Schrödinger’s Vapes: How Confusing Vape Regulations Harm Consumer Choice and Safety
Executive Summary
Smoking kills hundreds of Americans every day. Transitioning to vaping is one of best methods to stop smoking. While the risk from vaping is not zero, it is negligible for those who use well-made products. The U.K. government sends vaping kits to smokers to encourage them to quit, and permits the sale of vapes from vending machines. By contrast, U.S. public-health policy toward vaping is equivocal, and bogged down by concerns that children might start the habit. U.S. regulators have only approved a few vaping products, and they largely are not the ones that consumers most want. Nonetheless, the market does supply the products that adult consumers demand, regardless of their legal status. This paper describes a survey of a small subset of the legal market: 14 gas stations in the Philadelphia suburbs that sell large quantities of unapproved vaping products every day. It then reviews recent court decisions regarding the U.S. Food and Drug Administration’s (FDA) actions relevant to the sector, and suggests that U.S. policymakers should replace the FDA’s current arbitrary and capricious approach to vaping regulation with objective and reasonable quality standards.
I. Background
Burning tobacco releases hundreds of substances that contribute to more than 480,000 premature deaths annually in the United States from a range of causes, including cancer and cardiovascular disease.[1] While nicotine is the primary substance in cigarettes that creates physiological dependence, it is not dangerous in normal doses.[2] Nicotine patches and gum were developed to provide smokers with nicotine without the dangers of tobacco combustion. But while helping some smokers to quit, patches fail to meet the ritual, social habit, and other needs of most smokers.
Independent researchers and entrepreneurs understood this and developed alternatives to combustible products that better met smokers’ needs in the form of nicotine vaping products. Independent companies like NJoy and Pax Labs were among those that drove the early U.S. vaping market, with products such as the latter’s Juul pod-based e-cigarette, which used patented nicotine salts. Some users have preferred traditional tobacco flavors, but most report they enjoy alternate flavors, such vanilla, blueberry, and mango. Some vapes even contain no nicotine at all.[3]
Dating back to the 1980s, the major tobacco companies brought noncombustible “heat-not-burn” tobacco products to the market in markets like the U.K. and Japan.[4] Some also invested their capital to buy the more successful vaping-product companies, including Altria’s notable $13 billion partial acquisition of Juul in 2018, after it was spun off from Pax Labs.[5]
Vaping and heat-not-burn tobacco products have been shown to satisfy some of the ritual, sensory, pharmacokinetic, and social aspects that many smokers enjoy, while lowering the risks for the user. Vaping products are not riskless,[6] but they are substantially safer than smoking; the U.K. government suggests they are at least 95% safer, based on the available evidence.[7]
U.K. health authorities are sufficiently convinced of the relative safety of vaping that they encourage it as an alternative to patches and gum where those have not proved effective. Hospitals hand out free vaping starter kits to recruit smokers into a cessation program.[8] And in April 2023, the U.K. government decided to send vaping kits to roughly 1 million people—20% of the nation’s identified smokers.[9] U.K. health officials’ aim is for the U.K. to be a smoke-free society (that is, one with less than 5% regular smokers) by 2030. The U.K.’s support of vaping as an alternative to smoking is such that it even allows the products to be sold through vending machines.
A recent study by the MUSC Hollings Cancer Center found that smokers given vaping tools will reduce the amount they smoke, even if they are neither encouraged to use the tools nor even shown how to use them.[10] With 638 smoker participants, this was the largest study of its type concluded in the United States. Of the 638 smokers, 427 actively participated (211 in the control group did not receive vaping products). While some participants stated that they wanted to quit smoking and others stated that they did not, the reduction and even cessation in smoking was universal, including among those who had no intention of quitting.
This study adds to the weight of evidence that vaping options can reduce smoking.[11] It also answers a concern raised by vaping critics that vaping only works effectively in smoking cessation in an artificial study setting with smokers who say they want to quit.
Yet U.S. government policy remains equivocal about the relative benefits of vaping. The U.S. Food and Drug Administration (FDA) has approved a few vaping products,[12] but FDA communications (along with communications from other relevant federal agencies) focus more on the potential risks of vaping, especially to youth, rather than its role in smoking cessation in adults.[13]
As leading tobacco-regulation analyst Clive Bates has put it, the FDA has created “almost insurmountable regulatory hurdles and barriers to entry for vapes.”[14] The strict legal sanctions the FDA levied in 2019 against U.S. vape pioneer and previous market leader Juul,[15] preventing it from selling flavored products, have not been followed up with further significant action against manufacturers or retailers selling similar products from companies based outside the United States. The FDA has instead effectively left a legal void by denying approval to thousands of products, but failing to prevent those and similar products from reaching the market.[16]
There was also a period during which products manufactured using synthetic nicotine seemed to be able to circumvent the FDA’s rules. This ended in April 2022, when Congress passed legislation effectively deeming synthetic nicotine to be a “tobacco product” and thereby authorizing the FDA to regulate vapes that contained it.[17] Most producers, retailers, and consumers are, unsurprisingly, unsure of what is legal.
In a recent analysis of discarded vaping packs conducted across several states by the market-research group WSPM,[18] an astonishing more than 97% were not legal in the United States. This suggests that vast numbers of imported vaping products are brought into the country illegally. But are these products available only on the black market, or are they available in major retail outlets?
This issue brief aims to look closely at one subset of retailers: gas stations in several suburbs of Philadelphia. The gas stations are legal businesses that sell fuel and other quick-serve products, including drinks, food, cigarettes, and vaping products. Additionally, a more anecdotal analysis of three illicit markets, which primarily sell illegal drugs, is undertaken to observe what vaping products are available.
II. The Market for Vaping Products
When the field research for this project was undertaken, from December 2023 through June 2024, only 23 vaping products were approved for sale by the FDA. All of the approved products were tobacco-flavored.[19] By contrast, in the WSPM discarded-pack analysis, more than 98% of the recovered products were non-tobacco flavors. In other words, consumer demand appears to strongly favor non-tobacco-flavored vaping products, even though the FDA has not approved any such products for sale in the United States.
With such obvious demand for non-approved products, one would obviously expect a black market to emerge. Many food stores, gas stations, tobacco outlets, and other “convenience” locations, which have sold cigarettes for decades, now sell vaping products. While they do sell the FDA-approved products, I decided to investigate whether, and how many non-approved products are sold through these legal outlets.
Through personal contacts in the suburbs of Northeast Philadelphia, I examined the vaping products and sales over the previous year at 14 gas stations, some within city limits and some outside. Two of these gas stations, owned by the father of a friend, provided me with more than a decade of sales information, dating back to before these locations sold vaping products at all. This sample of convenience was not randomly created and is not intended to be representative of either this region of the country, nor even of Southeast Pennsylvania, specifically. It may contain unknown biases and may not reflect other locations within this geographic zone.
Over the six-month period that the survey was conducted, a total of 459 brand-name products were found across the 14 gas stations, with one station selling 169 individual brands. Two brands (Elf Bar and Lost Mary) dominated half the market, each with dozens of branded products. More than 30 different Elf Bar and Lost Mary flavors were identified, including myriad fruit flavors (blueberry, kiwi, watermelon, cherry, etc.), as well as flavors like bubble gum.
Figure 1 demonstrates the most popular brand groups. Note that Vuse, at 2% of the market, is the only brand with products (tobacco- or menthol-flavored) approved by FDA. Juul, also at 2%, has not been approved by the FDA, but its status remains in a kind of legal limbo.[20] Of the 459 identified branded products, only three were approved by the FDA. Therefore, more than 99% of the market is either illegal, or exists in a legal grey area.
FIGURE 1: Market Share of Most Popular Vapor Brands (%)
A. Are These Findings Unusual?
Over the past two years, on various visits to Washington, D.C., and New York City, I have visited gas stations up and down the I-95 corridor. These locations appear to sell similar products to those in the Philadelphia suburbs, often with different brands from within the same brand group. The most dominant product was Geek Bar in Maryland and D.C., while it was Elf Bar in Pennsylvania and Lost Mary in the New York metro area. These brands were also identified in the discarded-pack analysis, which noted that Geek Bar was the most discarded product group in Washington, D.C. All of these products are made by the same manufacturer: the China-based Shenzhen iMiracle, whose products are not approved for sale in the United States.
B. Market Value
Figure 2 demonstrates the growth in average monthly per-store revenues from vapor products. (For 2023, this is across all 14 gas stations; for 2016-2022, revenue was averaged across just the two stations for which data was available.)
The vast majority of this revenue comes from products that are not approved by the FDA. The much smaller revenue streams from approved vapes did also grow over time, but not at the same rates as for the non-approved products.
As demonstrated in Figure 2, average monthly sales have grown from a few hundred dollars to more than $10,000. The number of products sold has also grown from less than a dozen to hundreds. Every outlet in the survey sold more than 100 vape products. Non-approved products represented more than 99% of sales volume and 98% of revenue.
FIGURE 2: Average Monthly Vaping Revenue ($)
The two stations within Philadelphia city limits had slightly lower sales, presumably because their tax rates are slightly higher, although sample sizes were not sufficiently large to rule out other causes (e.g., lower average income in those locations).
III. Why Legal Businesses Sell Non-Approved Products
Five store managers/owners agreed to be interviewed on condition of anonymity. Of the five, none were entirely sure which, if any, products they sold were illegal. They reported that they assumed their suppliers operated legally and that they sell a wide variety of products. In short, they follow what customers buy, and rely on their suppliers to undertake legal due diligence.
One store owner commented that they might advertise vaping products more by displaying them more prominently in future, but were aware of the “legal limbo” of some products and that they “still made far more money from cigarette sales.” Cigarette (and cigar) sales were, on average, about 14 times larger than vaping-product sales in 2023 and 2024. One proprietor noted, however, that cigarette sales had been roughly 20 times more than vape sales only a few years ago, suggesting that vape sales are growing faster than cigarette sales.
Another owner reported that, while he obviously did not want to “break the law,” he has found that demand for vaping products is significant; that there is no “strong guidance on illegality”; and that there is “absolutely no enforcement.” Therefore, he said: “I’ll keep selling them until I’m told not to and that is enforced.”
A. How the Vaping Market Got to This Point
While distributors and retailers both are bound by the law, a significant amount of the blame for so many non-approved products being sold in the putatively legal market can be attributed to U.S. health policy and product regulation. While the FDA has denied application after application for useful vaping products, it takes no action against the sale of non-approved products.
One obvious concern is that the non-approved products currently available on the market are not required to meet any quality or safety standards. In denying approval to the vast majority of vapor products, the FDA has not only limited consumer choice, but it has induced many of those consumers to purchase products that may be of lower quality.
Vape manufacturers and importers want repeat business. They therefore have incentive not to harm users. But the FDA’s nominal claim of regulatory oversight for vaping products may have the effect of crowding out other means by which consumers might obtain information about the quality of vaping products. These could include, for example, industry standards or online vendors applying their own quality controls—both of which existed prior to the FDA deeming vapes to be tobacco products.[21]
Meanwhile, in evading its responsibility as an enforcer, the FDA has effectively misled consumers. Of course, the agency’s record in ensuring quality manufacturing processes contains other blemishes, including in its oversight of generic pharmaceuticals.[22] The potential for unnecessary harms from unauthorized vaping products (e.g., due to adulteration) is not negligible. While it is possible that these problems are magnified by the fact that most vapes are made in China, most authorized vapes are also manufactured in China. The more fundamental problem is that unauthorized vapes, by their nature, evade any regulatory approval. After all, domestically manufactured illegal cannabis vapes adulterated with e-acetate caused the death of 68 Americans in 2019 and 2020.[23]
On a more positive note, many of the larger manufacturers, including Shenzhen iMiracle, produce versions of their products that have been approved for sale by the U.K. government and therefore have cleared U.K. quality rules.[24] Indeed, Lost Mary appears to be the most ubiquitous brand in London, as it is on much of the Eastern seaboard of the United States. But the versions of these products marketed in the United States have higher levels of nicotine and may have been produced using different standards. Moreover, many other products sold in United States do not have equivalents that are currently approved in the U.K., or possibly anywhere.[25]
B. Attempts to Comply with FDA Guidance
While manufacturers have tried to comply with FDA rules, in the absence of clear guidance and objective standards, they have been faced with a nearly impossible task. For its part, the FDA has shown little interest in approving its backlog of product applications, leaving manufacturers to resort to litigation. In a recent decision, the 5th U.S. Circuit Court of Appeals found that the FDA’s decisionmaking processes for approving vaping products were “arbitrary and capricious.”[26] The agency has also repeatedly changed its mind regarding what it would require from manufacturers. As the court found:
FDA refused to review petitioners’ marketing restrictions, which it had repeatedly stated were key to discouraging youthful use of the products and were thus critical components of [applications]. FDA repeatedly counselled applicants that long term studies were likely unnecessary and it said nothing about comparative efficacy studies—until the PMTA deadline was long gone; and then it refused petitioners the opportunity to conduct such studies. Finally, FDA’s defense against petitioners on the merits of their applications is loaded with post hoc rationalizations. Any of these errors is a “fatal flaw.” Taken together, they are mortal wounds.[27]
The FDA has appealed the 5th Circuit’s ruling to the U.S. Supreme Court, which granted certiorari in July 2024.[28] This has left the legal limbo in place. David Spross of the National Association of Tobacco Outlets testified at a June 2024 hearing of the U.S. Senate Judiciary Committee about his members’ desire to sell legal vape products, and encouraged the FDA to authorize more, but most other witnesses and committee members were much more focused on the potential risks of vaping to youth.[29]
As Clive Bates has explained:
The technical, scientific, creative, and legal resources of American vape businesses are mired in endless, exhausting efforts to prove the acceptability of products that are already 8-10 years old to the satisfaction of the unyielding, never-satisfied FDA. In contrast, the Shenzhen innovation system is tirelessly focused on the consumer – what the consumer wants today and what they need to get around pointless regulation….FDA is nurturing demand for illicitly supplied Chinese products.[30]
C. Illicit Sellers of Illicit Products
Through previous work on opioids,[31] I have come to know several drug dealers whose primary market is selling products such as oxycodone, fentanyl and, occasionally, heroin. None sell vaping products to any scale, primarily because they are so easy to buy through ordinary retail outlets. When these drug dealers have sold vapes, it has only been flavored disposable vapes—products similar, if not identical, to those sold in convenience stores. The consensus they reported to me is that if there were a police crackdown on legal sales, they might sell more illicit vapes, but for now it remains a tiny market for them.
This is quite a telling finding. In a market for illegal products, illicit sellers with active buyers barely engage in the market because legal sellers dominate sales of non-approved products.
IV. Conclusion
It is hard to think of a public-health policy more poorly managed in the United States than vaping. Given that the alternative to vaping is often a far deadlier smoking habit, public policy should encourage vaping products manufactured to a high standard, and marketed and sold exclusively to adults. That means establishing and enforcing clear, objective, and reasonable quality standards that apply to all vapes on the market, as the U.K. has done,[32] not imposing arbitrary and capricious requirements on vape manufacturers and importers, as the FDA has done.
Thousands of U.S. outlets currently sell vaping products of unknown quality. While the FDA has threatened action against retailers with warning letters,[33] there has been little follow-through on enforcement. This failure undermines not only the rule of law, but also public health.
[1] See, Adult Data on Smoking, Ctr. for Disease Control and Prevention, https://www.cdc.gov/tobacco/data_statistics/fact_sheets/adult_data/cig_smoking/index.htm#references (last visited May 5, 2023)
[2] See Nicotine Dosage, Drugs.com, https://www.drugs.com/dosage/nicotine.html (last visited Aug. 16, 2023).
[3] Average Revenue Per Unit (ARPU) in the E-cigarettes Segment of the Tobacco Products Market Worldwide from 2019 to 2029, statista, https://www.statista.com/forecasts/1438523/average-revenue-per-unit-arpu-e-cigarettes-tobacco-products-market-worldwide (last visited Aug. 30, 2024).
[4] See Tax Treatment of Heated Tobacco Products, HM Treas., https://www.gov.uk/guidance/e-cigarettes-regulations-for-consumer-products (last updated Mar. 13, 2018).
[5] David Goldman, The Biggest American Cigarette Company Buys a $13 billion Stake in the Biggest E-cigarette Startup, CNN Bus. (Dec. 20, 2018), https://www.cnn.com/2018/12/19/business/altria-juul/index.html.
[6] Akihiro Kishimoto et al., Forecasting Vaping Health Risks Through Neural Network Model Prediction of Flavour Pyrolysis Reactions, 14 Sci. Rep. 9591, 10 (2024), https://www.nature.com/articles/s41598-024-59619-x.
[7] See Ann McNeill et al., Vaping in England: Evid. Update Feb. 2021, Public Health England (2021), https://www.gov.uk/government/publications/vaping-in-england-evidence-update-february-2021.
[8] See, Starter Vape Packs to be Handed Out in Hospitals, U.E. Anglia (Apr. 29, 2021), https://www.uea.ac.uk/about/news/article/starter-vape-packs-to-be-handed-out-in-hospitals.
[9] Neil O’Brien, Smokers Urged to Swap Cigarettes for Vapes in World First Scheme, Dep’t Health & Soc. Care (Apr. 11, 2023), https://www.gov.uk/government/news/smokers-urged-to-swap-cigarettes-for-vapes-in-world-first-scheme.
[10] See Leslie Cantu, Largest U.S. Study of E-cigarettes Shows Their Value as Smoking Cessation Aid, M.U.S.C. Health, https://muschealth.org/health-professionals/progressnotes/2023/fall/e-cigarettes-study (last visited Aug. 22, 2024).
[11] See Jeremy Y. Levett et al., Efficacy and Safety of E-cigarette Use for Smoking Cessation: A Systematic Review and Meta-analysis of Randomized Controlled Trails, 136 Am. J. Med. 802, 802-805 (2024), https://www.amjmed.com/article/S0002-9343%2823%2900295-4/fulltext#:~:text=io%2F26fkq).-,Results,CI%2C%201.29%2D2.44.
[12] See, FDA Permits Marketing of E-Cigarette Products, Marking the First Authorization of Its Kind by the Agency, U.S. Food & Drug Admin. (Oct. 12, 2021), https://www.fda.gov/news-events/press-announcements/fda-permits-marketing-e-cigarette-products-marking-first-authorization-its-kind-agency.
[13] Clive Bates, Fixing U.S. Vape Regulation- Twelve Proposals, The Counterfactual (Jun. 12, 2024), https://clivebates.com/fixing-u-s-vape-regulation-twelve-proposals.
[14] Id. at 11.
[15] James Ducharme, How Juul Got Vaporized, Time (May 17, 2021), https://time.com/6048234/juul-downfall.
[16] Matthew Perrone, Thousands of Unauthorized Vapes Are Pouring Into the US Despite the FDA Crackdown On Fruity Flavors, Associated Press (Jun. 26, 2023), https://apnews.com/article/fda-vapes-vaping-elf-bar-juul-80b2680a874d89b8d651c5e909e39e8f.
[17] See Requirements for Products Made With Non-tobacco Nicotine Take Effect Apr. 4, U.S. Food & Drug Admin. (Apr. 13, 2022), https://www.fda.gov/tobacco-products/ctp-newsroom/requirements-products-made-non-tobacco-nicotine-take-effect-april-14.
[18] See Cami Mondeaux, Majority of Disposed Vapes in D.C. Exported from China Despite Bad: Study, Wash. Exam’r (May 29, 2024), https://www.washingtonexaminer.com/policy/healthcare/3020885/majority-disposed-vapes-dc-exported-china-study.
[19] E-Cigarettes, Vapes, and other Electronic Nicotine Delivery Systems (ENDS), U.S. Food & Drug Admin., https://www.fda.gov/tobacco-products/products-ingredients-components/e-cigarettes-vapes-and-other-electronic-nicotine-delivery-systems-ends (last visited Aug. 30, 2024).
[20] Update on FDA’s Scientific Review of Juul Product Applications, U.S. Food & Drug Admin. (Jun. 6, 2024), https://www.fda.gov/tobacco-products/ctp-newsroom/update-fdas-scientific-review-juul-product-applications.
[21] Guy Bentley & Julian Morris, The FDA Has Decimated the E-cigarette Market, Reason Foundation (Sep. 22, 2021), https://reason.org/commentary/the-fda-has-decimated-the-e-cigarette-market.
[22] David Dobbs, A New Book Argues That Generic Drugs Are Poisoning Us, N.Y. Times (May 13, 2019), https://www.nytimes.com/2019/05/13/books/review/bottle-of-lies-katherine-eban.html.
[23] See, Severe Lung Disease Associated With Using E-cigarette Products, Ctr. for Disease Control & Prevention, https://archive.cdc.gov/www_cdc_gov/tobacco/basic_information/e-cigarettes/severe-lung-disease.html (last updated Feb. 18, 2020).
[24] See E-cigarettes: Regulations for Consumer Products, Med. & Healthcare Products Regul. Agency (Feb. 29, 2016), https://www.gov.uk/guidance/e-cigarettes-regulations-for-consumer-products (last updated Aug. 16, 2024).
[25] Russ Ware, Vaping and the FDA: An Updated Timeline, Versed Vaper (Jul. 26, 2024), https://versedvaper.com/vaping-and-the-fda-an-updated-timeline.
[26] See Jonathan H. Adler, En Banc Fifth Circuit Rejects FDA’s Vaping Regulation “Surprise Switcheroo”, Reason (Mar. 1, 2024), https://reason.com/volokh/2024/01/03/en-banc-fifth-circuit-rejects-fdas-vaping-regulation-surprise-switcheroo.
[27] Wages & White Lion Invs. v. Food & Drug Admin., 90 F.4th 357, 362 (5th Cir. 2024).
[28] Jessie Hellmann, Fight Over Flavored Vapes Lands at Supreme Court, Roll Call (Jul. 2, 2024), https://rollcall.com/2024/07/02/fight-over-flavored-vapes-lands-at-supreme-court.
[29] See, Combatting the Youth Vaping Epidemic by Enhancing Enforcement Against Illegal E-cigarettes, U.S. S. Comm on the Judiciary, 118th Cong. (2024), https://www.judiciary.senate.gov/committee-activity/hearings/combatting-the-youth-vaping-epidemic-by-enhancing-enforcement-against-illegal-e-cigarettes.
[30] Id. at 11.
[31] See Roger Bate, A Field Study of the Opioid Market: Authenticity and Price from Pharmacy to Street, AEI, available at https://www.aei.org/wp-content/uploads/2018/10/Bate-final-wp.pdf (last visited Aug. 23, 2024).
[32] Id. at 19.
[33] David Spross, FDA Steps Up Enforcement Actions Against Tobacco Manufacturers, Wholesalers and Retailers, CSP (Feb. 7, 2024), https://www.cspdailynews.com/tobacco/fda-steps-enforcement-actions-against-tobacco-manufacturers-wholesalers-retailers.