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R.J. Reynolds Tobacco Co.'s bid to carve out a "free speech" marketing niche for innovative products received a setback yesterday.
A U.S. District Court judge denied a motion for a preliminary injunction by Reynolds regarding the Family Smoking Prevention and Tobacco Control Act, which became law in June.
Judge Joseph McKinley ruled that "the plaintiffs have little likelihood of success" in challenging the modified-risk tobacco-products provision of the law.
A lawsuit was filed Aug. 31 in the Western District of Kentucky against the federal government and the Food and Drug Administration by Reynolds; Conwood Co. LLC, a sister company with Reynolds American Inc.; Lorillard Inc.; Commonwealth Brands Inc.; and two other parties.
The companies said they are trying to "protect their First Amendment right to communicate with adult tobacco consumers about their products." . . .
However, Adam Spielman, an analyst with Citigroup Global Markets Inc., said he believes that regulation will not undercut Reynolds' smokeless innovations. "The rules on new products do not require sign-off from the FDA if the product is substantially equivalent health-wise to existing products," he said.
The decision comes at a time when the National Cancer Institute has provided grants for a new series of medical studies on smokeless-tobacco products, some focused on whether the products provide a less harmful alternative to conventional tobacco products.
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A federal judge ruled Thursday that tobacco companies hoping to block new restrictions on their marketing have little chance of succeeding.
The companies had asked U.S. District Judge Joseph H. McKinley Jr. to issue a preliminary injunction in a lawsuit they filed in August claiming new tobacco regulations violate their right to free speech.
The companies, including two of the industry's three largest, are challenging provisions of a law that gave the U.S. Food and Drug Administration new authority over tobacco. In a 29-page decision, McKinley outlined the arguments in the lawsuit and found that blocking the provisions was not warranted. The ruling focused on a narrow portion of the legal challenge dealing with modified-risk tobacco products.
The question before the Court is whether Plaintiffs have met their burden of showing the need for the “extraordinary remedy” of a preliminary injunction against enforcement of the MRTP provision. Tennessee Scrap Recyclers Ass’n v. Bredesen, 556 F.3d 442, 447 (6th Cir. 2009). In determining whether to issue a preliminary injunction, courts consider four factors: (a) whether the movant has a strong likelihood of success on the merits; (b) whether the movant would suffer irreparable injury without the injunction; (c) whether issuance of the injunction would cause substantial harm to others; and (d) whether the public interest would be served by the issuance of the injunction. . . .
Assuming that the MRTP provision implicates the First Amendment, it seems likely that its restrictions on speech are constitutionally permissible. . . .
In sum, the Court concludes that Plaintiffs have little likelihood of success on the merits of their facial First Amendment challenge to the MRTP provision except on the theory that it operates as a prior restraint on speech and lacks a reasonable time limit for FDA review. . . .
Having considered each of the required factors, the Court finds that the “extraordinary remedy” of a preliminary injunction is unwarranted.
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III. CONCLUSION
For the foregoing reasons, Plaintiffs’ motion is DENIED.
A federal judge has turned down a request by the nation's No. 2 cigarette-maker and others to immediately halt enforcement of new federal regulations on tobacco products.
Their challenge to new U.S. Food and Drug Administration powers to regulate what tobacco firms say about their products has little likelihood of success, except on one point, Judge Joseph H. McKinley Jr. of the U.S. District Court in Bowling Green, Ky., ruled yesterday.
Because of that, and because the businesses couldn't show they faced irreparable harm, McKinley rejected tobacco companies' request for a preliminary injunction stopping FDA enforcement of rules limiting what they say about products they believe reduce the risk of using tobacco.
In a clear victory for public health, a federal judge in Kentucky today rejected a motion by tobacco companies to block key provisions of the new law giving the U.S. Food and Drug Administration (FDA) the power to regulate tobacco products. Specifically, today's decision strongly supports the government's authority to prevent the industry from making health claims about its products without FDA approval.
We applaud the federal court's decision to quickly and decisively reject the latest attempt by Big Tobacco to frustrate the intent of the new FDA law and allow the agency to get on with its role in putting an end to deceptive and dangerous tobacco marketing.
Eleven public health and consumer advocacy groups joined in the legal effort to thwart the industry's challenge to the law based on the claim that its First Amendment rights were violated.
The companies, including two of the industry's three largest, are challenging provisions of a law that gave the U.S. Food and Drug Administration new authority over tobacco. In a 29-page decision, McKinley outlined the arguments in the lawsuit and found that blocking the provisions was not warranted. . . .
The companies say the law, which takes full effect over three years, prohibits them from using "color lettering, trademarks, logos or any other imagery in most advertisements, including virtually all point-of-sale and direct-mail advertisements." Their complaint also says the law prohibits tobacco companies from "making truthful statements about their products in scientific, public policy and political debates."
The tobacco makers say new mandated warnings for cigarettes would relegate their branding to the bottom half of cigarette packaging and make it "difficult, if not impossible, to see."
In its response to the lawsuit, the FDA said the new marketing rules do not restrict free speech and serve a greater public health interest.
R.J. Reynolds Tobacco Co.'s bid to carve out a "free speech" marketing niche for innovative products was dealt a blow today.
A U.S. District Court judge in Richmond denied a motion for a preliminary injunction sought by Reynolds and other tobacco manufacturers regarding The Family Smoking Prevention and Tobacco Control Act.
A lawsuit was filed Aug. 31 against the federal government and the Food and Drug Administration by Reynolds, Conwood Co. LLC, a sister company with Reynolds American Inc., Lorillard Inc. and Commonwealth Brands Inc.
The companies had sought a preliminary injunction against The Family Smoking Prevention and Tobacco Control Act. They said they are trying to "protect their First Amendment right to communicate with adult tobacco consumers about their products."
But Judge Joseph McKinley ruled that the "plaintiffs have little likelihood of success" in their challenge to the modified risk tobacco products provision in the law.
Some points made in your recent article, "Agency warns of candy-like tobacco" (Oct. 26) need to be clarified and corrected. The dissolvable tobacco products made and marketed by R.J. Reynolds Tobacco Co. -- Camel Orbs, Sticks and Strips -- are not "tobacco candy." In fact, these are tobacco products and are sold on the same store shelves as other tobacco products. They carry the same health warnings as other smokeless tobacco products. Their sale is age-restricted and their packaging is child-resistant.
Dissolvable tobacco products have been sold in the U.S. for a number of years.
R.J. Reynolds will work closely with the FDA's Tobacco Products Scientific Advisory Committee and provide any information needed in its analysis of dissolvable tobacco products.
Reynolds American Inc. (NYSE: RAI) will webcast presentations the company will make to the investment community on Monday, Nov. 16, 2009, beginning at 9:00 a.m. Eastern Time.
During the webcast, members of the company’s management team will discuss Reynolds American’s performance and plans. . . .
Web Disclosure
Starting Jan. 1, 2010, RAI’s Web site, www.ReynoldsAmerican.com, will be the primary source of publicly disclosed news about RAI and its operating companies. We will use the Web site as our primary means of distributing quarterly earnings and other company news. We encourage investors and others to register at www.ReynoldsAmerican.com to receive alerts when news about the company has been posted.
In the past three months, the major tobacco companies have altered their promotional strategies, pulling back from umbrella programs and rechanneling efforts to specific brand promotions.
Based on an exclusive survey conducted by CSP Daily News and UBS Tobacco Analyst Nik Modi, nearly 80% of c-store chains said manufacturers have overhauled their total promotions, while only one of five said marketing promotions essentially have remained steady.
Among key comments from retailer respondents to the survey:
"From Altria I have notice more regionalized promotion deals. From R.J. Reynolds, they have cut back on their monthly discounts. Lorillard has given extra dollars off to the state of Wisconsin," responded one retailer.
Cigarettes' big three—Altria, R.J. Reynolds and Lorillard—are facing aggressive challenges from down trading and segment shifting in the convenience-store channel.
The nation's top three brands—Marlboro, Camel and Newport—are battling to hold onto market position in the convenience channel, some six months since Congress approved a record increase in the federal excise tax (FET) to finance expansion of the national children's insurance program, SCHIP.
Based on an exclusive survey conducted by CSP Daily News and UBS Tobacco Analyst Nik Modi, Lorillard appears to be the safest of the three.
Responding to the survey question asking, "Are you seeing substantial trade down from the big three premium brands?" half of the survey respondents said yes.
Asked which of the three premium brands are seeing the most negative pressure, about 40% named Marlboro specifically, and another 40% cited Camel or other Reynolds' brands such as Winston and Salem,
Is using smokeless tobacco just as harmful as smoking, or is it potentially a safer option?
Getting a definitive answer to that question has proved elusive despite centuries of medical research.
Resolving the issue, and providing clarity amid the heated rhetoric, has prompted a new series of medical studies sponsored by the National Cancer Institute.
One set focuses on whether such smokeless products as snus and the dissolvable products from R.J. Reynolds Tobacco Co., provide "a truly less-harmful alternative to conventional tobacco products, both at the individual and population level," according to the institute's grant application.
Another set, including one that was started Sept. 1 at Wake Forest University School of Medicine, is aimed at developing strategy to encourage reduced use or even quitting smokeless-tobacco products. Wake Forest is receiving a $2.9 million grant for its study.
Maura Payne, a spokeswoman for Reynolds, said that the company supports "well-designed studies" that could help develop science-based, tobacco-harm-reduction strategies." Payne said that Reynolds does not promote its new smokeless products as a way to quit smoking.
The institute said that the studies are necessary because "previous tobacco-use reduction efforts pursued by the public-health community were disadvantaged by incomplete knowledge and methods for evaluating the health impact of modified tobacco products."
The nation's two top cigarette-makers are boosting per-pack prices by 6 to 8 cents a pack.
Though the companies won't say why, analysts believe it is to cover new user fees charged by the U.S. Food and Drug Administration to pay for the costs of its new assignment to regulate tobacco.
The increase on what Altria's Philip Morris USA and Reynolds American's RJ Reynolds Tobacco Co. charge wholesalers seems unlikely to have a big effect on smoking, as this spring's 61.66 cent-a-pack hike in federal excise taxes did.
Last week, Altria Group Inc. chairman and chief executive Michael E. Szymanczyk told analysts the effect of that tax hike accounted for about two-thirds of the 16 percent drop in the number of cigarettes it sold in the third quarter. The rest came from wholesalers' inventory reductions.
R.J. Reynolds Tobacco Co. said today that it will raise the list price on its cigarette brands from 6 to 8 cents a pack for wholesale customers.
The price increase takes effect on Monday and affects all of its cigarette brands. . . .
The decision comes five days after Philip Morris USA announced a 6-cent a pack increase, which went into effect today.
"As marketing restrictions become stronger the pack becomes the best marketing tool," Hammond says. "When the words come off the pack, the industry relies on colors to a greater extent then they used to."
For example, Pall Mall recently removed descriptors like "full flavor" and "light," relying entirely on the color of the pack and the names of colors to identify each flavor.
"Of course, brands have always used colors," Hammond says. "The so called strengths of brands are aligned with the strengths of colors, and many smokers use colors as an indicator of risk. For example, red is perceived to be stronger than blue."
In other words, as the flavors get "lighter," so the do the colors. . . .
"Orange is a very interesting choice," Bansal-Travers says. "No other brand I can think of uses orange as a cigarette pack color, but orange is certainly the lightest that PM uses, creating a spectrum of color and trying to equate that with the spectrum of risk."
Primary design changes: Flavor descriptors, such as "Filter" and "Light," have been dropped, replaced with the names of colors.
Secondary design changes: The phrase "Famous American Cigarettes" has been moved to the bottom. While the logo and Latin phrases "Per aspera ad astra" ("Through hardships to the stars") and "In hoc signo vinces" ("By this sign you shall conquer") remain, the phrases "KING SIZE BOX" and "Wherever particular people congregate" have been removed from the front of the boxes.
For its Salem brand, manufacturer RJ Reynolds has changed the coloring of the packs and the descriptor terms.