Case 1:20-cv-00393-LO-TCB Document 829-1 Filed 01/21/22 Page 1 of 6 PageID# 21588
`Case 1:20-cv-00393-LO-TCB Document 829-1 Filed 01/21/22 Page 1 of 6 PagelD# 21588
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`EXHIBIT 1
`EXHIBIT 1
`FILED UNDER SEAL
`FILED UNDER SEAL
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`Case 1:20-cv-00393-LO-TCB Document 829-1 Filed 01/21/22 Page 2 of 6 PageID# 21589
`Case 1:20-cv-00393-LO-TCB Document 829-1 Filed 01/21/22 Page 2 of 6 PagelD# 21589
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`CONTAINS CONFIDENTIAL BUSINESS INFORMATION
`SUBJECT TO PROTECTIVE ORDER
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`UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF VIRGINIA
`ALEXANDRIA DIVISION
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`RAL STRATEGIC HOLDINGS, INC. and
`R.J. REYNOLDS VAPOR COMPANY,
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`Plaintiffs and Counterclaim
`Defendants,
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`Civil Action No. 1:20-cv-393
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`v.
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`ALTRIA CLIENT SERVICES LLC; PHILIP
`MORRIS USA INC.; and PHILIP MORRIS
`PRODUCTSS.A.,
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`Defendants and Counterclaim
`Plaintiffs.
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`
`AMENDED AND SUPPLEMENTED OPENING EXPERT REPORT
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`OF STACY EHRLICH
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`
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`426/91
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`Stacy Ehrlich
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`April 26, 2021
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`CONTAINS CONFIDENTIAL BUSINESS INFORMATION SUBJECT TO PROTECTIVE ORDER
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`B.
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`Any Advantage VUSE E-Cigarettes Can Gain for PMTA Review Is
`Valuable, Given the High Authorization Hurdles Such Products Face
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`127. E-cigarettes face a number of hurdles to PMTA authorization – hurdles that
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`ultimately could frustrate the ability of any e-cigarette to receive such authorization. FDA’s ENDS
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`Guidance states that “[i]f . . . there is significant initiation by youth, minimal quitting, or significant
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`dual use of combust[ed] and non-combust[ed] products, then the public health impact could be
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`negative.”195
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`196 Accordingly, any advantage the VUSE e-cigarette PMTAs can gain is
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`particularly valuable in this high-stakes situation.
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`1.
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`Epidemic Youth Use Is a Hurdle to an E-Cigarette PMTA
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`128. One of the primary hurdles that e-cigarette PMTAs face is the “epidemic” youth
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`use of e-cigarettes.197 Former U.S. Health and Human Services Secretary, Alexander Azar,
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`reflected that “[t]he United States has never seen an epidemic of substance use arise as quickly as
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`our current youth use of e-cigarettes.”198 As of September 2020, there were 3.6 million U.S. youth
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`using these products – with more than 8 in 10 using flavors.199 Regular use of e-cigarettes among
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`high school students (i.e. those that use at least 20 out of the last 30 days) increased from 20% in
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`195 1199_RESP00014118-1199_RESP00014169 at 1199_RESP00014135 (citing 79 Fed. Reg.
`23141, 23147 (2016).
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`196
`197 1199_RESP00010611-1199_RESP00010614; see 1199_RESP00011826-
`1199_RESP00011831; Pediatrics, 399 F. Supp. 3d at 485.
`198 1199_RESP00010611-1199_RESP00010614; see 1199_RESP00011826-
`1199_RESP00011831.
`199 1199_RESP00015126-1199_RESP00015128 at 1199_RESP00015127; Youth Tobacco Use:
`Results from the National Youth Tobacco Survey, FDA (Dec. 22, 2020),
`https://www.fda.gov/tobacco-products/youth-and-tobacco/youth-tobacco-use-results-national-
`youth-tobacco-survey.
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`131.
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`In addition to FDA, other governmental bodies have expressed concern over youth
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`use of e-cigarettes. For example, last April, Members of Congress launched the Congressional
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`Caucus to End the Youth Vaping Epidemic “to discuss needed solutions to better protect American
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`youth from the dangers of vaping and nicotine addiction.”212 Reynolds American, Inc.’s CEO
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`acknowledged before a Congressional committee in February 2020 that “[t]he increasing youth
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`vaping over the past two years and serious health issues from illicit products are now at the heart
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`of a national discussion.”213
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`132. The FTC also included Reynolds in an inquiry regarding sales, advertising, and
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`promotional methods for e-cigarettes.214 The FTC ordered Reynolds to produce, among other
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`things, annual data on the sales and giveaways of its e-cigarettes; annual amounts spent on
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`advertising and promoting e-cigarettes; and information about e-cigarette placement, the websites
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`and social media accounts used to advertise or sell e-cigarettes, affiliate programs, influencer
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`marketing, and college campus programs.215 FDA, too, closely scrutinizes sales, advertising, and
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`promotional methods for e-cigarettes as part of its PMTA review.216 Accordingly, any FTC
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`findings from its study are likely to be of interest to FDA and could impact whether the VUSE e-
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`cigarettes will receive PMTA authorization.
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`133. Because of the levels of youth use of e-cigarettes reported, e-cigarette
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`manufacturers have come under increasing scrutiny. Even before Reynolds filed its VUSE
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`212 1199_RESP50000411-1199_RESP50000412.
`213 1199_RESP00010932-1199_RESP00011048 at 1199_RESP00010958.
`214 See 1199_RESP00014485-1199_RESP00014486.
`215 Id.
`216 1199_RESP00010622-1199_RESP00010625.
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`PMTAs, FDA decided in 2018 to “reevaluat[e] its current compliance policy with respect to VUSE
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`brand products and similar products.”217 As FDA explained:
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`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.218
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`134.
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`135.
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`221
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`217 Id. at 1199_RESP00010622.
`218 Id. at 1199_RESP00010623.
`219
`220
`221
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`219
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`220
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`Case 1:20-cv-00393-LO-TCB Document 829-1 Filed 01/21/22 Page 6 of 6 PageID# 21593
`Case 1:20-cv-00393-LO-TCB Document 829-1 Filed 01/21/22 Page 6 of 6 PagelD# 21593
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`CONTAINS CONFIDENTIAL BUSINESS INFORMATION SUBJECT TO PROTECTIVE ORDER
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`advantage Reynolds derived from the use of the technology claimed in the Asserted Patents even
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`more valuable.
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`Cc.
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`PMTIAAuthorization for VUSE E-Cigarettes Is Imperative for Reynolds
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`161.
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`From a regulatory perspective,
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`it is imperative for Reynolds to obtain PMTA
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`authorizations for its VUSEe-cigarettes.
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`162.
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`Asdiscussed,all ofthe VUSE e-cigarettesare illegal.??Po
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`Po The VUSE Alto PMTAis covered until September 2021,
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`but, given the delays im PMTAreview, that additional time likely will not yield a PMTA
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`determination for this product, either, before the one-year grace period expires.”°°
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`163.
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`CTP Director Mitch Zellerhas stated very clearly that products not reviewed by the
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`:
`:
`:
`es
`>
`.
`oy)
`end of the one-year continued compliance period “risk FDA enforcement per FDA’s guidance.”?°°
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`253 1199RESP00016076-1199RESP00016079.
`254
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`°° Zeller Article; 1199RESP00016076-1199RESP00016079.
`256 Zeller Article.
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