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`Exhibit 20
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`UNITED STA TES INTERNATIONAL TRADE COMMISSION
`WASHINGTON, DC
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`Before the Honorable Clark S. Cheney
`Administrative Law Judge
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`In the Matter of
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`CERTAIN TOBACCO HEATING
`ARTICLES AND COMPONENTS THEREOF
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`Investigation No. 337-TA-1199
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`REBUTTAL EXPERT REPORT OF STACY EHRLICH
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`RELATING TO THF. PUBLIC INTEREST
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`~
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`Stacy Ehrlich
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`October 23, 2020
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`disagree with Complainants’ assertion that Eclipse serves as an adequate substitute for IQOS®, as
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`that statement is undermined by the vastly divergent FDA authorizations that each has received.
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`B.
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`ENDS Products Are Not Adequate Substitutes for IQOS®
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`112.
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`It appears that Complainants rely on ENDS products as the primary substitute for
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`IQOS®. From a regulatory perspective, these, too, are not adequate substitutes.
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`113. As noted above, under the FFDCA, new tobacco products (i.e., non-grandfathered
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`products) may not legally be marketed without premarket authorization. Accordingly, all deemed
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`new tobacco products on the market without FDA authorization, including all ENDS products, are
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`technically illegally marketed. As Health and Human Services (HHS) Secretary Alex Azar stated,
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`“HHS is taking a comprehensive, aggressive approach to enforcing the law passed by Congress,
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`under which no e-cigarettes are currently on the market legally.”132
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`114. However, under FDA’s current compliance policy, certain ENDS products are
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`permitted to remain on the market so long as they are the subject of PMTAs filed by September 9,
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`2020.133 Significantly, that enforcement discretion policy applies only to ENDS products that
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`were on the market on August 8, 2016, have not been modified since that date, and are not flavored
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`cartridge-based ENDS products (except for tobacco- and menthol-flavored products). Those
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`ENDS products not covered by the compliance policy are subject to enforcement action.134
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`132 1199_RESP00010611.
`133 See 1199_RESP50000269-0279.
`134 See Final Rule, Deeming Tobacco Products to be Subject to the Federal Food, Drug, and
`Cosmetic Act, as Amended by the Family Smoking Prevention and Tobacco Control Act;
`Restrictions on the Sale and Distribution of Tobacco Products and Required Warning Statements
`for Tobacco Products (Deeming Rule), 81 Fed. Reg. 29,011 (May 10, 2016), https://www.
`govinfo.gov/content/pkg/FR-2016-05-10/pdf/2016-10685.pdf; 1199_RESP00016448-59;
`1199_RESP00014254-67; 1199_RESP00014118-69.
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`115. Most PMTAs for ENDS products were submitted on September 9 or in the months
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`leading up to that deadline. For example, Complainants submitted PMTAs in October 2019 for
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`Vuse Solo, in April 2020 for Vuse Vibe and Vuse Ciro, and in September 2020 for Vuse Alto.135
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`116. Many ENDS product manufacturers could not or did not file PMTAs by the
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`September 9, 2020, deadline.136 Thus, after September 9, the ENDS market in the United States
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`narrowed.137 Indeed, it is likely that thousands of products are currently subject to FDA
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`enforcement action, potentially shrinking the ENDS market by magnitudes.138
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`117. With regard to premarket submissions (PMTAs, SE reports, and SE exemption
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`requests) that FDA did receive for deemed products, FDA has not released the number of
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`submitters or their names. Sources, however, have indicated that there are over 400 million
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`deemed products listed with FDA.139
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`118. Accordingly, and contrary to the Clissold Report, even assuming that the Agency
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`was fully staffed and ready, it is highly likely to take substantially longer than 12 months to review
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`most of those submissions.140 Indeed, FDA itself has said that “the likelihood of FDA reviewing
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`all of these applications during the one-year review period is low, given that this would be an
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`unprecedented number of applications and several orders of magnitude greater than anything the
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`135 1199_RESP00016064-65; 1199_RESP00016066-68; 1199_RESP00016069-70;
`1199_RESP00016082-85.
`136 1199_RESP00014302-05.
`137 See id.
`138 See 1199_RESP00014297-305; 1199_RESP00014222-29; 199_RESP00014462.
`139 See 1199_RESP00016450.
`140 See Clissold Rep. ¶¶ 32-34.
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`Agency has experienced.”141 The Agency has also stated that “[a]lthough CTP has greatly
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`expanded its reviewing capacity and is developing well-defined, consistent and transparent review
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`processes for all phases of premarket review, there are limits to these resources considering we
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`may receive applications for several millions of products.”142
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`119. Further, it is impossible to predict FDA’s determinations regarding these ENDS
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`PMTAs. PMTA authorizations should never be assumed, particularly because: (a) no e-cigarette
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`has obtained PMTA authorization; and (b) the threshold for the APPH determination may change
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`over time.143 Indeed, some in the industry are skeptical that any e-cigarette will be authorized.
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`For example, former FDA Commissioner David Kessler has stated that he does not believe FDA
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`will allow e-cigarettes to remain on the market. Indeed, “Dr. Kessler said he wouldn't bet on any
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`e-cigarettes surviving the FDA review.”144
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`120. Mr. Clissold states that “there is no reason to believe that the PMTAs will not be
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`authorized” for Complainants’ Vuse Solo and Vuse Vibe products.”145 I disagree. A PMTA is a
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`complex, voluminous submission. Any number of issues could arise that would frustrate PMTA
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`authorization, even for the most high-quality and well-supported PMTAs. Indeed, as stated above,
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`FDA has never granted PMTA authorization for any ENDS product, so it remains unclear to the
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`141 Mitch Zeller, Director of FDA’s CTP, Perspective: FDA’s Preparations for the September 9
`Submission Deadline (Aug. 31, 2020), https://www.fda.gov/tobacco-products/ctp-newsroom/
`perspective-fdas-preparations-september-9-submission-
`deadline?utm_source=Eloqua&utm_medium=email&utm_term=stratcomms&utm_content=blog
`&utm_campaign=CTP%20News%3A%20Sept.%209%20Perspective%20-%2083120.
`142 Id.
`143 Proposed Rule, Premarket Tobacco Product Applications and Recordkeeping Requirements,
`84 Fed. Reg. 50,566, 50,618 (Sept. 25, 2019), https://www.govinfo.gov/content/pkg/FR-2019-
`09-25/pdf/2019-20315.pdf.
`144 1199_RESP00014222-229.
`145 Clissold Rep. ¶ 31.
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`entire industry how the Agency will evaluate those applications. Complainants themselves
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`recognize this. Dr. Figlar testified that Complainants do not know whether FDA is “going to
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`authorize a product or not until they render their decision.”146
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`121. Once concern in particular that could frustrate the authorization of certain ENDS
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`PMTAs is the “epidemic” nature of youth abuse of ENDS products, discussed supra.
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`122. Even if FDA grants PMTA authorization to some ENDS products, there are likely
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`to be many others FDA will not authorize, as the quality of both the ENDS products and their
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`PMTAs vary widely.147 Thus, it is likely that only a small percentage of those ENDS products
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`covered by timely PMTAs will ultimately be authorized by FDA.
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`123.
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`It also is unclear how long FDA will allow those products covered by pending
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`PMTAs but not authorized by September 2021 to remain on the market during the Agency’s
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`continued review of those applications. FDA has said that it “would take into account relevant
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`considerations in deciding whether to initiate enforcement action against a particular product as
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`the one-year period for review comes to an end in September 2021,” but has offered no guarantee
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`of continued marketing.148
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`124. Mr. Clissold speculates that ENDS products for which PMTAs have been submitted
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`by September 9, 2020, could remain on the market for longer than one year while FDA reviews
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`those applications.149 As one unsupported hypothetical, Mr. Clissold states that “it is entirely
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`possible that as that [September 2021] deadline approaches, FDA may approach the courts for an
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`146 Figlar Dep. at 47:5-7.
`147 See 1199_RESP00016335-46.
`148 1199_RESP50000540-0541.
`149 Clissold Rep. ¶ 30.
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`extension of time to continue review [sic] those PMTAs submitted in good faith by industry.”150
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`In my opinion, however, because the plaintiffs in the AAP case have indicated that they would
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`likely oppose any requests for further relief from the court’s order,151 the court is unlikely to grant
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`such an across-the-board extension of time.
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`125. Mr. Clissold also mischaracterizes the AAP court’s order regarding the September
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`2021 deadline. Mr. Clissold opines that “all products with submitted PMTAs will be allowed to
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`remain on the market for up to a year while FDA reviews the PMTA, or even longer for good
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`cause, provided they were on the market on August 8, 2016.”152 The reference to “good cause”
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`in the relevant order, however, does not involve an extension of time for products with PMTAs
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`still pending at the one year mark. Rather, as Mr. Clissold himself quotes, the order states that
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`FDA “shall have the ability to exempt [new tobacco products on the market as of August 8, 2016]
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`from filing requirements for good cause on a case-by-case basis,” not from the one-year continued
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`compliance policy for products covered by a timely-filed PMTA under FDA evaluation.153
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`126. Mr. Clissold represents that “FDA has said that it will prioritize reviewing products
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`currently on the market that have the greatest chance of affecting public health,” and then opines
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`that ENDS products may fall into this definition.154 However, FDA actually indicated that it would
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`prioritize “those products currently on the market that have the greatest chance, either positively
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`150 Clissold Rep. ¶ 34.
`151 1199_RESP50000606-607.
`152 Clissold Rep. ¶ 28 (emphasis added).
`153 Clissold Rep. ¶ 24.
`154 Clissold Rep. ¶ 33.
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`or negatively, of impacting public health.”155 FDA did not specify which products might fall
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`within each category, but recent statements by FDA, HHS, and the CDC regarding the concern
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`over youth use of e-cigarettes highlight a perceived negative impact on public health brought by
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`at least certain ENDS products. For example, HHS Secretary Alex Azar has said that “[t]he United
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`States has never seen an epidemic of substance use arise as quickly as our current youth use of e-
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`cigarettes.”156
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`127. Further, Complainants also are part of an ongoing inquiry by the FTC regarding
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`Complainants’ sales, advertising, and promotional methods for its ENDS products.157 The FTC
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`orders seek, among other things, annual data on the sales and giveaways of e-cigarette products;
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`annual amounts the companies spent on advertising and promoting e-cigarette products; and
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`information about e-cigarette product placement, the websites and social media accounts used to
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`advertise or sell e-cigarettes, affiliate programs, influencer marketing, and college campus
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`programs.158 Sales, advertising, and promotional methods are also closely scrutinized by FDA as
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`part of a PMTA. Accordingly, any FTC findings from its study are likely to be of interest to FDA
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`and could impact whether Complainants’ Vuse e-cigarettes will receive PMTA authorization.
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`128.
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`Indeed, even before Complainants filed their Vuse PMTAs, FDA decided in 2018
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`to “reevaluat[e] its current compliance policy with respect to Vuse brand products and similar
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`products.”159 As FDA explained:
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`155 Perspective: FDA’s Preparations For The September 9 Submission Deadline (Aug. 31, 2020),
`https://www.fda.gov/tobacco-products/ctp-newsroom/perspective-fdas-preparations-september-
`9-submission-deadline.
`156 1199_RESP00010611; see also 1199_RESP00011826-31.
`157 See 1199_RESP50000542-0543.
`158 1199_RESP00010622.
`159 Id.
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`Last year, FDA announced a new comprehensive plan for tobacco and nicotine
`regulation aimed at better protecting children and significantly reducing tobacco-
`related disease and death. A component of that plan involved extending the
`compliance dates for submission of premarket applications for certain deemed
`products. That decision also resulted from a careful balancing of public health
`considerations, with the goals of establishing the proper scientific and regulatory
`foundation to efficiently and effectively implement the TCA and striking an
`appropriate balance between regulation and encouraging development of
`innovative tobacco products that may be less dangerous than cigarettes.
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`This careful balancing is being challenged by new information, from a variety of
`sources, about the epidemic rate of increase in youth use of ENDS products,
`including concerns about flavored e-cigarettes. Consequently, FDA is evaluating
`our regulatory tools to address this disturbing and accelerating trend. During the
`summer of 2018, FDA conducted an enforcement blitz of retailers nationwide,
`which resulted in more than 1,100 Warning Letters and approximately 130 civil
`monetary penalties being issued to retailers for underage sale of e-cigarettes. Those
`cases included the illegal sale of Vuse products to minors. This is unacceptable,
`both legally and as a matter of public health.160
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`129.
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`In any event, it is likely that many ENDS products currently marketed under FDA’s
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`compliance policy will receive refuse to accept, refuse to file, or no marketing orders over the next
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`12 months, which, in combination with FDA’s enforcement in this area, should substantially
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`reduce the number and availability of ENDS products in the marketplace.161
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`130. Mr. Clissold maintains that Complainants submitted PMTAs for their Vuse Solo
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`and Vuse Vibe “well in advance of the surge of submissions leading up to the September 9, 2020
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`deadline.”162 Yet this statement contradicts other portions of his report where he describes a
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`“dramatic surge in PMTA submissions” starting in the first half of 2020.163 Thus, by Mr.
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`Clissold’s own description, Complainants submitted PMTAs for their Vuse line of e-cigarettes
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`160 1199_RESP00010623.
`161 See 1199_RESP00014297-308; 1199_RESP00014309-10; 1199_RESP00014462-63.
`162 Clissold Rep. ¶ 34.
`163 Clissold Rep. ¶ 29.
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`during the height of the submission period. At any rate, FDA will not resolve PMTAs in the exact
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`order in which they were submitted.
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`C.
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`Other Products Are Not Adequate Substitutes for IQOS®
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`131. The other products the Murrelle Report points to as potential IQOS® substitutes
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`also are inadequate. With the exception of Swedish Match snus (a type of product that is unpopular
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`among many groups)164, each of the purported PRRPs the cited in that report lack the same coveted
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`regulatory status. Further, the Rodu, Arnold, and Benson Reports describes additional reasons
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`why these products are inadequate substitutes for IQOS®.
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`164 1199_RESP50000544-0565, at 162-172.
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