nicotine delivery devices under the umbrella of the FDA.

And in the course of doing so...well, that's what I'm...I'll throw that to you.

What has the FDA proposed, or enforcing, I should say?

Clive: With any regulation, your starting point should be what is the problem to which

this regulation is the solution, or what is the risk to which this regulation is the mitigation

response?

And the problem for the FDA is that there isn't actually very much wrong.

In fact, there's a lot right.

So we've seen...there's now eight and a half...there's about 38 million smokers in the U.S., about

8 and a half million vapers, and about 2 and a half million of them are people who no longer

smoke, okay?

So that's now a large-scale phenomenon relative to smoking, around quarter of the kind of

size, if you like.

But there's nothing really going wrong.

Most people who do it are quite happy about it or they wouldn't be doing it.

No one's making them doing it.

Many people have stopped smoking.

Many people are getting short-term benefits from it.

Smoking prevalence amongst adults is a record low, and falling rapidly.

Smoking prevalence among teenagers, it's a record low and has been falling rapidly.

You know, what's not to like?

What is the problem?

So what we get then is the hunt for the problem, and we see FDA spending a fortune on academic

studies.

We see CDC getting in alongside, problematizing the issue, okay?

So you'll see studies and you'll see talks about flavors, gateway effects, you know,

additives, and so on.

All of these things are essentially designed to create a sense of alarm that justifies

a regulatory intervention.

And one of the really terrible consequences of that is the misalignment of perceptions

of risk in the American public between what is real about e-cigarettes and what they think.

And roughly speaking, I think it's just over 5% of Americans would say e-cigarettes are

much less harmful than cigarettes, which is the right answer.

It can only be that answer.

Thirty-seven percent say the same or worse, and another 36% say, "I don't know."

Sally: And that perception has been changing over the last few years in the direction of

more ignorance.

Clive: In the wrong direction.

which is amazing.

So, to me, I mean, this is why Public Health England, Royal College of Physicians had come

out and been so clear about giving people an anchor, quantified anchor, you know, at

least 95% lower risk, so that it cuts through all the stuff that you're seeing in the newspapers

that's very alarming.

They say, "Well, no, if you put it context, it's all very, very much lower."

And I think that is a piece of collateral damage that has been done to the American

public by these agencies as they've tried to justify regulation, okay?

So next, we look at the regulation that they're actually proposing, which is...I mean, when

people ask me, "Is there anything good about the EU regulation?"

I say, "No, the only good thing is it's not the FDA, okay?"

And that is the only good thing you can say about it.

The FDA's regulation has a number of totally terrible features to it.

It's incredibly burdensome.

That's the big thing.

Very, very expensive, and it's very, very broadly applied to literally thousands of

products, product components, product variance, all need this full-scale authorization with

full justification to the FDA, repeated endlessly over and over again for roughly the same products

between companies within companies.

It's so massively wasteful, it's off the scale.

The second really negative feature of their regulation is you don't know what it takes

to be successful.

With the EU regulation, it's quite burdensome, but you do know that if you do the things

that are required, you can put your product on the market.

You know that with certainty that if you comply with quite clear regulations, it's on the

market, no problem.

With the FDA, they have to decide.

Somebody makes a decision to authorize your product and you don't know.

And this is the killer.

You don't know what their criteria are and how they will judge the evidence that you

put forward, what hurdle, evidential hurdles they want you to cross.

You cannot tell that in advance.

So that makes it harder for the companies who aren't giant tobacco companies to raise

the finance to...

Sally: Who can't even afford to...this application process.

Clive: Yeah.

Can they afford it in the first place?

They don't really know what the cost are going to be or how long it will take.

So how does that play into their financing?

Because it looks like a giant regulatory risk.

So many of them don't have particularly strong balance sheets, so they're looking to external

finance and refinancing their operations, and their investors go, "Well, this doesn't

look good, guys."

And we've already seen NJOY go down for that reason, or that and amongst other reasons.

So I think it's very harmful, and there's arguments like, "Well, will it take out 90%

of the market?

Or will it be 99% of the market?"

We shouldn't be having an argument about that.

You would be taking out 90% of something that is basically quite successful.

You know, large number of users, lowest-ever smoking rates.

Everybody's happy, and yet you think it's a good intervention to take out 90% of what's

driving that marketplace.

How can that be right?

They haven't assessed the likely unintended consequences that will flow from that intervention.

And it doesn't mean...it doesn't need that many extra smokers before you've got a detriment

that hugely outweighs any conceivable benefit from these regulations.

Sally: So what are the avenues of redress look like from the congressional legislative

standpoint?

And then we'll get into the other standpoint, which is the courts.

Clive: Yeah.

Well, I mean, the issue...I mean, tthere's two ways out of this.

There's a sort of legislative fix, which would essentially treat e-cigarettes now in the

same way that cigarettes, which we treated in 2009, which basically is if they're already

on the market, they can stay on the market, okay?

There's a fix in the legislation called moving the predicate date, which means if you're

on the market at this date, then you stay on the market and you only have to apply for

these burdensome applications if you do something completely new, okay?

That doesn't solve the problem totally, but it gives respite and would end the apocalyptic

emergency that the FDA is about to visit on that industry.

It would stop that and give time to put a sensible regulatory framework in place, okay?

And the difficulty with that is that the democrat side, moratory side, has been sold on the

idea that this is a get-out-of-jail-free card and that this would allow rogue traders, you

know, to go out and hook kids and everything.

So all the nonsense public health arguments are being played into trying to stop this

and make sure the apocalyptic regulatory intervention that the FDA has in mind goes ahead and destroys

the industry and leaves only the tobacco industry standing.

Why they want that is a mystery to me, but that will be the effect, even if it wasn't

the intent.