In early July, the FDA said that it would issue proposed rules on unspecified "tobacco products" in October. Those products are widely assumed to be e-cigarettes, which a 2010 court decision allows the agency to regulate.
The FDA declined to comment on the timing or contents of its planned "deeming regulations" for e-cigs, which are gaining popularity because they are perceived as being less harmful than traditional cigarettes. They also help and avoid the smell and indoor bans that plague tobacco smokers.
Azer and other industry observers said implementation of the regulations, after the FDA considers public comment could take another 12 to 18 months.
"There's an incentive now to get as good as you can before the FDA starts regulation," said Dr. Neal Benowitz of San Francisco General Hospital Medical Center.
"People know at some point these products are going to be evaluated. Therefore, there's an incentive to put together an effective product that people like, that are also safe," said Benowitz, who co-authored the article "The Regulatory Challenge of Electronic Cigarettes" published Monday in the Journal of the American Medical Association.
'May the best company win'
"At this point, it's a free trade, and may the best company win," said Eli Alelov, CEO of Logic Technology, the nation's No. 3 e-cig company.
His company is being realistic about possible FDA rules, however. For example, Logic advertises on more than 15 radio stations and is contemplating launching an expensive television campaign. That would follow TV ads by two of its leading competitors, Njoy and Blu (the latter was bought by Lorillard last year). Both radio and TV are off-limits to traditional cigarette ads.
"We're supposed to start a campaign by the end of the year," Alelov said of Logic's TV push. But, he added, "we want to wait for the FDA's proposed regulations to suggest "what we can and can't show on television."
Matthew Steingraber, co-founder of White Cloud Electronic Cigarettes, said there are "positives" that come from having no federal regulation, including "flexibility in the type of nicotine we can offer, and we're not held to a certain flavor."
White Could sells e-cigarettes containing six different strengths, ranging from "nicotine-free all the way up to 5.4 percent by volume," he said, adding that the options are a selling point to those looking to transition to e-cigs and then taper down their nicotine consumption.
The Tarpon Springs, Fla.-based company also sells 19 different flavors of e-cigs, including two added last month: Iced Berry and Zero K, which boasts "a cold blast of peppermint."
Flavors are prohibited for traditional cigarette makers. In 2009, the FDA flexed its muscle in regulating tobacco for the first time by banning candy- fruit- or clove-flavored cigarettes because of concerns they would attract teens.
"Adults, in fact, like fruit-flavored things, and I think it's a nice change, whenever you're switching from tobacco, which tastes horrible, to have different flavors available to you," Steingraber said.