number of smokeless section VIII.D.3. Although any new consumers to desired products would tobacco varieties, but has assumed that behind-the-counter shelving or locking imply economic costs. Economists the total number of cigarette and cases must be located at the retail level, typically measure inefficiencies smokeless tobacco varieties is 1,000. the prevailing business practice is for attributable to product bans by FDA also assumes that most varieties of tobacco manufacturers’ sales calculating lost ‘‘producers’ surplus,’’ cigarettes are packaged in both single representatives to assist and even pay which is a technical term for describing packs and cartons, but that each variety for this equipment.38 Since FDA cannot the difference between the amount a of smokeless tobacco is packaged in know if manufacturers would continue producer is paid for each unit of a good only one type of package. Consequently, this practice, this study assumes that and the minimum amount the producer the total number of labels was manufacturers and retailers would share would accept to supply each unit, or the calculated as: 933 cigarette varieties × 2 these costs equally by apportioning $11 area between the price and supply package types per variety (individual million to each. curve. Data from Cummings et al. packs and cartons) + 67 smokeless f. Educational program. The proposed indicate that youngsters under the age of tobacco varieties = 1,933 package types. regulation requires manufacturers of 18 consume 318 million packs of FDA used two approaches to estimate both cigarettes and smokeless tobacco cigarettes per year, leading to industry the cost to industry of changing these products to fund consumer educational profits of $117 million.39 On the labels. The first approach used programs. FDA estimates that the assumption that the proposed regulation information compiled by The Research requirements of this provision equate to would reduce teenage smoking by one- Triangle Institute (RTI) in its report to a total cost of about $150 million half, these profits would fall by about FDA on the cost of changing food annually for cigarette and smokeless $58 million. However, since most of this labels.35 RTI reported a cost of about tobacco product manufacturers. profit is derived from illegal sales to $700 for a 1-color change in a g. Restricted advertising/promotion. youths, FDA has not counted this figure lithographic printing process. FDA The determination of the industry costs as a societal cost. multiplied this figure by 4 to account for attributable to the proposed restrictions a 2 color change on the actual warning on tobacco product advertising is 2. Outcome-Based Activities labels and an additional 2 colors for complex. While there is no doubt that FDA plans to propose additional modifications to the existing label to individual companies realize enhanced requirements that would become make room for the warning label. This goodwill asset values from advertising effective only if the rule’s outcome- calculation yielded incremental printing programs, the industry has long held based objectives are not met. To avoid costs of about $2,800 per label, or that advertising prompts brand- these consequences, manufacturers may $5,412,400 for all 1,933 varieties of switching, but does not increase decide it is in their best interest to affected tobacco products. Adjusting aggregate sales. Of course, if this were initiate or to increase their support of this figure downward by RTI’s true, advertising would be unprofitable programs that discourage underage methodology to account for the current from the standpoint of the industry as purchasing of tobacco products. frequency of label redesign predicts that a whole and reduced levels would Alternative activities. Tobacco the total one-time cost of completing increase rather than decrease aggregate manufacturers may decide to actively these label changes within a 1-year industry profits. FDA does not accept support the achievement of the Federal Register / Vol. 60, No. 155 / Friday, August 11, 1995 / Proposed Rules 41367

‘‘Healthy People 2000’’ goals in order to flow of business in any particular outlet. effective approach, but at least one avoid the need to comply with any In some instances, the additional regional survey found that retail outlets optional provisions. For example, the workload might compel the hiring of readily complied with comparable local industry could work to reduce the additional employees. At other times, ordinances without architectural prevalence of underage tobacco use by the age verification would cause little remodeling or substantial refitting of contributing either financial or staffing productive time loss, or the checkout counters or store aisles.45 resources to local civic or public establishment would shift some of the Certain retail outlets that sell large programs, by developing and cost to customers through an increase in volumes of cigarettes by the carton disseminating effective educational the average amount of time customers would bear the greatest burden from this materials, or by establishing its own wait in line to make purchases. For this proposed provision, because the surveillance programs. FDA does not analysis, FDA has assumed that the physical size of cartons may preclude know which of these activities, if any, affected establishments would bear all their placement in close proximity to a the industry might support; but the cost of the costs imposed by this cashier. Most cigarette cartons are sold of such activities could be substantially requirement. Based on data from the in the 56,000 largest retail outlets, less than the cost of complying with an 1994 Surgeon General’s Report 42 on the including 23,000 supermarkets,46 12,800 optional provision of the outcome-based tobacco consumption of cigarette general merchandise outlets, and 20,200 objective. For example, if the cost of a smokers 5 to 6 years after high school, chain drug stores.47 If three-quarters of retail surveillance visit were $25, an and national data on the annual per these outlets spent an average of $300 industry program to monitor selling capita consumption of smokeless each for labor and materials to procedures in all 700,000 retail outlets tobacco,43 FDA estimates that accomplish this relocation, the one-time twice a year would cost $35 million. consumers aged 18 to 26 purchase 2.4 cost would be about $12.6 million. The SAMHSA estimated that the billion tobacco products a year. Since remaining 645,000 smaller retail establishment and implementation of FDA does not know how many of these establishments would typically need to effective State-administered retail purchases are for multiple items, the do much less, since small packages can surveillance systems would cost about agency has conservatively assumed that almost always be stored adjacent to or $30 million annually. the number of consumer transactions is directly above a cashier. Most outlets already keep the majority of cigarette 3. Costs to Retail Outlets about 2.2 billion. The time needed to conduct identification checks for these packs in such restricted areas, although SAMHSA recognized that retail transactions would vary, but if 75 most smokeless tobacco products may businesses would bear new costs for percent of the transactions were have to be relocated. FDA has assumed duties such as training staff, posting extended by 10 seconds and the average that 50 percent of these smaller outlets signs, and checking for compliance. It value of employee time was $15,410,44 would take 2 hours, and 25 percent believed the largest component of these the added time cost would amount to would take 4 hours to complete any costs would be for the ‘‘time spent in 2.1 cents per purchase, or $35 million necessary relocation of stock. At an instructing sales clerks that they must per year. Assuming current compliance estimated $7.70 labor cost per hour, this avoid selling to minors and in dealing at 20 percent reduces the incremental adds a one-time cost of $9.9 million, for with occasional lapses.’’ SAMHSA costs to $28 million. Tobacco a total of about $22.5 million. As noted projected these costs at roughly $100 transactions involving underage above under the ‘‘Cost to per year per establishment, or $100 smokers were excluded from this Manufacturers’’ section, manufacturers million for an estimated 1 million often pay partially or even completely calculation, based on the assumption establishments. SAMHSA noted, for behind-the-counter shelving or that they would decline dramatically however, that ‘‘effective training may locking cases for use in retail once compliance with the regulation already be in place in a third or more establishments. Thus, FDA assumed was achieved. of all businesses.’’ 40 FDA has developed that this $22.5 million one-time cost its own estimates of the costs likely to Self-service ban. The proposed ban on would be shared equally by be incurred by the retail sector for self-service displays would affect a manufacturers and retail outlets. additional employee time or other number of retail stores, although The required reconfiguration of expenses and finds that they do not shoplifting concerns have already tobacco displays may also impose added differ substantially from the SAMHSA caused many establishments to place labor costs for each purchase estimate. tobacco products in areas not directly transaction, especially for those outlets Training. SAMHSA reports that the accessible to customers. Retailers that that adopt signaling-type systems or that average retail store has 12 employees, have discontinued self-service displays move inventory to areas located further which implies a total of 8.4 million (12 have typically modified their stores by from employee workstations. To × 700,000) affected retail employees. either: (1) Placing tobacco products on estimate any additional labor costs, FDA Assuming retail employee shelving located directly behind or near has assumed that the ban on self-service compensation of $15,410 annually,41 all checkout lines, (2) placing tobacco tobacco displays would require 10 providing instructions for 15 minutes products behind one or two checkout seconds of additional labor time for 75 per employee amounts to about $16 lines only, similar to the ‘‘cash only’’ or percent of all retail transactions million per year. Adopting the ‘‘less than 10 items’’ lines commonly involving cartons of cigarettes. Based on SAMHSA finding that one-third of the found in supermarkets, (3) dispensing an estimated 900 million retail retail outlets are already conducting tobacco products from a controlled area transactions for cigarette cartons and an some training lowers this cost to $10 of the store, where store employees annual employee compensation of million. typically conduct other administrative $15,410,48 this added labor cost projects I.D. checks. Retail establishments or customer-service tasks, or (4) to about $14 million per year. This would bear additional costs if they must installing a signaling system, whereby estimate understates actual costs if the check the identification of purchasers, assigned store clerks bring requested required changes have a greater than because many establishments do not tobacco products to individual checkout expected adverse affect on labor currently conduct such checks. The stations. Each store’s physical productivity, but overstates actual costs burden imposed would vary with the configuration determines the most cost- if current compliance exceeds 25 41368 Federal Register / Vol. 60, No. 155 / Friday, August 11, 1995 / Proposed Rules percent. Also, some of the added costs products. The implications of FTC’s extraordinary growth in industry would be offset by reductions in second point, which addresses the effect advertising and promotion has been in product pilferage. Since FDA does not of advertising restrictions on market areas that are typically bundled with know the relative magnitude of these power and prices, is less obvious, as other products, or placed in prominent potentially offsetting factors, the agency various empirical studies have reached public settings that are difficult to has retained the $14 million figure as its conflicting conclusions. Nevertheless, ignore. Thus, there is considerable best preliminary estimate of the labor from FDA’s perspective, even if question about the contribution of these costs that would be imposed by the self- advertising restrictions led to higher programs to consumer utility. service ban. prices, this result would discourage b. Consumer surplus. Consumer In total, FDA projects that the retail tobacco consumption and thereby surplus is a concept that represents the sector would incur one-time costs of enhance the public health. Finally, amount by which the utility or about $11 million and annual costs of FTC’s third point, which emphasizes enjoyment associated with a product about $52 million. As shown above in the positive aspects of advertising in exceeds the price charged for the Table 2, the sum of the one-time costs supporting brand reputations, is more product. Since it reflects the difference imposed on the manufacturing and relevant for long-lived items, such as between the price the consumer would retail sectors for the initial provisions consumer durables, where purchases are be willing to pay and the actual market would range from about $26 to $39 infrequent or personal experience is price, it is used by economists to million, whereas the total annual costs inadequate. Advertising is less likely to measure welfare losses imposed by would be about $227 million. For these play a key role in assuring high quality consumer product bans. However, provisions, the sum of these annualized levels for tobacco products, where FDA’s proposed rule imposes no access one-time costs (15 years at 3 percent consumer search costs are low and a restrictions on adults, who would be discount rate) and annual operating brand’s reputation for quality is tested free to consume tobacco products if they costs yield about $230 million per year by consumers every day. For these so desired. Thus, FDA has not included (also about $230 million at 7 percent products, high quality would remain a any value for lost consumer surplus in discount rate). prerequisite of commercial success its estimate of societal costs. c. Inconvenience. Some adult 4. Costs to Consumers irrespective of advertising strategies. Other analysts suggest still other consumers would be inconvenienced by a. Advertising restrictions. potential attributes of product the unavailability of cigarette vending Advertising restrictions may impose advertising. For example, according to machines. FDA believes that over time, costs on society if they disrupt the F.M. Scherer, author of a widely read most smokers would adjust their dissemination of relevant information to text on industrial organization: purchasing patterns to reflect this consumers. According to the Bureau of circumstance. However, the agency has Economics of the FTC, the benefits of Advertising is art, and some of it is good not attempted to quantify the degree of advertising derive from: art, with cultural or entertainment value in this disutility and asks public comment its own right. In addition, it can be argued *** its role in increasing the flow and that consumers derive pleasure from the on its potential cost. reducing the cost of information to image advertising imparts to products, above E. Distribution and Transitional Effects consumers * * * First, advertising provides and beyond the satisfaction flowing in some information about product characteristics organic sense from the physical attributes of The proposed regulation would that enables consumers to make better the products. There is no simple case in logic impose a variety of sector-specific choices among available goods * ** for distinguishing between the utility people distributive effects. Those sectors Second, theoretical arguments and empirical obtain from what they think they are getting affiliated with tobacco and tobacco studies indicate that advertising increases and what they actually receive. As Galbraith products would lose sales revenues and new entry and price competition and hence observed, ‘‘The New York housewife who these losses would grow over time. On reduces market power and prices in at least was forced to do without Macy’s advertising some industries * * * Third, advertising the other hand, nontobacco related would have a sense of loss second only to industries would gain sales, because facilitates the development of brand that from doing without Macy’s.’’ 50 reputations. A reputation, in turn, gives a dollars not spent on tobacco would be firm an incentive to provide products that are Similarly, Becker and Murphy have spent on other commodities. of consistently high quality, that live up to argued that advertisements should be claims that are made for them, and that considered ‘‘goods’’ if people are willing 1. Tobacco Industry satisfy consumers.49 to pay for them and as ‘‘bads’’ if people For its calculation of regulatory FDA has considered each of these must be paid to accept them.51 They benefits, FDA estimated that issues in turn. While agreeing that explain that, in general, the more easily implementation of the proposed certain forms of advertising offer the advertisements can be ignored, the regulation would reduce the cigarette substantial benefits to consumers, the more likely it is that the ads themselves consumption of underage smokers by agency nevertheless believes that the provide utility to consumers. one-half. As discussed above, based on proposed tobacco product advertising Newspaper and magazine data presented in Cummings et al., FDA restrictions would impose few advertisements, for example, must estimates that teenage smokers under significant societal costs. As discussed provide positive consumer utility or the age of 18 consumed about 318 in the preamble above, the proposed they would be ignored by readers. The million packs of cigarettes in 1991. If regulation does not prohibit factual, proposed rule would allow such the proposed regulation cuts these sales written advertising. Thus, the proposed advertisements to continue, some in by one-half, the resulting annual drop in rule would not impede the their current form, others in a text-only industry revenue would be $143 million dissemination of important information format. (In fact, industry outlays for (assuming manufacturer share of 50 to consumers. While imagery and newspaper and magazine percent of retail price, or 90 cents per promotional activities may be important advertisements have dropped pack.) Moreover, FDA has assumed that determinants of consumer perceptions dramatically over the years, currently at least one-half of those 500,000 and sales, they typically provide little constituting only about 5 percent of the teenagers who would be deterred from meaningful information on essential industry’s total advertising and starting to smoke each year would distinctions among competing tobacco promotion budget.) Conversely, the refrain from smoking as adults, Federal Register / Vol. 60, No. 155 / Friday, August 11, 1995 / Proposed Rules 41369 increasing the number of adult report found that this sector currently that prohibiting the distribution of nonsmokers by 250,000 per year. Since generates about $18 billion in total sales nontobacco specialty items bearing the each adult smoker consumes about 500 volume and explains that ‘‘Cigarettes, name or logo of tobacco products would packs per year, lost sales revenues which have been on the downslide for affect a substantial number of specialty would amount to an additional $113 several years, are fortunately only a manufacturers. In comments to the million per year. small percentage (3.4 percent in 1993) of FTC,58 the Specialty Advertising In sum, FDA estimates that annual the total pie, thus the drop did not hurt Association International noted that it cigarette revenues would decline slowly total revenues significantly.’’ The ‘‘represents 4,400 firms that over time; falling by $143 million in the proposed prohibition of vending sales manufacture or sell utilitarian objects first year (while only teenagers are would require these firms to develop imprinted with advertising * ** affected), by $593 million in the fifth new markets to replace these sales predominantly small businesses.’’ To year, and by $1.2 billion in the tenth revenues. the extent that these products include year. The U.S. Bureau of the Census only a corporate name without brand 3. Advertising Sector reports the value of 1992 cigarette association, they could remain shipments at $28.8 billion. Thus, this In their annual reports to the FTC, marketable. However, it is likely that regulation is projected to reduce manufacturers of cigarettes and some of these firms would, at least revenues from cigarette sales by only 0.5 smokeless tobacco reported 1993 initially, lose part of this $760 million percent in the first year, 2.1 percent in advertising and promotional/marketing market and would experience short- the fifth year, and 4.0 percent in the expenditures of $6.0 billion and $119 term costs while exploring other tenth year following implementation. million, respectively. Approximately business options. While these reductions are significant, $1.9 billion (31 percent) of these outlays the gradual phasing of the impacts would be significantly impacted by the 4. Retail Outlets would significantly dissipate any proposed rule as they are primarily In addition to incurring the direct associated economic disruption. For directed to consumer advertising and costs of compliance described above, example, data from a 1992 report on the promotion. Of the remaining outlays, some retail establishments may receive contribution of the tobacco industry to about $2.6 billion (43 percent) go to smaller promotional allowances the U.S. economy prepared by Price consumers as financial incentives to (slotting fees) from manufacturers, Waterhouse for the Tobacco Institute 52 induce further sales (e.g., coupons, following the prohibition of self-service implies that, over a 10-year period, a 4 cents-off, buy-one-get one free, free displays and advertising imagery. percent reduction in sales would result samples), and $1.6 billion (26 percent) Industry promotional allowances totaled in the displacement of about 1,000 jobs to retailers to enhance the sale of their about $1.6 billion in 1993, or $2,600 per annually among warehousers, product. The affect on these outlet if spread evenly among the manufacturers, tobacco growers and expenditures would be much more estimated 600,000 retail outlets wholesalers. modest. currently selling tobacco products over- FDA cannot reasonably forecast the the-counter. It is likely that, 2. Vending Machine Operators future marketing strategies of tobacco notwithstanding these restrictions, The proposed regulation would manufacturers, but can foresee some fall manufacturers would continue to prohibit all vending machine sales of in the approximately $1.0 billion worth compete vigorously for the best display regulated tobacco products. In recent of current advertising that would be space available, so that few fees would years, cigarette vending sales have affected by the proposed ‘‘text only’’ be discontinued. For example, a recent dropped precipitously, due to numerous requirement. (The ‘‘text only’’ Canadian study 59 suggests that, ‘‘[i]n restrictive State and local ordinances. restriction does not apply to the absence of advertising and FDA does not have a definitive estimate publications where children comprise promotion outlets * * * the cigarette of the intensity of this decline, but is less than 15 percent of the readership or industry may be expected to provide aware of two industry surveys that are fewer than 2 million.) The impact of greater incentives to retailers to provide confirm its importance. The Vending these restrictions on the various more and better shelf space for their Times 48th Annual Census of the advertising media and agencies is brands in order to provide availability to Industry 53 shows a 6 percent drop in difficult to determine. For example, in the buyer in the store.’’ In addition, the number of cigarette vending response to Canada’s recently imposed alternative opportunities for point of machines from 1992 to 1993, but a 39 advertising ban, that country’s billboard purchase (POP) advertising have percent decline since 1983. The total industry ‘‘quickly replaced $20 million climbed briskly, as POP experts ‘‘cite in- number of packs sold reportedly in lost cigarette revenues with ads for store advertising as the fastest growing dropped almost 60 percent over this food, soap, toothpaste and beer.’’ 55 ‘‘In segment of the media industry.’’ 60 decade, from 2.7 billion to 1.1 billion. 1971, network TV ad revenue dropped Nevertheless, the agency is aware of at A second survey, the ‘‘1994 State of the 6 percent without cigarette advertising least one report indicating the ‘‘[l]oss of Industry Report,’’ Automatic ** *, but by 1972 network TV * ** industry-paid slotting fees to some retail Merchandiser (The Monthly had recouped its ad base.’’ 56 Current merchants because of the removal of Management Magazine for Professional advertising revenues affected by the self-service promotional tobacco Vending and OCS Operators) 54 found restrictions on billboard advertising displays, racks and kiosks.’’ 61 an even steeper recent decline; reporting near schools and playgrounds are also that the projected number of cigarette likely to be replaced by advertising 5. Other Private Sectors vending machines fell from 250,425 in revenues for other products. The Tobacco Institute’s Price 1992 to 181,755 in 1993, a drop of over Nevertheless, if the tobacco industry Waterhouse report 62 purports to 27 percent. That survey shows operator were to cut its advertising outlays by measure the induced effect on the revenues from cigarettes falling from one-half of the ‘‘text only’’ categories, national economy of spending by the $835 million in 1992 to $624 million in this dollar figure amounts to less than tobacco core and supplier sector 1993, down 25 percent. While the one-half of 1 percent of the reported employees and their families. It impact of this one product area is $131.3 billion spent on U.S. media calculates that induced or multiplier significant for the vending operators, the advertising in 1992.57 FDA is also aware effects result in 2.4 jobs for every 1 job 41370 Federal Register / Vol. 60, No. 155 / Friday, August 11, 1995 / Proposed Rules in the core and supplier sectors increasing rate over time, falling by 0.5 proposed rule. For example, as combined, and over $3 in compensation percent in the first year, 2.1 percent in explained earlier, the proposal would for every $1 in the other two sectors. the fifth year, and 4 percent in the tenth initially reduce the revenues of vending However, other analysts conclude that year. Thus, the proposed rule would machine operators by at least 3.4 such ratios should not be used to assess decrease State excise taxes on affected percent and almost three quarters of all longer term national economic impacts, tobacco products by from $31 million in vending machine operators are small because resources diverted from the the first year to $252 million in the businesses, having annual sales of less production of tobacco would be tenth year. Since tobacco taxes than $1 million.66 Further, the proposed reallocated to the production of other represented less than 1 percent of total rule would affect the distribution of goods and services. ‘‘If the focus is State tax revenues in 1992,65 even the specialty items showing a tobacco longer term, involving a period of, say, estimated tenth year impact measures product logo or name. According to the more than two years, then the induced only 0.03 percent of all State tax Specialty Advertising Association effect should not be included in the revenues. Nonetheless, if necessary, International, 80 percent of the measure because money not spent in State governments could raise tobacco manufacturers and 95 percent of the one industry would find another outlet product excise rates to offset these distributors in this industry have annual with equal (undistinguishable) induced revenue losses. The issue is complex, sales below $2 million. While the 63 effects.’’ Furthermore, over the long however, because a full evaluation of market place in which these firms term, regional impacts of the regulation the fiscal consequences of this proposal compete traditionally demands a quick would be similarly diffused. must consider a variety of public health response to constantly shifting market 6. State Tax Revenues impacts. For example, state Medicaid trends, this rule would have at least The proposed rule would decrease programs would benefit from reduced short-term impacts on many of these State tobacco tax revenues as fewer medical care expenditures, but they may firms. youths become addicted to tobacco also need to finance nursing home products. These excise tax losses would expenditures that climb with increased The proposed regulation would also increase as more of these youths become life expectancy. affect numerous retail establishments, non-smoking adults. According to the primarily convenience stores, but also Tobacco Institute, State cigarette excise F. Small Business Impacts small grocery stores, small general taxes totaled $6.2 billion for the year The Regulatory Flexibility Act merchandise stores and small gasoline ending June 30, 1993.64 Since State requires agencies to determine whether stations. Table 4 displays the relative excise taxes on other tobacco products the effects of regulatory options would share of the tobacco market for major (including smokeless tobacco) were impose a significant impact on a types of tobacco-dispensing outlets in $226 million, FDA assumes that the substantial number of small entities and 1987. As shown, food stores and service total State excise taxes on tobacco to consider those options which would stations received almost 75 percent of products affected by this proposal are minimize these impacts. Although most all tobacco sales revenue and tobacco about $6.3 billion annually. As manufacturers of tobacco products are products comprised 5 to 6 percent of the described above, FDA estimated that large corporations, the distribution of total sales of many of these compliance with this proposal would the product involves numerous small establishments. The great majority of reduce cigarette sales by a gradually enterprises that would be affected by the these retail outlets are small businesses.

TABLE 4.ÐSALES OF TOBACCO PRODUCTS AS A PERCENTAGE OF TOTAL SALESÐ1987 [Establishments with Payroll Only]

Tobacco sales % of total sales Estab- lish- Establishment type ments All es- ($ mils) (%) han- tablish- dling ments to- bacco

All ...... 23,231 100 5.0 1.6 Food Stores ...... 13,057 56 5.0 4.3 Service Stations ...... 4,280 18 6.5 4.2 Drug and Proprietary ...... 2,152 9 5.1 4.0 General Merchandise ...... 1,470 6 2.1 0.8 Liquor Stores ...... 706 3 7.2 3.8 Eating and Drinking ...... 182 1 2.4 0.1 Source: 1987 Census of Retail Trade, Merchandise Line Sales.

To illustrate the effects of this the cost assumptions described above, estimate does not account for the proposal on a typical small retail store, the outlet’s first year costs would total possible reduction in promotional FDA separately estimated the likely about $320, with the largest single cost, allowances, although these allowances compliance costs for an average-sized $285, the labor cost for checking might fall following a ban on self- convenience store that sells 300 identification. For those stores that service marketing. Alternatively, as packages of tobacco products daily, of already verify the age of young noted above, manufacturers would which about 50 might be purchased by customers of tobacco products, the continue to compete for the best shelf young adults aged 18 to 26. Based on additional costs fall to $35. This space for their products, perhaps even Federal Register / Vol. 60, No. 155 / Friday, August 11, 1995 / Proposed Rules 41371 more so if they find that ‘‘text only’’ have already become regular smokers by 14. Jason, L.A., et al., ‘‘Active Enforcement advertising erodes the stimulus effect of the age of 18, and because that age limit of Cigarette Control Laws in the Prevention point-of-purchase advertising. Thus, the is already consistent with most State of Cigarette Sales to Minors,’’ The Journal of proposed advertising restrictions could and local laws. the American Medical Association, vol 266, The agency also considered restricting No. 22, December 11, 1991, p. 3159. enhance the share of the industry’s 15. U.S. Department of Health and Human advertising and promotion budget that rather than prohibiting sales from Services, ‘‘Reducing the Health is directed towards promotional vending machines. However, as stated Consequences of Smoking: 25 Years of allowances in retail outlets. in the preamble above, studies indicated Progress,’’ A Report of the Surgeon General, that measures such as placing locks on U.S. Department of Health and Human G. Alternatives vending machines or restricting their Services, Public Health Service, Centers for One alternative considered by the placement failed to prevent young Disease Control, National Center for Chronic agency was a far more prescriptive people from purchasing cigarettes from Disease Prevention and Health Promotion, monitoring requirement for tobacco vending machines. Office on Smoking and Health, DHHS manufacturers. Under this rule, each publication No. (CDC) 89–8411, p. 517, 1989. manufacturer of tobacco products would References 16. Economics and Operational Research Division, Department of Health, ‘‘Effect of have been required to adopt a system for 1. Statement of Clyde Behney and Maria Hewitt on Smoking-Related Deaths and Tobacco Advertising on Tobacco monitoring the sales and distributions of Consumption: A Discussion Document retail establishments. These monitoring Financial Costs: Office of Technology Assessment Estimates for 1990 Before the Reviewing the Evidence,’’ p. 22, October systems were to: (1) Include signed Senate Finance Committee, April 28, 1994, 1992. written agreements with each retailer, pp. 1–2. 17. Kropp, R., ‘‘A Position Paper on (2) contain adequate organizational 2. Littlechild, S.C., ‘‘Smoking and Market Reducing Tobacco Sales to Minors by structure and personnel to monitor the Failure,’’ in ‘‘Smoking and Society: Toward Prohibiting the Sale of Tobacco Products by labeling, advertising, and sale of tobacco a More Balanced Assessment,’’ R.D. Tollison, Means of Self-Service Merchandising and products at each retail distribution editor, Lexington Books, p. 271, 1986. Requiring Only Vendor-Assisted Tobacco Sales,’’ North Bay Health Resources Center, point, and (3) establish, implement, and 3. Viscusi, W.K., ‘‘Smoking: Making the Risky Decision,’’ Oxford University Press, Petaluma, California, p. 4, November 3, 1994. maintain procedures for receiving and 18. Manning, W.G., et al., ‘‘The Costs of investigating reports regarding any 1992; see also Beales, J.H., ‘‘Teenage Smoking: Fact and Fiction,’’ The American Poor Health Habits, A Rand Study,’’ Harvard improper labeling, advertising, or Enterprise, pp. 20–25, March/April 1994. University Press, Cambridge, 1991. distribution. The additional costs for 4. Goodin, R.E., ‘‘No Smoking: The Ethical 19. Peto et al., ‘‘Mortality from Smoking in this monitoring was estimated at about Issues,’’ University of Chicago Press, pp. 30– Developing Countries, 1950–2000,’’ Oxford $85 million per year. FDA rejected this 32, 1989. University Press, p. A10, 1994. Indirect alternative, because it decided that the 5. Becker, G.S., and K.M. Murphy, ‘‘A estimates from national vital statistics. industry might employ its resources Theory of Rational Addiction,’’ Journal of 20. Assumes new non-smokers are 50 more efficiently if permitted to choose Political Economy, vol. 96, No. 4, pp. 675– percent male and 50 percent female. 700, 1988. 21. For each 10-year age interval, the among alternative compliance modes. It number of life-years is calculated as the is possible, however, that the industry 6. Becker, G.S., M. Grossman, and K.M. Murphy, ‘‘An Empirical Analysis of Cigarette number of people in each cohort (250,000) might implement certain features of this Addiction,’’ The American Economic Review, times the probability of surviving until the approach in order to avoid the optional vol. 84, No. 3, pp. 396–418, June 1994; end of that age interval times 10 years of life, performance-based provision that would Chaloupka, F., ‘‘Rational Addictive Behavior plus the number expected to die in that become effective if the ‘‘Healthy People and Cigarette Smoking,’’ Journal of Political interval times an assumed 5 years of life. 2000’’ goals were not met. Economy, vol. 99, No. 4, pp. 722–742, 1991; 22. Hodgson, T.A., ‘‘Cigarette Smoking and A second alternative considered by Keeler, T.E., et al., ‘‘Taxation, Regulation, Lifetime Medical Expenditures,’’ The the agency was to require package and Addiction: A Demand Function for Milbank Quarterly, vol. 70, No. 1, p. 91, 1992. inserts containing educational Cigarettes Based on Time-Series Evidence,’’ (Based on data from the American Cancer information in cigarette and smokeless Journal of Health Economics, vol. 12, pp. 1– Society’s Cancer Prevention Study II). 23. id., p. 97 (Using the average of the male tobacco products. FDA had incomplete 18, 1993. 7. Chaloupka, F., ‘‘Rational Addictive and female totals). date to estimate the additional cost of Behavior and Cigarette Smoking,’’ Journal of 24. Hodgson, T.A., ‘‘Annual Costs of Illness this requirement, but based on Political Economy, vol. 99, No. 4, pp. 740, Versus Lifetime Costs of Illness and comments submitted by industry in 1991. Implications of Structural Change,’’ Drug response to a Canadian proposal, 8. Manning, W.G., et al., ‘‘The Costs of Poor Information Journal, vol. 22, No. 3, p. 329, preliminarily projected one-time costs Health Habits, A Rand Study,’’ Harvard 1988. of about $490 million and annual University Press, Cambridge, 1991. 25. Rice, D.P., et al., ‘‘The Economic Costs operating costs of about $54 million. 9. Gravelle, J.G., and D. Zimmerman, ‘‘CRS of the Health Effects of Smoking, 1984,’’ The FDA did not select this alternative as Report for Congress: Cigarette Taxes to Fund Milbank Quarterly, vol. 64, No. 4, p. 526, Health Care Reform: An Economic Analysis,’’ 1986. the agency was not certain that the Congressional Research Service, p. 1, March 26. Schelling, T.C., ‘‘Economics and benefits of this provision would justify 8, 1994. Cigarettes,’’ Preventive Medicine, vol. 15, pp. the large compliance costs. 10. See the 1992 Report of the Surgeon 549–560, 1986. FDA also considered setting the General, pp. 105–112, for a full summary of 27. Fisher, A., L.G. Chestnut, and D.M. permissible age for purchase at 19 rather these methodologies and findings. Violette, ‘‘The Value of Reducing Risks of than 18, because many 18-year-old 11. Statement of Clyde Behney and Maria Death: A Note on New Evidence,’’ Journal of adolescents are still in high school, Hewitt on Smoking-Related Deaths and Policy Analysis and Management, vol. 8, No. where they can easily purchase tobacco Financial Costs: Office of Technology 1, pp. 88–100, 1989. products for classmates. This alternative Assessment Estimates for 1990 Before the 28. Viscusi, W.K., ‘‘Fatal Tradeoffs: Public would have added costs of about $34 Senate Finance Committee, April 28, 1994, p. and Private Responsibilities for Risk,’’ Oxford 2. University Press, p. 24, 1992. million annually, mostly due to lost 12. ‘‘Medical-Care Expenditures 29. Miller, A.L., ‘‘The U.S. Smoking- producer profits. The proposed Attributable to Cigarette Smoking—United Material Fire Problem Through 1992: The regulation restricts access to regulated States, 1993,’’ in ‘‘MMWR,’’ CDC, DHHS, vol Role of Lighted Tobacco Products in Fire,’’ tobacco products for persons under the 43, No. 26, July 8, 1994, pp. 469–472. National Fire Protection Association, p.2, age of 18, because most adult smokers 13. 1992 SGR, p. 111. 1994. 41372 Federal Register / Vol. 60, No. 155 / Friday, August 11, 1995 / Proposed Rules

30. ‘‘Appendix V: Regulatory Impact Petition for Regulation of Unfair and 21 CFR Part 897 Analysis Guidance,’’ in ‘‘Regulatory Program Deceptive Alcoholic Beverage Advertising of the United States Government,’’ Office of and Marketing Practices,’’ Appendix A, pp. Cigarettes, Smokeless tobacco, Management and Budget, pp. 663–666, April 3–4, March 1985. Labeling, Advertising, Sale and 1, 1990–March 31, 1991. 50. Scherer, F.M. ‘‘Industrial Market Distribution, Reporting and 31. Id., p. 663. Structure and Economic Performance,’’ 2nd recordkeeping requirements. 32. ‘‘1994 State of the Industry Report,’’ in Edition, Rand McNally College Publishing Therefore, under the Federal Food, Automatic Merchandiser, August 1994, p. Co., Chicago, p. 380, 1980. Drug, and Cosmetic Act and under A8. 51. Becker, G.S. and K.M. Murphy, ‘‘A authority delegated to the Commissioner 33. ‘‘Census of the Industry Issue,’’ in Simple Theory of Advertising as a Good or Vending Times, August 1994. of Food and Drugs, it is proposed that Bad,’’ Quarterly Journal of Economics, vol. 21 CFR parts 801, 803, and 804 be 34. ‘‘Tar, Nicotine, and Carbon Monoxide 108, p. 941, November 1993. of the Smoke of 933 Varieties of Domestic 52. ‘‘The Economic Impact of the Tobacco amended and that a new part 897 be Cigarettes,’’ Federal Trade Commission, Industry on the United States in 1990,’’ Price added as follows: 1994. Waterhouse, October 1992, p. ES–3. Note: The part number for part 897 as 35. French, M.T., et al., ‘‘Compliance Costs 53. Vending Times, ‘‘Census of the proposed at 60 FR 32417 will be changed by of Food Labeling Regulations,’’ Final Report, Industry Issue,’’ 1994, p. 42. the agency in a future issue of the Federal RTI Project Number 233U–3972–02 DFR, January 1991. 54. Automatic Merchandiser, ‘‘State of the Register. 36. Department of National Health and Industry Report,’’ p. A8, August, 1994. Welfare, ‘‘Tobacco Products Control 55. Wolfson, A. ‘‘Canada’s Ad Ban Puts PART 801ÐLABELING Regulations, amendment,’’ Canada Gazette, Cigarettes Out of Sight,’’ The Courier-Journal, pp. A1,–A4, August 1, 1994. 1. The authority citation for 21 CFR Part II, vol. 127, No. 16, pp. 3277–3294, part 801 continues to read as follows: August 11, 1993. 56. Teinowitz, I., ‘‘First Smoke, Then Fire’’, 37. Kaiserman, M., Department of National Advertising Age, p. 30, Spring 1995. Authority: Secs. 201, 301, 501, 502, 507, Health and Welfare, Canadian Government, 57. Endicott, R.C., ‘‘Top Advertisers 519, 520, 701, 704 of the Federal Food, Drug, personal communication, February 1, 1995. Rebound, Spending to $36 Billion,’’ and Cosmetic Act (21 U.S.C. 321, 331, 351, 38. Kropp, R., ‘‘A Position Paper on Advertising Age, vol. 64, No. 41, p. 1, 352, 357, 360i, 360j, 371, 374). Reducing Tobacco Sales to Minors by September 29, 1993. 58. 56 FR 11661, (March 20, 1991). 2. Section 801.61 is amended by Prohibiting the Sale of Tobacco Products by adding a new paragraph (d) to read as Means of Self-Service Merchandising and 59. Expert Panel Report, ‘‘When Packages Requiring only Vendor Assisted Tobacco Can’t Speak: Possible impacts of plain and follows: Sales,’’ North Bay Health Resources Center, generic packaging of tobacco products,’’ § 801.61 Statement of identity. Petaluma, California, p. 5, November 3, 1994. Prepared at the request of Health Canada, p. 39. Cumings, K. M., T. Pechacek, and D. 140, March 1995. * * * * * Shopland, ‘‘The Legal Sale of Cigarettes to 60. ‘‘An Advertising Supplement’’ (d) This provision does not apply to U.S. Minors: Estimates by State,’’ American Advertising Age, p. 2, September 26, 1994. cigarettes or to smokeless tobacco Journal of Public Health, vol. 84, No. 2, 61. Kropp, R., ‘‘A Position Paper on products as defined in part 897 of this February 1994, p. 301, (Derived by Reducing Tobacco Sales to Minors by chapter. substracting sales to 18-year-olds from the Prohibiting the Sale of Tobacco Products by reported 516 million packs consumed). Means of Self-Service Merchandising and PART 803ÐMEDICAL DEVICE 40. 58 FR 45156, 45159–45160 (August 26, Requiring Only Vendor-Assisted Tobacco REPORTING 1993). Sales,’’ North Bay Health Resources Center, 41. ‘‘The Economic Impact of the Tobacco Petaluma, California, p. 2, November 3, 1994. 3. The authority citation for 21 CFR Industry on the United States in 1990,’’ Price 62. ‘‘The Economic Impact of the Tobacco part 803 continues to read as follows: Waterhouse, p. II–10, October 1992 Industry on the United States in 1990,’’ Price Authority: Secs. 502, 510, 519, 701, 704 of 42. 1194 SGR, p. 85. Waterhouse, October 1992. the Federal Food, Drug, and Cosmetic Act (21 43. U.S. Department of Commerce, 63. Gray, H.P., and I. Walter, ‘‘The U.S.C. 352, 360, 360i, 371, 374). ‘‘Statistical Abstract of the United States Economic Contribution of the Tobacco 1993,’’ 113 edition, 1993, p. 137; Department Industry,’’ in ‘‘Smoking and Society: Toward 4. Section 803.1 is amended by of Health and Human Services, Office of a More Balanced Assessment’’, R.D. Tollison, adding a new paragraph (d) to read as Inspector General, ‘‘Spit Tobacco and Youth’’ editor, Lexington Books, p. 248, 1986. follows: Additional Analysis, June 1993. 64. The Tobacco Institute, ‘‘The Tax 44. ‘‘The Economic Impact of the Tobacco Burden on Tobacco,’’ vol. 28, 1993, p. 4. § 803.1 Scope. Industry on the United States in 1990,’’ Price 65. U.S. Department of Commerce, * * * * * Waterhouse, P. II–10, October 1992. ‘‘Statistical Abstract of the United States (d) This part does not apply to 45. Kropp, R. ‘‘A Position Paper on 1994,’’ 114th edition, no. 464, 1994, p. 298. Reducing Tobacco Sales to Minors by cigarettes or to smokeless tobacco 66. ‘‘1994 State of the Industry Report,’’ in products as defined in part 897 of this Prohibiting the Sale of Tobacco Products by Automatic Merchandiser, August 1994, p. Means of Welfare Merchandising and A2. chapter. Requiring only Vendor-Assisted Tobacco Sales,’’ North Bay Health Resources Center, List of Subjects PART 804ÐMEDICAL DEVICE Pentaluma, California, p. 5, November 3, DISTRIBUTOR REPORTING 1994. 21 CFR Part 801 5. The authority citation for 21 CFR 46. U.S. Department of Commerce, Labeling, Medical devices, Reporting ‘‘Statistical Abstract of the United States part 804 continues to read as follows: and recordkeeping requirements. 1994,’’ 114th edition, no. 1284, 1994, p. 787. Authority: Secs. 502, 510, 519, 520, 701, 47. National Association of Chain Drug 21 CFR Part 803 704 of the Federal Food, Drug, and Cosmetic Stores, ‘‘Prescription Drug Marketplace Act (21 U.S.C. 352, 360, 360i, 360j, 371, 374. Simulation Mode; User’s Guide,’’ Appendix Imports, Medical devices, Reporting 6. Section 804.1 is amended by B, 1992. and recordkeeping requirements. 48. ‘‘The Economic Impact of the Tobacco adding a new paragraph (c) to read as Industry on the United States in 1990,’’ Price 21 CFR Part 804 follows: Waterhouse, p. II–10, October 1992. 49. Recommendations of the Staff of the Imports, Medical devices, Reporting § 804.1 Scope. Federal Trade Commission, ‘‘Omnibus and recordkeeping requirements. * * * * * Federal Register / Vol. 60, No. 155 / Friday, August 11, 1995 / Proposed Rules 41373

(c) This part does not apply to § 897.2 Purpose. pyrrolidinyl) pyridine or C10H14N2, distributors of cigarettes or smokeless The purpose of this part is to establish including any salt or complex of tobacco products as defined in part 897 conditions for the sale, distribution, and nicotine. of this chapter. use of cigarettes and smokeless tobacco (f) Package means a pack, box, carton, 7. New part 897 is added to read as products in order to: or container of any kind in which follows: (a) Reduce the number of people cigarettes or smokeless tobacco products under 18 years of age who become are offered for sale, sold, or otherwise PART 897ÐCIGARETTES AND addicted to nicotine, thus avoiding the distributed to consumers. SMOKELESS TOBACCO PRODUCTS life-threatening consequences associated (g) Point of sale means any location at with tobacco use; and which a consumer can purchase or Subpart AÐGeneral Provisions (b) Provide important information otherwise obtain cigarettes or smokeless Sec. regarding the use of these products to tobacco products for personal 897.1 Scope. users and potential users. consumption. 897.2 Purpose. § 897.3 Definitions. (h) Retailer means any person who 897.3 Definitions sells or distributes cigarettes or (a) Cigarette means any product smokeless tobacco products to Subpart BÐSale and Distribution to (including components, accessories, or Persons Under 18 Years of Age individuals for personal consumption. parts) which contains or delivers (i) Smokeless tobacco means any cut, 897.10 General responsibilities of nicotine, is intended to be burned under ground, powdered, or leaf tobacco that manufacturers, distributors, and ordinary conditions of use, and consists contains or delivers nicotine and that is retailers. of: 897.12 Additional responsibilities of intended to be placed in the oral cavity. manufacturers. (1) Any roll of tobacco wrapped in 897.14 Additional responsibilities of paper or in any substance not Subpart BÐSale and Distribution to retailers. containing tobacco; Persons Under 18 Years of Age 897.16 Conditions of manufacture, sale, and (2) Any roll of tobacco wrapped in distribution. any substance containing tobacco § 897.10 General responsibilities of which, because of its appearance, the manufacturers, distributors, and retailers. Subpart CÐLabels and Educational Programs type of tobacco used in the filler, or its Each manufacturer, distributor, and packaging and labeling, is likely to be retailer is responsible for ensuring that 897.24 Established names for cigarettes and offered to, or purchased by, consumers the cigarettes or smokeless tobacco smokeless tobacco products. as a cigarette described in paragraph 897.29 Educational programs concerning products it manufactures, labels, cigarettes and smokeless tobacco (a)(1) of this section; or advertises, packages, distributes, sells, products. (3) Any roll of tobacco wrapped in or otherwise holds for sale comply with leaf tobacco or any substance containing all applicable requirements under this Subpart DÐLabeling and Advertising tobacco (other than any roll of tobacco part. 897.30 Scope of permissible forms of described by paragraphs (a)(1) or (a)(2) labeling and advertising. of this section) and as to which 1,000 § 897.12 Additional responsibilities of 897.32 Format and content requirements for units weigh not more than 3 pounds. manufacturers. labeling and advertising. (b) Cigarett tobacco means any loose In addition to the other 897.34 Sale and distribution of non-tobacco tobacco that contains or delivers responsibilities under this part, each items and services, contests and games of nicotine and is intended for use by manufacturer shall: chance and sponsorship of events. 897.36 False or misleading labeling and consumers in a cigarette. Unless (a) Remove, from each point of sale, advertising. otherwise stated, the requirements all self-service displays, advertising, pertaining to cigarettes shall also apply labeling, and other manufacturer- Subpart EÐMiscellaneous Requirements to cigarette tobacco. supplied or manufacturer-owned items 897.40 Records and reports. (c) Distributor means any person who that do not comply with the 897.42 Preemption of State and local furthers the marketing of cigarettes or requirements under this part; requirements and requests for advisory smokeless tobacco products, whether (b) Through its representatives, when opinions. domestic or imported, at any point from they visit any point of sale in their 897.44 Additional regulatory measures. the original place of manufacture to the normal course of business, visually Authority: Secs. 502, 510, 520, 701, 704 of person who makes final delivery or sale inspect and ensure that the products are the Federal Food, Drug and Cosmetic Act (21 to the ultimate user, but who does not labeled, advertised, and distributed in U.S.C. 352, 360, 360j, 371, 374). repackage or otherwise change the accordance with this part. Subpart AÐGeneral Provisions container, wrapper, or labeling of the cigarettes or smokeless tobacco § 897.14 Additional responsibilities of retailers. § 897.1 Scope. products, or the package of the cigarettes or smokeless tobacco In addition to the other requirements (a) This part is intended to establish products. under this part, each retailer is the conditions under which cigarettes (d) Manufacturer means any person, responsible for ensuring that all sales of and smokeless tobacco products that including any repacker and/or relabeler, cigarettes or smokeless tobacco products contain or deliver nicotine, because of who manufactures, fabricates, to any person (other than a distributor their potential for harmful effect, shall assembles, processes, or labels a or retailer) comply with the following be sold, distributed, or used under the finished cigarette or smokeless tobacco requirements: restricted device provisions of the product. The term does not include any (a) The retailer or an employee of the Federal Food, Drug, and Cosmetic Act. person who only distributes finished retailer shall verify by means of (b) References in this part to cigarettes or smokeless tobacco photographic identification containing regulatory sections of the Code of products. the bearer’s date of birth that no person Federal Regulations are to chapter I of (e) Nicotine means the chemical purchasing or intending to purchase the Title 21, unless otherwise noted. substance named 3-(1-Methyl-2- product is younger than 18 years of age; 41374 Federal Register / Vol. 60, No. 155 / Friday, August 11, 1995 / Proposed Rules

(b) The cigarette or smokeless tobacco § 897.29 Educational programs concerning newspapers, magazines, periodicals, or product shall be provided to the person cigarettes and smokeless tobacco other publications (whether periodic or purchasing the product by the retailer or products. limited distribution). For the purposes by an employee of the retailer, without (a) Each manufacturer shall establish of this section, an adult newspaper, the assistance of any electronic or and maintain an effective national magazine, periodical, or publication, as mechanical device (such as a vending public educational program to measured by competent and reliable machine or remove-operated machine); discourage persons under 18 years of survey evidence, is any newspaper, and age from using cigarettes and smokeless magazine, periodical, or publication: tobacco products. The major portion of (1) Whose readers aged 18 years or (c) The retailer or an employee of the this program must appear on television. older constitute 85 percent or more of retailer shall not break or otherwise (b) Each manufacturer shall allocate the total readership, and open any cigarette package or smokeless an amount for the educational program (2) That is read by fewer than 2 tobacco product to sell or distribute that is proportionate to its share of the million persons under age 18. individual cigarettes or number of total advertising and promotional (b) Each manufacturer, distributor, cigarettes or any quantity of cigarette expenditures for the most recent year and retailer advertising or causing to be tobacco or of a smokeless tobacco reported by all manufacturers to the advertised, disseminating or causing to product that is smaller than the quantity Federal Trade Commission pursuant to be disseminated, advertising, but not in the unopened product. the Federal Cigarette Labeling and labeling, permitted under § 897.30(a), Advertising Act or the Comprehensive shall include, as provided in section 502 § 897.16 Conditions of manufacture, sale, Smokeless Tobacco Health Education and distribution. of the Federal Food, Drug, and Cosmetic Act. The Total amount to be spent shall Act, the product’s established name and (a) Restriction on product names. A be $150,000,000 per year. a statement of its intended use as manufacturer may not use a trade or Subpart DÐLabeling and Advertising follows: ‘‘Cigarettes—A Nicotine- brand name of a nontobacco product as Delivery Device’’, ‘‘Cigarette Tobacco— the trade or brand name for a cigarette § 897.30 Scope of permissible forms of A Nicotine-Delivery Device’’, or ‘‘Loose or smokeless tobacco product, except for labeling and advertising. Leaf Chewing Tobacco’’, ‘‘Plug Chewing tobacco products on which a trade or (a) This subpart does not apply to Tobacco’’, ‘‘Twist Chewing Tobacco’’, brand name of a nontobacco product cigarette or smokeless tobacco product ‘‘Moist Snuff’’ or ‘‘Dry Snuff’’, was in use on January 1, 1995. package labels. A manufacturer, whichever is appropriate for the (b) Minimum cigarette package size. distributor, or retailer may distribute or product, followed by the words ‘‘A No manufacturer, distributor, or retailer cause to be distributed: Nicotine-Delivery Device’’. shall sell or cause to be sold, distribute (1) Advertising which bears the (c) Each manufacturer, distributor, cigarette or smokeless tobacco product or cause to be distributed, any cigarette and retailer of cigarettes shall include, brand name (alone or in conjunction package that contains fewer than 20 in all advertising, but not labeling, with any other word) or any other permitted under § 897.30(a), a brief cigarettes. indicia of tobacco product identification statement, such as the one specified (c) Vending machines, self-service only in newspapers; in magazines; in below, printed in black text on a white displays, mail-order sales, and other periodicals or other publications background: ‘‘impersonal’’ modes of sale. Cigarettes (whether periodic or limited About one out of three kids who and smokeless tobacco products may be distribution); on billboards, posters, an become smokers will die from their sold only in a direct, face-to-face placards in accordance with paragraph smoking. exchange between the retailer and the (b) of this section; and in nonpoint of (d) The statement required under consumer. Examples of methods of sale sale promotional material (including paragraph (c) of this section shall be that are not permitted include, but are direct mail); and readable, clear, conspicuous, prominent, not limited, vending machines, self- (2) Labeling which bears the cigarette and contiguous to the Surgeon General’s service displays, mail-order sales, and or smokeless tobacco product brand warning. mail-order redemption of coupons. name (alone or in conjunction with any § 897.34 Sale and distribution of non- (d) Free samples. Manufacturers, other word) or any other indicia of tobacco product identification only in tobacco items and services, contests and distributors, and retailers may not games of chance and sponsorship of distribute or cause to be distributed any point of sale promotional material; events. audio and/or video formats delivered at free samples of cigarettes or smokeless (a) No manufacturer, distributor, or tobacco products. a point of sale; and on entries and teams in sponsored events. retailer shall market, license, distribute, (b) No outdoor advertising, including sell, or cause to be marketed, licensed, Subpart CÐLabels and Educational distributed, or sold any item or service Programs but not limited to billboards, posters, or placards, may be placed within 1,000 (other than cigarettes or smokeless § 897.24 Established names for cigarettes feet of any playground, elementary tobacco products), which bears the and smokeless tobacco products. school or secondary school. brand name (alone or in conjunction with any other word), logo, symbol, Each cigarette or smokeless tobacco § 897.32 Format and content requirements motto, selling message, recognizable product package, carton, box, or for labeling and advertising. color or pattern of colors, or any other container of any kind that is offered for (a) Each manufacturer, distributor, indicia of product identification similar sale, sold, or otherwise distributed shall and retailer advertising or causing to be or identifiable to those used for bear the following established name: advertised, disseminating or causing to cigarettes or smokeless tobacco ‘‘Cigarettes’’, ‘‘Cigarette Tobacco’’, be disseminated, labeling and products. ‘‘Loose Leaf Chewing Tobacco’’, ‘‘Plug advertising permitted under § 897.30 (b) No manufacturer, distributor, or Chewing tobacco’’, ‘‘Twist Chewing shall use only black text on a white retailer shall offer or cause to be offered Tobacco’’, ‘‘Moist Snuff’’, or ‘‘Dry background. This section shall not any gift or item, or the right to Snuff’’, whichever name is appropriate. apply to advertising appearing in adult participate in any contest, lottery, or Federal Register / Vol. 60, No. 155 / Friday, August 11, 1995 / Proposed Rules 41375 game of chance to any person should be plainly marked as ‘‘Labels’’, (i) Section 521(a) of the Federal Food, purchasing cigarettes or smokeless or ‘‘Labeling and Advertising’’, Drug, and Cosmetic Act does not tobacco products in consideration of the whichever is appropriate. preempt a State or local requirement for purchase thereof, or to any person in (c) Manufacturers, distributors, and which an application for exemption consideration of furnishing evidence, retailers shall, upon the presentation by from preemption has been submitted such as credits, proofs-of-purchase, or an FDA representative of official under § 808.20 of this chapter because coupons, of such a purchase. credentials, make all records and other the State or local requirement is equal (c) No manufacturer, distributor, or information collected under this part to or substantially equivalent to a retailer shall sponsor or cause to be and all records and other information requirement under the Federal Food, sponsored any athletic, musical, artistic related to the events and persons Drug, and Cosmetic Act, is not a or other social or cultural event, in the identified in such records available to requirement within the meaning of brand name, logo, motto, selling the FDA representative for purposes of section 521(a) of the Federal Food, Drug, message, recognizable color or pattern of inspection, review, copying, or any and Cosmetic Act, or is more stringent colors, or any other indicia of product other use related to the enforcement of than and does not conflict with the identification similar or identical to the Federal Food, Drug, and Cosmetic requirements under this part, or those used for cigarettes or smokeless Act and this part. tobacco products. A manufacturer, (ii) Issuance of an advisory opinion is distributor, or retailer may sponsor or § 897.42 Preemption of State and local in the public interest. cause to be sponsored any athletic, requirements and requests for advisory § 897.44 Additional regulatory measures. musical, artistic or other social or opinions. cultural event in the name of the (a) General. In addition to the Seven years after the publication date corporation which manufactures the requirements imposed under this part, of any final rule based on the proposed tobacco product, provided that both the manufacturers, distributors, and rule published in the Federal Register registered corporate name and the retailers shall comply with any more on (date of publication of the final rule), corporation were in existence prior to stringent State or local requirements if the percentage of people under the age January 1, 1995. relating to the sale, distribution, of 18 years who smoke cigarettes has not labeling, advertising, or use of cigarettes decreased by 50 percent since 1994 (as § 897.36 False or misleading labeling and and smokeless tobacco products, advertising. determined by an objective, provided that those State or local scientifically valid, and generally Labeling or advertising of any requirements do not conflict with the cigarette or smokeless tobacco product accepted program), and/or if the requirements under this part. These percentage of males under the age of 18 is false or misleading if the labeling or more stringent State or local advertising contains any express or years who use smokeless tobacco requirements are not preempted under products has not decreased by 50 implied false, deceptive, or misleading section 521(a) of the Federal Food, Drug, statement, omits important information, percent since 1994 (as determined by an and Cosmetic Act (21 U.S.C. 360k(a)). objective, scientifically valid, and lacks fair balance, or lacks substantial (b) Requests for advisory opinions. (1) generally accepted program), and the evidence to support any claims made for Any State or political subdivision of a percentage of females under the age of the product. State may request an advisory opinion 18 years who use smokeless tobacco from the Food and Drug Administration Subpart EÐMiscellaneous products has increased since 1994 (as with respect to the preemptive effect of Requirements determined by an objective, this part on any particular State or local scientifically valid, and generally § 897.40 Records and reports. requirement. The request for an accepted program), then the agency advisory opinion should comply with (a) Each manufacturer shall, on an shall take additional measures to help the requirements at § 10.85 of this annual basis, submit: achieve the reduction in the use of chapter. The agency may, in its (1) Copies of all labels, except that a tobacco products by children and manufacturer may submit a discretion and after consulting the State adolescents described above. representative sample of such labels if or political subdivision, treat a request the labels will be similar for multiple for an advisory opinion as an Dated: August 9, 1995. packages or products; and application for exemption from David A. Kessler, (2) Copies of all labeling and a preemption under § 808.20 of this Commissioner of Food and Drugs. representative sampling of advertising. chapter. (b) The manufacturer shall send this (2) The Commissioner, on his or her Donna E. Shalala, information to the Document and own initiative, may issue an advisory Secretary of Health and Human Services. Records Section, 12420 Parklawn Dr., opinion relating to a State or local [FR Doc. 95–20051 Filed 8–10–95; 8:45 am] Rockville, MD 20852. The information requirement if he or she finds that: BILLING CODE 4160±01±P