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/ TTD STATES OF AM1RICA FEDERAL TRADE COKM~ISSION WASHIINGTON. D.C 2l75'30 oFF%F os 7W WCPWTMr ' ---- < The Honorable Thomas A. Luken Chairman. Subcommittee on Transportation, Tourism and Hazardous Materials U. S., House of Representatives Washington, D~. C'. 2,0515 ' Dear Chairman Luken: June 17, 198'8' Thank you for your letter of'May 23, 198'8, inviting the Commissiort''s comments on H.R. 45'43,, proposed legislation titled the Cigarette Testing and Liability Act of 1988. This proposed legislation requires that the Fed'eral Trade Commission arrange for a, continuing,study of various constituent parts of tobacco smoke through an arrangement with a government laboratory or a non-profit laboratory with no connections to: tobacco companies., The study must include.random testing of the amounts of seven specified substances and "'other constituents" found in cigarette smoks as well as the levels of such constituents in tobacco smoke when smokers engage in compensatory smoking behavior. The Commission would be required to report annually to!Congress on the resul'ts of this continuing study., The proposed legislation, also, repeals the existing preemption section of the Federal Cigarette Labeling and Advertising Act (',FCLAA)~., The: current provision on preemptionn contained in the FCLAA preempts State laws requiring statements on cigarette labels relating to smoking and health, or imposing othsr, requirements or prohibitions on cigarette advertising or promotion based on smoking and health. In ad'di~tion, the! proposed legislation would add a new provision specifying that compliance with the labeling and advertising provision of the FCLAA, does. not relieve: any person from liability under a State"s statutory or common law. The Commission.questions the need for the expanded testing program envisioned by this legislation and the designation of the FTC as.the agency to.administer it. Im addition, we note the potential for inconsistent health warnings that might take place if the.current preemption provision, is deleted entirely. Ourr comments address the designation of'the FTC as the agency to administer testing,, the costs associated with the testing, program, the usefulness of the program, the proposal to adj'ust.

The Honorable Thomas A.. Luken -- Page Z test results for compensatory smoking, and repeal of the current preemption provision~.., Designation Of The FTC As The Aaencv To Administer Testing The Commsssion is a law enforcement agency composed of attorneys and economists. As~indicated in, prior hearings before the Subcommittee, the Commission created, a, cigarette testing laboratory in 1966 to facilitate the! dissemination of'tar and nicotine information, pursuant to a uniform testing standard.. Since 1971, the cigarette industry has included the tar and nicotine ratings in all advertising as a result of a voluntary agreement among.the major cigarette companies.1 The Commission determined, in early 1987 to close the laboratory. Prior to making this decision., the Commission notified'..the House and'Senate Appropriations Committees of the proposed reprogramming of funds, as well as a number of other Congressional offices that had expressed interest irr tobacco issues. No objections to this proposal were raised. The Commission found that closing the laboratory was necessary for several reasons!., E'irst,, the operation of a highly complex testing program,, even one limited to tar, nicotine and carbon monoxide, was incompatible with the expertise and overalll responsibilities of the agency. The cost of the laboratory was high, and the Commission would' have had to commit significant additional funds in order to continue the: progra~m.Finally, the Commission was persuaded that the same information could be obtained from other sources, and other means were available to verify the accuracy of industry testing results. Consistent with its notice to the~appropriations committees, the Commission closed'the laboratory on, April 15, 1987. Testing for tar and nicotine content is now being conducted by the Tobacco Institute Testing Laboratory (TITL) under well- established methodoTogy. The Commission, through, a staff contractor, has unrestricted'access to the TITL lab and closely monitors the TIM test results. The Commission is collecting 1 Beginning in 1980 the Commission, also~began, testingg cigarette smoke for carbon; monoxide. The Tobacco Institute Testing, Laboratory continues testing for carbon monoxide. The Commission actively monitors this testingi, and is collecting and will rep~ortthat data to Congress and the:public.

e The Honorable Thomas A. Luken -- Page 3 that data for.1987'and will publish those results in the next few months.2 ' Because the Commission is not a scientific body, we questionn seriously whether it is the appropriate agency to conduct the testing program provided for in this proposed legisliation. Even when the cigarette testing laboratory was fully operational, the Commission"s laborratory staff simply executed' a previously established methodology = a continuing, routine basis. Thee agency's scientific expertise was not, and is not, extensive enough to perform or evaluate complex scientific~ testing of a myriad of tbbacco smoke constituents. It is our strong belief that such responsibilities are more appropriately assigned to another agency withl appropriate scientific expertise. The National Cancer Institute, for example, has previously contracted with the government laboratory at Oak Ridge for testing different types of constituents in cigarettes. That testing,began in 1968 and lasted nearly ten years. The'. Oak Ridge testing program involved several large experiments relating, to the types of constituents found, in cigarettes. In~ addition, other agencies of the Federal Government havee scientific expertise in the area of smoking and health,. Under Section 3 of the Comprehensive Smoking Education Act, 15'LJ!.S.C. §I 13!41, for example, the Department of'Health and Human Services is given the responsibility for conducting and coordinating research, oni smoking and health, and for collecting and analyzing, studies and datairelating to smoking and health. Notwithstanding our position, that the Commission, is not the appropriate agency to test or oversee the proposed testing of individual cigarette smoke constituents, we agree that the Commission should!continue efforts to, ensure that consumers. receive accurate information about the tar and nicotine content of'cigarettes.. The Commission will continue to monitor closely the companies' testing oflthe tar and nicotine content of cigarettes and the disclosure of that information,. Cost Of TestinaiProgram In addition to determining, whether the: FTC is the appropriate agency to administer such a testing program,, we 2 Because the proposed legisl!ation, envisions only random testing, we presume that the Commission would'i continue to coll!ect and publish industry tar, nicotine and carbon monoxide data, on, a, regular basis. As a result, we would anticipate that this data would continue to form the basis for the industry''s disclosure.of this information.

/ The Honorable Thomas A. Luken -- Page 4 ~ believe the Subcommittee should consider whether the testing, program contemplated in the proposed legislation is warranted in light of the costs involved. Staff of'the Oak Ridge National Laboratory estimates the costs for testing fifty brands of' cigarettes for the seven, components specifically identified in, the legislation at approximately $500,000 to $750,000.3' Oak Ridge also estimates that start-up, costs for this testing program would be $1001,000 to $500,,000. These estimates do not include expenditures for items, such as housing and administering the program, that the Commission would be required to make, or the significant additional costs that would result if it were necessary to, collect a random and representative sample of. cigarettes as part of the testing program. In addition to the seven constituents, specifically identifiedifor testing, there are "'thousands"' of other constituents im tobacco and tobacco smoke, including "many suspected or proved toxic agents.'"4 Depending on the scope of testing envisionedi, the costs of the program could range in the millions of dollars. Usefulness of The Proposed Testing Program In contrast to the costs, the usefulness of the results of the proposed testing, program seem specu'lative, it is our understanding, that significant research identifying thousands of constituents of tobacco smoke has already been done, and it is not clear what the proposed testing will addito that research.5' It is also not clear whether the intent of the proposedi leg,islation is to use the information obtained'to "'rank"' cigarettes by the quantities of the different'ccnstituents involved. Attempting such an undertaking, however, might not yield results useful to consumers. Michael Guerin, Section Head of the Analytical Chemistry Division of'Oak Ridge National Laboratories„ has stated his belief that the rankings obtained under the current testing program wouldnot change a great extent 3' This estimate is based on the cost involved in two rounds of testing for these constituents. 4 A Report of the Surgeon General, The Health Consequences of Smoking: The Changina, Cigarette, January'12, 1981, at 33-34; See aliso A-Report of the Surgeon General, The T3ealth, Consecxuences of the Smokina, 1987, at 56-60; A report of the Surgeon General,. The Health Consequences of Smokingi, 1986, at 12!7'-14, 206, 2'29-30. 5i See e. a. , A Report of' The Surgeon, General, The Health Consequences of Smoking, 1983, at 208!, et. ali .: See a so A Report of the Surgeon General, S,fiokina and Health, January 11" 1979, Chapter 14.

The Honorable Thomas A. Luken,-- Page 5: within any class of cigarettes if various constituent,levels were included. Accordingito bSr. Guerin, this is because the constituents that are presently measured (tar, nicotine andd carbon monoxide) tend to be surrogates~for other constituents,., Adi'ustment Of'Test Results For Compensatorv Smokinc The proposedilegislation, also would require the FTC to, arrange:for testing,to reflect the level ofthese cig,arettee constituents present if individuals change their smoking behavior to~compensate for lower levels of nicotine. The tar and nicotine numbers currently obtained by the FTC methodol'ogy offer objective, uniform and comparable ratings for cigarettes smoked in a uniform,manner. Thus, as the District. Court found in Brown & Williamson,6'the numbers provide legitimate~comparative information to consumers attempting to, lower their overall tar and'nicotine consumption,. However, consumers lose.some:of the relative benefits of low tar cigarettes if they smoke more cigarettes, smoke more of each cigarette, take deeper puffs, or oth~erwise increase the smokee inhaled. Since the Brown & Williamson d'ecision, the Commission has conducted an ongoing review of the cigarette testing,methodology that, among other things, has examined possible ways to measure the effects of compensatory smoking!, but to date no cigarette company, scientific agency or health group has offered a viable alternative to the present testing system. The Commission is currently awaiting the results of a Department of Health and Human~ Services study of the prevalence, attitudes, knowledge andd beliefs about smokingibehavior among the adult populati~om.. The Commd:ssion.staff'worked closely with the Office oniSmoking and Health in designing questions for the survey. The.survey asks smokers about their knowSedge of tar ratings for their cigarette: brands and'.their beliefs and expectations about cigarettes with lower tar ratings. One series of quest3ons asks smokers to identify the brand of cigarettes they currently use and any other brands that they have regularly purchasedlin the:past. Smokers are also askediabout their knowledge of the tar ratings of their, cigarettes and~whether this was high, low or the:same as most cigarettes. In addition, the survey seeks toldetermine whether these individuaTs smoked~more or less.prior to changing brands. 6 FTC v. Brown & Williamson, 580' F.Supp. 981, 9!86 (D~.D'.C. 19'83 ), aff r'd„ 7,78 F. 2d 35, Q,D. C'. Cir. 1985). One current method': of smoking cessation ('"Iniicotine fad'ing") iso to reduce 'the. nicotine.content of cigarettes being smoked using figures published by the FTC. U.S. Dept. of Healthiand Human Services Review and Evaluation of Smoking Cessation Methods (1987) ,'at 83.

The Honorable Thomas A. Luken --.Page g, / .. it is our hope that the study results will provide useful insights into compensatory smoking issues and'enable the Ccmmission to review its tar and nicotine program in light of the study's findings.7 Preemption The FCLAA currently provides that (1) noistatement relating to smoking and health, other than those contained in the FCLAA, can be required on any cigarette package (,15 U.S.C. g 1334(a),) and ('2)'1 no:requirement or prohibition based on smoking or health, shall be imposed under State.law with respect to the advertising! or promotion of any cigarettes labeled in, conformity with the Act (',15 U.S.C. § 1334(,b)).. The final section of the proposed legislation would eliminate these preemption provisions and replace them withia new provision stating that compliance with, Section 4' (labe];ing and advertising, warnings) and Section 7 (reporting of'addiitives to HES) shall not relieve any person of liability under state law. It is our und'erstanding that the amended provision is primarily designed to eliminate certain defenses that tobacco companies assert in product-liability'suits8 and provide thee states with greater flexibility in regulating certainimarketing andi promotional practices. Eecause the issue of tort liability is beyond the Commission's jurisci!iction,, we express no view on. it. We note, however, that the proposed legislation"s repeal of the preemption provision could have~other effects on the labeling and, advertising of cigarettes. If the warnings included in the FCLAA do not preempt state law individ'ual states will be free to require warnings that are inconsistent withithe currently requixed federal warnings.. Thus states would'be free not only, to require more stris.gent warnings, but to require inclusion of warnings that detract from the four rotational warnings currently mandated by the FCLAA. Also, the proposed legislation would allow the. states to require their own vaaxnings in cigarette advertising. This would maice~it uirtually: impossibletoe advertise cigarettes on, a national basis. As a general matter,. 7 Information cbtained from, this survey may enable the C©mmission to dete~rmine,for example,, whether tarand'nicotine figures should be expressed in raniges instead of simple numericall figures and, if so, zow such ranges might be set. 8' See Cipollone v., Liagatt Groun, inc., 789 F.2d 181 (3rd Cir. 1986') ; cert. denied. _ U.5., _, 1!Q7~ S. Ct. 907 (1987)1.

/ • j . The Honorable Thomas A. Lu}ten,- Page 7' - ~:. . .. ... . .. .. •. .•.... f t :.;a ~~ - d: - - .' . rt. •Aiyr'-.'T the Comma:ssion 'does not favor advertising bans, and' achieving - such a ban indirectly, in our view,'does not enhance its merit. intended to~ haveonhealth warnings for cigarette labeling and'advextising. We favor retention of the current uniformity in the health warnings0 there may be narrower amendments that will leave the present system of' uniform rotational health, warnings in effectt. In addition, we believe that it woul'd be helpful to clarify the preemptive effect (if any) that the proposed leg,islation is tort and prod~uctliability decision&anid provide the states with the authority toiregulate marketing practices such as sampling,9 r.S ~. . i., To the extent the Subcommittee's intent is to,reverse prior Conclusion The Coamission believes that tar and nicotine testing should follow the procedures commonly usedifor testing other consumer products. That procedure is to require industry'testingiunder a uniform testing methodol'ogy rather thaniprovide a taxpayer- subsidized federal testing program. The Commission also urges that whatever changes are made in the current preemption provisions, the present system of uniform health warnings be retained. Thank you for the opportunity to comment on your proposal. By Direction of the Co*.nmissioni. ` m'. ~ ~ O G.7 6-A 9 Samplingiis a promotional practice by which free cigarettes, or couporls redeemable for free cigarettes, are Ir+ 4a distributed to the public.