The vaping industry is fighting for its very survival in a multi-front war against various groups that would, on the surface, seem like unlikely allies: Democrat politicians, tobacco companies, pharmaceutical companies, and state governments. This bizarre alliance is an example of what Jonathan H. Adler of Case Western Reserve University School of Law calls a “Bootlegger and Baptist” theory of regulation, which is when groups with divergent interests unite over a common goal, in this case the regulation of e-cigarettes. The theory is named after the unlikely coalition of bootleggers and Baptists who were united in their goal of keeping alcohol illegal during Prohibition.
What exactly is causing these radically different groups to unite forces against the nascent vaping industry? What are they afraid of?
If you look at the politicians who have voted against vaping you’ll see that the majority of them are Democrats. Whether you agree or disagree with them on all other issues, it’s undeniable that being against vaping rights is almost exclusively a left-wing phenomenon. But why are they so opposed to vaping?
The answer is, as always, follow the money.
For years, smokers who were looking to quit their deadly habit were faced with only two choices: Going cold turkey or using some form of nicotine replacement therapy (gum, patches, etc). Most people have problems fighting their nicotine cravings when going cold turkey, so they went in droves to their local pharmacies to shell out for pricey nicotine patches and gum in the hopes of being able to slowly taper off their cravings. For decades this has led to massive and predictable profits for the titans of the drug industry. Whether the nicotine replacement therapies were effective or not was irrelevant. The only thing that mattered was that people thought they were and would continue to pay for them in the desperate hope that they would be able to finally quit cigarettes. Once e-cigarettes hit the market, smokers realized that they could simulate the effects of nicotine replacement products with a product that actually mimicked the motions of smoking and gave them a variety of flavors, making it much easier to finally kick the habit. As more and more vaping products were sold, Big Pharma began to see the profits from the nicotine replacement products shrink.
The pharmaceutical companies who manufacture nicotine replacement therapies (NRT) such as gum or patches have a huge interest in crushing the e-cigarette industry. Many of these NRTs are actually covered by the Democrat-passed Affordable Care Act, which was created with input from Big Pharma. This was just the beginning of a lengthy and lucrative partnership between drug companies and congressional Democrats.
Leaders from within Big Pharma have publicly stated that the industry is hurting their bottom line, and after spending over $100 billion developing NRTs, they will do anything to protect their market share from the emerging threat of unregulated e-cigs. Transparency Market Research predicts that the vaping industry will be worth $16.02 billion by 2019. In 2014 it was only worth $6.4 billion. From the point of view of Big Pharma, every dollar earned by vaping companies is a dollar taken away from them. The insane growth of the e-cig industry must be stopped if they want to continue to earn outsized profits from useless smoking cessation aids. One of the most cost-effective ways for them to stop that growth? Political contributions.
OpenSecrets.org, an organization that is dedicated to exposing and keeping track of political donations, shows that the Democrats who have been most vocal about opposing vaping have also received some of the largest contributions from the pharmaceutical industry.
Senator Ed Markey (D-MA) has gone on record as saying that he thinks the e-cig industry “should be put out of business.” He has received a lifetime total of $449,750 from the pharmaceutical industry via campaign and political action committee donations.
Former Senator Frank Lautenberg (now deceased) was one of the earliest opponents of vaping. He received $473,122 from drug companies.
Robert Menendez, who counts sponsorship of the Family Smoking Prevention and Tobacco Control Act as one of his many anti-vaping accomplishments, has received an astonishing $780,195 from pharmaceutical companies throughout his career.
There’s no need to list the amounts received by other anti-vaping Democrats, as these three are enough to illustrate my point. But rest assured that they have received substantially more than any of the pro-vaping Republicans, especially when you filter the results to only view the last few years (aka when the vaping industry became big enough to threaten Big Pharma).
But Big Pharma’s pernicious influence in the government is not just limited to elected representatives in congress. They have also managed to infiltrate the FDA under the Obama administration by securing key leadership positions for their loyalists. Dr. Robert Califf, the current FDA commissioner, has a history of representing pharmaceutical companies, many of which have their own nicotine replacement therapies on the market.
His well-sourced Wikipedia entry tells you everything that you need to know about his connection with the giants of the drug industry:
He was a paid consultant for Merck Sharp & Dohme, Johnson & Johnson, GlaxoSmithKline,AstraZeneca, and Eli Lilly per ProPublica from 2009 to 2013. The largest consulting payment was $87,500 by Johnson & Johnson in 2012, and “most of funds for travel or consulting under $5,000”, which has been called “minimal for a physician of his stature”.From 2013-2014 he was paid a total of $52,796, the highest amount was $6,450 from Merck Sharp & Dohme, followed by Amgen, F. Hoffmann-La Roche AG, Janssen Pharmaceutica, Daiichi Sankyo, Sanofi-Aventis, Bristol-Myers Squibb and AstraZeneca. He was the Director of Portola Pharmaceuticals, Inc. from July 2012 to January 26, 2015, Advisor of Proventys, Inc., Chairman of the medical advisory board of Regado Biosciences, Inc. and has been member of the medical advisory board since June 2, 2009, and member of the clinical advisory board of Corgentech Inc. Forbes wrote that his close ties to the drug industry were the reason for him not being nominated for the FDA Commissioner position in 2009.
Mitch Zeller, the Director for the FDA’s Center for Tobacco Products, is another drug company lackey who has managed to be appointed to an influential position. As a lobbyist for GlaxoSmithKline, he was instrumental in crafting the 2009 Tobacco Control Act. In fact, he was even a special White House guest in the Rose Garden when Obama signed the legislation. Now he has virtually unlimited and unchecked power to regulate a product that is in direct competition with his former employer. Seems like a conflict of interest, right?
As Dr. Gilbert Ross of the American Council on Science and Health stated to the Washington Examiner:
“The alarmist concerns raised by the drug companies are understandable, because they’re rent-seeking.”
For those of you who haven’t taken an economics class, rent-seeking is when companies try to increase market share without creating any new economic value. Lobbying and political contributions as well as seeking to impose regulations on competitors are the most common manifestations of rent-seeking in modern economies. The massive amounts of money spent on donations and lobbying, as well as the regulations that have been drafted under the leadership of their former paid employees are a perfect textbook example of rent-seeking in the most evil way possible: One that creates wealth for themselves not just by taking money away from their rivals, but also by taking the lives of innocent people who will find it much harder to quit smoking without the aid of e-cigarettes.
The tobacco industry was caught completely off-guard by the rapid rise in vaping. In less than ten years, the e-cigarette business went from being virtually non-existent to being a multi-billion dollar juggernaut that threatened the massive profits that Big Tobacco has enjoyed from selling their deadly yet addictive product.
Once the large tobacco giants finally realized that vaping wasn’t going to go away or remain a small niche industry, they decided to join in by creating their own products. Today all of the behemoth tobacco companies have their own line of electronic cigarettes: Blu, owned by Imperial Tobacco; MarkTen, owned by Altria Group; and VUSE, owned by R.J Reynolds.
These products, while slickly marketed and focus-grouped to perfection, were a major misstep by Big Tobacco. The marketing teams and money of some of the most powerful companies in the world weren’t enough to help Big Tobacco bring the out-of-control vapor market back under their thumb. The problem? They all dedicated their resources towards creating exact imitations of real cigarettes, known in the industry as cig-a-likes.
Against all odds, most vapers preferred the bigger, clunkier, and harder to use mods and tanks that were being developed by small-time companies. Big Tobacco continued to watch from the sidelines as the e-cigarette industry continued to grow year after year into a multi-billion dollar monstrosity that began to actually pose an existential threat to their business model. Something had to be done to stop it.
Altria spokesman Brian May openly admits that Altria “did support FDA extension of authority over e-cigarettes and other tobacco products.” Why would a company that makes it’s own e-cigarette line, MarkTen, want to support regulations against it’s own product? The answer is simple: Knowing that they are one of the only companies who can afford the million-dollar FDA approval process, they are hoping to indirectly shut down their competition. Remember that most vape manufacturers are small companies and might not even have access to a million dollars, let alone the multi-millions required to approve several products. “Our goal is to be a leader in the vaping space,” May added, referring to the MarkTen e-cigarettes.
It seems that rent-seeking through increased government regulation is their strategy for achieving market dominance, since competing on the free market has been nothing short of a disaster for Big Tobacco.
In order to understand why state governments have been so keen on passing increasingly strict restrictions on the vapor industry, you’ll have to take a trip down memory lane to November 1998, the year that the Tobacco Master Settlement Agreement was enacted.
This agreement was sold as being a a major blow against Big Tobacco, but in reality did nothing more than make the tobacco industry even more powerful than anyone could have ever imagined. The agreement included yearly payments in perpetuity from Big Tobacco to 46 different states, in part based upon how much money the companies made from sales. This led to states securitizing the payments in the form of bonds sold to Wall Street, allowing them to spend the Big Tobacco money BEFORE they actually receive it.
The unexpected rise in vaping has directly hurt the profits of the tobacco industry, and thus is indirectly depriving state governments of a revenue stream that they have become dependent upon.
Basically, the less cigarettes that Big Tobacco sells, the less money that the state governments receive. For more information on the TMSA, be sure to check out the Truth About Vaping video on this very topic. It’ll open your eyes to the true extent of the corruption in the state governments.
In an effort to protect their tobacco revenues, some states have directly funded anti-vaping propaganda campaigns in order to increase public support for further restrictions on the industry. The most egregious example of this is California’s “Still Blowing Smoke” campaign, which is funded by the California Department of Public Health. The massive sums of money spent trying to re-educate the citizens of California against vaping include money spent on TV commercials, billboards, and more.
A recent survey by Reuters confirms the depressing truth: the anti-vaping propaganda is working. According to the survey:
- 47% say that vaping is NOT healthier than smoking compared with 38% who felt that way a year ago.
- 43% said that they did not believe that vaping could help with quitting smoking compared to 39% who held the same view last year.
- 66% say that vaping can be addictive compared with 61% last year.
- 49% think that vaping has a similar effect as second hand tobacco smoke compared with 42% last year.