When will the regulatory standards for e-cigarettes be issued?

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E-cigarettes have become a topic for discussion among representatives and members: Sun Chengye, a member of the National Committee of the Chinese Peoples Political Consultative Conference, suggested banning the sale of e-cigarettes to minors, and He Lin, a member of the National Peoples Congress, also proposed suggestions on protecting young people from e-cigarettes and accelerating the introduction of industry regulations.

The debate that has never stopped

In the past few years, the debate about e-cigarettes has never stopped. Supporters believe that e-cigarettes are 95% less harmful than traditional tobacco, and the vast majority of users are traditional smokers, which helps to quit smoking. Opponents believe that e-cigarettes are also cigarettes, which will bring a portal effect and attract more non-smokers, especially minors. At the same time, the scientific research system of e-cigarettes in academia is still in its infancy, and the long-term impact of e-cigarettes on public health will take longer to study.

The debate continues, but the industry development has not stopped. In Shenzhen, China, 90% of the worlds e-cigarette production capacity is gathered. After the second half of 2020, two e-cigarette listed companies were born-Smoore International and Ruxin Technology. The former is the worlds largest e-cigarette OEM factory, and the latter is the parent company of the well-known e-cigarette consumer brand RELX.

From the perspective of the industrial structure, e-cigarettes have become one of the few electronic consumer products that China has mastered the entire chain of research and development, production, and sales and has taken a leading position in the international market. At present, the market value of Smoore International exceeds 300 billion yuan, and the market value of RELX also exceeds 170 billion yuan. Investors vote with their feet, which to a certain extent also verifies the future value of e-cigarettes and atomization technology.

For the national standard formulation plan for Electronic Cigarettes issued on October 11, 2017, the outside world once predicted that it would be released in 2019. However, according to the latest data on the website of the National Standards Committee, the aforementioned standard is still in the under review stage, which has not yet been finalized, adding uncertainty to the e-cigarette industry.

Undecided regulatory standards

According to data from the China Electronic Cigarette Industry Committee, in 2020, Chinas e-cigarette exports reached 49.4 billion yuan and domestic sales reached 14.5 billion yuan. Compared with 2019, exports rose by 12.8%, while domestic sales also rose by 30%. From the above data, it can be seen that e-cigarettes have become one of the important industries for my countrys export and foreign exchange earnings. However, from the perspective of the consumer market, according to Huachuang Securities Research Report, global sales of electronic vaporizers reached US$20.2 billion in 2019, a year-on-year increase of 28.43%, with China accounting for about 6.85%.

Chinas electronic cigarette consumer market is in its early stages, and national standards and regulatory policies need to be improved, which is the focus of industry insiders. The national standard formulation plan for Electronic Cigarettes was issued as early as October 11, 2017, and the outside world once predicted that it might be released in 2019. However, according to the latest data on the website of the National Standards Committee, the aforementioned standard is still in the under review stage. So far, Chinas policy regulations on the electronic cigarette industry remain at two levels: prohibition of sales to minors, prohibition of online sales, and prohibition of smoking electronic cigarettes in public places in some cities.

The official standard has not yet been officially released, and practitioners, regulatory authorities, experts and scholars have their own views on the identity of electronic vaporizers. Because it does not contain tobacco, the most common closed electronic cigarettes on the market do not belong to the tobacco monopoly products stipulated in the Tobacco Monopoly Law of the Peoples Republic of China, so traditional tobacco retail channels have always been relatively cold to this. Another type of electronic cigarette, called heat-not-burn, which is different from atomized electronic cigarettes, such as IQOS, has been clearly included in the jurisdiction of tobacco monopoly because it contains tobacco ingredients.

For the pending regulatory standards, the general view is that a one-size-fits-all approach is unlikely. A column published in Science magazine on December 13, 2019 pointed out that the problems caused by electronic cigarettes need to be solved as soon as possible, but a one-size-fits-all ban on electronic cigarettes will do more harm than good. Excessively cautious restrictions or bans on less harmful electronic cigarette products while leaving deadly cigarette products on the market do not protect public health, the author wrote in the article.

Harm reduction or gateway effect

For the main role of electronic cigarettes, some professionals tend to claim harm reduction. By taking in nicotine through atomization, heat-not-burn methods, etc., electronic cigarettes avoid harmful substances such as tar produced by tobacco combustion. Some studies have found that electronic cigarettes are less harmful than cigarettes. However, some experts believe that nicotine in e-cigarettes is addictive, so there is a gateway effect: attracting some non-smokers, especially minors, to become dependent on nicotine due to exposure to e-cigarettes, and eventually become users of traditional cigarettes.

The current control policies and strength of e-cigarettes in various countries are different, which also makes whether e-cigarettes are the first cigarette for non-smokers have different voices. For example, a paper published by the Chinese Center for Disease Control and Prevention in The Lancet proves that more than 96% of e-cigarette users in China are old smokers who are addicted to smoking, want to quit smoking, and understand the harm of smoking. According to data from the British Department of Health, most current e-cigarette users are former or current smokers. Only 0.8% to 1.3% of young people who have never smoked are e-cigarette users.

Empowering and expanding the development of the health industry

Although e-cigarettes are still controversial in China, Shenzhen plays the role of producing and exporting 90% of e-cigarettes in the global electronic atomizer market. In fact, the new species of e-cigarettes was first invented by Chinese medicine practitioner Han Li in 2003. After more than a decade of technological iteration and update, e-cigarettes have become a rare Chinese invention, Chinese technology, Chinese production and a dominant sub-industry in the world.

Ao Weinuo, Secretary-General of the Electronic Cigarette Industry Committee of the China Electronic Commerce Association, believes that at present, e-cigarettes have become a typical representative of the integration and upgrading of my countrys electronic information technology and traditional fine chemical technology, and are also an internationally renowned business card for my countrys electronic information manufacturing industry. Whether it is the pricing power of independent brands, the agglomeration effect of the entire industrial chain, or the high-density market distribution and intellectual property rights, Chinas first-mover advantage in this field is already very obvious.

On the other hand, with more than a decade of technological accumulation, Shenzhens e-cigarette industry can also explore the platform value of atomization technology. In fact, in addition to being applied to e-cigarette products, atomization technology has long been widely used in the medical field. In the future, this technology is expected to open up new space in the field of life and health, and has an industrial value that cannot be ignored.

For example, medical atomizers and atomized inhalation preparations including traditional Chinese medicine have become conventional tools for treating respiratory diseases. However, due to the size and operation of the equipment, the application of atomization technology in the field of big health is still rare. And the leading domestic e-cigarette companies have quietly started their layout in this regard.

On March 5 this year, RUXIN Technology released a new product that does not contain nicotine. It is reported that the product extracts herbal raw materials that are both medicinal and edible, and is the companys attempt to explore the platformization of atomization technology. In addition, RUXIN Technology also revealed that the company is cooperating with a number of pharmaceutical companies and research institutions to evaluate technology and products and explore the development of new atomized inhalation drugs.

In this regard, Ao Weinuo believes that future technological innovation will inevitably be the focus of e-cigarette companies and atomization technology. If more companies invest in the exploration and application of new electronic atomization technologies, the global market prospects of this industry will be very broad.

Zhong Guoping, director of the Data Center of the Institute of Clinical Pharmacology of Sun Yat-sen University and deputy director of the Clinical Trial Evaluation Professional Committee of the Guangdong Food and Drug Review and Certification Technology Association, said that atomization technology should focus on human safety and health and improve the quality of life of the people. From the perspective of actively carrying out relevant basic research and clinical research, empower and expand the development of the health industry.

Observation

Related companies should jointly promote the e-cigarette industry

Towards standardization, standardization, and internationalization

At this years two sessions, suggestions for e-cigarettes focused more on protecting young people from e-cigarettes. In fact, the countrys regulatory policies have long been implemented to protect minors from e-cigarettes. As early as 2018, the State Administration for Market Regulation and the State Tobacco Monopoly Administration issued the Notice on Prohibition of Selling E-cigarettes to Minors. In 2019, the two bureaus further issued the Notice on Further Protecting Minors from E-cigarettes, requiring all Internet online channels to prohibit the sale of e-cigarette products. In the past two years, most e-cigarette companies have also focused on the protection of minors. Take Ruxin Technology as an example. In December 2019, the company launched the Sunflower System, an intelligent protection system for minors, using technologies such as face, name, and ID card triple verification to strictly prohibit minors from purchasing.

In addition to protecting minors, the low threshold once caused the Chinese e-cigarette industry to be mixed and scattered. At present, the quality of e-cigarettes on the market is still uneven, and there is a lack of detailed rules for market evaluation and supervision. E-cigarette products need to be produced in a standardized manner. For now, the e-cigarette industry is in urgent need of the introduction of national standards. Ao Weinuo said. He said that for enterprises, the introduction of regulatory policies is the only way to standardize development, and it is not a bad thing. After the introduction of normative documents and policies such as the National Standard for Electronic Cigarettes, the industry can carry out orderly competition based on the standards. After the baptism of strong supervision, the industry will quickly concentrate on the head and move towards standardization faster.

Obviously, in a standardized environment, encouraging enterprises to compete positively, and making the good better through market mechanisms and scale effects, can promote the standardized development of the entire industry.

As a new thing and new technology, e-cigarettes have their positive value, but the invisible negative effects cannot be ignored. Weigh the two benefits and choose the heavier one, and weigh the two harms and choose the lighter one. How to formulate a reasonable e-cigarette regulatory system through cost-benefit analysis method with the goal of minimizing public health risks is also a direction worth thinking about and practicing in Shenzhen as a pilot demonstration area.

At the same time, Shenzhen is also an area where leading enterprises gather and industries are highly concentrated. Some practitioners suggested that if Shenzhen could take the lead in appropriate trials, issue local standards, clarify the management departments, and subdivide the management of electronic cigarettes and traditional tobacco, and comprehensively consider public health, industrial development, and tobacco control goals on the premise of resolutely prohibiting minors from using them, it may help Shenzhen continue to seize industrial development opportunities in the global competition and consolidate its position as an industrial highland.

Ao Weinuo also called on relevant companies to actively participate and jointly promote the development of the electronic cigarette industry towards standardization, standardization, and internationalization. To achieve the healthy and sustainable development of the global electronic atomization industry, it is inevitable that the four core elements of protecting minors, quality and safety, market prospects, and regulation are indispensable.