The proposed rule, if finalized, would add a requirement that tobacco manufacturers of grandfathered tobacco products and products that are exempt from the requirements of demonstrating substantial equivalence maintain records to demonstrate that they can legally market their products. For products that receive a Premarket Tobacco Product Application (PMTA) marketing order, the proposed rule, if finalized, would require certain postmarket reporting, including periodic reporting and adverse experience reporting. The proposed rule also establishes requirements for the content and format of PMTA and the procedures we follow to review the PMTA.
If finalized, the proposed rule would create cost savings for firms and for us by reducing the number of follow-on submissions for PMTAs. The proposed rule would also create cost savings for us by reducing the cost of review, reducing the number of deficiency letters we would issue during substantive scientific review, and eliminating the need to process unnecessary data. We estimate that average annualized benefits over 20 years would equal $5.54 million at a 7 percent discount rate and $5.44 million at a 3 percent discount rate.
If finalized, the proposed rule would create costs for firms and for us by increasing the number of complete PMTA submissions for deemed and originally regulated tobacco products. Moreover, because this is the first regulation to account for the costs of the PMTA requirements for originally regulated products, we also include the costs to submit and review PMTAs for these tobacco products; we already included the costs to submit and review PMTAs for deemed tobacco products in the final regulatory impact analysis for the Deeming Rule. Firms would incur costs to maintain and submit postmarket reports, and we would incur costs to review postmarket reports. Finally, firms would incur costs to read and understand the rule and costs to maintain records for some grandfathered products. We estimate that average annualized costs over 20 years would equal $7.05 million at a 7 percent discount rate and $6.76 million at a 3 percent discount rate.
Regulatory Impact Analysis
Federal Register: 84 FR 50566, September 25, 2019