• Decrease font size
  • Return font size to normal
  • Increase font size
U.S. Department of Health and Human Services

Tobacco Products

Transcript of Call with Industry on Draft Guidances

Moderator: Kathleen Quinn
October 26, 2009
1:00 pm CT

Coordinator: Welcome and thank you all for standing by. All participants will be on a listen only until the question and answer portion of today’s conference call.

At that time to ask a question or make a comment you would press star 1 on your phone. This call is being recorded. If you have any objections you may disconnect at this time.

I will now turn your meeting over to Miss Kathleen Quinn, thank you ma’am, you may begin.

Kathleen Quinn: Hi (Cindy), thank you so much and thank you all for joining us today. I’m just going to quickly let you know who is in the room with me and then we will go ahead and get started with today’s session.

Obviously myself Kathleen Quinn, I’m joined today by Dr. Lawrence Deyton, (Kaffa Norain) and (Marisa Cruz). And with that Dr. Deyton I’d like to turn the call over to you.

Lawrence Deyton: Hi, thanks very much Kathleen and good afternoon everybody, I want to thank all of you for participating in this call. We really do appreciate the effort and thought that has gone into the drafting of the comments and questions that we’ve received about our draft guidance document for registration and listing.

And we encourage you to continue to submit your questions and comments by mail, by email or through the public docket. I’m very sorry that today we can’t have a really full and open dialogue about these issues.

As you’re probably aware we have certain procedures here that we must follow as we’re developing these kind of guidances. But I just want to assure all of you that we’re listening very, very carefully and looking at the comments that you submitted in writing into the docket and the email.

We really take your comments and your suggestions very seriously and our goal to continue to improve the guidance. After our initial comments today we want to open up the line to all of you for your comments and suggestions.

We really do welcome your thoughts and feedback regarding what was said today on this call as well as any comments on any other aspect of the draft guidance document.

So for today’s call we’d like to focus on comments on the draft registration and listing guidance document. We anticipate using our next call on November 3 to address concerns and questions about the ingredients submission.

So of course to allow as many callers as possible to be heard today we ask that you keep your comments to under two minutes and again please use all other available means to get us your suggestions and your comments.

But before we begin, the Center for Tobacco Products has received several questions about the draft document.

And we’d like to address some of the issues that have come up in those comments that we received so far. And for that I want to turn the call over to Dr. (Marisa Cruz) who has been working these issues for the Center for Tobacco Products.


(Marisa Cruz): Thank you very much Dr. Deyton. First we received a number of questions about the definitions of some of the terms used in the draft guidance. And we would like to address those terms now.

Our answers are based on the draft guidance and we do want to remind everyone that we can change the guidance based on the feedback we receive from you today and from others that are commenting on this guidance document.

First an owner is any person who has an ownership interest in an establishment. If you do not have an ownership interest in an establishment you are not considered an owner.

An operator is a person who has management authority over an establishment and it is possible for an owner and operator to be the same person.

We’ve also interpreted the term establishment to be a place of business under one management at one general physical location.

Another topic that has generated a number of questions is who is required to register and list their products under Section 905 of the Tobacco Control Law.

We’d like to reiterate that any person who owns or operates an establishment in any state that manufactures, prepares, compounds or processes a tobacco product is responsible for registering and listing their products.

There are however a number of entities that are not required to register or list products and we’d like to go over those now. The law does not apply to growers of tobacco, to tobacco warehouses, and to tobacco grower cooperatives.

Therefore these entities are not required to register or list products. Just to clarify the term tobacco warehouse includes business that de-stem dry or pack tobacco leaves for storage or shipment or that mechanically remove foreign material from tobacco leaves or humidify tobacco with nothing other than water.

However the term tobacco warehouse does not include businesses that reconstitute tobacco leaves or to manufacturers, distributors or retailers of tobacco products or businesses that apply any substances to the tobacco leaves other than water in the form of steam or mist.

Companies are only required to list their products that are currently regulated under the law. So for example the company makes both cigarettes and pipe tobacco, the company only has to list its cigarette products.

At this time the registration and product listing requirements apply only to owners and operators of domestic establishments. So owners and operators of foreign establishments are not required to register those establishments and list the product manufactured in those establishments until FDA issues a regulation establishing these requirements.

At this time I’d like to turn the call back over to Kathleen Quinn who will detail some of the logistics of how we’ll handle this call.

Kathleen Quinn: Hi, thank you (Marisa). Just a few housekeeping rules that I wanted to go by and also just give you a little bit of extra information. Again we are going to open up the line in a minute to hear your comments and your feedback.

We would like you to keep it to less than - two minutes or less but before we do so I just wanted to mention a couple things before we change.

The first is that the comment period will close for this particular guidance on Section 905 on October 30. In addition we expect the final guidance to publish on November 5.

So again please make sure you put as many comments in as you feel are necessary. The next thing I wanted to let you know is that on November 3 we will hold another listening session at the same time from 2 to 3 with the same phone information, specifically on what we’re calling Section 904.

And with that I would like (Cindy) if we could open up the line to begin to take caller’s comments.

Coordinator: Thank you, at this time if you have a comment or wish to ask a question you can press star 1 on your phone. Please remember to unmute your phone and record your name clearly when prompted.

I do need your name in order to introduce your question. To withdraw your request you would just press star 2. Again to ask a question it’s star 1. It will be just a moment while our questions register.

Our first question or comment is from Kevin Altman, your line is open sir.

Kevin Altman: Yes, I’m Kevin Altman with the Council of Independent Tobacco Manufacturers of America or CITMA for short.

The draft guidance on establishment registration states the FDA has developed a paper form, FDA form 3741 as an alternative submission tool.

We’d like to know when this template form would be available in draft for comment by small manufacturers who are unable to support data electronically. And if that is going to be some time we’re running up against a deadline now of December 30.

We’d like to note that we’d like to look at a 60 day extension from the time that form is made final in order to submit our registration information. Thank you.

Coordinator: Thank you, our next question or comment is from Jim Dillard, your line is open.

Jim Dillard: Thank you, hi, this is Jim Dillard from Altria. We had submitted about five questions to Dr. Deyton and what I’d like to do is summarize - there’s three main issues that we’d be looking for some clarification.

The first one, Dr. (Cruz) began to talk about the various establishments. And one of the questions we have is whether or not an establishment that has been closed down, whether or not you have to register that facility, particularly if it closed down say middle of the year.

We had a major manufacturing site that we had announced two years ago that we were in the process of closing and in fact finished that this year.

So we’re curious whether or not that type of establishment needs to be registered on December 30. The second area is around the most recent characterizing flavor standard, 907A1A.

We know that that ban went into effect in September and since there now is a product standard for cigarettes under 907 the listing information and then therefore the type of labeling and consumer information that would need to be submitted along with the listing of the cigarette, it appears in the statute that we need to provide all the labeling, but not all consumer information.

And so we’d like some clarification on that as well as a little bit better definition on consumer information for smokeless products since there’s not a tobacco product standard.

How much and what type of consumer information should be submitted? And then our third issue is really around the definition of commercial distribution and any exclusion for investigational use.

It’s common in this industry to do consumer tasting panels, preference surveys, home use tests and under that sort of scenario, we don’t believe it meets the definition of commercial distribution.

So we’d be interested to additionally understand the investigational use products and any exemptions that might go with those types of products and exemptions from requirements of Chapter 9.

That’s it for me today, we’ll also be submitting some comments by this Friday. We appreciate the opportunity to provide the agency with comments.

Coordinator: Thank you, our next question or comment comes from (Tom Hirschfield), your line is open.

(Tom Hirschfield): Yeah, this is (Tom Hirschfield) from JT International USA regarding the recently issued draft guidances which state that ideally one principal should register for all owners and/or operators to reduce the number of redundant submissions.

This principle registrant would be expected to have the authorization to represent and fulfill the obligations of the owners/operators on whose behalf he or she is registering.

Does the FDA plan to recommend a specific format for obtaining and documenting such authorizations?

Will there be a mechanism by which FDA will affirmatively confirm that the owners/operators who are registered through an authorized representative have fulfilled their obligations under Section 905?

Thank you and we as well look forward to working with you in this process. Thank you.

Coordinator: Our next question or comment comes from (James Deer), your line is open.

(James Deer): Yes, thank you. We would like to ask question on holding company structures. And any entity which is part of a holding company structure whereby a number of the members of that structure do not engage in one of the four activities noted in the guidance document.

And they don’t engage in repackaging or other alteration of any product as it comes from the manufacturer.

We don’t think should be required to register and we’d like to suggest that the holding company’s affiliates distributors and other entities that do not engage in such activity should not be required to register.

And my question is would the FDA consider the registration only of the entity engaged in the manufacturing itself to be acceptable?

Coordinator: Our next comment is from Ben Haas, your line is open.

Ben Haas: Hi, thank you, my name is Ben Haas, I’m an attorney with Latham and Watkins. You’ve clarified that the registration and listing requirements apply currently to domestic establishments that are engaged in the manufacturing, processing, etcetera of tobacco products.

And as such they did not apply to foreign establishments. We’d like some clarification in the final guidance related - regarding the impact of these requirements on importers who do not engage in processing or re-labeling or repackaging or anything like that.

Specifically clarification that importers need not register until FDA issues additional regulations.

It’s also important to obtain this clarification in light of the fact that the Section 904 ingredient listing requirements will require explicitly importers to participate in that process resulting in a situation which importers will need to apparently provide ingredient information this September.

But will not otherwise be required to register or list their products. Taking both guidances together we hope that FDA will clarify what obligations are imposed on quarters as of that date. Thank you.

Coordinator: Our next comment is from (Jennifer Lee), your line is open.

(Jennifer Lee): Hi, my name is Jennifer Lee from Carolina Tobacco Company. The majority of small businesses other than a single corporate entity trading under a single name and selling a single brand will have difficulty in navigating the definitions of manufacturer establishment and operator in the guidance documents.

Small manufacturers need clearer guidance as to how to apply the above definitions to companies that perform activities that push them into all of the above definitions.

And I would ask that the FDA provide such guidance to small manufacturers. Thank you.

Coordinator: Our next comment is from (Bill McGrath), your line is open.

(Bill McGrath): Good afternoon and we appreciate you taking the time to continue the dialogue with industry or at least hear industry’s concerns. By the way my name is (Bill McGrath), I represent RAI Services which is the service company that will be insuring FDA compliance for the operating companies of Reynold’s American.

We had a while back with regard to the OBM comment submitted some comments to FDA, largely with regard to time. I want to reiterate the comments we had earlier about really the fact that for all companies the timeline is getting very short.

For small companies trying to gather the resources to comply, for large companies who have much larger volumes of submissions to make.

On that you know we - the process has begun for which we’re grateful. I would be interested in hearing from anyone else on the line about their concerns with regard to the pilot program that ended on Friday.

We’d all I think like to know very quickly about the changes and the time frame for making the appropriate changes to the web portal to make it work.

We actually had some fairly significant technical issues and as we finish up registration, move to documents listing and ingredients submission, we need FDA to once again come out with a timeline in which these issues are going to be addressed.

Portals are going to be finalized so that industry may do the training, the infrastructure building that’s necessary. On that we would concur with the need for a timeline that stems from the date of completion.

We’re always ready to talk to you to help you learn more about the industry and we appreciate this time.

Coordinator: Our next comment is from Everett Gee, your line is open.

Everett Gee: Good afternoon. I’ve got a question on the necessity to register on the establishment or operator guidance. I did hear and was listening to some of the helpful comments at the beginning of the call from FDA on tobacco warehouses and tobacco coops.

This question is probably similar but wondering on tobacco dealer, I represent a tobacco dealer, Golden Leaf Tobacco Company that does no processing whatsoever, doesn’t have the technology or equipment to even add water in the leaf processing.

Just buys green leaf tobacco from farmers and they buy other processed tobacco from other leaf dealers. It may send out green leaf tobacco for processing but by third party.

It may send out for blending but it’s truly a middle man type operation and we just wanted to confirm the necessity or non-necessity for registration of truly a leaf dealer that is really adding nothing to, doesn’t have the capacity to add anything to the tobacco itself.

But the industry has historically operated with these type middle man companies between farmers and manufacturers, less so now perhaps than five and ten and twenty and fifty years ago.

But still wanted to have some clarification on the leaf dealer scenario that doesn’t process or touch any of the tobacco itself. Appreciate the time and thank you very much.

Coordinator: Our next comment is from (Lourdes Han), your line is open.

(Lourdes Han): Thank you for taking my call, I’m with Wellstone Tobacco Company. We manufacture - we do not manufacture tobacco products, we use contract manufacturer. Does a contract manufacturer register our brand, our product?

Or do we register our product? The difficulty is if the manufacturer is supposed to register our product or put the onus on him and then we must rely on him to meet any deadlines, follow guidelines, make registration deadlines and so forth.

Just have a question if we could as well or how is that sorted out? Thank you.

Coordinator: Our next comment is from (Lavonny Paramishu), your line is open.

(Lavonny Paramishu): Thank you and good afternoon. The guidance identifies the list of principle components that should be identified in product listing. Is this list exhaustive?

If not will the final guidance confirm if these expectations with respect to the listing of tobacco product components? Thank you.

Coordinator: Our next comment is from Kevin Altman, your line is open.

Kevin Altman: Thank you. Again I’d like to - we’ve made this comment several times but the Family Smoke and Prevention Tobacco Control Act requires that FDA establish an office to assist small tobacco product manufacturers.

And actually states the Secretary shall establish within the Food and Drug Administration an identifiable office to provide technical and other non-financial assistance to small tobacco product manufacturers to assist in the complying with the requirements of this act.

Congress made it very clear in its March 22, 2009 committee report on the act, the committee noted that an entity that qualifies as a small tobacco product manufacturer has access to fewer economic resources and therefore needs special consideration provided for SPMs and certain portions of the act.

And that Section 901F directs FDA to establish this office to assist these small tobacco product manufacturers to provide them technical assistance in complying with this act.

We are now moving from a questions and comments period to the actual regulations of the act by the FDA and less than 90 days companies are going to be required to register and also provide their listing ingredients barring any extension of the timed deadline.

Please also note that numerous changes to packaging and labeling are now less than eight months away which for the small tobacco product manufacturers is now even more challenging due to the long lead times for the printers.

With all of this in mind we ask again that you immediately establish the office to assist these small tobacco product manufacturers so they may be better able to comply with the new regulation. Timing is of the essence in this matter.

Thank you very much for your time and consideration.

Coordinator: Our next comment is from Michael Shannon, your line is open.

Michael Shannon: Hello, this is Michael Shannon with Lorillard Tobacco Company. The registration requires establishment engaged in the manufacturing and we were requesting whether corporate headquarters who are not physically located at those locations are establishments that manufacture tobacco must register.

Coordinator: Our next comment is from Everett Gee, your line is open.

Everett Gee: Hi, thank you again. The draft guidance refers and imports the concept of agency into the issue of who must file the registration.

I don’t want to over read agency but this could conceivably result in requirements to get power of attorney from directors who have little knowledge of the day to day operations of a manufacturing facility.

We strongly submit a company should file its registration be responsible therefore but there is no congressional mandate nor would we respect and submit a Sarbanes Oxley type attempt to make every officer in direct responsible for every statement in their registration.

And we would like to seek FDA’s guidance on this issue on the agency issue and the registration itself. Thank you.

Coordinator: Our next comment is from Ben Haas, your line is open.

Ben Haas: Yeah, hi this is Ben Haas with Latham Watkins again. The draft guidance informs owners and operators that are corporations that they should identify the name of each corporate officer and director on the registration.

I think industry would benefit from some clarification regarding the scope of this requirement, particularly for those registrants that are part of larger international enterprises that could have a number of different officers and directors.

We would ask FDA to provide some further instruction on this requirement on the final bids. Thank you.

Coordinator: Our next comment is from Leanne Moore, your line is open.

Leanne Moore: Thank you, I’m Leanne Moore, Assistant General Counsel for Nashville Tobacco and my question relates to the standard form for industry terms.

FDA uses some terms that are statutory rather than the common industry terms and my question is whether the FDA will work with the industry group to develop a common standard for what certain terms mean and how they are defined. Thank you.

Coordinator: Our next comment is from Bill Sherman, your line is open.

Bill Sherman: Thank you very much. My name is Bill Sherman from Nat Sherman’s and as part of the product listing requirements, registrants are required to submit examples of all advertising and labeling.

Will the final guidance confirm that materials published at trade journals which are not communications directed at consumers, that they are not considered advertising and therefore not be submitted under - to the FDA under Section 905?

Thank you very much.

Coordinator: Our next comment is from Kevin Altman, your line is open.

Kevin Altman: Yes, just I guess expanding on the last question, the act also has a requirement to report a representative sample of advertising materials for specific sub grant, but we’re not real sure what constitutes a representative sample.

We’d ask for guidance from FDA as to what they would like to see as a representative sample of the material. Thank you.

Coordinator: Our next comment is from (Lavonny Paramishu), your line is open.

(Lavonny Paramishu): Thank you, this is (Lavonny Paramishu) from (King Meek) Marketing again. Does the FDA currently intend to adopt a uniform product identification system as described in Section 905E?

If so how will FDA determine the correct identification nomenclature for all tobacco products and what is the timing for the establishment of such a system?

Thank you.

Coordinator: Our next comment is from (Bill McGrath), your line is open.

(Bill McGrath): Hi, this is (Bill McGrath) from RAI Services again. Two specific points we’d like to get more guidance on, first of all the guidance mentions using UPC codes as a particular identifier. UPC codes change within a particular brand style for a multitude of reasons including promotions, specials, so that a single brand style can have a large number of UPCs over time.

We’d like to know in the guidance whether FDA has considered any alternatives or whether the FDA is flexible as to what manufacturers use.

Second thing, just a technical point on the pilot program, the Dun’s number again with regard to flexibility in the reporting system, the Dun’s number is listed in the registration as not mandatory.

However our folks tell us that it was very difficult to not possible to in fact do registration and listing without a Dun’s number.

So we hope you will address those things in your next guidance. Thanks.

Coordinator: Our next comment is from Kevin Altman, your line is open.

Kevin Altman: I guess again to expand on what was just said, for sample labeling on product packaging, small manufacturers, we do not have uniform or unique ID numbers for each label other than perhaps the brand name itself identified on the package and the UPC codes.

We’re asking and hope that FDA would agree that UPC codes would act as a specific identifier for our products. Thank you.

Coordinator: At this time I’m showing no further comments.

Kathleen Quinn: Thank you very much (Cindy). If there are no other comments then we are going to go ahead and conclude today’s call. Just a reminder that we do obviously have the docket but we also have an email address if you need to follow up.

It’s ctp904and905questions and again thank you very much for today and our next listening session is on November 3 from 2 to 3 with the same phone number. Thank you.

Coordinator: This concludes today’s teleconference, thank you all for your attendance, you may disconnect at this time.