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The fundamental flaw of the Philip Morris negotiated/backed FDA legislation
is that it protects the deadliest tobacco product (cigarettes), the largest
cigarette manufacturer (Philip Morris) and the largest cigarette brand
(Marlboro) at the expense of consumer health and the least hazardous
tobacco products (smokefree).  It would be insane for US Congress (via the
FDA) to prohibit smokefree tobacco products from being truthfully marketed
to smokers as less hazardous alternatives to cigarettes, which are 100
times deadlier. 

Bill Godshall

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Tobacco Bill Likely Off US Senate's Agenda For Now

Dow Jones 
August 25, 2008: 06:01 PM EST
http://money.cnn.com/news/newsfeeds/articles/djf500/200808251801DOWJONESDJO
NLINE000417_FORTUNE5.htm

WASHINGTON -(Dow Jones)- With bipartisan support for an effort to give the
Food and Drug Administration sweeping new authority to regulate tobacco and
recent House passage of a tobacco regulation bill, the stars once seemed
aligned for Senate action on tobacco legislation this year.

But a key senator has pledged to block the bill, and with a crowded Senate
schedule, that may be enough to scuttle it until next year.

Sen. Richard M. Burr, R-N.C., has repeatedly threatened to veto the bill if
it comes up on the Senate floor in September, when members return from
their summer recess for a three-week work period. A filibuster would likely
push the bill off the agenda in September, leaving it for a lame-duck
session or consideration when Congress returns next year.

The bill, passed in the House on July 30, would have a dramatic effect on
the tobacco industry, which includes publicly-traded companies such as
Reynolds American Inc. (RAI), Lorillard Inc. (LO) and Altria Group Inc.
(MO), which owns cigarette maker Philip Morris USA.

The bill has support among Democrats and Republicans in the Senate, and a
spokesman for Senate Majority Leader Harry Reid, D-Nev., said it is
"possible" that Reid could bring up the bill in September.

But tobacco lobbyists advocating against the bill in its current form
believe they are in the clear for now on the bill, due to the timeframe and
the potential for Burr to draw out debate on the bill.

"The question is, are they going to spend, out of the three weeks left, a
week and a half or two on this?" said one lobbyist concerned with the
matter.

Bill Corr, executive director of the Campaign for Tobacco-Free Kids,
acknowledged that the bill is "competing with a lot of very important
things that need to happen" and that "it's very hard to see how many
legislation is going to get done."

Provisions in the bill would give the FDA limited authority to monitor
smoking products and ban flavored cigarettes, with an exemption for
menthol-flavored cigarettes. It could impose controls on advertising that
restrict companies to plain, black and white "tombstone" ads and stop the
use of the terms "low tar" and "mild."

Not all tobacco companies are opposed to the legislation. Philip Morris
expressed support for House passage of the bill, which it argued would put
all tobacco companies on a high - and equal - standard for regulations.

But Burr and others say that Philip Morris' support of the legislation may
just be a way to preserve market dominance by hurting smaller competitors
who are less able to afford the high cost of complying with new
regulations.

"The legislation as currently written would basically lock the United
States into a snapshot that goes into the future," Burr said in a phone
interview. "If you lock in where you are today, this is a pretty good
business model, you're making pretty good money."

Still, some say that passage of a new tobacco regulation bill - whether it
comes this year or not - will hurt the industry as a whole.

Andrew Parmentier, who analyzes tobacco companies as managing director of
equity research at FBR Capital Markets Corp. in Arlington, Va., said that
Philip Morris' support of the legislation isn't surprising because of the
likelihood that proposed FDA regulation will eventually become law.
Parmentier warned that regulating the industry would force radically new
dynamics on all tobacco companies, including Philip Morris.

"I would expect the company to make that argument given the fact that the
horse is already out of the barn," Parmentier said. "If you're driving a
lot of these discount brands out of the market, who's to say the black
market doesn't increase two or three-fold?"

Long an ally of the tobacco industry, Burr was instrumental in stopping a
similar effort to require FDA regulation of tobacco in 2004. And in the
2004 election cycle, when Burr was first elected to the Senate, Center for
Responsive politics figures show he received $164,472 in contributions from
the tobacco industry - more than twice as much as any other House or Senate
candidate and just short of President George W. Bush's total contributions
from the industry.

Burr argues that the bill passed in July by the House would exacerbate
problems at an overstretched FDA. Despite political tradewinds favoring
Democrats in the fall, he expresses optimism that he can prevail upon
Congress to steer clear of an FDA tobacco regulation bill next year.

"We'll have a different makeup in the House, and a different makeup in the
Senate, a different administration in office," Burr said. "One or two more
food safety issues comes up, and maybe people will realize that maybe
dumping something like this on the FDA is not a good idea."

But Democratic presidential candidate Sen. Barack Obama, D-Ill., and
Republican presidential candidate John McCain, R-Ariz., are both
co-sponsors of a Senate bill requiring tobacco regulation, which doesn't
bode well for opponents of new regulations.

"Burr, more and more, is on an island on this," Parmentier said. 
.