A controversy remains brewing over whether e-cigarettes should be regulated as a tobacco product or considered as a “drug delivery device.” Part of the argument is based on science and public health concerns, but much of the argument, as one might guess, actually revolves around money.
A court initially mandated that the U.S. Food and Drug Administration (FDA) regulate e-cigarettes as a tobacco product rather than as a drug delivery device. The FDA and individual states are still grappling with how best to define these products, who should be allowed to buy them and how to tax them. At present the FDA and most states consider them the same as tobacco cigarettes.
Health advocates very strongly want them classified the same as regular cigarettes, but many e-cig users and all e-cig manufacturers want them classified as smoking cessation devices, i.e., non-tobacco products.
There are already 200 e-cigarette manufacturing companies in the U.S. Sales in the “vaping” industry are about $2B now, and projected to reach $10B annually within a few years. Traditional cigarettes are heavily taxed products (a surcharge of $2.00-$4.35 per pack is added, depending on the state), thus e-cigarette classification from that standpoint becomes a really hot potato politically.
As the debate continues, there are several considerations for insurers:
- E-cigs do not contain tobacco but are typically used to deliver refined nicotine to users in a polyethylene glycol water mist (as in a medicinal inhaler), thus there are not the inherent tobacco-associated risks. However, one cannot currently distinguish an e-cig user from a tobacco smoker via routine cotinine screening. From that standpoint, considering e-cigarette users as smokers would seem prudent for underwriting, at least for now.
- As currently manufactured, nicotine delivery by these devices is reportedly inconsistent. Use of such devices as a means of quitting tobacco use — compared with other established nicotine-containing smoking cessation products — is being met with skepticism in some clinical corners.
- The fact that consumers can potentially modify the nicotine dose being administered when the re-usable canisters are refilled is worrisome as excess nicotine itself is known to have adverse health consequences. Presumably, canisters could also be used to administer other substances of potential concern.
- The risk of long-term exposure to/inhalation of a polyethylene glycol/nicotine/water vapor admixture is unclear.
Will proposed insureds even bother to disclose they use e-cigarettes? Possibly, only after they are quoted “smoker” rates.
It seems likely that the FDA will re-affirm that e-cigarettes should be regulated as a tobacco product. This position should help insurers to continue to assume tobacco use with (+) cotinine testing and rate accordingly. Whether tobacco rates will cover the potential risks associated with the last two considerations as would be intended, is unclear.
If select states decide to consider e-cigarettes differently from the federal ruling, things could get more complicated. It may be interesting to see if insurance labs can come up with a way to better determine nicotine source. Stay tuned.