[Federal Register Volume 76, Number 120 (Wednesday, June 22, 2011)]
[Rules and Regulations]
[Pages 36628-36777]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-15337]



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Vol. 76

Wednesday,

No. 120

June 22, 2011

Part II





Department of Health and Human Services





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Food and Drug Administration





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21 CFR Part 1141





Required Warnings for Cigarette Packages and Advertisements; Final Rule

Federal Register / Vol. 76 , No. 120 / Wednesday, June 22, 2011 / 
Rules and Regulations

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration

21 CFR Part 1141

[Docket No. FDA-2010-N-0568]
RIN 0910-AG41


Required Warnings for Cigarette Packages and Advertisements

AGENCY: Food and Drug Administration, HHS.

ACTION: Final rule.

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SUMMARY: The Food and Drug Administration (FDA) is amending its 
regulations to add a new requirement for the display of health warnings 
on cigarette packages and in cigarette advertisements. This rule 
implements a provision of the Family Smoking Prevention and Tobacco 
Control Act (Tobacco Control Act) that requires FDA to issue 
regulations requiring color graphics, depicting the negative health 
consequences of smoking, to accompany the nine new textual warning 
statements required under the Tobacco Control Act. The Tobacco Control 
Act amends the Federal Cigarette Labeling and Advertising Act (FCLAA) 
to require each cigarette package and advertisement to bear one of nine 
new textual warning statements. This final rule specifies the color 
graphic images that must accompany each of the nine new textual warning 
statements.

DATES: This rule is effective September 22, 2012. See section VIII of 
this document, Implementation Date, for additional information. The 
incorporation by reference of a certain publication listed in the rule 
is approved by the Director of the Federal Register as of September 22, 
2012.

FOR FURTHER INFORMATION CONTACT: Gerie Voss or Kristin Davis, Center 
for Tobacco Products, Food and Drug Administration, 9200 Corporate 
Blvd., Rockville, MD 20850-3229, 877-287-1373, [email protected] 
or [email protected].

SUPPLEMENTARY INFORMATION: 

Table of Contents

I. Introduction
    A. Purpose and Overview
    B. Background
II. Need for the Rule and Responses to Comments
    A. Cigarette Use in the United States and the Resulting Health 
Consequences
    1. Smoking Prevalence and Initiation in the United States
    2. Health Consequences of Smoking
    B. Inadequacy of Existing Warnings
    C. Consumers' Lack of Knowledge of the Health Risks
    D. Larger, Graphic Warnings Communicate More Effectively
    E. Need To Refresh Required Warnings
III. FDA's Selection of Color Graphic Images
    A. Methodology for Selecting Images
    B. FDA's Research Study
    1. Study Design
    2. Use of FDA's Study Results in Selection of Images
    3. Comments on FDA's Research Study
    C. Comments to the Docket
    1. Comments Submitting Research on FDA's Proposed Required 
Warnings
    2. Other Comments
    D. Selected Images
    1. ``WARNING: Cigarettes are addictive''
    2. ``WARNING: Tobacco smoke can harm your children''
    3. ``WARNING: Cigarettes cause fatal lung disease''
    4. ``WARNING: Cigarettes cause cancer''
    5. ``WARNING: Cigarettes cause strokes and heart disease''
    6. ``WARNING: Smoking during pregnancy can harm your baby''
    7. ``WARNING: Smoking can kill you''
    8. ``WARNING: Tobacco smoke causes fatal lung disease in 
nonsmokers''
    9. ``WARNING: Quitting smoking now greatly reduces serious risks 
to your health''
    10. Image for Advertisements With a Small Surface Area
    E. Non-Selected Images
    1. ``WARNING: Cigarettes are addictive''
    2. ``WARNING: Tobacco smoke can harm your children''
    3. ``WARNING: Cigarettes cause fatal lung disease''
    4. ``WARNING: Cigarettes cause cancer''
    5. ``WARNING: Cigarettes cause strokes and heart disease''
    6. ``WARNING: Smoking during pregnancy can harm your baby''
    7. ``WARNING: Smoking can kill you''
    8. ``WARNING: Tobacco smoke causes fatal lung disease in 
nonsmokers''
    9. ``WARNING: Quitting smoking now greatly reduces serious risks 
to your health''
    10. Image for Advertisements With a Small Surface Area
IV. Comments Regarding Textual Warning Statements
    A. Changes to Textual Warning Statements
    B. Attribution to the Surgeon General
    C. Foreign Language Translations
V. Description of the Final Rule
    A. Overview of the Final Rule
    B. Description of Final Regulations and Responses to Comments
    1. Section 1141.1--Scope
    2. Section 1141.3--Definitions
    3. Section 1141.10--Required Warnings
    4. Section 1141.12--Incorporation by Reference of Required 
Warnings
    5. Section 1141.14--Misbranding of Cigarettes
    6. Section 1141.16--Disclosures Regarding Cessation
VI. Comments Regarding Implementation Issues
    A. Technical Issues Regarding Compliance
    B. Textual Statement Color Formats
    C. Random Display and Rotation of Warnings
VII. Legal Authority and Responses to Comments
    A. FDA's Legal Authority
    B. First Amendment Commercial Speech Issues
    C. Takings Under the Fifth Amendment
VIII. Implementation Date
IX. Federalism
X. Environmental Impact
XI. Analysis of Impacts
    A. Introduction and Summary
    B. Comments on the Preliminary Regulatory Impact Analysis
    1. General
    2. Need for the Rule
    3. Benefits
    4. Costs
    5. Distributional Effects
    6. Impact on Small Entities
    C. Need for the Rule
    D. Benefits
    1. Reduced Cigarette Smoking Rates
    2. Quantifying Benefits That Accrue to Dissuaded Smokers
    3. Reduced Fire Costs
    4. Summary of Benefits
    E. Costs
    1. Number of Affected Entities
    2. Costs of Changing Cigarette Labels
    3. Ongoing Costs of Equal and Random Display
    4. Market Testing Costs Associated With Changing Cigarette 
Package Labels
    5. Advertising Restrictions: Removal of Noncompliant Point-of-
Sale Advertising
    6. Government Administration and Enforcement Costs
    7. Summary of Costs
    F. Cost-Effectiveness Analysis
    G. Distributional Effects
    1. Tobacco Manufacturers, Distributors, and Growers
    2. National and Regional Employment Patterns
    3. Retail Sector
    4. Advertising Industry
    5. Excise Tax Revenues
    6. Government-Funded Medical Services, Insurance Premiums, and 
Social Security
    H. International Effects
    I. Regulatory Alternatives
    1. 24-Month Compliance Period
    2. 6-Month Compliance Period
    3. Alternative Graphic Images
    4. Summary of Regulatory Alternatives
    J. Impact on Small Entities
    1. Description and Number of Affected Small Entities
    2. Description of the Potential Impacts of the Final Rule on 
Small Entities
    3. Alternatives to Minimize the Burden on Small Entities
XII. Paperwork Reduction Act of 1995
XIII. References

I. Introduction

A. Purpose and Overview

    The Tobacco Control Act was enacted on June 22, 2009, amending the 
Federal Food, Drug, and Cosmetic Act (FD&C Act) and FCLAA, and 
providing FDA with the authority to regulate tobacco products (Pub. L. 
111-31; 123 Stat.

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1776). Section 201 of the Tobacco Control Act modifies section 4 of 
FCLAA (15 U.S.C. 1333) to require that the following nine new health 
warning statements appear on cigarette packages and in cigarette 
advertisements:
     WARNING: Cigarettes are addictive
     WARNING: Tobacco smoke can harm your children
     WARNING: Cigarettes cause fatal lung disease
     WARNING: Cigarettes cause cancer
     WARNING: Cigarettes cause strokes and heart disease
     WARNING: Smoking during pregnancy can harm your baby
     WARNING: Smoking can kill you
     WARNING: Tobacco smoke causes fatal lung disease in 
nonsmokers
     WARNING: Quitting smoking now greatly reduces serious 
risks to your health.
    Section 201 of the Tobacco Control Act also states that ``the 
Secretary [of Health and Human Services] shall issue regulations that 
require color graphics depicting the negative health consequences of 
smoking'' to accompany the nine new health warning statements.
    As discussed in the preamble to the proposed rule (75 FR 69524 at 
69525, November 12, 2010), cigarette smoking kills an estimated 443,000 
Americans each year, most of whom began smoking when they were under 
the age of 18 (Ref. 1). Tobacco use is the foremost preventable cause 
of premature death in the United States, and has been shown to cause 
cancer, heart disease, lung disease, and other serious adverse health 
effects (Ref. 2). The U.S. Government has a substantial interest in 
reducing the number of Americans, particularly children and 
adolescents, who use cigarettes and other tobacco products in order to 
prevent the life-threatening health consequences associated with 
tobacco use (section 2(31) of the Tobacco Control Act).
    Although FCLAA has required the inclusion of textual health 
warnings on cigarette packages and in cigarette advertisements for many 
years, there is considerable evidence, which was presented in the 
preamble to the proposed rule (75 FR 69524 at 69529 through 69531) and 
is discussed in section II.B of this document, that the existing 
cigarette health warnings are given little attention or consideration 
by viewers. A 2007 report from the Institute of Medicine (IOM) 
described the warnings as ``invisible'' (Ref. 3), and found that they 
fail to communicate relevant information in an effective way. The 
warnings currently in use in the United States also fail to include any 
graphic component, despite the evidence in the scientific literature 
that larger, graphic health warnings promote greater understanding of 
the health risks of smoking and would help to reduce consumption (see 
75 FR 69524 at 69531 through 69533). In proposing this regulation and 
preparing this final rule, we found substantial evidence indicating 
that larger cigarette health warnings including a graphic component, 
like those being required in this rule, would offer significant health 
benefits over the existing warnings. Consistent with Executive Order 
13563, this regulation is ``based on the best available evidence'' and 
has allowed ``for public participation and an open exchange of ideas.''

B. Background

    On November 12, 2010, as directed by section 201 of the Tobacco 
Control Act and in the interest of public health, we issued a proposed 
rule seeking to modify the warnings that appear on cigarette packages 
and in cigarette advertisements to include color graphic images 
depicting the negative health consequences of smoking; these images 
were proposed to accompany the nine new textual warning statements set 
forth in section 201 of the Tobacco Control Act (see 75 FR 69524). The 
Agency received more than 1,700 comments to the docket for the November 
12, 2010, notice of proposed rulemaking (NPRM) on required warnings for 
cigarette packages and advertisements. Comments were received from 
cigarette manufacturers, retailers and distributors, industry 
associations, health professionals, public health or other advocacy 
groups, academics, State and local public health agencies, medical 
organizations, individual consumers, and other submitters. These 
comments are summarized and responded to in the relevant section(s) of 
this document. Similar comments are grouped together by the topics 
discussed or the particular portions of the NPRM or codified language 
to which they refer.
    To make it easier to identify comments and FDA's responses, the 
word ``Comment,'' in parenthesis, appears before the comment's 
description, and the word ``Response,'' in parenthesis, appears before 
FDA's response. Each comment is numbered to help distinguish among 
different comments. Similar comments are grouped together under the 
same comment number. The number assigned to each comment is purely for 
organizational purposes and does not signify the comment's value or 
importance or the order in which it was received.

II. Need for the Rule and Responses to Comments

A. Cigarette Use in the United States and the Resulting Health 
Consequences

1. Smoking Prevalence and Initiation in the United States
    In explaining the need for the proposed rule, we provided 
information in the NPRM on smoking prevalence and initiation rates 
among adults and children in the United States. As stated in the NPRM 
(75 FR 69524 at 69526), approximately 46.6 million U.S. adults (or 20.6 
percent of the adult population) are cigarette smokers (Ref. 4). 
Moreover, almost half (46.3 percent) of youth in grades 9 through 12 in 
the United States have tried cigarette smoking, and 19.5 percent of 
youth in grades 9 through 12 are current cigarette smokers (Ref. 5 at 
p. 10). Smoking rates among U.S. adults have shown virtually no change 
during the 5-year period from 2005 to 2009 (Ref. 4), and smoking rates 
among U.S. youth have not decreased from 2006 to 2009 (Ref. 6).
    Furthermore, each year millions of U.S. adults and children become 
new smokers. Data from the 2008 National Survey on Drug Use and Health 
indicate that 2.4 million persons aged 12 or older in the United States 
smoked cigarettes for the first time in the past 12 months (Ref. 7 at 
p. 59). In addition, these data indicate that almost 1 million 
Americans aged 12 or older started smoking cigarettes daily within the 
past 12 months (Ref. 7 at p. 60).
    In other words, approximately 6,600 people aged 12 or older in the 
United States become new cigarette smokers every day, and more than 
2,500 individuals become new daily cigarette smokers every day (Ref. 7 
at pp. 59-60). Moreover, nearly 4,000 of the people who become new 
cigarette smokers every day and nearly 1,000 of the individuals who 
become new daily cigarette smokers every day are children under the age 
of 18 (Ref. 7 at pp. 59-60). These statistics for youth smokers are 
particularly concerning, as studies suggest that the age people start 
smoking can greatly influence how much they smoke per day and how long 
they smoke, which in turn influences their risk of tobacco-related 
disease and death (Refs. 8, 9, and 10).
    FDA received many comments that were strongly supportive of the 
proposed rule, some of which provided data and information consistent 
with that in the NPRM regarding cigarette use prevalence and initiation 
in the United States (75 FR 69524 at 69526 through 69527). Many of 
these comments also stated that smokers would be more

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likely to quit smoking and that nonsmokers would be less likely to 
start smoking if cigarette advertisements and packages display, 
visually and graphically, the health effects of cigarettes. Most of 
these comments expressed a belief that the required warnings would help 
reduce the existing and future use of cigarettes. Some comments that 
were supportive of the proposed rule discussed the smoking prevalence 
and initiation rates in the United States in particular populations. 
These comments, and FDA's responses, are summarized in the following 
paragraphs.
    (Comment 1) Multiple comments indicated that people with less 
education and lower incomes have higher smoking prevalence rates in 
general. One comment from a health care association indicated that 
women of low educational background have higher smoking prevalence 
rates and that many of these women still are not aware of cigarettes' 
impact on life expectancy, heart disease, and pregnancy.
    (Response) We agree that adults with low education levels have 
higher than average smoking prevalence rates. For example, as discussed 
in the NPRM (75 FR 69524 at 69526), 49.1 percent of adults with a 
General Education Development certificate (GED) and 28.5 percent of 
adults with less than a high school diploma were current smokers in 
2009, compared with 5.6 percent of adults with a graduate degree (Ref. 
4). We also agree that graphic health warnings may be particularly 
important communication tools for these smokers, as there is evidence 
suggesting that countries with graphic health warnings demonstrate 
fewer disparities in health knowledge across educational levels (Ref. 
11 at p. 18 and Ref. 3 at p. 295).
    (Comment 2) Multiple comments noted that smoking rates vary by race 
and ethnicity, with American Indians/Alaska Natives having the highest 
rates. One comment also noted that the health and economic costs of 
smoking vary by race and ethnicity. For example, the comment stated 
that African-American smokers suffer disproportionately from smoking-
related diseases, including lung cancer, heart disease, and strokes 
(citing Ref. 12), and called for measures to address these disparities.
    One comment from a State public health agency indicated that racial 
minority populations and economically disadvantaged populations have 
smoking prevalence rates that are two to three times higher than the 
general population.
    (Response) We agree that smoking rates vary by race and ethnicity 
and socioeconomic status. For example, prevalence data from 2009 for 
current U.S. adult cigarette smokers indicate that, among racial/ethnic 
groups, adults reporting multiple races had the highest smoking 
prevalence (29.5 percent), followed by American Indians/Alaska Natives 
(23.2 percent) (Ref. 4). We also agree that economically disadvantaged 
populations have higher smoking prevalence rates. For example, data 
from 2009 indicate that the prevalence of current smoking was higher 
among U.S. adults living below the Federal poverty level (31.1 percent) 
than among those at or above this level (19.4 percent) (Id.). We have 
selected required warnings that will help effectively convey the 
negative health consequences of smoking to a wide range of population 
groups, including different racial and ethnic groups and different 
socioeconomic groups, and that can help both to discourage nonsmokers 
from initiating cigarette use and to encourage current smokers to 
consider quitting. For additional information regarding our selection 
of required warnings to reach a broad range of population groups, see 
section III of this document regarding our selection of the final 
images.
    (Comment 3) Multiple comments stated that tobacco use disparities 
exist among lesbian, gay, bisexual, and transgender individuals. One 
comment from a community organization stated that lesbian, gay, 
bisexual, and transgender individuals smoke at rates almost 50 percent 
to 200 percent higher than the rest of the population and strongly 
supported the proposed rule.
    (Response) We agree that evidence suggests that gay, lesbian, 
bisexual, and transgender populations have higher smoking rates than 
their heterosexual counterparts (Ref. 13). The required warnings will 
help convey information about various health risks of smoking to 
individuals from a wide range of demographic groups and will help 
encourage smoking cessation and discourage smoking initiation.
    (Comment 4) One comment from a nonprofit research organization 
indicated that members of the U.S. military have rates of smoking that 
are unacceptably high, particularly among younger members. The comment 
detailed the negative outcomes of smoking to military personnel, 
including lower physical performance, an increased risk of injury 
during physical tasks, a greater number of days sick and unable to 
report for duty, poorer job performance, and a higher likelihood of 
premature discharge from active duty, and stated that smoking and its 
negative effects among active duty personnel costs the military an 
estimated $1 billion annually in health care and lost productivity 
(Ref. 14). The comment also referred to evidence suggesting the tobacco 
industry has targeted military members and fought efforts to reduce 
tobacco product consumption by military personnel, and indicated that 
the proposed rule is an important step in protecting military members 
from the health harms of cigarette use and will likely decrease 
cigarette use among military personnel.
    (Response) We agree that members of the U.S. military have higher 
smoking prevalence rates than the general population; approximately 
20.6 percent of the U.S. adult population smoke cigarettes, while data 
from 2008 indicate that 31 percent of active duty military personnel 
smoke cigarettes (Ref. 15). We agree that the required warnings will 
help convey information about various health risks of smoking to a wide 
range of individuals, including members of the U.S. military and 
veterans who began smoking while in military service, and that the 
required warnings will encourage smoking cessation and discourage 
smoking initiation in these individuals.
2. Health Consequences of Smoking
    Smoking is responsible for at least 443,000 premature deaths per 
year in the United States, and each year cigarettes are responsible for 
approximately 5.1 million years of potential life lost (Ref. 1). Annual 
direct health care expenses due to smoking total approximately $96 
billion, and annual productivity losses due to premature deaths alone 
from cigarette smoking total approximately $96.8 billion (Id.).
    The Agency received many comments that were supportive of the 
proposed rule, some of which reiterated the health risks of smoking 
described in the NPRM (75 FR 69524 at 69527 through 69529) and stressed 
the need for measures, such as graphic health warnings, to curb smoking 
in the United States in order to improve health and to reduce the 
massive health care costs attributable to tobacco-related illnesses. 
Some of these comments cited data demonstrating that smoking is the 
leading cause or most powerful risk factor for particular diseases, 
such as chronic obstructive pulmonary disease (COPD), bladder cancer, 
and atherosclerosis.
    However, FDA also received multiple comments disputing the health 
risks of smoking. These comments and FDA's responses are summarized in 
the following paragraphs.
    (Comment 5) One comment from an individual expressed a belief that 
addiction to nicotine is 99 percent

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psychological and only 1 percent pharmacological, and that nicotine is 
no more addictive than caffeine.
    (Response) We disagree with the assertion that nicotine addiction 
does not have a substantial physiologic component. While we acknowledge 
that behavioral processes play a role in initiation and maintenance of 
nicotine addiction, nicotine is a powerful pharmacologic agent that 
acts in a variety of ways at different sites in the body. As stated in 
the NPRM, nicotine causes physical dependence characterized by 
withdrawal symptoms that usually accompany nicotine abstinence (75 FR 
69524 at 69528). Regarding the relative addictiveness of nicotine and 
caffeine, caffeine is distinct from nicotine in its abuse liability, 
which includes a consideration of multiple factors, including the 
dependence potential of a substance and the degree to which it produces 
adverse effects (see Ref. 16 at p. 304). Caffeine produces only minimal 
disruptive physiological effects and, unlike nicotine from tobacco 
products, caffeine is generally not used in ways that are considered to 
be of significant adverse health effect (see Id. at pp. 285 and 304).
    (Comment 6) One comment stated that nicotine withdrawal is the only 
medical condition that is irrefutably caused by cigarettes.
    (Response) We disagree with this comment. While nicotine addiction 
is one negative health effect of cigarette smoking, it is not the only 
medical condition irrefutably caused by cigarettes. As detailed in the 
2004 report of the Surgeon General, ``The Health Consequences of 
Smoking,'' which summarizes thousands of peer-reviewed scientific 
studies and was itself peer-reviewed, cigarettes have been shown to 
cause an ever-expanding number of diseases and conditions, including 
lung cancer, laryngeal cancer, oral cavity and pharyngeal cancers, 
esophageal cancer, bladder cancer, pancreatic cancer, kidney cancer, 
stomach cancer, cervical cancer, acute myeloid leukemia, all the major 
clinical cardiovascular diseases, COPD, and a range of acute 
respiratory illnesses (Ref. 2).
    Maternal smoking during pregnancy causes a reduction in lung 
function in infants, and women who smoke during pregnancy are more 
likely to experience premature rupture of the membranes, placenta 
previa, and placental abruption (Id. at pp. 508 and 576). Smoking also 
increases rates of preterm delivery and shortened gestation, and women 
who smoke are twice as likely as nonsmokers to have low birth weight 
infants; smoking also increases the risk of sudden infant death 
syndrome (SIDS) (Id. at pp. 569, 576, 587 and 601).
    Children who smoke experience impaired lung growth and an early 
onset of lung function decline (Id. at pp. 508-509, 2004 SG). Smoking 
during adulthood also leads to a premature onset of accelerated age-
related decline in lung function (Id. at p. 509). Smoking also results 
in poor asthma control and causes a range of respiratory symptoms in 
children, adolescents, and adults, including coughing, phlegm, 
wheezing, and shortness of breath (Id.).
    Furthermore, cigarette smokers have poorer overall health status 
compared to nonsmokers, and an increased risk of adverse surgical 
outcomes related to wound healing and respiratory complications 
compared to nonsmokers. Smokers are also at an increased risk for hip 
fractures, and smoking increases the risk for periodontitis, cataract, 
and the occurrence of peptic ulcer disease in persons who are 
Heliobacter pylori positive (Id. at pp. 717-719, 736, 777, 780, and 
813).
    In addition, exposure to secondhand smoke has been shown to cause a 
variety of negative health effects in nonsmokers, including lung 
cancer, cardiovascular disease, and respiratory symptoms (see Ref. 17).
    (Comment 7) Some comments were submitted by individuals disputing 
the negative health consequences of smoking that are described in the 
graphic warnings. These comments generally indicated that the 
individuals submitting the comments were smokers, and that they and/or 
their family members (who were exposed to secondhand smoke) had not 
experienced negative health effects from smoking.
    (Response) We disagree with these comments. Cigarette smoking has 
been shown to cause a wide range of negative health consequences, as 
detailed in the previous response. Furthermore, it can be years before 
some of the negative health consequences of smoking clinically 
manifest. Thus, the personal health status of the individuals 
submitting these comments could change in the future. A scientific 
determination that a product causes a particular negative health 
consequence is based on data from large groups of individuals, and the 
fact that an individual product user has not experienced (or has not 
yet experienced) a particular negative health consequence does not mean 
the product does not cause that harm.
    Moreover, to the extent these comments indicate that many smokers 
do not fully understand the serious health risks of cigarettes or do 
not believe that these risks apply to them, they illustrate the need 
for health warnings that effectively communicate the negative health 
consequences of smoking to consumers. For additional information 
regarding consumers' lack of knowledge of smoking risks, see section 
II.C of this document.
    (Comment 8) One comment stated that cigarettes are a minor public 
health concern compared to obesity and alcohol, and that cigarette use 
results in less health care costs than medical treatment for the obese.
    (Response) As discussed in the NPRM, cigarette smoking is the 
leading cause of preventable death and disease in the United States 
(Ref. 4). Furthermore, cigarettes are responsible for health care 
expenditures and productivity losses resulting in a combined economic 
burden of approximately $193 billion per year (Ref. 1). The total costs 
of smoking to society are much higher, as the estimate for productivity 
losses does not include costs associated with smoking-related 
disability, employee absenteeism, or costs associated with secondhand-
smoke attributable disease morbidity and mortality (Id.).
    We disagree that cigarettes are a minor public health concern, even 
as compared to other public health issues, and also disagree with the 
implication that the public health issue of smoking should not be 
addressed because other public health issues exist. The required 
warnings will have a significant, positive impact on public health (75 
FR 69524 at 69526), and as a result will help mitigate the single 
largest cause of preventable death and disease in the United States.

B. Inadequacy of Existing Warnings

    In the preamble to the proposed rule, FDA explained how cigarette 
packages and advertisements can be effective channels for communication 
of important health information, particularly given that pack-a-day 
smokers are potentially exposed to warnings more than 7,000 times per 
year (75 FR 69524 at 69529). However, the existing warnings have 
suffered from three crucial problems: (1) They have not changed in more 
than 25 years, (2) they often go unnoticed, and (3) they fail to convey 
relevant information in an effective manner. FDA also explained that 
larger, graphic warnings communicate the health risks of smoking more 
effectively. The preamble to the proposed rule presented extensive 
evidence from other countries' experiences with graphic warnings as 
well as information from the 2007 IOM Report (75 FR 69524 at 69531). On 
the

[[Page 36632]]

basis of the available scientific evidence, the IOM concluded that 
larger, graphic warnings would promote greater public knowledge of the 
health risks of using tobacco and would help reduce consumption (Ref. 
3).
    We received numerous comments regarding the adequacy of the 
existing warnings that appear on cigarette packages and advertisements. 
The large majority of these comments supported our analysis of the 
existing warnings, but a few comments disagreed with this analysis. 
These comments, and our responses, are summarized in the following 
paragraphs.
    (Comment 9) A substantial number of comments, including those from 
health institutions, nonprofit organizations, academics, and consumers, 
agreed with FDA's conclusion that the existing warnings that appear on 
cigarette packages and advertisements are ineffective at conveying the 
health risks of smoking (75 FR 69524 at 69529 through 69531).
    However, one comment stated that the current warnings were 
``fine.'' Two comments expressed the belief that the existing warnings 
have worked successfully in the current information environment.
    (Response) We disagree with the comments stating that the existing 
warnings that appear on cigarette packages and advertisements are 
effective. As several other comments noted, the Surgeon General has 
long recognized that the cigarette warnings are deficient. For example, 
in its 1994 report the Surgeon General noted that the warnings had 
become ineffective due to their size, shape, and familiarity (Ref. 18). 
That same year, the IOM concluded that the warnings were ``inadequate * 
* * and woefully deficient when evaluated in terms of proper public 
health criteria'' (Ref. 19 at p. 237). Yet those same warnings are 
still in use more than 16 years after the Surgeon General's report and 
26 years after their inception. Accordingly, we conclude that the 
existing warnings for cigarettes do not adequately communicate the 
health risks of smoking.

C. Consumers' Lack of Knowledge of the Health Risks

    In the preamble to the proposed rule, FDA described how the 
existing warnings that currently appear on cigarette packages and 
advertisements have largely gone unnoticed by both smokers and 
nonsmokers (75 FR 69524 at 69530). FDA also provided clear evidence 
that the warnings have failed to convey appropriately crucial 
information such as the nature and extent of the health risks 
associated with smoking cigarettes (75 FR 69524 at 69530 through 
69531).
    FDA received many comments regarding the level of consumers' 
knowledge regarding the health risks of smoking. Several comments 
stated that consumers are adequately informed about the risks of 
smoking or even overestimate the risks of smoking, while many other 
comments explained that consumers lack knowledge about a wide variety 
of smoking risks. A summary of these comments, and our responses, is 
included in the following paragraphs.
    (Comment 10) Several comments, including comments from tobacco 
product manufacturers and individual consumers, objected to the new 
required warnings, in part because they claimed that consumers already 
know the health risks associated with smoking. The submitters expressed 
the belief that the new warnings are unnecessary, because the new 
warnings provide information that the public has been aware of for many 
years.
    (Response) We disagree. Many comments provided significant evidence 
to support the notion that consumers, including those in communities 
with low literacy rates and military personnel, actually lack knowledge 
or underestimate the risks associated with smoking. As discussed in 
this document, this lack of knowledge may involve either an incomplete 
understanding of the statistical risks or a failure to understand the 
personal (as opposed to the statistical) risks (see also section XI.B.2 
of this document). There is also a possibility that the risks are not 
considered at the time of purchase, even if they are understood--a 
special problem for those who are deciding whether to start to smoke. 
The requirements adopted here should help to counteract all of these 
problems.
    While most smokers understand that smoking poses certain 
statistical risks to their health, many fail to appreciate the severity 
and magnitude of those risks (Refs. 20 and 21), and there is evidence 
that even when smokers appreciate the statistical risk, they 
underestimate the personal risk that they face (Ref. 22). A 2007 survey 
found that two in three smokers underestimate the chance of a smoker 
developing lung cancer compared to a nonsmoker (Ref. 23). The survey 
also found that up to a third of smokers erroneously believe that 
certain activities, such as exercise and taking vitamins, could 
``undo'' most of the effects of smoking (Id.).
    Other research also highlights how smokers underestimate the health 
effects of smoking. For example, in a 2008 survey, more than one-
quarter of current smokers did not agree that smoking increases a 
person's chances of getting cancer ``a lot'' (Ref. 24). Furthermore, 
one study, involving smokers' perception of their personal risk, found 
that only 40 percent of current smokers believed they had a higher-
than-average risk of cancer and only 29 percent believed they had a 
higher-than-average risk of heart disease (Ref. 25). Even among heavy 
smokers (those who smoke at least 40 cigarettes per day), less than 
half believed they were at increased risk for these diseases (Id.). In 
another demonstration of underestimation of personal risk, a study 
found that adolescent smokers underestimated their personal risk, even 
if they had an accurate sense of the statistical risk (Ref. 22).
    A 2005 study of smokers in the United States and three other 
countries found that there were significant gaps in smokers' knowledge 
about the risks of smoking and that smokers living in countries where 
health warnings referred to specific disease consequences of smoking 
were much more likely to be aware of those consequences (Ref. 26). The 
study concluded that smokers are not fully informed about the risks of 
smoking, and that warnings that are graphic, larger, and more 
comprehensive in content are more effective in communicating the health 
risks of smoking (Id.).
    Thus, even if consumers are aware of certain negative health 
consequences of smoking, such as lung cancer and emphysema, and even if 
they are aware of certain statistical risks, many smokers underestimate 
their personal risks, and many Americans are under-informed about other 
health risks associated with smoking. For example, while nearly all 
daily smokers in one study correctly identified that smoking caused 
lung cancer (99 percent) and emphysema (97 percent), a lower percentage 
of respondents correctly identified smoking as causing low birth weight 
babies (88 percent), worsened asthma (85 percent), miscarriages (76 
percent), other cancers (69 percent), head and neck cancers (68 
percent), cervical cancer (48 percent), stomach ulcers (46 percent), 
reproductive difficulties (44 percent), osteoporosis (41 percent), and 
SIDS (40 percent) (Ref. 27). In fact, research indicates that most 
people know only one or two of the many diseases causes by smoking. One 
survey found that while a majority of people knew that smoking caused 
life-threatening illnesses, more than half of the respondents were 
unable to name a smoking-related illness other than lung cancer (Ref. 
28). Similarly, researchers

[[Page 36633]]

found that when asked about health risks of smoking, 39 percent of 
respondents either answered incorrectly or said they did not know (Ref. 
29).
    Americans also lack adequate understanding of the addictive nature 
of cigarettes. Although one comment provided local surveys showing that 
adults already know that cigarettes are addictive, there is also 
evidence that many adolescents do not appreciate the addictive nature 
of cigarettes. The 2007 IOM Report explained that ``adolescents 
misperceive the magnitude of smoking harms and the addictive properties 
of tobacco and fail to appreciate the long-term dangers of smoking, 
especially when they apply the dangers to their own behavior'' (Ref. 3 
at p. 93). In addition, one survey found that fewer than 5 percent of 
daily smokers in high school think that they still will be smoking at 
all in 5 years, yet more than 60 percent of high school smokers are 
regular daily smokers 7 to 9 years later (Ref. 30). Another survey 
found that only 7.4 percent of adult smokers and 4.8 percent of young 
smokers expected to smoke longer than 5 years when they started, but 87 
percent of these adults and 76 percent of these youth reported that 
they had been smoking for more than 5 years (Ref. 31).
    There is also evidence that certain demographic groups are even 
less aware of the negative health consequences of smoking, which is 
particularly concerning in light of the evidence that these groups also 
have some of the highest smoking prevalence rates (see section II.A.1 
of this document). For example, research shows that knowledge of 
smoking risks is lower among people with lower incomes and fewer years 
of education (Refs. 32 33 and 24). Smokers in the military also 
underestimate the actual risk of serious disease and substantially 
underestimate their own risks (a point that fits well with the evidence 
of underestimation of personal risks) (Refs. 34 35 and 36).
    In addition to underestimating the risks smoking poses to their own 
health, Americans underestimate the health effects of secondhand smoke 
on others. In the 2010 Report, ``How Tobacco Smoke Causes Disease: The 
Biology and Behavioral Basis for Smoking-Attributable Disease,'' the 
Surgeon General concluded that ``many of the effects from active 
smoking can be observed in persons involuntarily exposed to cigarette 
smoke'' (Ref. 37). In addition, individual studies have shown that 
secondhand smoke triggers childhood asthma and is associated with both 
heart disease and cancer (Ref. 17). Yet, most parents believe that 
smoke exposure has little or no negative impact on children's asthma 
(Ref. 38), and a 2009 study found that nearly one-fifth of Americans do 
not believe that secondhand smoke is dangerous to nonsmokers (Ref. 39).
    There is a final point. Even if many people do have an accurate 
understanding of the statistical risk, and even if, in the abstract, 
many smokers also have an accurate understanding of their personal 
risk, that understanding may be too abstract to be thought of at the 
time of purchase, especially (but not only) for those who are starting 
to smoke. Efforts to make the relevant risks salient are justified and 
indeed required under the Tobacco Control Act.
    (Comment 11) A few comments claimed that adults actually 
overestimate the risks of smoking-related disease, and stated that this 
further underscores the lack of a need for graphic health warnings. In 
particular, one comment referred to a Montana survey in which adults 
believed that smoking caused colon cancer.
    (Response) We disagree with these comments. While the Montana 
survey referred to in one of the comments indicates that some consumers 
are not aware of the precise relationship between smoking and certain 
diseases (for example, the 2004 Surgeon General's report notes that the 
evidence is suggestive but not sufficient to infer a causal 
relationship between smoking and colorectal cancer (Ref. 2 at p. 26)), 
we are aware of significant research indicating that many consumers are 
not sufficiently aware of the risks associated with smoking, as 
discussed in the previous response. We find that the weight of evidence 
clearly demonstrates that many consumers lack adequate knowledge about 
the health risks of smoking--especially the personal risks. In 
addition, the comments claiming that adults overestimate smoking's 
risks fail to take into account consumers' lack of knowledge of other 
health risks due to smoking, like the dangers of secondhand smoke, 
reproductive difficulties, and miscarriages, as described in the 
previous response.

D. Larger, Graphic Warnings Communicate More Effectively

    Since Canada first introduced graphic health warnings for 
cigarettes in 2001, an extensive evidence base has been developed to 
examine the effects of graphic health warnings in Canada and in the 
more than 30 other countries that have adopted similar requirements for 
graphic health warnings on cigarettes. As FDA extensively discussed in 
the NPRM (75 FR 69524 at 69531 through 69533), the research literature 
indicates that large graphic health warnings, such as those being 
required in this rule, are more likely than text-only warnings to (1) 
get consumers' attention, (2) influence consumers' awareness of 
cigarette-related health risks, and (3) affect smoking intentions and 
behaviors. FDA received many comments on the efficacy of large, graphic 
warnings, as well as comments regarding the potential for any rebound 
effect from the use of graphic warnings. Those comments, and FDA's 
responses, are summarized in the following paragraphs.
    (Comment 12) A wide variety of comments, including those from 
health institutions, nonprofit organizations, and academics, agreed 
with FDA's findings in the NPRM that larger, graphic warnings are 
effective.
    However, several comments stated that the changes in the format and 
placement of the warnings being proposed, including the use of graphic 
images, will not result in reductions in cigarette use given the 
experiences in other countries. For example, one comment noted that 
Health Canada's own data found, among other things, that there was no 
statistically significant decline in smoking incidence consumption for 
adolescents or adults after the introduction of graphic warnings. This 
comment expressed the belief that Canada's warnings have been 
ineffective and that FDA's graphic health warnings will be similarly 
ineffective.
    (Response) For the reasons stated in the NPRM, we conclude that 
larger, graphic warnings are effective in conveying the health risks of 
smoking, influencing consumer awareness of these risks, and affecting 
smoking intentions. We disagree with comments stating that the change 
in format and placement of the warnings will not be effective. The set 
of required warnings we have selected will satisfy our primary goal, 
which is to effectively convey the negative health consequences of 
smoking on cigarette packages and in advertisements, and this effective 
communication can help both to discourage nonsmokers, including minor 
children, from initiating cigarette use and to encourage current 
smokers to consider cessation to greatly reduce the serious risks that 
smoking poses to their health.
    The research literature clearly indicates that larger, graphic 
warnings are effective at communicating the health risks associated 
with smoking, encouraging users to quit smoking, and discouraging 
nonsmokers from beginning to smoke. We already included significant 
research to

[[Page 36634]]

substantiate this conclusion in the preamble to the proposed rule, and 
the comments did not specifically dispute this analysis (see 75 FR 
69524 at 69531 through 69532). In addition, as we noted in the NPRM, 
the available evidence demonstrates that graphic health warnings are 
(1) more likely to be noticed than text-only warnings, (2) more 
effective for educating smokers about the health risks of smoking and 
for increasing the time smokers spend thinking about the health risks, 
and (3) associated with increased motivation to quit smoking (Id.). As 
several comments noted, evidence from countries with graphic health 
warnings also indicates that such warnings are an important information 
source for younger smokers, and that pictures are effective in 
conveying messages to children (Ref. 40 at pp. 3, 20, and 24-26). These 
important effects of graphic warnings are sustained longer than any 
impact from text-only warnings (Ref. 41).
    Further, the data from Health Canada does not indicate that the 
warnings have been ineffective at conveying the health risks of smoking 
and impacting smoking intentions. We cited several studies in the 
preamble (including data from Health Canada) that illustrated the 
effectiveness of the Canadian graphic health warnings, which have been 
found effective at providing youth and adult smokers with health 
information, making consumers think about the health effects of 
smoking, and increasing smokers' motivations to quit smoking, among 
other things (see 75 FR 69524 at 69532). For example, national surveys 
conducted on behalf of Health Canada indicate that approximately 95 
percent of youth smokers and 75 percent of adult smokers report that 
the Canadian pictorial warnings have been effective in providing them 
with important health information (Ref. 3 at p. 294).
    (Comment 13) One comment suggested that the new required warnings 
will have a greater impact on nonsmokers who inadvertently view 
cigarette packages than on smokers and, therefore, will not be 
effective in achieving FDA's goals.
    (Response) We are not aware of any evidence to substantiate this 
comment. Further, our required warnings are intended to have an impact 
on both smokers and nonsmokers. As stated in the preamble to the 
proposed rule, ``the new required warnings are designed to clearly and 
effectively convey the negative health consequences of smoking on 
cigarette packages and in cigarette advertisements, which would help 
both to discourage nonsmokers, including minor children, from 
initiating cigarette use and to encourage current smokers to consider 
cessation to greatly reduce the serious risks that smoking poses to 
their health'' (75 FR 69524 at 69526). Therefore, the warnings are 
intended to have an impact on nonsmokers as well as smokers, and the 
required warnings will effectively communicate the negative health 
consequences of smoking to both of these important audiences.
    (Comment 14) Several comments, including comments from cigarette 
manufacturers and individual consumers, expressed concerns that the new 
required warnings on cigarette packages and advertisements would cause 
people not to look at packages or cause them to hold their cigarettes 
in decorative cases. The comments also indicated that some of the 
proposed images would induce youth to purchase cigarettes rather than 
deter them from smoking, because the new images would be striking to 
youth. These comments stated that this ``rebound effect'' would 
undermine the intent of the warnings and decrease their effectiveness.
    (Response) We disagree. Comments expressing concerns about a 
potential rebound effect did not provide persuasive scientific evidence 
to demonstrate such an effect is likely to occur (or that it would have 
sufficient magnitude to be a significant concern). The comments 
referenced older studies that did not specifically address graphic 
warnings on cigarette packages and advertisements, and also referred to 
a qualitative study conducted on the European Union's graphic warnings, 
in which some focus group participants commented that some warnings 
were humorous or that they were not persuasive in educating consumers 
about dental diseases associated with smoking (Ref. 42). When weighing 
this qualitative information against the quantitative research 
available, including evidence from countries with graphic health 
warning requirements, as well as the findings of the expert panel of 
the IOM in its 2007 report (see Ref. 3), the information referenced in 
the comments is not persuasive. (While focus groups can provide useful 
information, it is well known that they are not as reliable as real-
world evidence for drawing conclusions about causal relationships and 
generalizing results to the population as a whole (Ref. 43).)
    Furthermore, we note that in the European Union qualitative study 
referenced in the comments, the researchers concluded that pictures 
have the potential to add a powerful element to health warning messages 
and that the old text-only messages were not working (Ref. 42 at p. 
43). They also noted that some of the warning messages the comments 
referred to, including the referenced dental disease image, provoked a 
highly emotional response in all the countries surveyed despite the 
comments from certain focus group participants (Id. at p. 35). The 
research literature suggests that images that evoke emotional responses 
can increase the likelihood smokers will reduce their smoking, make an 
attempt to quit, or quit altogether (Ref. 44).
    While one comment said that the failure of fear-inducing messages 
based on health effects is ``well-known in areas outside of smoking 
prevention,'' the comment did not provide sufficient evidence of such 
failure in the area of smoking prevention. In fact, as some comments 
discussed, there is scientific evidence relating to cigarette graphic 
health warnings illustrating the success of fear-inducing messages 
(see, e.g., Ref. 44). For example, one comment referred to research 
that found that smokers exposed to Canada's graphic health warnings 
generally did not try to avoid the fear-inducing messages, and that any 
avoidance engaged in by smokers does not appear to undermine quitting 
intentions or attempts (citing Ref. 45). Similarly, researchers 
analyzing data related to graphic warnings found that:

    [T]here is no evidence that pictorial warnings lead to boomerang 
effects. An analysis of data from the ITC Four Country Survey found 
that the Australian pictorial warnings, introduced in 2005, led to 
greater avoidant behaviours (e.g. covering up the pack, keeping it 
out of sight, or avoiding particular labels), compared to Canada, 
the United Kingdom, and the USA. Importantly, those smokers who 
engaged in avoidant behaviours were no less likely to intend to quit 
or to attempt to quit replicating the findings of a study of the 
Canadian warnings. Thus, although pictorial warnings can lead to 
avoidance and defensive reactions, such reactions are actually 
indicators of positive impact.

(Ref. 46, citing Refs. 20 and 44). To the extent that smokers engage in 
any defensive avoidance with respect to the new required warnings, we 
are adding a reference to a cessation resource to give smokers an 
immediate way to act upon this impulse and access cessation assistance. 
The research literature suggests that such a reference is effective in 
diminishing potential avoidance effects in response to messages that 
arouse fear (see Ref. 40 at pp. 39-41). See section V.B.6 of this 
document for additional information regarding our rationale and 
authority for including a reference to a cessation resource in the 
required warnings.
    (Comment 15) Several comments expressed concern about the potential

[[Page 36635]]

effectiveness of the new required warnings, particularly those that are 
fear-based, with certain portions of the population. These comments 
expressed the following concerns: (1) Many youths and young adults are 
rebellious and will be attracted to what they perceive as the 
``forbidden fruit;'' (2) fear-based warnings fail with groups that have 
low self-esteem; (3) fear-based warnings fail with adolescents, because 
they tend not to be influenced by health-based deterrents; and (4) the 
new required warnings are ``high fear messages'' that may actually 
inhibit reductions in smoking, because they decrease a person's 
perceived ability to quit smoking. These comments expressed the belief 
that the new required warnings would be ineffective.
    (Response) While acknowledging the concerns, we disagree. It is 
true that messages that induce fear, pointing to a risk, may not be 
effective when people are unaware of how to reduce the risk, but in 
this case, the best way to reduce the risk is clear. We have chosen a 
balanced set of images, including those that may arouse fear and those 
that may generate other emotional responses in certain individuals in 
order to reach a diverse population of smokers and nonsmokers, as well 
as youth, young adults, and adults. Furthermore, as is explained in 
more detail in section III.B of this document, we conducted a research 
study to quantitatively evaluate the relative efficacy of the proposed 
required warnings in communicating the health harms of smoking to 
adults (aged 25 or older), young adults (aged 18 to 24), and youth 
(aged 13 to 17). The nine selected required warnings showed positive 
effects on important study measures in all study populations, including 
youth, relative to the text-only control. In particular, as is 
discussed in more detail in section III of this document, the selected 
required warnings showed strong impacts on the salience measures in our 
research study, including emotional and cognitive measures.
    The research literature suggests that these measures are likely to 
be related to behavior change. For example, the literature suggests 
that risk information is most readily communicated by messages that 
arouse emotional reactions (see Ref. 45), and that smokers who report 
greater negative emotional reactions in response to cigarette warnings 
are significantly more likely to have read and thought about the 
warnings and more likely to reduce the amount they smoke and to quit or 
make an attempt to quit (Ref. 44). The research literature also 
suggests that warnings that generate an immediate emotional response 
from viewers can confer negative feelings about smoking and undermine 
the appeal and attractiveness of smoking (Ref. 45 and Ref. 40 at pp. 
37-38). In addition, research has shown that younger adolescents are 
more likely to notice and think about health warnings that include 
graphic images (Ref. 47).
    The required warnings will effectively communicate the negative 
health consequences of smoking, and we do not agree that they will have 
unintended negative effects among younger population groups.
    (Comment 16) One comment expressed concern that the new graphic 
images on cigarette packages and advertisements would actually make 
cigarette smokers sicker, as the images would increase smokers' anxiety 
and damage their self-esteem.
    (Response) We disagree. We are not aware of any scientific evidence 
to support this claim. In fact, as discussed in the preamble to the 
proposed rule, the available evidence suggests that graphic health 
warnings can benefit the public health by increasing smokers' 
intentions to quit and reducing the likelihood of initiation by 
nonsmokers (75 FR 69524 at 69532).
    (Comment 17) A few comments stated that fear-based warnings fail to 
work when the message being conveyed is already clearly understood and 
does not provide new information. These comments expressed the view 
that, because consumers already understand the risks associated with 
smoking, the new required warnings would not be effective in achieving 
FDA's goals.
    (Response) We disagree. As explained in section II.C of this 
document, there is substantial evidence demonstrating that the premise 
of these comments is not correct and that many consumers do not 
adequately understand the personal risks associated with smoking.

E. Need To Refresh Required Warnings

    As amended by the Tobacco Control Act, FCLAA includes provisions 
that can help prevent or delay the wear out of the new required 
warnings. For example, section 4(c)(1) of FCLAA (15 U.S.C. 1333(c)(1)) 
indicates that the required warnings on cigarette packages must be 
randomly displayed in each 12-month period, in as equal a number of 
times as is possible on each brand of the product, and be randomly 
distributed throughout the United States, in accordance with a warning 
plan approved by FDA. Section 4(c)(2) of FCLAA requires the warnings to 
be rotated quarterly in cigarette advertisements, also in accordance 
with a warning plan approved by FDA.
    Nevertheless, as stated in the NPRM, we intend to monitor the 
effects of the new required warnings once they are put into use. We 
will conduct research and keep abreast of scientific developments 
regarding the efficacy of various required warnings and the types and 
elements of various warnings that improve efficacy. As stated in the 
NPRM, we will use the results of our monitoring and such research to 
help determine whether any of the textual warning statements or 
accompanying graphic images should be revised in a future rulemaking 
(75 FR 69524 at 69534). This commitment to continued empirical testing 
is consistent with Executive Order 13563, section 1, which states that 
our regulatory system ``must measure, and seek to improve, the actual 
results of regulatory requirements.''
    FDA received numerous comments regarding the need periodically to 
refresh the warnings to minimize wear out, which we have summarized and 
responded to in the following paragraphs.
    (Comment 18) Many comments, including comments from health 
institutions, nonprofit organizations, and academics, suggested that 
FDA should refresh the graphic warnings on a regular basis because 
consumers can become habituated to and ignore warnings. The comments 
referred to scientific research on the effectiveness of graphic 
warnings for cigarette packages and advertisements, which strongly 
recommends that warnings be periodically refreshed to maintain their 
effectiveness and impact on consumers (Refs. 18, 42, 44, and 26). The 
comments suggested a wide range of timeframes as to when FDA should 
refresh the graphic warnings. One comment suggested that FDA track the 
effectiveness of the required warnings on a quarterly basis and that 
the results of any testing be made publicly available. One comment 
suggested that FDA establish a conclusion that new graphic warnings for 
cigarette packages and advertisements will be required at no more than 
a 2-year interval. A few comments also suggested that FDA establish a 
target schedule for reconsideration and revision of the warnings, which 
would include ongoing consumer research and re-examination of the 
effectiveness of the required warnings.
    (Response) We agree that refreshing the required warnings on a 
periodic basis can help maintain their effectiveness. Researchers have 
found that graphic images and text messages are likely to have greater 
impact at the time they are introduced and that

[[Page 36636]]

meaningful impact of the warnings may decline with repeated exposure 
(Ref. 41). Rotating a variety of cigarette warnings and updating the 
warnings periodically is likely to minimize the negative effects of 
overexposure (Ref. 3).
    However, we are not aware of any research that warrants the 
selection of a particular timeframe for future iterations of required 
warnings. As stated by several comments, there is no definitive rate at 
which the warnings will wear out, as it depends on many factors 
including the variety of message executions, exposure level, and the 
appeal of the message.
    We recognize the value of conducting ongoing evaluation of the 
effects of the required warnings after they enter the marketplace. We 
also intend to monitor and evaluate the effects of the required 
warnings, and to monitor the warnings for potential wear out. In 
addition, we will keep abreast of scientific developments regarding the 
efficacy of various required warnings and the types and elements of 
various warnings that improve efficacy. As noted, this monitoring is 
consistent with Executive Order 13563, which recognizes the importance 
of measuring ``actual results'' and of analyzing significant rules 
after they are in effect to determine whether they should be 
``modified, streamlined, expanded, or repealed so as to make the 
agency's regulatory program more effective or less burdensome in 
achieving the regulatory objectives.''
    When we determine that changes to the required warnings are 
appropriate (including changes to the textual warning statements and/or 
the color graphic images) because they would promote greater public 
understanding of the risks associated with smoking, we can exercise our 
authority to initiate a new rulemaking to modify the required warnings 
under section 202(b) of the Tobacco Control Act (adding subsection (d) 
to section 4 of FCLAA).\1\
---------------------------------------------------------------------------

    \1\ Section 202(b) of the Tobacco Control Act amends section 4 
of FCLAA (15 U.S.C. 1333) to add a new subsection (d), ``Change in 
Required Statements.'' However, section 201 of the Tobacco Control 
Act also amends section 4 of FCLAA to add a new subsection (d), 
``Graphic Label Statements.''
---------------------------------------------------------------------------

III. FDA's Selection of Color Graphic Images

A. Methodology for Selecting Images

    When we issued the NPRM, we proposed color graphic images to 
accompany the nine textual warning statements required by Congress in 
section 201 of the Tobacco Control Act. In all, we proposed 36 
potential required warnings, consisting of the color graphic images FDA 
developed and the nine textual warning statements from the Tobacco 
Control Act. These 36 proposed required warnings were made available as 
electronic files in portable document format (.pdf) and displayed in 
the document entitled ``Proposed Required Warning Images,'' which was 
included in the docket for the proposed rule. The proposed required 
warnings were also made available on FDA's Web site. Consistent with 
section 4 of FCLAA, 2 versions of each of the 36 proposed required 
warnings were developed; one with the textual warning statement in 
black font on a white background, and one with the textual warning 
statement in white font on a black background.
    As explained in the preamble to the proposed rule (75 FR 69524 at 
69534 through 69535), in considering and developing appropriate color 
graphic images to accompany the nine textual warning statements set 
forth in section 201 of the Tobacco Control Act, FDA assessed the 
graphic warnings that other countries have required, and worked with 
various experts in the fields of health communications, marketing 
research, graphic design, and advertising to develop 36 proposed 
required warnings. Each of the proposed color graphic images depicted 
the negative health consequences of smoking, and the themes and 
subjects depicted in each image illustrated the message conveyed by the 
accompanying textual warning statement.
    The NPRM explained that we planned to select 9 final required 
warnings from among the 36 proposed required warnings. We sought 
comments on what color graphic images to require in this final rule, 
including comments on the 36 proposed color graphic images included 
with the NPRM.
    In addition, as is described in more detail in section III.B of 
this document, we conducted research on the 36 proposed required 
warnings to evaluate the relative effectiveness of the proposed color 
graphic images and their accompanying textual warning statements at 
conveying information about various health risks of smoking, and 
additionally, at encouraging smoking cessation and discouraging smoking 
initiation.
    In order to determine which color graphic images to require in the 
final rule, we considered a number of factors. First, we considered the 
relative effectiveness of the proposed required warnings based on the 
strength of effect the different color graphic images had on the 
various endpoints and across the populations included in our study (see 
section III.B of this document for a more detailed description of the 
research study).
    In addition, we considered the substantive public comments received 
in the docket related to the 36 proposed required warnings (see section 
III.C of this document for more information on the comments received; 
the comments relating to each image are summarized and responded to in 
sections III.D and III.E of this document). We also considered the 
comments received in the docket that suggested that we use other images 
in the required warnings, including images that have been used in other 
countries' graphic health warnings. However, as discussed in more 
detail in the following comment summaries and in section III.B of this 
document, we selected images for the nine required warnings from among 
the images we developed and proposed. Our research study, among other 
information, indicated these required warnings will effectively 
communicate the negative health consequences of smoking to a wide range 
of population groups. As explained in the comment responses throughout 
this section III, the comments submitted to the docket did not persuade 
us that other images, including images used in other countries' graphic 
health warnings, were more appropriate for use in the required warnings 
than the images we selected.
    Furthermore, we considered the relevant scientific literature in 
the docket, and in particular the extent to which the literature 
supported or refuted aspects of the images and the extent to which the 
literature helped determine the appropriate weight to give to other 
information (including the appropriate weight to give to the various 
endpoints considered in our research study).
    We also considered the variety and diversity reflected in the 
images in making selection decisions in order to ensure that the final 
set of required warnings effectively communicates risk information to a 
diverse range of audiences, including audiences that have been targeted 
by tobacco industry marketing efforts. We took into account the 
importance of selecting a set of required warnings that includes a 
diversity of styles (e.g., photographic versus illustrative), themes, 
and human images (e.g., race, gender, age). This is consistent with the 
evidence base for graphic health warnings from countries that have 
already implemented such warnings, which indicates that variety is 
important in enhancing the noticeability and salience of warnings and 
broadening their relevance for target groups (Ref. 40 at p. 46 and Ref. 
48 at

[[Page 36637]]

p. 9), and which suggests that warnings that include pictures of people 
should broadly represent the ethnic/racial profile of the relevant 
country (Ref. 11).
    We also considered whether to have one image accompany each of the 
textual warning statements set forth in section 201 of the Tobacco 
Control Act.
    We received multiple comments regarding our proposal to select 9 
final required warnings and our proposal to select them from among the 
36 proposed color graphic images that were made available with the 
NPRM. We have summarized and responded to these comments in the 
following paragraphs (we also received a number of comments on the 
proposed color graphic images themselves; these comments are summarized 
in sections III.D and III.E of this document. In addition, we received 
a number of comments regarding our research study, which assessed the 
relative effectiveness of the 36 proposed color graphic images; these 
comments are summarized in section III.C of this document).
    (Comment 19) Several comments suggested that FDA select more than 
one graphic image for each new textual warning statement. The comments 
reasoned that by limiting the warnings to one graphic image per textual 
statement, the health warnings would effectively communicate to fewer 
segments of the smoking and nonsmoking populations. Some comments also 
suggested that selecting more than one image per warning statement 
would counteract wear out of the required warnings. One comment 
suggested that FDA develop multiple series of images and require that 
each series be used one at a time to delay wear out.
    (Response) We decline to select more than one image for each 
warning statement as suggested in these comments. We believe that the 
set of nine required warnings we selected will be sufficient at this 
time to achieve our goal of effectively communicating the negative 
health consequences of smoking and to prevent wear out of the required 
warnings for several years. Furthermore, the nine selected required 
warnings will appeal to a diverse range of audiences, and, as discussed 
in section III.D of this document, the images selected showed 
significant effects on important measures in our research study across 
the three study populations (adults, young adults, and youth).
    We intend to monitor the effects of these required warnings once 
they are put into use. We will conduct research and keep abreast of 
scientific developments regarding the efficacy of various required 
warnings and the types and elements of various warnings that improve 
efficacy. Given the significant changes being made to the text, format, 
and placement of the existing warnings by this rule, it will be 
valuable to obtain relevant data on the effects of the complete set of 
required warnings as soon as possible. If we were to expand the number 
of required warnings, it could delay an assessment of efficacy of the 
warnings under conditions of real-world use. We intend to use the 
results of our monitoring and of research conducted on the required 
warnings once they are in public use to determine whether changes 
should be made to the required warnings in a future rulemaking, 
including changes to add new images or to modify the existing required 
warnings. Accordingly, at this time we decline to select more than nine 
images.
    (Comment 20) Multiple comments suggested that FDA use graphic 
warning images that have been tested or used in other countries instead 
of or in addition to one or more of the images that FDA proposed. Some 
of these comments indicated that images that are in use in other 
countries would be more effective and educational than some or all of 
FDA's proposed images.
    (Response) We decline to follow this suggestion. FDA's research 
study evaluated the 36 proposed required warnings. The results from 
this research study suggest that the nine selected required warnings 
will effectively communicate negative health consequences of smoking to 
a diverse range of audiences. Moreover, if we were to select images 
that were not evaluated in our study, it would be difficult to 
objectively assess the relative efficacy of such images compared to the 
36 proposed images. Compared to the information provided by our 
research study, the supporting information in the comments did not 
convince us that the images suggested by those comments would more 
effectively communicate the negative health consequences of smoking 
than the images we have selected in this final rule.
    (Comment 21) A number of comments suggested that FDA use other 
images than those published with the proposed rule. For example, some 
comments recommended that FDA use images that depict real people with 
real diseases and not models. A few recommended that FDA include images 
that show negative cosmetic effects of smoking, such as stained fingers 
and bad breath, in order to impact adolescents concerned about body 
image. One comment suggested that FDA portray a picture of an obituary, 
while another recommended the use of an image depicting the amount of 
money smokers spend to purchase cigarettes every year.
    (Response) We decline to select the images suggested in these 
comments. Each of the required warnings selected by FDA was 
quantitatively tested to assess its relative effectiveness in 
communicating the negative health consequences of smoking. In selecting 
the set of nine required warnings, we considered the results of our 
research study and a number of other factors and have concluded that 
the nine selected required warnings effectively communicate the 
negative health consequences of smoking. In addition, we are adopting 
the nine textual warning statements mandated by Congress in section 
4(a)(1) of FCLAA. The images selected were designed to correlate with 
those warning statements; the available evidence base highlights the 
value of the text and images in graphic health warnings relating to one 
another in a meaningful way (see Ref. 40 at p. 41). Including images 
inconsistent with the textual warning statements could confuse 
consumers and detract from the effectiveness of the warnings. 
Furthermore, some of our selected images do show the negative cosmetic 
effects that can occur as a result of the health consequences of 
smoking. Moreover, some of the images proposed for use in the comments, 
such as an image showing the amount of money smokers spend to purchase 
cigarettes, would not be consistent with the statutory requirement that 
the required warnings depict the negative health consequences of 
smoking.

B. FDA's Research Study

    As explained in the NPRM (75 FR 69524 at 69535), we conducted 
research on the 36 proposed required warnings. Specifically, we 
conducted an Internet-based consumer research study with over 18,000 
participants that quantitatively examined the relative efficacy of the 
36 proposed color graphic images in communicating the harms of smoking 
to 3 target groups: Adult smokers (age 25 or older), young adult 
smokers (aged 18 to 24), and youth (aged 13 to 17) who currently smoke 
or who are susceptible to smoking.
    The purpose of the study was to: (1) Measure consumer attitudes, 
beliefs, and intended behaviors related to cigarette smoking in 
response to the proposed color graphic images and their accompanying 
textual statements; (2) determine whether consumer responses to the 
proposed color graphic images and their accompanying textual statements 
differed across various groups based on age, smoking status, or

[[Page 36638]]

other demographic variables; and (3) evaluate the relative 
effectiveness of the proposed color graphic images and their 
accompanying textual warnings statements at conveying information about 
various health risks of smoking, and additionally, at encouraging 
smoking cessation and discouraging smoking initiation.
    We placed a report (Ref. 49; see also Ref. 50 \2\) that described 
the research study and presented the results of the analyses from the 
research study in the docket for the proposed rule and announced the 
report's availability by a notice in the Federal Register on December 
7, 2010 (see 75 FR 75936 at 75936 through 75937) so that the public had 
an opportunity to comment on the results.
---------------------------------------------------------------------------

    \2\ While the numerical results reported in the study report 
(Ref. 49) were correct, and while all of the results discussed in 
this rule are accurately described, some of the descriptors 
contained in the study report were in error. An errata sheet for the 
study report (Ref. 50), which lists all the errors and the 
corrections, has been prepared and is being placed in the docket. 
These errors did not adversely impact commenters' ability to convey 
their assessment of the images and the study results in their 
comments. To the extent some comments included inaccurate statements 
about the study results in their significant comments as a result of 
the errors, we recognized the inaccuracy and were able to discern 
the material points in the comment and evaluate them appropriately, 
as is reflected in the comment summaries and responses.
---------------------------------------------------------------------------

    This section briefly describes the design of FDA's research study 
and key endpoints examined in the research study; a full description of 
the study and the several hundred pages of data and data analyses are 
contained in the study report and accompanying appendices (Ref. 49) 
that was placed in the docket for the proposed rule. This section also 
describes how the results from this research study informed the 
selection of the final required warnings.
    FDA received numerous comments in the docket related to the 
research study; this section also includes a summary of the substantive 
comments received about the research study and FDA's responses to these 
comments.
1. Study Design
    FDA's research study evaluated the required warnings proposed for 
each of the nine warning statements against a text-only control (which 
contained the warning statement without any accompanying color graphic 
image). Study participants were randomly assigned to be exposed to 
either one of the 36 proposed required warnings (treatment groups) or 
one of the 9 textual warning statements (control groups). Treatment 
groups for each target population (adults, young adults, and youth) 
viewed a hypothetical pack of cigarettes that included one of the 
proposed required warnings, which appeared on the upper 50 percent of 
the pack, while the control group viewed a hypothetical pack of 
cigarettes with a warning statement (but no warning image), which 
appeared on the side of the pack. Furthermore, among adults, an 
additional treatment group viewed a hypothetical advertisement that 
included one of the proposed required warnings, which encompassed 
approximately 20 percent of the upper right area of the advertisement, 
while a control group viewed a hypothetical advertisement with a 
warning statement in the same location (but without a warning image) 
that was presented using the size and format currently required by 
FCLAA. The study tested the relative efficacy of each proposed required 
warning relative to the text-only control for that warning statement 
for the various outcomes measured.
    Each respondent viewed either a single cigarette package or 
advertisement that displayed one of the proposed required warnings or a 
text-only warning. Respondents answered questions about their immediate 
reactions to the cigarette package or advertisement, related attitudes 
and beliefs about smoking, as well as intentions to quit or start 
smoking. At the end of the survey, subjects were asked to recall which 
warning statement and image they saw earlier in the survey to assess 
the accuracy of recall. In addition, 1 week after completing the 
survey, subjects were re-contacted and asked to recall the warning 
statement and image to which they were exposed. Overall, the following 
key outcomes were measured after exposure to one of the required 
warnings or the text-only control, and/or at 1 week follow-up:
     Salience--The study examined emotional and cognitive 
responses to the cigarette packages and advertisements that bore health 
warnings. Participants provided ratings of their responses to the 
packages and advertisements. The ratings were aggregated to create two 
scales: (A) An emotional reaction scale, which included ratings on how 
the warning made the respondent feel, such as ``depressed,'' 
``discouraged,'' and ``afraid''; and (B) a cognitive reaction scale, 
which included ratings on what the respondent thought about the 
warning, such as ``believable,'' ``meaningful,'' and ``convincing''.\3\ 
Regression analyses were used to assess the relative impact of 
treatment conditions on ratings as compared to the text-only control.
---------------------------------------------------------------------------

    \3\ Some additional cognitive measures, including the reaction 
item ``the pack was difficult to look at'' (or, for the adult sample 
viewing the print ad, ``the ad was difficult to look at'') were also 
evaluated but were not reported as part of the composite cognitive 
reaction scale. These items were not sufficiently correlated with 
the other cognitive measures to include in the composite measure.
---------------------------------------------------------------------------

     Recall--The study measured participants' recall of the 
nine warning statements after exposure to either one of the proposed 
required warnings or the text-only control (baseline). Participants 
were also re-contacted after 1 week and asked about their recall of the 
warning statement they had viewed (1 week follow-up). The results were 
analyzed to determine whether exposure to the proposed required 
warnings elicited higher recall of the warning statements than exposure 
to the text-only controls. In addition, in the treatment groups (i.e., 
participants who viewed one of the proposed required warnings), recall 
of the image was assessed at baseline and at 1-week follow-up. Because 
the control group did not view an image, the impact of the proposed 
required warnings on image recall was measured against one of the 
proposed required warnings for each warning statement that had been 
selected to be the referent image and statistically assessing whether 
recall of the images associated with the other proposed required 
warnings was higher or lower than recall of the referent image.
     Influence on Beliefs--The study assessed whether the 
proposed required warnings had a significant impact on beliefs about 
the health risks of smoking to regular smokers relative to the text-
only control, as well as whether they had a significant impact on 
beliefs about the health risks of secondhand smoke exposure to 
nonsmokers relative to the text-only control.
     Behavioral Intentions--The study assessed whether the 
proposed required warnings may have a significant impact on cessation, 
by assessing smokers' intentions to quit smoking (i.e., asking 
participants how likely it is that they would try to quit smoking 
within the next 30 days). In youth, the study assessed whether the 
proposed required warnings may have a significant impact on potential 
initiation, using a measure of how likely youth felt they were to be 
smoking 1 year from now.
    As the study report (Ref. 49) explains, the outcomes examined were 
selected based on established theories of message processing and 
health-related behavior change, which suggest that immediate emotional 
and cognitive reactions to messages, and recall of messages, are part 
of a process that eventually leads to

[[Page 36639]]

changes in beliefs and intentions and ultimately to behavior change.
2. Use of FDA's Research Study Results in Selection of Images
    As described in section III.A of this document, in order to 
determine which color graphic images to require in the final rule, we 
considered a number of factors, including the results from our research 
study. We carefully examined the research results for the 36 proposed 
required warnings on all the different outcomes in determining which 
images to require in this final rule. However, the responses on the 
salience measures served as a primary basis for distinguishing among 
the 36 proposed required warnings for a number of reasons.
    First, many of the proposed required warnings elicited significant 
impacts on the salience measures (emotional and cognitive measures), 
which the research literature suggests are likely to be related to 
behavior change (Ref. 51). For example, the literature suggests that 
risk information is most readily communicated by messages that arouse 
emotional reactions (see Ref. 45), and that smokers who report greater 
negative emotional reactions in response to cigarette warnings are 
significantly more likely to have read and thought about the warnings 
and more likely to reduce the amount they smoke and to quit or make an 
attempt to quit (Ref. 44). The research literature also suggests that 
warnings that generate an immediate emotional response from viewers can 
result in viewers attaching a negative affect to smoking (i.e., feel 
bad about smoking), thus undermining the appeal and attractiveness of 
smoking (Ref. 45 and Ref. 40 at pp. 37-38).
    In comparison to the salience measures, fewer of the proposed 
required warnings elicited significant impacts on the beliefs measures 
in our research study, and on the whole the proposed required warnings 
did not elicit strong responses on the intentions measures. Given the 
design of our research study, where participants had only a single 
exposure to one proposed required warning, it is not surprising that 
the proposed required warnings did not consistently show effects on 
these beliefs and intentions measures, which are more eventual outcomes 
in the behavior change process than the salience responses, which occur 
more immediately. However, this does limit the utility of these longer-
term measures in discriminating across the proposed required warnings. 
Thus, given the design of the study, the results on the salience 
measures, which the research literature indicates are predictors of 
more eventual behavioral outcomes, were considered to be more 
meaningful than the results on the beliefs and intentions measures in 
discriminating between the images.
    In addition, we gave greater weight to outcomes on the salience 
measures than to outcomes on the statement recall measures for several 
reasons. First, there is evidence to suggest that, while recall of 
associated warning message statements may be reduced in the short term 
by moderately or highly graphic pictorial warnings versus text-only 
controls or less graphic pictorial warnings, these warnings still 
increase intentions to quit through evoked emotional responses (Ref. 
52). Second, as described previously, participants in the research 
study were exposed to a single viewing of the proposed required 
warnings, which does not allow for assessment of the effect that 
repetitive viewing of the required warnings may have on recall. Recall 
can be expected to increase in real world settings where consumers will 
be exposed to the warnings multiple times. Third, recall was generally 
high for all the proposed required warnings, even where there was not a 
significant difference compared to the text-only control or where 
recall was significantly lower for the proposed required warning than 
for the text-only control. For example, for the nine required warnings 
that we selected for use in this final rule, the research study shows 
that recall of both the textual warning statements and the color 
graphic images was high at both baseline and at 1-week follow-up, 
exceeding 50 percent on all measures, and, in many cases, exceeding 80 
percent.
3. Comments on FDA's Research Study
    FDA received a number of comments related to its research study in 
the docket for the proposed rule, which are summarized and responded to 
in the following paragraphs.
    a. Study design. Several comments addressed the cross-sectional 
design of the study.
    (Comment 22) Several comments, including comments from cancer 
researchers, nonprofit organizations, and academics noted that 
participants in the study were exposed to a proposed required warning 
only once in a controlled environment. These comments stated that the 
single exposure study design makes it impossible to assess long term or 
actual effects of the proposed required warnings. Two of these comments 
recommended that FDA conduct longitudinal research or post-market 
surveillance to assess actual long-term effects.
    (Response) We agree that the study design does not permit us to 
reach firm conclusions about the long-term, real-world effects of the 
proposed required warnings on the measured outcomes. As noted 
previously, the purpose of the study was not to assess actual effects 
but to assess the relative effects of the proposed required warnings on 
various outcomes. Data on the relative effects of the various proposed 
required warnings provided a more objective and scientific basis to 
help select which required warnings should be included in the final 
regulation. A cross-sectional design with a single exposure under 
experimental conditions is appropriate for assessing relative effects. 
For absolute effects, the scientific literature presented in the 
preamble to the proposed rule provides a substantial basis for our 
conclusion that the required warnings will effectively communicate the 
health risks of smoking, thereby encouraging smoking cessation and 
discouraging smoking initiation.
    However, we recognize the value of conducting an ongoing evaluation 
of the effects of the required warnings after they enter the 
marketplace, and we intend to monitor and evaluate their ability to 
effectively communicate the negative health consequences of smoking. 
This evaluation will provide information regarding whether the required 
warnings effectively reach the appropriate target audiences, wear out 
of the required warnings, and whether and what changes to the required 
warnings may be appropriate in any future rulemaking on this subject.
    (Comment 23) A comment from tobacco product manufacturers stated 
that a longitudinal study demonstrating that the required warnings 
would have actual effects on smoking prevalence was necessary to 
support the final regulation.
    (Response) We appreciate the value of longitudinal studies but 
disagree that such a study is necessary to support the final 
regulation. As discussed previously, our research study assessed the 
relative efficacy of the 36 proposed required warnings published with 
the NPRM, and the cross-sectional study design was appropriate for that 
purpose. The scientific literature presented in the preamble to the 
proposed rule provides a substantial basis for our conclusion that the 
required warnings will effectively communicate the health risks of 
smoking, thereby encouraging smoking cessation and discouraging smoking 
initiation.

[[Page 36640]]

    (Comment 24) Several comments discussed behavioral models similar 
to that described in FDA's research study (see Ref. 49) and explained 
how those models provide a rationale for how health warnings can 
effectively communicate risk information about the harmful effects of 
tobacco use. For example, one comment from a researcher working on an 
international project to evaluate the impact of graphic health warnings 
for tobacco products stated that the primary objectives of health 
warnings are to educate and inform smokers and nonsmokers about the 
many negative health consequences of smoking and to provide information 
that can enhance their efficacy for quitting. The comment noted that 
effective health warnings increase knowledge and thoughts about the 
harms of cigarettes, the extent to which the smoker could personally 
experience a smoking-related disease, and as a result, increase 
motivation to quit smoking. Another academic who also is conducting 
research on graphic health warnings commented that a wide variety of 
research suggests that health warnings with pictures are significantly 
more likely to draw attention, result in greater information 
processing, and improve memory for warnings than text-only warnings. A 
comment from a researcher with expertise in risk perceptions and 
decisionmaking stated that changes in smoking behavior based on warning 
labels appear to require four steps: (1) Immediate, negative affective 
reactions to the potential consequences of smoking; (2) associations of 
these emotional reactions to smoking cues; (3) increases in perceptions 
of the risks of smoking, and finally (4) increases in quit 
contemplation and reductions in smoking behaviors.
    (Response) We agree that the design of our research study is 
consistent with established social science models (in psychology, 
economics, and related fields) of risk communication and health 
behavior change. The purpose of graphic health warnings is to 
effectively communicate the negative health consequences of cigarette 
use to smokers and nonsmokers, which is critical given the seriousness 
of these consequences. Greater understanding of those health effects 
will motivate some smokers to stop smoking and prevent some nonsmokers 
from starting to smoke. The preamble to the proposed rule presented a 
detailed discussion of the scientific literature to substantiate our 
conclusion that graphic health warnings can be an effective means of 
communicating important health information about the risks of smoking 
(see 75 FR 69524 at 69531 through 69533). These comments provide 
additional support for that conclusion.
    b. Study results. Several comments discussed the results from FDA's 
research study.
    (Comment 25) Several comments, including comments from academics, 
nonprofit organizations, and health professional organizations, stated 
that FDA's research study provides data consistent with the overall 
literature demonstrating the effectiveness of graphic health warnings. 
For example, one comment stated that in general the study results are 
consistent with prior findings that the addition of graphic images to 
health warnings is beneficial in comparison to text-only warnings. 
Another comment stated that, based upon the FDA study and the existing 
scientific literature, it is possible to conclude that the proposed 
graphic warnings are likely to be effective.
    Other comments, including comments from tobacco product 
manufacturers, advertising industry associations, and a public policy 
organization, asserted that FDA's research study fails to provide 
evidence of efficacy. These comments stated that the study did not show 
evidence that the proposed required warnings would actually affect 
prevalence of smoking, and failed to demonstrate sufficient evidence 
that the proposed required warnings would significantly affect consumer 
knowledge of the risks of smoking or actual behavior change.
    (Response) We agree that the study is generally consistent with the 
existing scientific evidence demonstrating that graphic health warnings 
can effectively communicate the negative consequences of cigarette 
smoking, and by doing so, can encourage smoking cessation and 
discourage smoking initiation. We disagree that the study results do 
not support the efficacy of the warnings. We presented substantial 
research in the preamble to the proposed rule supporting the efficacy 
of graphic health warnings (75 FR 69524 at 69531 through 69534), and 
the results of our research study are consistent with that research.
    c. Study outcome measures. Numerous comments discussed the key 
outcomes measured in FDA's research study.
    (Comment 26) FDA received a wide variety of comments concerning the 
use of emotional reactions to assess the relative effectiveness of the 
proposed graphic warnings. A number of comments, including those from 
academics, medical institutions, and public health groups, supported 
the inclusion of emotional reaction measures. These comments stated 
that graphic health warnings that elicit strong emotional reactions, 
especially negative feelings, are more effective in communicating the 
negative health consequences of smoking and in motivating healthier 
behaviors than warnings that do not elicit emotional reactions, and 
indicate that these effects are well established in the scientific 
literature.
    For example, one comment stated that the scientific literature 
shows that graphic depictions of the negative health effects of smoking 
arouse reasonable fears and are associated with greater consideration 
of health risks, increases in motivations to quit, and ultimately with 
attempts at cessation. Another comment stated that theoretical models 
and studies in communications and social psychology suggest that 
graphic health warnings can be effective because they elicit greater 
emotional engagement with the information provided and it is that 
engagement that drives behavior change. Another comment from an 
academic researcher stated that considerable psychological research 
suggests that risk is more readily communicated by information that 
arouses emotional associations with the activity. Emotional reactions 
can be readily accessed from memory by mere presentation of the 
stimulus, and appear to be powerful predictors of smoking behavior. Yet 
another comment stated that growing evidence from controlled 
experiments and survey research indicates that, compared to text-only 
warnings, graphic health warnings evoke stronger emotional responses 
and increase motivations to quit or not start smoking. The comment 
indicated that these studies are consistent with cognition and 
neuroscience research demonstrating that relative to linguistic or text 
information, imagery-based information can be processed more rapidly, 
evoke stronger emotional responses, induce greater cognitive processing 
and attitude change and can be recalled more easily.
    However, other comments stated that reliance on emotional measures 
for assessing graphic health warnings is inappropriate. A joint comment 
from tobacco product manufacturers stated that the study measured only 
the effect of eliciting strong emotional and cognitive reactions, which 
confirms that the warnings were intended not to inform consumers with 
purely factual and uncontroversial information, but rather to shock 
consumers into adopting the Government's preferred course of conduct. 
Another tobacco product manufacturer commented that, to the extent FDA 
selected images based on emotional or cognitive reactions and not

[[Page 36641]]

on ability to inform consumers about the health risks of smoking, the 
regulations would not pass constitutional muster. A comment from a 
public policy organization commented that emotional and cognitive 
responses are irrelevant measures of effectiveness if there is no 
behavior response.
    (Response) On the basis of our review of the relevant scientific 
literature and the feedback received in the docket, we conclude that 
our inclusion of emotional reaction measures to evaluate the relative 
effects of the 36 proposed required warnings was appropriate and is 
consistent with well-established principles in the scientific 
literature. As discussed in the study report that was placed in the 
docket (Ref. 49) and in other comments summarized in previously in this 
document, eliciting strong emotional and cognitive reactions to graphic 
warnings enhances recall and information processing, which helps to 
ensure that the warning is better processed, understood, and 
remembered. Thus, these responses can enhance the effective 
communication of the health warning message. These responses in turn 
influence short-term outcomes, such as later recall of the message and 
changes in knowledge, attitudes, and beliefs related to the dangers of 
tobacco use and exposure to secondhand smoke. As attitudes and beliefs 
change, they eventually lead to changes in intentions to quit or to 
start smoking and then later can lead to lower likelihood of smoking 
initiation and greater likelihood of successful cessation.
    We disagree that use of emotional reaction measurements 
demonstrates the Agency's intent to advocate a preferred position or 
course of conduct. Each of the nine graphic warnings required by the 
final regulations communicates negative health consequences of smoking 
that are well-established in the scientific literature. Consistent with 
the Tobacco Control Act, the purpose of these required warnings is to 
communicate effectively and graphically the very real, scientifically 
established adverse health consequences of smoking. The overall body of 
scientific evidence indicates that health warnings that evoke strong 
emotional responses enhance an individual's ability to process the 
warning information, leading to increased knowledge and thoughts about 
the harms of cigarettes and the extent to which the individual could 
personally experience a smoking-related disease. Increased knowledge 
and thoughts about the negative consequences of smoking, in turn, are 
reasonably likely to result in more informed and healthier behaviors, 
such as trying to quit smoking or deciding not to start.
    (Comment 27) We also received two comments concerning the cognitive 
measure used in the study. A comment filed by tobacco product 
manufacturers observed that ``looks cool'' was one of the measured 
cognitive reactions. The comment stated that the study analysis omits 
responses on whether the warnings ``looked cool,'' and contended that 
if a substantial number of participants viewed a warning as ``looks 
cool,'' the warning would be unlikely to have the intended effect. The 
comment concluded that the ratings for the ``looks cool'' measure do 
not appear to have been neutral; the comment stated that regression 
results for the ``looks cool'' measure indicates that this measure 
elicited one of the strongest estimated effects of the study and the 
results go in the opposite direction of effectively communicating 
health risk information.
    (Response) We disagree that data concerning the ``looks cool'' 
outcome was omitted or that the results for this outcome go in the 
opposite direction of the intended effect of communicating the negative 
health consequences of smoking. Although the ``looks cool'' outcome was 
not included in the reported composite cognitive measure, the study 
report (Ref. 49) includes the results for this measure in its 
appendices. The measure was reverse coded, so that a higher value 
corresponded with the intended directionality for other measures. Thus, 
a high value for ``looks cool'' corresponds to a response of ``strongly 
disagree'' from the respondent. The data presented in the appendices 
demonstrate that for each of the nine selected required warnings, 
significantly more participants disagreed that the warning ``looked 
cool'' than participants who viewed the text-only control warning. 
Eight of the nine required warnings elicited significantly higher 
ratings than the text-only control warning across all target audiences. 
Ratings for the ninth required warning, which includes the textual 
statement ``WARNING: Quitting smoking now greatly reduces serious risks 
to your health,'' show that significantly more adults disagreed that 
the selected required warning ``looked cool.'' Responses for young 
adults and youth were in the appropriate direction, but the responses 
were not significantly different from the text-only control warning.
    (Comment 28) We also received a comment concerning the 
believability measure. This comment raised a concern that some of the 
36 proposed required warnings may be perceived as unrealistic because 
they did not vividly portray immediate health risks, which could lead 
some smokers to discount the warning. The comment recognized that a 
believability measure was included in the study as part of the 
cognitive reaction scale, but stated that specific results for 
believability were not reported, and recommended that FDA examine the 
mean scores of the specific believability items in conjunction with 
other important measures included in the study.
    (Response) We agree with the comment that believability is a 
helpful measure for assessing the relative effectiveness of warning 
images. All of the selected images scored significantly higher than the 
controls on the cognition measures, which included ratings on how 
meaningful the warning was, whether it was informative, and whether it 
was believable. While the results do not include mean scores for 
believability and other individual measures, the appendices include the 
parameter estimates from regression analyses on these individual 
measures. The results show that, in most cases, the images selected for 
the nine required warnings scored significantly better than the control 
with respect to believability.
    (Comment 29) One comment stated that the statement recall measure 
is less important and less relevant to decisions about smoking than 
negative affective reactions because the warning statements are now 
believed by smokers and nonsmokers.
    (Response) Statement recall was appropriately included as part of 
the assessment of the relative effectiveness of the 36 proposed 
required warnings. As discussed in section II.C of this document, while 
both smokers and nonsmokers have some understanding about some of the 
risks of smoking, there are significant gaps in their knowledge, 
including about the magnitude and severity of the risks of smoking. We 
also note that, as explained in section III.B.2 of this document, 
although we carefully examined the research results on all the study 
measures for the 36 proposed required warnings, including recall, the 
responses on the salience measures served as a more important basis 
than recall for distinguishing among the 36 proposed required warnings.
    (Comment 30) A joint comment submitted by tobacco product 
manufacturers asserted that the study fails to demonstrate that the 
published graphic warnings will have any discernible effects on smoking 
risk beliefs.

[[Page 36642]]

    (Response) We disagree with this comment. Four of the nine selected 
required warnings did show a significant impact on beliefs about the 
health risks of smoking relative to the text-only control among at 
least one study population. In addition, there is substantial evidence 
in the scientific literature showing that graphic health warnings 
effectively increase consumer understanding of the health risks of 
smoking. In the preamble to the proposed rule (75 FR 69524 at 69531 
through 69533), we presented substantial research showing that graphic 
health warnings significantly increase consumer thoughts about and 
understanding of the health risks of smoking after they were introduced 
in other countries. In addition, as discussed previously in this 
document, considerable scientific evidence shows that health warnings 
that elicit strong emotional and cognitive reactions are better 
processed and more effectively communicate information about the 
negative health consequences of smoking. Each of the nine required 
warnings elicited strong effects on the emotional and cognitive 
reaction scales, which indicates that these warning will effectively 
communication information about the negative health consequences of 
smoking.
    Based on the results of our research study and the existing 
scientific literature, we conclude that graphic health warnings, 
including the nine selected required warnings, are likely to increase 
consumer knowledge and understanding of the health risks of smoking.
    (Comment 31) A comment submitted by tobacco product manufacturers 
criticized the study's use of intentions to measure behavioral change 
and stated that FDA should have presented data showing actual effects 
on behavior.
    (Response) We disagree that intentions are an inappropriate 
variable for assessing potential behavioral changes. While measures of 
intended behavioral outcomes do not perfectly predict a future behavior 
outcome, it is a necessary precursor. The scientific literature 
indicates that one's intentions to quit smoking must be increased 
before one makes the actual quit attempt. Thus, we conclude that it was 
appropriate in our research study to assess quit intentions as a proxy 
for behavior change. In accordance with Executive Order 13563, after 
the rule is in effect we will be undertaking analysis to better 
understand the behavioral effects of the warnings.
    (Comment 32) Several comments raised concerns that the lack of 
strong statistically significant results concerning intentions in FDA's 
research study is an indication that the required warnings will not be 
effective. For example, a comment submitted by tobacco product 
manufacturers stated that the results of FDA's research study show that 
graphic health warnings will not result in a statistically significant 
reduction in youth initiation or overall prevalence of smoking, and 
thus, confirms that the warnings will not be effective.
    (Response) We disagree that our study results indicate that the 
required warnings will not be effective. It is important to recognize 
that FDA's research study was not designed or intended to produce 
evidence demonstrating actual effects on behavior. Rather, the study 
was designed to provide data concerning the relative effects of the 
graphic health warnings in order to provide a more objective and 
scientific basis for our selection of the set of nine required warnings 
in the final regulation. There is considerable evidence in the 
scientific literature demonstrating that graphic health warnings 
effectively increase awareness of the health risks of smoking, which is 
the principal purpose of the warnings, and that this awareness in turn 
can influence smoking intentions and behaviors. We included significant 
research to substantiate this conclusion in the preamble to the 
proposed rule (see 75 FR 69524 at 69531 through 69533). For example, as 
discussed in the proposed rule, a 2007 report from an expert IOM panel 
that evaluated the existing scientific evidence on health warnings 
concludes that the available scientific evidence indicates that larger, 
graphic health warnings would promote greater public understanding of 
the health risks of using tobacco and would help to reduce consumption 
(Ref. 3).
    FDA's research study cannot be viewed in isolation from the overall 
body of scientific evidence evaluating the efficacy of graphic health 
warnings. While the research study itself did not provide evidence of 
strong effects on intentions (which, as noted in section III.B.2 of 
this document, is not surprising given the single-exposure design of 
the study), the overall body of scientific literature does provide 
sufficient evidence that the required warnings, by increasing public 
understanding of and thoughts about the health risks of smoking, will 
be effective in encouraging smoking cessation and discouraging smoking 
initiation.
    A number of comments provide additional support for our conclusion. 
For example, a comment from a researcher conducting an international 
longitudinal study on graphic health warnings states that studies show 
that graphic depictions of smoking's adverse effects on the body are 
associated with greater consideration of health risks, increases in 
motivations to quit smoking, and ultimately, attempts at cessation. A 
comment by a researcher with expertise in risk perceptions and 
decisionmaking concludes that emotional associations to smoking appear 
to be powerful predictors of smoking behavior and may well be causally 
implicated in efforts to either stop or start smoking.
    (Comment 33) A comment from tobacco product manufacturers stated 
that the responses to the ``smoking urges'' questions included in the 
study would provide a better measure for assessing whether the proposed 
required warnings affected smoking behavior and, referring to the 
responses regarding these questions, the comment asserts that, on 
balance, seeing the proposed required warnings increased the desire to 
have a cigarette rather than decreased it.
    (Response) We disagree that our research study shows that, on 
balance, seeing the proposed required warnings increased the desire to 
have a cigarette. The ``smoking urges'' measures were reverse coded, so 
that a higher value corresponded with the intended directionality for 
other measures in the study. Thus, a high value corresponds to a 
response of ``strongly disagree'' from the respondent. The data 
presented in the study report appendices (Ref. 49, study report) show 
that, for three of the nine selected required warnings, significantly 
more participants in at least one target group disagreed with the 
statement that they wanted a cigarette than participants exposed to the 
text-only control warning. For one of the selected required warnings, 
significantly more adult participants who viewed the warning on a 
cigarette pack disagreed that they wanted a cigarette, but 
significantly more adults who viewed the warning in a cigarette 
advertisement agreed. For one of the selected required warnings, 
significantly more participants in one target audience agreed that they 
wanted a cigarette than participants exposed to the text-only control 
warning. Results for the remaining selected required warnings and 
sample groups were not significantly different from the text-only 
control warning.
    Thus, on balance, the study does not show that exposure to the 
final set of nine images increased the desire to smoke a cigarette 
among study participants. As discussed in the previous response, the 
overall body of

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scientific literature provides ample evidence that the required 
warnings, by increasing public understanding of and thoughts about the 
health risks of smoking, are likely to encourage smoking cessation and 
discourage smoking initiation. Data from our research study regarding 
``smoking urges'' provide no basis for calling into question that 
evidence.
    d. Study limitations and issues regarding methodology. A number of 
comments discussed a wide variety of issues concerning limitations of 
FDA's research study and raised various issues concerning the study 
methodology.
    (Comment 34) Several comments, including comments from health 
institutions, nonprofit organizations, and academics, raised concerns 
that the demographics of FDA's research study did not include adequate 
sample sizes for minority populations and persons of lower income or 
lower education status. These comments noted that the findings of the 
study therefore may not be relevant to populations with high smoking 
prevalence and to those consumers who might be most impacted by graphic 
health warnings. Some of the comments recommended further testing in 
these populations.
    (Response) We recognize the importance of reaching populations with 
high smoking prevalence, including various racial/ethnic groups and 
persons of lower income or lower education status. The study report 
provides analyses of the relative effects of the images within various 
sub-groups, separating samples by gender, race, and education. The 
analyses, for the most part, confirm that the relative effects of the 
images are consistent across groups. As such, we have determined that 
the required warnings will help to effectively convey the negative 
health consequences of smoking to a wide range of audiences, including 
different racial and ethnic populations and different socioeconomic 
groups.
    (Comment 35) A comment from tobacco product manufacturers 
criticized the study methodology because it did not include a 
nationally representative sample of participants and claimed that this 
failure biased the study results. The comment stated that the study 
report (Ref. 49, study report) fails to disclose basic sampling 
information and provides no indication that those conducting the study 
adjusted for the effect of choosing participants by soliciting 
volunteers. The comment concluded that this failure was significant 
because the participants in the study may not reflect the population of 
interest and may bias the statistical estimates.
    (Response) We disagree that the study results are invalid due to 
the demographic composition of the sample. The research study was not 
intended to be a survey of the national population, but rather a study 
using random assignment to study conditions. The study included 
individuals from certain target groups, particularly current smokers 
and youth who may be susceptible to initiation of smoking. Statistical 
methods were used to assess the relative impact of each of the proposed 
required warnings on various outcomes, rather than to assess the 
absolute impact one would expect to observe in the U.S. population as a 
whole.
    (Comment 36) One comment raised a concern that lack of adequate 
pretesting of the proposed required warnings evaluated in FDA's 
research study could compromise the overall effectiveness of the pool 
of images tested. The comment stated that it would have been more 
helpful to conduct pilot testing with a very large group of images (at 
least 20 per textual warning statement) to ensure testing and selection 
of the most effective graphic warnings.
    (Response) We agree that more extensive pretesting may have been 
useful. However, we disagree with the suggestion that the overall 
effectiveness of the required warnings could be compromised by the 
inability to conduct additional pretesting prior to the research study. 
The results of the research study as well as research submitted by 
others during this rulemaking proceeding indicate that the overall 
efficacy of the pool of proposed required warnings is quite strong. 
Based on those data, as well as the overall scientific literature, we 
conclude that the required warnings will effectively communicate the 
negative health consequences of smoking to smokers and nonsmokers.
    (Comment 37) A comment submitted by tobacco product manufacturers 
asserted that selection bias is a serious methodological flaw of the 
study. The comment stated that participants were recruited from an 
Internet panel and offered the opportunity to participate in the 
research study, creating a selection bias that was compounded by the 
fact that the invitation to participate stated that the study was 
funded by FDA. The comment noted that there is no indication that the 
study corrected for the selection bias and opines that one would not 
expect the selection bias to be neutral given the identification of FDA 
as the sponsor of the study.
    (Response) We disagree that selection bias is a serious 
methodological flaw of the study. Although we acknowledge the potential 
for selection bias, we disagree that this potential bias was likely to 
significantly affect the results of the study. Even if participants who 
approve (or disapprove) of FDA were more likely to participate in the 
study, one would expect that bias would affect all of the experimental 
conditions, including the text-only control warnings. A bias of this 
sort would affect the absolute effects of the warnings in general, but 
not the pattern of relative effectiveness of individual warnings. As a 
result, selection bias does not invalidate the results of the study, 
which provides insight on the relative effectiveness of the various 
warnings under consideration.
    (Comment 38) A comment from tobacco product manufacturers stated 
that FDA's research study is seriously flawed because 32 percent of the 
participants dropped out of the study before completing the 
questionnaire. The comment stated that quitting the survey was not 
likely to be a random event and may have been a result of smokers who 
are not receptive to graphic health warnings dropping out. If so, the 
comment suggested that this would have significantly overstated the 
results of the study.
    (Response) We disagree that the drop-out rate observed in the study 
undermines the validity of the results of the study. Table 3-1 from the 
methodology report displays the total number of individuals entering 
the study. However, these values represent the total number of 
individuals who entered the study's ``landing page,'' which is the site 
to which invitees link from the e-mail invitation. The invitation from 
e-Rewards, as well as the landing page, refers to the study as a 
``Study about Consumer Products.'' There were no references to FDA, 
smoking, or tobacco in either the invitation or the landing page. 
Though it is true that a number of invitees chose not to continue after 
seeing the invitation or the landing page, their decision not to 
participate cannot be attributed to a bias for or against FDA or the 
implementation of graphic health warnings on cigarettes.
    In addition, the number of individuals identified as ``Quits'' in 
table 3-1 of the methodology report includes individuals who quit after 
viewing the landing page and those who quit after having been informed 
of FDA's involvement and that the survey concerned smoking or tobacco. 
Of those individuals identified as ``Quits'', only a very small number 
were in the latter group (i.e., quit after being informed of FDA's 
involvement and that the survey concerned smoking or tobacco). For

[[Page 36644]]

example, of the 13,673 respondents who entered the adult pack survey 
(the point in time when they viewed the study's landing page), 2,179 
chose at some point to discontinue. Of these, only 148 individuals, or 
about 1.1 percent of those entering the study, chose to discontinue the 
survey after being informed of FDA's involvement and that the survey 
concerned smoking or tobacco. A similar pattern exists for all of the 
study samples: In the adult pack follow-up sample 23 individuals, or 
0.6 percent, chose to discontinue after being informed; in the adult ad 
study sample 193 individuals, or 2.1 percent, chose to discontinue 
after being informed; in the adult ad follow-up sample 26 individuals, 
or 0.7 percent, chose to discontinue after being informed; in the young 
adult study sample 152 individuals, or 1.3 percent, chose to 
discontinue after being informed; in the young adult follow-up sample 
11 individuals, or 0.3 percent, chose to discontinue after being 
informed; in the youth study sample 104 individuals, or 0.3 percent, 
chose to discontinue after being informed; and in the youth follow-up 
sample 13 individuals, or 0.5 percent, chose to discontinue after being 
informed. The drop-out rate, as calculated here, varies across the 
study samples but never exceeds 2.1 percent. Therefore, we do not agree 
that the drop-out rate invalidates the results of the study.
    (Comment 39) A comment from tobacco product manufacturers stated 
that the youth component of FDA's research study is subject to a 
response bias. The comment stated that the study failed to address the 
risk that the youth participants might alter their responses due to a 
concern that their parents might see the results.
    (Response) We disagree that the youth sample is likely subject to a 
response bias. Youth participants were told at the outset of the study 
that their responses would be kept confidential. Once the study was 
complete, other household members could not retrieve those responses. 
Moreover, if youth participants were concerned about parental awareness 
of their participation, it would likely have resulted in a decision not 
to participate rather than a decision to alter their responses.
    (Comment 40) A comment from tobacco product manufacturers raised a 
concern that the youth sample is subject to a selection bias because 
participants were derived from families whose parents also participated 
in the study.
    (Response) We disagree. As discussed in section 2.2.3 of the 
methodology report (included in the docket as part of the study report 
(Ref. 49, study report)), most of the youth were sampled from a 
separate youth panel, which was independent of the adult panel. Some of 
the youth were sampled from the households of the adult panel. However, 
those in the latter group were sampled independently and randomly from 
the adults that participated in the study. Although possible, it is 
unlikely that both a parent and child from a single household received 
an invitation for the study and completed the study.
    (Comment 41) A comment from tobacco product manufacturers objects 
to the manner in which the study assessed emotional and cognitive 
reactions. The comment states that the study weighted the responses to 
multiple questions, but fails to disclose the weights used and the 
justification for those weights, and states that without information on 
the weighting system, one cannot assess these measures for bias.
    (Response) We disagree with this comment. Section 4.2 of the 
methodology report for our research study (included in the docket as 
part of the study report (Ref. 49, study report)) indicates that a 
factor analysis was used to determine the appropriate items to include 
within each scale. A weighting scheme was not used. Rather, items were 
combined using a simple summative scale. Use of a simple summative 
scale is a widely-used method of analyzing these data.
    (Comment 42) A comment from tobacco product manufacturers states 
that the study used an inappropriate methodology by measuring risk 
awareness and smoking intentions on a scale. The comment states that 
evaluating these measures on a scale is inappropriate for testing 
awareness of a fact and also resulted in the authors making subjective 
and undisclosed decisions about how to weight those values.
    (Response) We disagree. It is appropriate to measure the impact of 
a warning on the strength of an individual's awareness, beliefs, and 
intentions. To do this, one must use a scaled response, rather than a 
dichotomous response, to each question. In the research study, items 
were not weighted within each scale. Rather, they were combined using a 
simple summation of ratings. This is a widely-used methodology for this 
type of study.
    (Comment 43) A report attached to the comment from tobacco product 
manufacturers criticizes FDA's research study for failing to assess 
baseline knowledge among participants to determine whether the proposed 
required warnings increased awareness of the health effects of smoking.
    (Response) The lack of an assessment of baseline knowledge does not 
make the study results less reliable or invalid. In a study such as 
FDA's research study, responses to the control conditions serve as 
proxies for baseline knowledge, awareness, beliefs, and intentions. 
Comparing the treatment responses to those of the control allow for an 
assessment of the potential impact the treatment has on baseline 
measures.

C. Comments to the Docket

    FDA received hundreds of comments on the 36 proposed required 
warnings; the comments relating to each proposed required warning are 
discussed in sections III.D and III.E of this document. Some comments 
discussed the 36 proposed required warnings generally or discussed 
different styles or themes used in the set of proposed required 
warnings. These comments are summarized and responded to in this 
section.
    As explained in section III.A of this document, we considered the 
comments submitted to the docket as we determined which color graphic 
images to require to accompany the nine textual warning statements in 
the final rule. We did not simply count the number of comments received 
supporting or opposing the use of a particular image as a way to 
measure the relative effectiveness of our proposed images or of images 
recommended by comments, but rather evaluated the substantive input 
contained in the comments to help inform our decisions in selecting or 
not selecting a particular image and to obtain other relevant 
information related to research on the images. Many of the comments 
contained information about the submitter's personal opinions, beliefs, 
and attitudes related to various images. While this information is 
helpful in understanding how people might interpret various images and 
in raising issues for further exploration, this type of qualitative 
information is not as useful as quantitative assessments of the 
relative effectiveness of the 36 proposed required warnings at 
conveying information about the negative health consequences of 
smoking, such as the assessment provided in FDA's research study.
    Furthermore, as described in more detail in the comment summaries 
and responses in sections III.D and III.E of this document, some of the 
information contained in comments that criticized or opposed the use of 
various proposed images suggested that the images evoked negative 
emotional reactions in the viewer. The research literature,

[[Page 36645]]

however, suggests that warnings that evoke these reactions can increase 
the likelihood smokers will reduce their smoking, make an attempt to 
quit, or quit altogether (Ref. 44).
1. Comments Submitting Research on FDA's Proposed Required Warnings
    We received several comments, including comments from academics, a 
nonprofit organization, and a prevention specialist, that described the 
results of scientific investigations that the submitters had conducted 
to examine the potential effectiveness of FDA's proposed required 
warnings on various outcomes. We address that research and our 
responses to these comments in the comment summaries and responses in 
this section. The information contained in these comments about 
particular proposed required warnings is also discussed as applicable 
in sections III.D and III.E of this document.
    As is discussed in the summaries in this section, the nine required 
warnings we have selected for use on cigarette packages and in 
cigarette advertisements generally performed well in the studies 
discussed in these comments. These comments indicate that the findings 
from our own research study are robust, as they have generally been 
confirmed under the various different study designs utilized in the 
research discussed in these comments.
    However, in contrast to our own research study, we did not have 
access to the raw data or to all the statistical analyses for the 
studies discussed in these comments. In addition, the design of some of 
these studies did not allow for an assessment of the relative 
effectiveness of FDA's 36 proposed required warnings. This limited the 
utility of the information provided in the submissions.
    Thus, while we carefully considered the information provided in 
these submissions, the results of our own study were more helpful in 
making research-based selection choices.
    (Comment 44) One study was submitted by a group from a medical 
institution and by a collaborating academic who has conducted research 
on graphic health warnings. Participants were recruited from an 
Internet panel of adults, young adults, and youth. The report for the 
study states that it was intended to assess the potential effectiveness 
of FDA's 36 proposed required warnings. Among other things, 
participants were asked to provide certain demographic information as 
well as information concerning their smoking status and attitudes and 
beliefs about smoking. In addition, the study tested nine ``sets'' of 
warnings, one for each of the textual warning statements required by 
the Tobacco Control Act. Each set included each of the proposed 
required warnings published with the proposed rule for use with the 
specific textual warning statement as well as at least one alternative 
warning. Each participant was randomly assigned to view and rate two 
sets of health warnings.
    Warnings within each set were first rated individually on a scale 
of 1 to 10 and then participants were asked to rank order the entire 
set for perceived effectiveness for discouraging smoking. The comment 
presented the rating and ranking scores for the health warnings. The 
comment also presented preliminary statistical analyses for the overall 
ranking scores; statistical data were not presented for individual 
ratings for the individual measures assessed. The comment concludes 
that preliminary results from the study show that warnings that were 
more explicit about the health risks of smoking were rated as being 
more effective among both adults and youth. The academic who conducted 
the study similarly concluded that health warnings that were more 
explicit and that elicited greater emotional reactions were rated as 
being most effective, and the researcher recommended that FDA select 
certain graphic warnings that received high rating and ranking scores 
in the study (including required warnings proposed by FDA as well as 
graphic warnings that have been used in other countries).
    (Response) The results of this study are generally consistent with 
the results of the scientific literature and the study sponsored by 
FDA. This study shows that the existing cigarette warnings are not 
salient among either adults or youth. Among other responses, 50.3 
percent of adults responded that they never or rarely noticed the 
health warnings on cigarette packs, while 23.7 percent stated that they 
often or very often noticed the warnings. Among youth, 63.3 percent 
responded that they never or rarely noticed the health warnings on 
cigarette packs, while 12.9 percent stated that they often or very 
often noticed the warning. The graphic warnings selected for inclusion 
in the final regulation generally performed relatively well in both 
this study and in FDA's research study. It is difficult to assess the 
results of this study more specifically without additional information 
concerning the study protocol, methods, and statistical analyses.
    (Comment 45) A study was submitted by a researcher with expertise 
in risk perceptions and decisionmaking. Participants were young adult 
college students, including smokers, nonsmokers, and ``vulnerable'' 
nonsmokers. The study assessed emotional reactions, risk perceptions, 
and smoking aversion. Participants were randomized into four 
conditions, with each viewing 18 graphic warnings. Two conditions 
viewed graphic warnings being used in other countries, one condition 
viewed 18 graphic warnings published with the proposed rule, and the 
fourth condition viewed the proposed FDA graphic warnings plus three 
graphic warnings from other jurisdictions. According to the comment, 
warnings ``that were perceived as more graphic, more intense, less 
good, and more fearful produced more thoughts about not wanting to 
smoke.'' The comment concludes that, compared to the viewed warnings 
being used in other countries, the FDA proposed required warnings did 
not maximize thoughts of health risk perceptions or smoking aversion, 
although the differences between the warnings from other jurisdictions 
and FDA's proposed required warnings were marginal.
    (Response) The nine required warnings that we have selected 
performed relatively well in this study. Many performed as well as the 
warnings from other jurisdictions and some performed better. It is 
difficult to assess the results of this study more specifically, 
however, without additional information concerning the study protocol, 
methods, and statistical analyses.
    (Comment 46) A study was submitted by a group of behavioral 
scientists whose research focuses on cognitive, emotional, and imagery 
processes that influence how people respond to messages about health 
risks. Their experimental study evaluated the 36 proposed required 
warnings published with the proposed rule. Participants were young 
adults ages 18 to 25, and included smokers and nonsmokers. Each 
participant viewed 18 of the 36 proposed required warnings and was 
asked to rate each on the following measures: Perceived comprehension, 
worry about the health risks of smoking, and the extent to which the 
warning discouraged the participant from wanting to smoke a cigarette. 
The comment states that the study provides strong support that most of 
the graphic warnings proposed by FDA are perceived by young adult 
smokers as easy to understand, as enhancing worry about the health 
risks of smoking, and as discouraging young adult smokers from wanting 
to smoke. The comment states that the results of the study are 
consistent with the growing body of

[[Page 36646]]

evidence showing that, compared to text-only warnings, graphic warnings 
can evoke stronger emotional responses and reduce motivations to smoke.
    (Response) The nine required warnings that we have selected 
performed relatively well in this study. It is difficult to assess the 
results of this study more specifically without additional information 
concerning the study protocol, methods, and statistical analyses.
    (Comment 47) A study was submitted by two researchers at a 
university-based public policy center. The comment states that the 
study, of young adult and adult smokers, was conducted to assess 
limitations of the FDA study and to identify ways to increase the 
impact of the warnings. The study used the same online survey firm as 
that used in the FDA study, although respondents who participated in 
the FDA study were not eligible to participate in this study. The study 
was limited to four of the nine warning statements required by the 
Tobacco Control Act. The graphic warnings assessed for each of these 
four statements included some of the proposed FDA warnings, these same 
proposed warnings with additional text or color added, and some graphic 
warnings used in Canada. Graphic warnings were compared against a text-
only control warning that appeared on the side of a cigarette pack. The 
study used two indices to assess efficacy. The first assessment was 
perceived effectiveness in discouraging someone from smoking. For the 
second assessment, participants were asked to imagine themselves 
smoking a cigarette and then to report how good or bad they would feel 
smoking a cigarette. The comment states that in three of the four 
warning messages required by the Tobacco Control Act, a single exposure 
to a large graphic warning was more effective in creating immediate 
negative emotional associations with the act of smoking than exposure 
to the text-only warning. The comment states that the study did not 
show that the single exposure affected immediate plans to quit smoking; 
the authors of the comment note that a brief test following a single 
exposure is unlikely to detect this effect, and that they would expect 
quit intentions to increase through repeated exposures to the warnings.
    (Response) The proposed required warnings published by FDA and 
included in this study performed relatively well in this study. It is 
difficult to assess the results of this study more specifically without 
additional information concerning the study and the statistical 
analyses.
    (Comment 48) An organization of high school students submitted the 
results of a study they conducted to assess the efficacy of the 36 
proposed required warnings published with the proposed rule. 
Organization members recruited participants from their high schools and 
communities. Each participant viewed 18 of the proposed required 
warnings and was asked to rate each warning for perceived effectiveness 
in stopping someone from smoking. Findings were reported as arithmetic 
means and modes. The comment concludes that study respondents generally 
believed that the most effective images were the more graphic images.
    (Response) We note that the nine required warnings we selected 
generally rated highly in this study.
    (Comment 49) One comment contained the results of a study conducted 
by two individuals among college students at a U.S. university. In this 
study, 63 college students, apparently including both smokers and 
nonsmokers, were shown the 36 proposed required warnings and asked to 
rate them on a scale of 1 to 7 on their perceived effectiveness in 
helping smokers' intent to quit. According to the comment, certain 
demographic information also was obtained from participants. The 
comment identifies the five proposed required warnings that were ranked 
as being the most effective warnings and the five proposed required 
warnings that were ranked as being the least effective. According to 
the comment, demographic factors did not affect the rating scores. The 
only factor identified as having an impact on rating was smoking 
status, with participants who had a history of smoking more likely to 
rate the graphic warnings as being effective than subjects who did not 
have any history of smoking.
    In another comment, submitted by a self-identified prevention 
specialist from a U.S. public school district, 1,339 high school 
students viewed the 36 proposed required warnings and were asked 
``which image would change your mind about smoking.'' The comment 
identified the ``top three'' proposed required warnings.
    (Response) We note that the proposed required warnings chosen as 
``most effective'' include some of the nine required warnings we 
selected. Neither of these comments included sufficient information or 
data with which to further assess the results or conclusions.
2. Other Comments
    FDA also received a number of other comments that discussed the 
proposed required warnings generally or highlighted issues that applied 
to some or all of the proposed required warnings. These comments are 
summarized and responded to in the following paragraphs.
    (Comment 50) Many comments stated that graphic health warnings that 
elicit strong emotional responses are most effective in communicating 
the negative health consequences of smoking and in encouraging smoking 
cessation and discouraging smoking initiation. Most of these comments 
recommended that FDA select the warnings that evoke the strongest 
emotional responses. Some of these comments cited graphic warnings used 
in other countries or international research showing that images that 
trigger emotional responses promote greater awareness and better 
recollection of the health risks of smoking. Some of these comments 
also stated that warnings that trigger these responses retain their 
effectiveness longer. Some of these comments recommended that FDA 
select graphic warnings that portray graphically disturbing images or 
images that evoke fear or disgust.
    (Response) We agree that eliciting strong emotional responses helps 
communicate health information. The overall body of scientific 
literature indicates that health warnings that evoke strong emotional 
reactions enhance an individual's ability to process the warning 
information. This leads to increased knowledge and thoughts about the 
health risks of smoking and the extent to which an individual could 
personally experience a smoking-related disease, which can in turn 
motivate positive behaviors. For example, the literature suggests that 
risk information is most readily communicated by messages that arouse 
emotional reactions (see Ref. 45), and that smokers who report greater 
negative emotional reactions in response to cigarette warnings are 
significantly more likely to have read and thought about the warnings 
and more likely to reduce the amount they smoke and to quit or make an 
attempt to quit (Ref. 44). The research literature also suggests that 
warnings that generate an immediate emotional response from viewers 
confer negative affect to smoking cues and undermine the appeal and 
attractiveness of smoking (Ref. 45 and Ref. 40 at pp. 37-38). In FDA's 
study, eight of the nine selected required warnings elicited strong 
emotional reactions across all target audiences. As is further 
discussed in section III.D of this document, the ninth selected 
required warning, which, unlike the other eight required warnings, 
contains a warning statement that is framed in a positive manner, also

[[Page 36647]]

showed significant effects on the emotional reaction scale in one study 
population. Given the manner in which this ninth warning is framed, it 
is not expected to arouse the same level of response on the emotional 
reaction scale used in FDA's research study as the other eight warning 
messages (see section III.D of this document).
    Some of the required warnings we selected include images that may 
be more emotionally disturbing to certain individuals than others. As 
we discussed in the preamble to the proposed rule, the use of health 
warnings with disturbing tonal qualities appears to be effective (75 FR 
69524 at 69534). But research also indicates that other types of 
graphic images, including some that individuals do not find frightening 
or disturbing, can also be effective in communicating the health risks 
of smoking (Id.). The set of nine graphic warnings we selected includes 
a balanced set of images in order to reach the broadest target audience 
of smokers and potential smokers.
    (Comment 51) Some comments raised concerns about the quality of the 
proposed required warnings published by FDA. Some believed that the 
proposed required warnings were weaker than those used in other 
countries, and thus, would be less impactful than those in use in other 
countries. A few comments said the images were overdone and insulting, 
and a few indicated that the submitters believed that the visuals were 
poorly crafted.
    (Response) We disagree with these comments. We have chosen a 
balanced set of images for use with the required warnings, and these 
warnings are generally consistent with the graphic health warnings used 
in other countries. The results from our research study and the overall 
body of scientific literature on graphic warnings provide a strong 
basis for concluding that the nine selected required warnings will 
effectively communicate the negative health risks of smoking to smokers 
and potential smokers.
    (Comment 52) Some comments raised concerns that the proposed 
required warnings were too explicit and too visually disturbing. Some 
of these comments raised concerns that the images were too disturbing 
for children to see, and others indicated that nonsmokers should not 
have to be subjected to ``gross'' images when they go into retail 
establishments. Two comments raised concerns that images that showed 
humans in distress or human remains were disrespectful and degrading. 
One comment stated that the proposed warnings crossed the line and were 
an effort to manipulate people to stop smoking or not to start.
    (Response) We disagree. The set of nine required warnings we 
selected include a balanced set of images. Some individuals may find 
certain images more visually disturbing than others. The images are not 
intended to shock or disturb, but rather to effectively educate and 
inform smokers and potential smokers about the serious health 
consequences of smoking. Each of the nine graphic warnings communicates 
negative health consequences of smoking that are well-documented in the 
scientific literature. By appropriately conveying the serious health 
consequences in a truthful, forthright manner, the images contain 
information that may disturb some viewers because the severe, life-
threatening and sometimes disfiguring health effects of smoking are 
disturbing. The overall body of scientific evidence indicates that 
larger, graphic health warnings will effectively communicate these 
risks. We do not agree that these warnings are disrespectful or 
degrading.
    (Comment 53) A number of comments advocated for the selection of a 
set of images that could communicate with the diverse U.S. population, 
and emphasized the importance of human diversity in the images, in part 
to help ensure the images reach people of low socioeconomic status that 
are more likely to be smokers and/or to have lower literacy. The 
comments stated that graphic health warnings are an especially 
important communication tool for these population groups. A few 
comments also raised concerns that not enough of the 36 proposed 
required warnings depicted younger people, and indicated this could 
reduce their impact among youth.
    (Response) We agree that it is important to select a set of images 
that can communicate with the diverse U.S. population. As discussed in 
section III.A of this document, we considered the need for diversity 
when making image selections, and the images selected include a 
diversity of human images (e.g., race, gender, age), as well as a 
diversity of styles (e.g., photographic versus illustrative) and 
themes. This is consistent with the evidence base for graphic health 
warnings from countries that have already implemented such warnings 
(see Ref. 40 at p. 46 and Ref. 11).
    (Comment 54) A number of comments raised concerns that some of the 
proposed graphic warnings included graphic illustration or ``cartoon-
style'' images. Some of these comments stated that these warnings might 
trivialize the serious health risks of smoking or diminish the 
importance of the warnings, with some asserting that this style is 
contradictory to the serious messages being conveyed. One comment 
believed that these warnings would soften the message, while another 
believed the graphic illustration warnings were ``harsh.'' Some 
comments stated that these warnings would negatively affect the 
believability of the warnings and would not be taken seriously by 
youth. One comment expressed concern that the graphic illustration 
style images might resonate with youth, but would not be effective with 
young adults or adults. It was also noted in the comments that the 
images presented in this style may inadvertently suggest approval of 
tobacco use to low-literacy populations that do not comprehend the 
accompanying textual statement, and that these images could allow 
smokers to deny the health consequences that are presented. Another 
comment stated that the research suggests ``cartoon-style'' images and 
overly conceptual images are easily dismissed by smokers.
    (Response) We disagree with the contention that the use of graphic 
illustration style images is categorically inappropriate. One of the 
required warnings we selected is presented in this style. As discussed 
in section III.B of this document, our research study shows that the 
selected required warnings, including the required warning that 
includes a graphic illustration style image, showed strong effects in 
terms of emotional reaction scale, cognitive reaction scale (including 
believability), and the ``difficult to look at'' measure. Given these 
results, we concluded that the graphic illustration style can be an 
effective style for communicating the negative health risks of smoking, 
including to a diverse range of viewers. In addition, it is important 
to include a variety of different styles in the final set of warnings. 
As discussed in the preamble to the proposed rule, a varied set of 
warnings is consistent with the scientific literature, facilitates 
better targeting of specific groups whose interests may vary, and has 
been shown to be effective in delaying or counteracting wear out of the 
warnings (75 FR 69524 at 69534).
    (Comment 55) A number of comments advocated that FDA select only 
required warnings with photographic images. Some of these comments 
stated that the use of photographic images was important to 
realistically portray the negative health consequences of smoking and 
to provide a real-life quality to the warnings. One comment stated that 
photographic images were needed to ensure that smokers and

[[Page 36648]]

potential smokers understood that the depicted health consequence could 
really happen and to provide a more physical connection. One comment 
stated that photographic images would be more engaging and remembered 
than images presented in other styles. One comment stated that warnings 
with abstract imagery that require individuals to ``connect the dots'' 
and draw inferences present an unnecessary and counterproductive hurdle 
for viewers, and are unlikely to have an effect on smokers.
    (Response) We agree that graphic warnings with photographic images 
can effectively communicate the negative health consequences of 
smoking, and most of the required warnings we selected include 
photographic images. The existing scientific literature, the experience 
of other countries, and the results of our research study show that 
graphic warnings using photographic images can effectively communicate 
the negative health consequences of smoking. At the same time, we do 
not agree that photographic images are the only style of imagery 
capable of effectively communicating these health risks. A balanced set 
of warnings with a variety of image styles is more likely to 
effectively reach a broad group of target audiences, and we note that 
graphic warnings used in many other countries include a mix of imagery, 
including photographic and other styles.
    (Comment 56) Some comments stated that graphic warnings will not be 
effective in deterring smoking. One comment stated that smokers already 
know the health risks of smoking and are very brand loyal, so graphic 
images will not affect their smoking decisions. Another comment stated 
that youth will not be deterred by pictures and the graphic warnings 
could instead make smoking more enticing to youth. One comment stated 
that smokers are addicted to cigarettes and ``flashy'' pictures will 
not stop them from smoking but instead will only encourage them to 
cover the pictures. On the other hand, other comments concluded that 
graphic health warnings are likely to affect smoking decisions. One 
comment stated that graphic warnings will deter initiation, and another 
stated that the warnings will lead to a decrease in cigarette sales. 
One comment stated that graphic warnings will reach people who 
otherwise would not read text-only warnings.
    (Response) As previously discussed, we concluded that large graphic 
warnings are effective in conveying the health risks of smoking, 
influencing consumer awareness and knowledge of those risks and having 
an impact on smoking intentions. We disagree with comments stating that 
required warnings will not be effective. We have determined that the 
set of required warnings we have selected will effectively convey the 
negative health consequences of smoking, which will help discourage 
nonsmokers, including children and adolescents, from starting to smoke 
cigarettes, and help encourage current smokers to consider cessation to 
greatly reduce the serious risks that smoking poses to their health.
    (Comment 57) Several comments stated that images that depict 
realistic suffering caused by tobacco use are more effective in 
promoting cessation than images that portray death.
    (Response) We agree that graphic warnings that depict the realistic 
suffering caused by tobacco use can be effective at communicating the 
negative health consequences of smoking, and some of the required 
warnings we selected include such images. At the same time, we do not 
agree that such images are the only images capable of effectively 
communicating the negative health consequences of smoking. A balanced 
set of warnings with a variety of image themes is most likely to 
maximize the effectiveness of the selected required warnings among a 
broad group of target audiences, and notes that graphic warnings used 
in many other countries include a mix of imagery. As discussed in the 
preamble to the proposed rule, the existing research indicates that the 
use of a variety of health warnings broadens the reach of the warnings, 
and is effective in counteracting overexposure and delaying wear out of 
the warnings (75 FR 69524 at 69534).
    (Comment 58) One comment stated that most of the proposed images 
are illustrations rather than graphic warnings, in that they are 
meaningful only to people who are already aware of the information in 
the accompanying textual warning.
    (Response) Consistent with the requirements of section 201 of the 
Tobacco Control Act, we have developed color graphic images that depict 
the negative health consequences of smoking to accompany the nine new 
warning statements provided by Congress in the Tobacco Control Act. The 
graphic health warnings, referred to as ``required warnings'' in the 
NPRM and in this final rule, consist of the combination of each textual 
warning statement and the accompanying color graphic image we selected 
for use with each statement. The submitter of this comment seems to 
misunderstand how the images are to be used; they were not developed to 
serve as stand-alone warning messages, but rather to accompany textual 
warning statements. Although we disagree with the contention in this 
comment that the images are only meaningful in conjunction with the 
information in the accompanying textual warning, the images are 
required to be presented at all times with this accompanying 
information.

D. Selected Images

    This section discusses the nine color graphic images that we 
selected for use with the textual warning statements set forth in 
section 201 of the Tobacco Control Act and the factors that influenced 
each selection decision, including the results from our research study, 
the substantive comments received in the docket, the relevant 
scientific literature, and any other considerations weighed, such as 
the diversity a particular image contributes to the overall set of 
required warnings.
    The document entitled ``Proposed Required Warning Images'' that was 
included in the docket for the proposed rule displayed each of the 36 
proposed required warnings (consisting of the proposed images and 
accompanying warning statements) on two consecutive pages, with one 
display showing the warning statement accompanying the image in black 
text on a white background and one display showing it in white text on 
a black background. The images are referred to in this section by the 
pages on which they appear in the ``Proposed Required Warning Images'' 
document and by the descriptive names used for each image in the study 
report (Ref. 49) summarizing the results of our research study.
    In this section's discussion of the results from our research study 
for each selected image, the endpoints that the images showed a 
statistically significant effect on in one or more of the study 
populations (adult smokers aged 25 or older, young adult smokers aged 
18 to 24, and youth who currently smoke or who are susceptible to 
smoking aged 13 to 17) are described. This discussion also notes the 
level of significance of the effects by providing p-values: (p<0.05), 
(p<0.01), and (p<0.001). The p-value is reflective of the percent 
chance the finding could have happened by coincidence. For example, for 
a finding that is significant at 0.1 percent (p<0.001), there is less 
than one chance in a thousand that the finding happened by coincidence. 
The full description of our research study and the analyses are 
contained in the study report (Ref. 49, study report) that was placed 
in the docket for the proposed rule.

[[Page 36649]]

    The required warnings, consisting of the nine color graphic images 
we selected and the textual warning statements, are contained in a 
document titled ``Cigarette Required Warnings,'' as is further 
discussed in section V of this document.
1. ``WARNING: Cigarettes are Addictive''
    We selected the image which appears on pages one and two of the 
document ``Proposed Required Warning Images,'' referred to as ``hole in 
throat,'' for use with this warning statement.
    In our research study, this image had a significant effect 
(p<0.001) on all salience measures (emotional reaction scale, cognitive 
reaction scale, and difficult to look at measure) in all three study 
populations (adults, young adults, and youth). The image had the 
numerically largest effects of the images proposed for use with this 
warning statement on the emotional reaction scale and the difficult to 
look at measure in all three study populations, as well as on the 
cognitive reaction scale in adults. As discussed in section III.B of 
this document, these salience impacts are important, as the research 
literature suggests that they are likely to be related to behavior 
change.
    The image also had a significant impact (p<0.05) on adult \4\ 
beliefs about the health risks of smoking for smokers, and a 
significant impact (p<0.05) on adult beliefs about the health risks of 
secondhand smoke exposure for nonsmokers, relative to the text-only 
control.
---------------------------------------------------------------------------

    \4\ Throughout this section, the results on individual study 
measures discussed for the adult study population are results from 
the adult sample viewing the hypothetical cigarette package (as 
opposed to the sample viewing the hypothetical advertisement), 
unless otherwise noted.
---------------------------------------------------------------------------

    However, young adults viewing the image had significantly lower 
statement recall at one week follow-up than those who viewed the text-
only control (55.9 percent versus 74.3 percent), as did adults viewing 
a hypothetical advertisement containing the proposed required warning 
(64.1 percent versus 87.7 percent). However, recall of the statement 
was generally high for the image (ranging from 55.9 percent to 86.3 
percent), even where it was significantly lower than for the text-only 
control, and we conclude that repetitive viewing of the required 
warning is likely to increase recall. As explained in section III.C of 
this document, we gave greater weight to outcomes on the salience 
measures than to outcomes on the recall measures.
    We received a number of comments on this image, which we have 
summarized and responded to in the following paragraphs.
    (Comment 59) FDA received a large number of comments supporting the 
use of the image ``hole in throat,'' including comments from 
individuals (including former smokers), public health advocacy groups, 
academics, State and local public health agencies, and health care 
professionals. Many comments stated that this image is the best image 
for use with this warning statement. Some comments indicated that the 
image was appropriately compelling and effectively communicates the 
risks of smoking. Other comments stated that the image will be an 
effective deterrent to smoking by making a smoker think twice before 
buying cigarettes and/or by making children think twice before starting 
to smoke. Several comments also indicated that the image concretely 
conveys the health harms of smoking.
    (Response) We selected this image for use with this warning 
statement.
    (Comment 60) One comment supported use of this image in part 
because of the diversity reflected in the image, and noted that it 
could be a Latino smoker or a man of color, which could make it more 
relevant than other proposed images with low socioeconomic status 
smokers. Another comment noted that the image targets a critical 
demographic group by portraying an image of a man.
    (Response) We agree that it is beneficial to have a diverse set of 
images that communicates with a wide range of audiences, including 
population subgroups with higher smoking prevalence rates. In light of 
this, we selected a set of nine required warnings (including the image 
``hole in throat,'' which portrays a man of color) that includes a 
variety of human images that are broadly representative of the overall 
population.
    (Comment 61) As mentioned in section III.C of this document, some 
comments submitted to the docket described the results of scientific 
investigations that the submitters had conducted to examine the 
potential effectiveness of FDA's proposed images on various outcomes. 
This image was discussed in some of these comments. For example, in one 
submitter's study, participants rated this image highly on its ease of 
comprehension. It also induced relatively greater worry and feelings of 
discouragement from wanting to smoke than a text-only control. The 
submitter concluded that this image was the most effective of the 
images proposed for use with this warning statement. Additionally, this 
image was one of two images deemed effective in another submitter's 
survey of comparative effectiveness of the 36 proposed required 
warnings at stopping someone from smoking, and it received the highest 
overall rating of the images examined for use with this statement in 
another submitter's study of the potential effectiveness of the images.
    (Response) As discussed in section III.C of this document, we 
carefully considered the comments submitted to the docket that 
described the results of studies conducted by the submitters on our 
proposed required warnings. The results summarized in these comments 
are generally supportive of our image selection decisions.
    (Comment 62) FDA also received some comments that opposed the use 
of the image ``hole in throat.'' One comment noted that the image was 
``too gross to be effective,'' while another comment stated that it 
``offend[s] against human dignity.'' In addition, one comment stated 
that the image would only have a one-time shock value, and another 
comment indicated that the image was too vague in nature.
    (Response) We disagree with these comments. The image effectively 
and concretely communicates the negative health consequences of 
smoking. The image clearly portrays the addictive nature of cigarettes, 
depicting a man who is still smoking despite prior evidence (a stoma in 
his neck) of surgery for cancer. As discussed, this image had a highly 
significant effect (p<0.001) on all salience measures (emotional 
reaction scale, cognitive reaction scale, and difficult to look at 
measure) in all three study populations (adults, young adults, and 
youth). The research literature indicates that images that evoke 
emotional reactions can promote greater awareness and better 
recollection of the health risks of smoking, and can increase the 
likelihood smokers will reduce their smoking, make an attempt to quit, 
or quit altogether (Ref. 20, 44, and 45).
    Furthermore, contrary to the assertion that the image will only 
have a one-time shock value, the research literature suggests that more 
vivid warnings are more likely to retain their salience over time (Ref. 
3 at p. C-4 and Ref. 41).
2. ``WARNING: Tobacco Smoke Can Harm Your Children''
    We selected the image which appears on pages 9 and 10 of the 
document ``Proposed Required Warning Images,'' referred to as ``smoke 
approaching baby,'' for use with this warning statement.
    In our research study, this image had a significant effect 
(p<0.001) on all the salience measures (emotional reaction scale, 
cognitive reaction scale, and

[[Page 36650]]

difficult to look at measure) in the adult and youth samples. In young 
adults, the image also had a significant effect on all the salience 
measures (emotional reaction scale (p<0.01), cognitive reaction scale 
(p<0.001), and difficult to look at measure (p<0.05)).
    The image had a significant effect (p<0.05) on recall of the 
warning statement at baseline compared to the control for adults and 
youth. The image also had a significant effect (p<0.05) on statement 
recall at 1 week follow-up in young adults. The image also showed some 
of the largest effect sizes for image recall (at baseline and at 1 week 
follow-up) in adults and young adults across the images proposed for 
use with this warning statement.
    The image had a statistically significant effect (p<0.05) on youth 
intentions to not smoke in the next year, with 71.6 percent of youth 
viewing the image reporting that they would not be likely to smoke in 
the next year compared to 56.9 percent of youth viewing the text-only 
control.
    As is discussed in further detail in section III.E of this 
document, three other images proposed for use with this warning 
statement, ``smoke at toddler,'' ``girl crying,'' and ``girl in oxygen 
mask,'' also had significant effects on all the salience measures 
(emotional reaction scale, cognitive reaction scale, and difficult to 
look at measure) in all three study populations (adults, young adults, 
and youth). While several of the images proposed for use with this 
warning statement could effectively convey the negative health 
consequences of tobacco smoke exposure for nonsmokers (and in 
particular, children), we ultimately considered ``smoke approaching 
baby'' to have the strongest overall research results of the images 
proposed for use with this warning statement for multiple reasons.
    First, two of the images that also showed significant effects on 
all the salience measures across the study populations, ``girl crying'' 
and ``girl in oxygen mask,'' were negatively associated with beliefs 
about the health risks of secondhand smoke exposure for nonsmokers in 
the adult sample. In other words, adults who viewed these images were 
less likely to believe that nonsmokers will suffer from negative health 
effects related to secondhand smoke exposure than adults who viewed the 
text-only control.
    As described in section III.B of this document, we determined that 
the salience results from our research study are the most meaningful 
basis for making distinctions among the images given the design 
limitations of the research study, which exposed each participant to 
each image only once, and thus may not be able to accurately 
distinguish the relative effects of the images on more eventual 
outcomes, such as changes in beliefs, as reliably as their effects on 
more immediate emotional and cognitive reactions. However, the negative 
results observed on the secondhand smoke beliefs measure for the images 
``girl crying'' and ``girl in oxygen mask'' were of concern, 
particularly given that the subject of the warning statement is the 
health risks of secondhand smoke exposure for children. Thus, ``smoke 
approaching baby'' was considered a preferable alternative to these two 
images.
    Furthermore, ``smoke approaching baby'' was associated with youth 
reporting that they would be less likely to be smoking 1 year from now.
    We received a number of comments on this image, which we have 
summarized and responded to in the following paragraphs.
    (Comment 63) FDA received several comments supporting the use of 
the image ``smoke approaching baby,'' including comments from 
individuals, a public health advocacy group, and State and local public 
health agencies. Some of these comments indicated that this image is 
the best image of the ones proposed for use with this warning 
statement. One comment stated that the image will clearly inform 
parents that when they smoke in the presence of their children, their 
children will also be inhaling toxins, and another comment noted that 
the image realistically shows secondhand smoke exposure and health 
effects. Some comments noted that the image will deter smoking, with 
one comment noting that the depiction of an innocent baby will resonate 
with parents and cause them to think about their children's health 
before smoking.
    (Response) We selected this image for use with this warning 
statement.
    (Comment 64) FDA also received some comments expressing support for 
the diversity reflected in the image. One comment stated that the image 
will appeal to different age and other demographic groups, while 
another comment noted that the child in the image could be African-
American, Hispanic, Latino, Native American, and/or Native Hawaiian or 
Pacific Islander, and suggested that the image could resonate with a 
variety of important population subgroups. The comment also noted that 
Latino parents say the health of their children is a motivating factor 
in their decision to quit smoking.
    (Response) It is important to have a diverse set of images that 
communicate with a wide range of audiences, including a variety of 
population subgroups. In order to ensure that the final set of required 
warnings effectively communicates risk information to a diverse range 
of audiences, we selected a set of nine required warnings, including 
the image ``smoke approaching baby,'' that includes a variety of human 
images that are broadly representative of the overall population.
    (Comment 65) As mentioned in section III.C of this document, some 
comments submitted to the docket described the results of scientific 
investigations that the submitters had conducted to examine the 
potential effectiveness of FDA's proposed images on various outcomes. 
This image was discussed in some of these comments. For example, it was 
rated highly on its ease of comprehension and induced relatively 
greater worry and feelings of discouragement from wanting to smoke than 
a text-only control in one submitter's study.
    (Response) As discussed in section III.C of this document, we 
carefully considered the comments submitted to the docket that 
described the results of studies conducted by the submitters on our 
proposed required warnings. The results summarized in these comments 
are generally supportive of our image selection decisions.
    (Comment 66) FDA also received some comments critical of the image 
``smoke approaching baby.'' These comments suggested that the child 
does not appear to be suffering harms to his health and/or looks too 
healthy. One of these comments also stated that the image was 
associated with youth reporting that they would be more likely to be 
smoking 1 year from now, and advised against its use.
    (Response) We do not agree that the image does not depict the 
health hazards of secondhand smoke. Graphic depictions of the visible 
effects of disease are not the only way of communicating the health 
risks of secondhand smoke for children (see Ref. 11), some of which 
(such as impaired lung growth), are not necessarily externally visible 
in a photograph of a child exposed to secondhand smoke. Furthermore, it 
is important to keep in mind that the image is not used in isolation, 
but accompanies the textual warning statement, which provides 
additional context for what is shown. As evidenced by the significant 
effects the image had on the salience measures compared to the text-
only control across the populations participating in FDA's research 
study, the required warning depicts the health consequences of

[[Page 36651]]

secondhand smoke exposure in a manner that has an impact on both 
smokers and potential smokers. Thus, we conclude that the required 
warning effectively conveys the message that exposure to tobacco smoke 
is harmful for children.
    We also note that the comment stating that the image was associated 
with youth reporting that they would be more likely to be smoking 1 
year from now is incorrect. In fact, the image had a statistically 
significant effect on decreasing youth intentions to smoke (see Ref. 49 
at p. 4-4; see also Ref. 50). As stated previously, 71.6 percent of 
youth viewing this image reported that they would not be likely to 
smoke in the next year, compared to 56.9 percent of youth viewing the 
text-only control.
3. ``WARNING: Cigarettes Cause Fatal Lung Disease''
    We selected the image which appears on pages 25 and 26 of the 
document ``Proposed Required Warning Images,'' referred to as 
``healthy/diseased lungs,'' for use with this warning statement.
    In our research study, this image had a significant effect 
(p<0.001) on all the salience measures (emotional reaction scale, 
cognitive reaction scale, and difficult to look at measure) in all 
three study populations (adults, young adults, and youth). The image 
had the numerically largest effects of the images proposed for use with 
this warning statement on the salience measures. As discussed in 
section III.B of this document, these salience impacts are important, 
as the research literature suggests that they are likely to be related 
to behavior change.
    The image also showed some of the largest effect sizes for image 
recall (at baseline and at 1 week follow-up) in adults and youth across 
the images proposed for use with this warning statement.
    We received a number of comments on this image, which we have 
summarized and responded to in the following paragraphs.
    (Comment 67) FDA received a large number of comments supporting the 
use of the image ``healthy/diseased lungs,'' including comments from 
individuals, public health advocacy groups, medical organizations, 
academics, State and local public health agencies, and health care 
professionals. Many comments indicated that this image is the best 
image for use with this warning statement, with one stating that the 
image dramatically depicts a health consequence of smoking, and another 
noting that it was appropriately gripping and compelling.
    Several comments noted that, based on FDA's research results, this 
image is the clear choice among the four images proposed by FDA for use 
with this warning statement. Some comments noted that similar images 
have been used effectively in other countries that require graphic 
health warnings on cigarette packages. One comment noted that this 
image could reach a younger audience, and hopefully prevent them from 
starting to smoke.
    (Response) We selected this image for use with this warning 
statement.
    (Comment 68) As mentioned in section III.C of this document, some 
comments submitted to the docket described the results of scientific 
investigations that the submitters had conducted to examine the 
potential effectiveness of FDA's proposed images on various outcomes. 
This image was discussed in some of these comments. For example, in one 
submitter's study, participants rated this image highly on its ease of 
comprehension. It also induced relatively greater worry and feelings of 
discouragement from wanting to smoke than a text-only control. The 
submitter concluded that this image was the most effective of the 
images proposed for use with this warning statement. Another comment 
also submitted research suggesting that this image was the highest 
rated for potential effectiveness among the set of images proposed for 
use with this warning statement. Another submitter showed that, in a 
survey, respondents rated this image as one of the most effective of 
the 36 proposed images for encouraging smokers to quit smoking. The 
image was also identified in a survey of high school students as one of 
the ``top three'' proposed required warnings (out of 36) in another 
submitter's study.
    (Response) As discussed in section III.C of this document, we 
carefully considered the comments submitted to the docket that 
described the results of studies conducted by the submitters on our 
proposed required warnings. The results summarized in these comments 
are generally supportive of our image selection decisions.
    (Comment 69) FDA also received some comments critical of the image 
``healthy/diseased lungs.'' One comment noted that the image was ``too 
gross to be effective,'' while several comments expressed the opposite 
belief, with some suggesting that the diseased pair of lungs should be 
more damaged.
    (Response) The image ``healthy/diseased lungs'' is an appropriate 
image that effectively conveys the negative health consequences of 
smoking. While, as reflected in the above summary, some comments 
expressed a belief that the image of the diseased lung is ``too gross'' 
and some expressed a belief that the image is too healthy in 
appearance, the image effectively evoked emotional and cognitive 
reactions in viewers in FDA's research study, which in turn suggests 
that the image has the potential to promote greater awareness of the 
health risks of smoking and motivate positive behavioral outcomes, 
including an increased likelihood that smokers will reduce their 
smoking, make an attempt to quit, or quit altogether (Refs. 20, 44, and 
45).
4. ``WARNING: Cigarettes Cause Cancer''
    We selected the image which appears on pages 33 and 34 of the 
document ``Proposed Required Warning Images,'' referred to as 
``cancerous lesion on lip,'' for use with this warning statement.
    In our research study, this image had a significant effect 
(p<0.001) on all the salience measures (emotional reaction scale, 
cognitive reaction scale, and difficult to look at measure) in all 
three study populations (adults, young adults, and youth). The image 
had the numerically largest effects of the images proposed for use with 
this warning statement on the emotional reaction scale and had the 
numerically largest effects on the cognitive reaction scale in young 
adults and youth. As discussed in section III.B of this document, these 
salience impacts are important, as the research literature suggests 
that they are related to behavior change.
    The image also had a significant impact (p<0.05) on beliefs about 
the health risks of smoking for smokers, and a significant impact 
(p<0.01) on beliefs about the health risks of secondhand smoke exposure 
for nonsmokers relative to the text-only control in the adult sample 
that viewed a hypothetical advertisement containing the proposed 
required warning.
    The image also showed some of the largest effect sizes for image 
recall (at baseline and 1 week follow-up) in adults and youth across 
the images proposed for use with this warning statement, though it 
showed lower correct recall of the warning statement compared to the 
control in adults at 1 week follow-up (68.3 percent versus 85.1 
percent). However, recall of the statement was generally high at 1 week 
follow-up among study participants who viewed this image (ranging from 
68.3 percent to 77 percent), and, based on the scientific literature, 
we conclude that repetitive viewing of the required warning is likely 
to increase recall. As explained in section III.C of this document, we 
gave greater weight to

[[Page 36652]]

outcomes on the salience measures than to outcomes on the recall 
measures.
    As is discussed in further detail in section III.E of this 
document, another image proposed for use with this warning statement, 
``deathly ill woman,'' also had significant effects on all the salience 
measures (emotional reaction scale, cognitive reaction scale, and 
difficult to look at measure) in all three samples (adults, young 
adults, and youth). While we agree that this image, similar to the 
selected image of ``cancerous lesion on lip,'' is a very strong image 
that effectively conveys the negative health consequences of smoking, 
we ultimately chose ``cancerous lesion on lip'' for use with this 
warning statement for several reasons.
    First, ``cancerous lesion on lip'' was the only image among the 
images proposed for use with this warning statement that had a positive 
impact on beliefs about the health risks of smoking and secondhand 
smoke exposure in one of the study samples (adults viewing a 
hypothetical advertisement).
    Furthermore, as is stated in several comments (see the following 
paragraphs), the selected image, ``cancerous lesion on lip,'' is likely 
to have particular relevance for youth. As explained in some of these 
comments, the research literature suggests that youth are likely to 
relate to and be susceptible to cigarette warnings depicting the 
negative short-term impacts of smoking on their personal appearance, 
including their lips and teeth (Ref. 53).
    We received a number of comments on this image, which we have 
summarized and responded to in the following paragraphs.
    (Comment 70) FDA received a large number of comments supporting the 
use of the image ``cancerous lesion on lip,'' including comments from 
individuals, public health advocacy groups, a medical organization, 
academics, State and local public health agencies, and health care 
professionals. Several comments suggested that FDA should use this 
image because it has a very high potential to reach consumers and 
positively influence their behavior.
    A few comments also specifically addressed the benefits of using an 
image that shows the public that cigarettes cause oral cancers, noting 
that public awareness of this negative health consequence is low, and 
that many smokers and nonsmokers only relate cigarettes to lung cancer 
(see also section II.C of this document regarding consumers' lack of 
knowledge regarding the health risks of smoking).
    Multiple comments also noted that, based on FDA's research results, 
this image was the best choice among the four images proposed for use 
with this warning statement, significantly outperforming ``white 
cigarette burning'' and ``red cigarette burning,'' and slightly 
outperforming ``deathly ill woman.''
    (Response) We selected this image for use with this warning 
statement.
    (Comment 71) Several comments noted that the image could be 
especially effective with younger audiences and could positively 
influence such audiences by illustrating how the health effects caused 
by smoking negatively affect their physical appearance. The comments 
indicated that adolescents can relate to and will be susceptible to 
this message.
    (Response) We agree with these comments. It is important to include 
content in the required warnings that is relevant to youth. The image 
``cancerous lesion on lip'' has the potential to positively impact 
youth behavior, in addition to adult and young adult behavior.
    (Comment 72) As mentioned in section III.C of this document, some 
comments submitted to the docket described the results of scientific 
investigations that the submitters had conducted to examine the 
potential effectiveness of FDA's proposed images on various outcomes. 
This image was discussed in some of these comments. For example, in one 
submitter's study, participants rated this image highly on its ease of 
comprehension. It also induced relatively greater worry and feelings of 
discouragement from wanting to smoke than a text-only control. The 
submitter concluded that this image, along with ``deathly ill woman,'' 
was one of the most effective of the images proposed for use with this 
warning statement. In addition, this image was rated as the most 
effective of the 36 proposed images in another submitter's survey of 
comparative effectiveness of the images in helping smokers quit. It was 
also the highest rated image among the set of images proposed by FDA 
for use with this warning statement in another submitter's study of the 
potential effectiveness of the images, and was identified by high 
school students as one of the ``top three'' proposed required warnings 
(out of 36) in another submitter's study.
    (Response) As discussed in section III.C of this document, we 
carefully considered the comments submitted to the docket that 
described the results of studies conducted by the submitters on our 
proposed required warnings. The results summarized in these comments 
are generally supportive of our image selection decisions.
    (Comment 73) FDA also received some comments critical of the image 
``cancerous lesion on lip.'' Two comments indicated that the image was 
``too gross'' to be effective, while another comment stated that it 
borders on the offensive. In contrast, some comments suggested that the 
image should be more graphic. Another comment suggested that oral 
cancer was an odd choice of cancers to depict in the graphic warning.
    (Response) We disagree with these comments. With respect to the 
comments stating that the image was ``too gross'' or that it was 
offensive, the research literature indicates that images that evoke 
strong emotional reactions can promote greater awareness and better 
recollection of the health risks of smoking and can increase the 
likelihood smokers will reduce their smoking, make an attempt to quit, 
or quit altogether (Refs. 20, 44, and 45).
    With respect to the suggestion that the image is not graphic 
enough, as discussed previously, this image had a highly significant 
effect (p<0.001) on all the salience measures (emotional reaction 
scale, cognitive reaction scale, and difficult to look at measure) in 
all three study populations (adults, young adults, and youth), which in 
turn suggests that the image has the potential to motivate positive 
behavior change (Id.).
    Furthermore, the choice of cancers depicted in the required warning 
is appropriate, and will help inform the public that cigarettes cause 
oral cancers, and thus increase public awareness of the negative health 
consequences of smoking.
5. ``WARNING: Cigarettes Cause Strokes and Heart Disease''
    We selected the image which appears on pages 39 and 40 of the 
document ``Proposed Required Warning Images,'' referred to as ``oxygen 
mask on man's face,'' for use with this warning statement.
    In our research study, this image had a significant effect 
(p<0.001) on all the salience measures (emotional reaction scale, 
cognitive reaction scale, and difficult to look at measure) in all 
three study populations (adults, young adults, and youth). The image 
had the numerically largest effects of the images proposed for use with 
this warning statement on the emotional reaction scale and the 
difficult to look at measure in all the study populations. These 
impacts are important, as the research literature suggests that graphic 
warnings that evoke responses of this kind are

[[Page 36653]]

likely to increase awareness of the health risks of smoking and 
increase the likelihood that smokers will reduce their smoking, make an 
attempt to quit, or quit altogether (Refs. 20, 44, and 45).
    The image also showed some of the largest effect sizes for image 
recall (at baseline and 1 week follow-up) in adults and youth across 
the images proposed for use with this warning statement.
    We received a number of comments on this image, which we have 
summarized and responded to in the following paragraphs.
    (Comment 74) FDA received a large number of comments supporting the 
use of the image ``oxygen mask on man's face,'' including comments from 
individuals, medical organizations, public health advocacy groups, 
health care professionals, State public health agencies, and academics. 
Many of these comments indicated that this image is the best image for 
use with this warning statement, while some also noted that the image 
will make smokers think twice about continuing to smoke. Some comments 
also noted that the image is beneficial in that it will inform the 
public of negative consequences of smoking aside from lung disease.
    Some comments also noted that, based on FDA's research results, 
this image was the best choice for use with this warning statement, 
noting that it elicited the highest scores on the emotional reaction 
scale of the images tested for use with this statement in FDA's 
research study.
    (Response) We selected this image for use with this warning 
statement.
    (Comment 75) As described in section III.C of this document, some 
comments submitted to the docket described the results of scientific 
investigations that the submitters had conducted to examine the 
potential effectiveness of FDA's proposed images on various outcomes. 
This image was discussed in some of these comments. For example, in one 
submitter's study, participants rated this image highly on its ease of 
comprehension. It also induced relatively greater worry and feelings of 
discouragement from wanting to smoke than a text-only control. The 
submitter concluded that this image was the most effective of the 
images proposed for use with this warning statement. In another 
submitter's study, this image was the highest-rated of the FDA-proposed 
images for use with this warning statement; however, this study also 
evaluated two images used with similar warning statements in other 
countries (one of open heart surgery, one of a bloody brain), and noted 
that they rated higher than FDA's proposed images.
    (Response) As discussed in section III.C of this document, we 
carefully considered the comments submitted to the docket that 
described the results of studies conducted by the submitters on our 
proposed required warnings. The results summarized in these comments 
are generally supportive of our image selection decisions.
    (Comment 76) FDA also received some comments critical of the image 
``oxygen mask on man's face.'' One comment noted that the image was 
``too gross to be effective,'' and one comment stated that the image 
should feature a younger person to highlight the fact that heart 
attacks and stroke can occur in young smokers as well as in older 
smokers.
    (Response) The image ``oxygen mask on man's face'' is an 
appropriate image that effectively conveys the negative health 
consequences of smoking. We do not agree with the statement that the 
image is ``too gross to be effective;'' the image effectively elicited 
emotional and cognitive reactions in viewers in our research study, 
which in turn suggests that the image has the potential to promote 
greater awareness of the health risks of smoking and motivate positive 
behavioral outcomes, including an increased likelihood that smokers 
will reduce their smoking, make an attempt to quit, or quit altogether 
(Refs. 20, 44, and 45).
    While we agree with the statement in the comment that heart disease 
and strokes can occur in young smokers as well as in older smokers, the 
selected required warning will effectively communicate with a range of 
audiences, including consumers of different ages. As described 
previously, ``oxygen mask on man's face'' had a significant effect 
(p<0.001) on all the salience measures (emotion measures, cognition 
measures, and difficult to look at measure) in all three study 
populations (adults, young adults, and youth). We considered the 
variety and diversity reflected in the images in making selection 
decisions, and took into account the importance of selecting a set of 
required warnings that includes a diversity of styles (e.g., 
photographic versus illustrative), themes, and human images (e.g., 
race, gender, age). While the person shown in this image is an older 
man, some of the images show younger people. Overall, the nine selected 
required warnings will effectively communicate to a wide range of 
consumers, including both young and older smokers.
6. ``WARNING: Smoking During Pregnancy Can Harm Your Baby''
    We selected the image which appears on pages 45 and 46 of the 
document ``Proposed Required Warning Images,'' referred to as ``baby in 
incubator,'' for use with this warning statement.
    In our research study, this image had a significant effect 
(p<0.001) on all the salience measures (emotional reaction scale, 
cognitive reaction scale, and difficult to look at measure) in all 
three study populations (adults, young adults, and youth). The image 
had the numerically largest effects of the images proposed for use with 
this warning statement on the salience measures. As discussed in 
section III.B of this document, these salience impacts are important, 
as the research literature suggests that they are likely to be related 
to behavior change.
    The image had a significant effect (p<0.01) on recall of the 
warning statement at baseline compared to the text-only control in 
youth. The image also had a significant effect (p<0.05) on statement 
recall at follow-up in young adults, and showed the largest effect 
sizes for image recall (at baseline and 1 week follow-up) in adults and 
youth across the images proposed for use with this warning statement.
    The image had a significant impact (p<0.05) on beliefs about the 
health risks of smoking for smokers in adults, although it had a 
negative significant impact (p<0.05) on beliefs about the health risks 
of smoking for smokers in youth. Thus, the results on this beliefs 
measure were mixed for ``baby in incubator.'' However, given the 
strength of the effects observed for this image on the salience 
measures, the required warning that includes the ``baby in incubator'' 
image is likely to increase awareness of the health risks of smoking 
and increase the likelihood that smokers will reduce their smoking, 
make an attempt to quit, or quit altogether (Refs. 20, 44, and 45).
    We received a number of comments on this image, which we have 
summarized and responded to in the following paragraphs.
    (Comment 77) FDA received a number of comments supporting the use 
of the image ``baby in incubator,'' including comments from 
individuals, a community organization, a public health advocacy group, 
health care professionals, a State public health agency, and academics. 
Several of these comments indicated that this image is the best image 
for use with this warning statement, with some noting that the image 
effectively shows how smoking during pregnancy can damage a baby's 
health. One comment noted that the image could stimulate discussion 
about how smoking affects pregnancy among youth.

[[Page 36654]]

    One comment also noted that the image ``baby in incubator'' 
outperformed the other image proposed for use with this warning 
statement in FDA's research study on the key criteria that have proven 
most meaningful.
    (Response) We selected this image for use with this warning 
statement.
    (Comment 78) As described in section III.C of this document, some 
comments submitted to the docket described the results of scientific 
investigations that the submitters had conducted to examine the 
potential effectiveness of FDA's proposed images on various outcomes. 
This image was discussed in some of these comments. For example, in one 
submitter's study, participants rated this image highly on its ease of 
comprehension. It also induced relatively greater worry and feelings of 
discouragement from wanting to smoke than a text-only control. The 
submitter concluded that this image was the most effective of the 
images proposed for use with this warning statement. However, in 
another submitter's study, this image was evaluated against images used 
in other countries, one of which was very similar in composition to 
``baby in incubator'' but which was a photograph rather than a graphic 
illustration. In that submitter's study, the photographic image was 
rated significantly higher than ``baby in incubator.''
    (Response) As discussed in section III.C of this document, we 
carefully considered the comments submitted to the docket that 
described the results of studies conducted by the submitters on our 
proposed required warnings. The results summarized in these comments 
are generally supportive of our image selection decisions.
    (Comment 79) FDA also received a number of comments critical of the 
image ``baby in incubator.'' The majority of these comments objected to 
the graphic illustration style used for the image, with some submitters 
approving of the concept but stating that a photograph would be more 
impactful, and some indicating that the style is inappropriate, either 
because it downplays the seriousness of the risk described in the 
required warning or because it would inappropriately appeal to youth 
without discouraging them from smoking.
    Some comments indicated that the lettering style used in the image 
was difficult to read, and one comment stated that the results from 
FDA's research study for this image, while better than the results for 
the other image proposed for use with this warning statement 
(``pacifier & ashtray''), were not compelling.
    One comment stated that the image bordered on the offensive.
    (Response) The image ``baby in incubator'' is an appropriate image 
that effectively conveys the negative health consequences of smoking. 
As discussed in section III.C of this document, we are aware that many 
comments received in the docket expressed concern about the use of 
graphic illustration style images and expressed a belief that this 
style was not strong enough to elicit appropriate reactions. However, 
as discussed in section III.C of this document, we disagree with the 
contention that the use of graphic illustration style images is 
categorically inappropriate. As the results from our research study 
demonstrate, the ``baby in incubator'' image effectively elicited 
emotional and cognitive reactions, showing a highly significant effect 
(p<0.001) on these measures in all study populations, which in turn 
suggests that the image has the potential to promote greater awareness 
of the health risks of smoking and motivate positive behavioral 
outcomes, including an increased likelihood that smokers will reduce 
their smoking, make an attempt to quit, or quit altogether (Refs. 20, 
44, and 45).
    In addition, based on the study results, we also do not agree that 
the image is inappropriately offensive or that our research results for 
this image are not compelling. Based on the overall feedback received, 
we also disagree that the text in the proposed warning is difficult to 
read.
7. ``WARNING: Smoking Can Kill you''
    We selected the image which appears on pages 49 and 50 of the 
document ``Proposed Required Warning Images,'' referred to as ``man 
with chest staples,'' for use with this warning statement.
    In our research study, this image had a significant effect 
(p<0.001) on all the salience measures (emotional reaction scale, 
cognitive reaction scale, and difficult to look at measure) in all 
three study populations (adults, young adults, and youth). The image 
had the numerically largest effects of the images proposed for use with 
this warning statement on the salience measures. As discussed in 
section III.B of this document, these salience impacts are important, 
as the research literature suggests that they are likely to be related 
to behavior change.
    The image was also associated with higher intentions to quit 
smoking compared to the text-only control (p<0.05) in adults.
    The proposed required warning featuring the ``man with chest 
staples'' image showed some of the largest effect sizes for image 
recall among the images proposed for this warning statement at baseline 
in all study populations and at 1 week follow-up in young adults and 
youth.
    Young adults viewing the image had significantly lower recall of 
the warning statement than those viewing the text-only control at 
baseline (76.2 percent versus 92.3 percent) and 1 week follow-up (78.9 
percent versus 91.3 percent). However, recall of the statement was 
generally high at baseline and follow-up among study participants who 
viewed this image (ranging from 76.2 percent to 90.4 percent), and 
repetitive viewing of the required warning is likely to increase 
recall. As explained in section III.C of this document, we gave greater 
weight to outcomes on the salience measures than to outcomes on the 
recall measures.
    We received a number of comments on this image, which we have 
summarized and responded to in the following paragraphs.
    (Comment 80) FDA received a large number of comments supporting the 
use of the image ``man with chest staples,'' including comments from 
individuals (including former smokers), public health advocacy groups, 
medical organizations, health care professionals, State and local 
public health agencies, and academics. Many of these comments indicated 
that this image is the best image for use with this warning statement, 
while some also noted that the image is appropriately attention-
grabbing or powerful and that it will make smokers think twice about 
continuing to smoke, or help them smoke less. Some comments also noted 
that the image is an excellent way of driving home the message that 
smoking can kill you. One comment stated that the image is a strong, 
solid concept that has been used effectively in other countries that 
require graphic health warnings on cigarette packages.
    Some comments stated that, based on FDA's research results, this 
image is the best choice for use with this warning statement, noting 
that it elicited the highest scores on the emotional reaction scale of 
the images tested for use with this statement in FDA's research study, 
and had other positive results.
    (Response) We selected this image for use with this warning 
statement.
    (Comment 81) As described in section III.C of this document, some 
comments submitted to the docket described the results of scientific 
investigations that the submitters had conducted to examine the 
potential effectiveness of FDA's proposed images on various outcomes. 
This image was discussed in some of these comments. For example,

[[Page 36655]]

in one submitter's study, participants rated this image highly on its 
ease of comprehension. It also induced relatively greater worry and 
feelings of discouragement from wanting to smoke than a text-only 
control. In another submitter's study, it was noted that, based on 
respondents' rating and ranking of this image's effectiveness, the 
image clearly stands out as the highest rated of the images FDA 
proposed for use with this warning statement.
    (Response) As discussed in section III.C of this document, we 
carefully considered the comments submitted to the docket that 
described the results of studies conducted by the submitters on our 
proposed required warnings. The results summarized in these comments 
are generally supportive of our image selection decisions.
    (Comment 82) FDA also received some comments critical of the image 
``man with chest staples.'' One comment stated that the image was ``too 
gross to be effective,'' while another stated the image ``offend[s] 
against human dignity.'' A few comments suggested that the person in 
the image should look worse (e.g., paler, weaker, thinner, like he had 
suffered more), and some comments suggested the person's death should 
be more clearly tied to smoking by the image. One comment indicated 
that persons unfamiliar with an autopsy may not understand the image.
    (Response) The image ``man with chest staples'' is an appropriate 
image that effectively conveys the negative health consequences of 
smoking. We do not agree that the image ``is too gross to be 
effective'' or that it ``offend[s] against human dignity;'' the image 
shows a realistic outcome of the negative health consequences caused by 
smoking, and effectively elicited emotional and cognitive reactions in 
viewers in our research study. This in turn suggests that the image has 
the potential to promote greater awareness of the health risks of 
smoking and motivate positive behavioral outcomes, including an 
increased likelihood that smokers will reduce their smoking, make an 
attempt to quit, or quit altogether (Refs. 20, 44, and 45).
    Viewers will understand that the image shows someone who has died 
from a smoking-related cause. Although we agree that not all viewers 
will necessarily be familiar with an autopsy scar, it is important to 
keep in mind that the image is not used in isolation, but accompanies 
the textual warning statement, which provides additional context for 
what is shown. The results observed in our research study suggest that 
viewers from all age groups understood and reacted to this image in 
desirable ways. The figure shown is appropriate; although some of the 
negative health consequences of smoking may lead to the effects on 
appearance suggested in the comments (e.g., significant disease-related 
weight loss), other consequences, such as heart attacks, can kill 
smokers without first causing these effects.
8. ``WARNING: Tobacco Smoke Causes Fatal Lung Disease in Nonsmokers''
    We selected the image which appears on pages 57 and 58 of the 
document ``Proposed Required Warning Images,'' referred to as ``woman 
crying,'' for use with this warning statement.
    In our research study, this image had a significant effect 
(p<0.001) on the emotional reaction scale in all three study 
populations (adults, young adults, and youth). It also showed 
significant effects on the difficult to look at measure in all study 
populations (adults (p<0.01), young adults (p<0.001), and youth 
(p<0.001)), and significant effects on the cognitive reaction scale in 
all study populations (adults (p<0.05), young adults (p<0.001), and 
youth (p<0.001)). This image was the only image proposed for use with 
this warning statement that showed significant effects on all the 
salience measures in our research study.
    The image also had a significant impact (p<0.05) on beliefs about 
the health risks of smoking for smokers in young adults.
    The proposed required warning that included this image also showed 
the largest effect sizes for image recall (at baseline and 1 week 
follow-up) in adults, young adults, and youth across the images 
proposed for this warning statement. Youth viewing the image had 
significantly lower recall of the warning statement than those viewing 
the text-only control at baseline (52.4 percent versus 68.9 percent). 
However, recall of the statement was generally high among study 
participants who viewed this image, and repetitive viewing of the 
required warning is likely to increase recall. As explained in section 
III.C of this document, we gave greater weight to outcomes on the 
salience measures than to outcomes on the recall measures.
    FDA received a number of comments on this image, which the Agency 
has summarized and responded to in the following paragraphs.
    (Comment 83) FDA received several comments supporting the use of 
the image ``woman crying,'' including comments from individuals 
(including former smokers) and public health advocacy groups. Some of 
these comments indicated that this image is the best image of the ones 
proposed for use with this warning statement. One comment stated that 
the image stood out as particularly effective among the proposed 
required warnings because it shows the devastating effects secondhand 
smoke can have on people who have tried to protect themselves by not 
smoking, and indicated that the image will remind smokers that they are 
harming their loved ones and others around them as well as themselves. 
Others noted that the image sends a powerful message.
    One comment indicated that the image outperformed the other images 
proposed for use with this warning statement on the emotional reaction 
scale and the difficult to look at measure in FDA's research, and noted 
that it appears to be a cut above the other images.
    (Response) We selected this image for use with this warning 
statement.
    (Comment 84) One comment approved of the diversity reflected in the 
image (which shows an African-American woman).
    (Response) We agree that it is beneficial to have a diverse set of 
images that communicate with a wide range of audiences, including a 
variety of population subgroups. In order to ensure that the final set 
of required warnings effectively communicates risk information to a 
diverse range of audiences, we selected a set of nine required 
warnings, including the image ``woman crying,'' that includes a variety 
of human images that are broadly representative of the overall 
population.
    (Comment 85) As described in section III.C of this document, some 
comments submitted to the docket described the results of scientific 
investigations that the submitters had conducted to examine the 
potential effectiveness of FDA's proposed images on various outcomes. 
This image was discussed in some of these comments. For example, this 
image induced relatively greater worry and led to higher ratings of 
feeling discouraged from wanting to smoke than a text-only control in 
one submitter's study.
    (Response) As discussed in section III.C of this document, we 
carefully considered the comments submitted to the docket that 
described the results of studies conducted by the submitters on our 
proposed required warnings. The results summarized in these comments 
are generally supportive of our image selection decisions.
    (Comment 86) FDA also received some comments critical of the image 
``woman crying.'' One comment indicated that the image borders on the

[[Page 36656]]

offensive, while another stated it is too sensational to be effective.
    Other comments suggested that the image did not directly portray a 
health consequence of secondhand smoke, or that the image is not 
clearly tied to secondhand smoke. One comment also suggested that the 
image should not be used because it did not have an impact on beliefs 
about the health harms of secondhand smoke or on quit intentions in 
FDA's research study.
    (Response) We disagree with these comments. The image ``woman 
crying'' is an appropriate image that effectively conveys the negative 
health consequences of smoking. We do not agree that the image is 
offensive or too sensational; the image is a realistic portrayal of how 
the negative health consequences caused by exposure to secondhand smoke 
can affect people. It effectively elicited emotional and cognitive 
reactions in those who viewed it in our research study, which in turn 
suggests that the image has the potential to promote greater awareness 
of the health risks of smoking and motivate positive behavioral 
outcomes, including an increased likelihood that smokers will reduce 
their smoking, make an attempt to quit, or quit altogether (Refs. 20, 
44, and 45).
    We do not agree that the image does not depict a health consequence 
of secondhand smoke. Graphic depictions of the visible effects of 
disease are not the only way of communicating the health risks of 
secondhand smoke exposure (see Ref. 11). The negative health 
consequences caused by secondhand smoke exposure, including fatal lung 
disease, have many dimensions, including emotional suffering. This 
image highlights that dimension. Furthermore, it is important to keep 
in mind that the image is not used in isolation, but accompanies the 
textual warning statement, which provides additional context for what 
is shown. As evidenced by the image's significant impact on the 
salience measures across the populations participating in our research 
study, the proposed required warning effectively depicts the health 
consequences of secondhand smoke exposure, including the suffering 
endured by those experiencing these health consequences.
9. ``WARNING: Quitting Smoking Now Greatly Reduces Serious Risks to 
Your Health''
    We selected the image which appears on pages 67 and 68 of the 
document ``Proposed Required Warning Images,'' referred to as ``man I 
Quit t-shirt,'' for use with this warning statement.
    In our research study, the image had a statistically significant 
effect on the emotional reaction scale in young adults (p<0.05), and on 
the cognitive reaction scale in adults (p<0.05), young adults (p<0.01), 
and youth (p<0.001).
    The proposed required warning that included this image also showed 
the largest effect sizes for image recall (at baseline and 1 week 
follow-up) in adults, young adults, and youth across the images 
proposed for this warning statement.
    Although this image, along with the other images proposed for use 
with this warning statement, did not elicit the magnitude of reactions 
on the salience measures (emotional reaction scale, cognitive reaction 
scale, difficult to look at measure) that some of the images proposed 
for use with other warning statements did, this is likely a result of 
the information being conveyed in the warning statement, which 
emphasizes the positive health benefits of quitting smoking. The 
content of this required warning is not expected to arouse the same 
level of response on some of the salience measures as the other 
messages.
    However, the research literature suggests that warnings that focus 
on the benefits of quitting are effective at encouraging cessation, and 
suggests that positive, self-efficacy messages can be used effectively 
as one component of graphic health warnings to increase smokers' 
motivations and confidence about quitting (Ref. 40 at pp. 35, 39-41). 
The research literature also highlights the importance of including one 
or more warnings that provide solutions, such as the ``man I Quit t-
shirt'' required warning, in a set of warnings conveying the negative 
health consequences of smoking. Specifically, the literature recommends 
that, in addition to communicating the health risks of smoking, some 
warnings should also provide information on how to avoid these risks 
(i.e., by quitting), in order to optimize the effectiveness of the 
overall set of warning messages (see Ref. 48 and Ref. 40 at p. 37).
    As is discussed in further detail in section III.E of this 
document, another image proposed for use with this warning statement, 
``cigarettes in toilet bowl,'' also had significant effects on the 
emotional reaction scale in some study populations and on the cognitive 
reaction scale, as well as showing positive effects on other study 
measures. While this image, similar to the selected image (``man I Quit 
t-shirt''), could be effectively used with this warning statement, we 
ultimately selected ``man I Quit t-shirt'' for use with this warning 
statement based on a consideration of multiple factors, including the 
feedback received in the docket, which is discussed in the comment 
summaries in the following paragraphs and in section III.E of this 
document.
    Furthermore, as noted in section III.A of this document, in order 
to ensure that the final set of required warnings effectively 
communicates risk information to a diverse range of audiences, we 
selected a set of nine required warnings, including the image ``man I 
Quit t-shirt,'' that includes a variety of human images that are 
broadly representative of the overall population. The image ``man I 
Quit t-shirt'' contributes to the variety seen in the final set of 
images by picturing a man who is younger than the men in the other 
required warning images. Additionally, as reflected in the comment 
summary, the man shown in the image is perceived by many viewers as 
strong and ``macho,'' suggesting that the image has the potential to 
reach and effectively communicate with a demographic group that has 
been heavily targeted by tobacco industry cigarette advertising (see 
Ref. 54 at p. 151). The depiction of men as strong, powerful, macho, 
rugged, and independent, and the association of these characteristics 
with cigarette brands, has long been a prominent theme in tobacco 
industry advertising (Id. at p. 151), and targeted marketing efforts by 
the tobacco industry have led to greater smoking uptake and lower 
cessation rates in targeted subgroups (Id. at p. 211).
    We received a number of comments on this image, which we have 
summarized and responded to in the following paragraphs.
    (Comment 87) FDA received a number of comments supporting the use 
of the image ``man I Quit t-shirt,'' including comments from 
individuals, public health advocacy groups, medical organizations, and 
State and local public health agencies. Many of these comments 
indicated that this image is the best image of the ones proposed for 
use with this warning statement. Several of the comments discussed 
specific favorable aspects of the image or potential effects of the 
image, including that the image models a positive behavior, is 
compelling, and that it will encourage others to quit. Several comments 
believed that the image could reach a critical demographic group by 
showing a younger, ``cool,'' ``macho'' man and suggesting that it is 
manly and/or cool to quit smoking. Some comments also suggested that 
the image is positive in that it shows that quitting is a heroic 
decision.
    (Response) We selected this image for use with this warning 
statement.

[[Page 36657]]

    (Comment 88) As described in section III.C of this document, some 
comments submitted to the docket described the results of scientific 
investigations that the submitters had conducted to examine the 
potential effectiveness of FDA's proposed images on various outcomes. 
This image was discussed in some of these comments. In one submitter's 
study, the image ``man I Quit T-shirt'' was the highest rated of the 
images proposed by FDA for use with this warning statement among 
adults. This study also tested a version of the required warning that 
had been manipulated to add a quitline number; this version was rated 
and ranked as the most effective warning overall among study 
participants. In another submitter's study, this image was rated highly 
on its ease of comprehension, but led to lower worry relative to a 
text-only control (but as the researcher noted, the message in this 
warning is reassuring: ``Quitting smoking now greatly reduces serious 
risks to your health'').
    (Response) As discussed in section III.C of this document, we 
carefully considered the comments submitted to the docket that 
described the results of studies conducted by the submitters on our 
proposed required warnings. The results summarized in these comments 
are generally supportive of our image selection decisions.
    (Comment 89) FDA also received some comments critical of the image 
``man I Quit t-shirt.'' Some comments indicated that the image does not 
convey a health consequence of smoking, while one indicated that the 
text was difficult to read. One comment also noted that the image 
failed to show an effect on some measures in FDA's research study, and 
another indicated that the image is banal.
    (Response) We disagree with these comments. The image ``man I Quit 
t-shirt'' is an appropriate image. Consumers can be educated about the 
negative health consequences of smoking in a variety of ways. While the 
other required warnings discuss and portray the consequences of 
starting or continuing to smoke (which has been shown to be one 
effective way to educate consumers), another method of increasing 
awareness and knowledge about the negative consequences of a behavior 
is to disseminate messages that discuss the positive health benefits of 
refraining from a behavior (Ref. 55). Studies attest to the potential 
effectiveness of warnings that adopt such an approach (Ref. 40 at p. 
35). Accordingly, the warning statement used in this required warning, 
``Quitting smoking now greatly reduces serious risks to your health,'' 
is framed in a positive manner, discussing the health benefits of 
ceasing to smoke, and the image is consistent with this text. This 
required warning, particularly as part of the overall set of required 
warnings, will help educate consumers about the negative health 
consequences of smoking and help encourage positive behavior (see Ref. 
40 at pp. 35 and 40).
    Based on the overall feedback received and the results from our 
research study, we also disagree that the text in the proposed warning 
is difficult to read or that the image is banal.
10. Image for Advertisements With a Small Surface Area
    In addition to proposing 36 required warnings for use on cigarette 
packages and in cigarette advertisements in the NPRM, we also proposed 
two other color graphics for use solely in advertisements with a small 
surface area of less than 12 square inches (75 FR 69524 at 69539). As 
we explained in the NPRM, these two proposed color graphics differ in 
their composition from the other proposed images in that the details of 
these two color graphics should be clear, conspicuous, and legible even 
when the image is reduced in size to occupy 20 percent of a surface 
with an area of less than 12 square inches (75 FR 69524 at 69535). We 
proposed that whichever of these options was selected would be used in 
combination with one of the nine textual statements only in 
advertisements with a small surface area (i.e., less than 12 square 
inches). However, as we noted in the NPRM, even an advertisement with a 
relatively small surface area would need to be large enough so that the 
required graphic and accompanying textual warning statement are clear, 
conspicuous, and legible (75 FR 69524 at 69539).
    We selected the image which appears on page 75 of the document 
entitled ``Proposed Required Warning Images'' for use with the textual 
warning statements solely in advertisements with a small surface area 
(defined as less than 12 square inches). This image depicts a black 
exclamation mark enclosed within a red equilateral triangle.
    As stated previously, FDA proposed two images for use solely with 
the textual warning statements in advertisements with a small surface 
area; the selected image described in the previous paragraph and an 
image of a burning cigarette enclosed in a red circle with a red bar 
across it. We did not receive any comments on either of the proposed 
images.
    Versions of both of these images have been used in other contexts. 
For example, the image of an exclamation mark enclosed within a 
triangle is often used to draw attention to a warning of danger or 
hazards that could result in personal injury or a threat to health 
(see, e.g., 16 CFR 1211.15, 16 CFR 1407.3; 16 CFR 1500.19; and Ref. 
56). The image of a burning cigarette enclosed in a red circle with a 
red bar across it is the international ``No Smoking'' symbol (Ref. 56) 
and is often used on signs and placards to denote an area where smoking 
is prohibited (see, e.g., 14 CFR 23.853, 49 CFR 374.201).
    In light of the other contexts in which the two proposed images are 
used, we selected the image of the exclamation mark enclosed within a 
red equilateral triangle, as we believe this image is more appropriate 
than the other proposed image for use in the required warnings. As 
stated, this image is commonly used to draw attention to a warning of 
danger which could result in personal injury or a threat to health, 
which is consistent with its purpose in cigarette advertisements with a 
small surface area. Many consumers have likely been exposed to similar 
symbols in other contexts and, as a result, are likely to recognize and 
understand that the image is drawing attention to a warning of a threat 
to health.

E. Non-Selected Images

    This section discusses the 27 color graphic images that we proposed 
but have not selected for use at this time, and the factors that 
influenced the decision not to use each image, including the research 
results for the images, the comments received in the docket, and the 
relevant scientific literature.
    Consistent with the discussion of selected images in section III.D 
of this document, the images are referred to in this section by the 
pages on which they appear in the ``Proposed Required Warning Images'' 
document and by the descriptive names used in the study report (Ref. 
49, study report) summarizing the results of FDA's research study.
1. ``WARNING: Cigarettes Are Addictive''
    As discussed in section III.D of this document, we selected the 
image ``hole in throat'' for use with the statement, ``WARNING: 
Cigarettes are addictive.'' We proposed three other images for use with 
this statement: ``cigarette injection,'' which appears on pages 3 and 4 
of the document ``Proposed Required Warning Images;'' ``red puppet,'' 
which appears on pages 5 and

[[Page 36658]]

6 of the document ``Proposed Required Warning Images;'' and ``woman in 
rain,'' which appears on pages 7 and 8 of the document ``Proposed 
Required Warning Images.''
    Cigarette Injection. The image ``cigarette injection'' had strong 
overall research results in FDA's research study, including significant 
effects on the emotional and cognitive reaction scales in all three 
study populations and significant effects on the difficult to look at 
measure in adults and young adults. It also showed higher correct 
recall of the warning statement compared to the control in adults and 
young adults at baseline, and was associated with higher intentions to 
quit compared to the control for young adults. The image also had a 
positive significant impact on adult beliefs about the health risks of 
smoking for smokers in adults viewing the hypothetical cigarette 
package with the proposed required warning, although it had a negative 
significant impact on this same measure in adults viewing the 
hypothetical cigarette advertisement featuring this proposed required 
warning.
    The image selected for use with this warning statement, ``hole in 
throat,'' had numerically larger effects than this image (``cigarette 
injection'') on the salience measures (emotional and cognitive reaction 
scales, difficult to look at measure) in all three study populations. 
As discussed in section III.B of this document, the research literature 
suggests that the salience measures used in FDA's study are likely to 
be related to behavior change.
    In addition, the selected image, ``hole in throat,'' enhanced the 
diversity of the overall set of selected images by helping ensure the 
human images broadly represent the U.S. population. Although 
``cigarette injection'' offered variety in terms of style in that it 
uses a graphic illustration style as opposed to the photographic style 
used in most of the selected images, this style is incorporated in the 
final set of required warnings with the image used for the warning 
statement ``Smoking during pregnancy can harm your baby.''
    FDA received a number of comments on this image, which the Agency 
has summarized and responded to in the following paragraphs.
    (Comment 90) FDA received several comments that supported the use 
of the image ``cigarette injection,'' including comments from 
individuals, public health advocacy groups, and a State public health 
agency. Some of the comments stated that the image would be an 
effective smoking deterrent. Several of the comments noted that the 
image would help smokers understand that, although cigarettes are legal 
products, they are just as addictive as illegal drugs like heroin. One 
comment indicated that the image would be particularly effective with 
underage smokers.
    FDA also received several comments that opposed the use of the 
image ``cigarette injection.'' Many of these comments objected to the 
graphic illustration style used in the image, with some stating it 
would be ineffective or less effective than a photographic image, and 
some indicating it would detract from the seriousness of the message 
being conveyed. Some comments also expressed concern that the style 
would inappropriately appeal to youth without deterring them from 
smoking.
    A few comments also objected to the comparison of legal cigarette 
products with illegal drugs, with one comment indicating this 
downplayed the seriousness of intravenous drug use, and another comment 
noting that the analogy of cigarette use to heroin use could cause 
consumers to discount the message if they believe that cigarette and 
heroin use are not comparable.
    Some comments also stated that the image could be misunderstood or 
was too abstract, and one comment stated that the image does not 
illustrate adverse health effects.
    One comment noted that the proposed required warning featuring the 
``cigarette injection'' image was not rated highly on its ease of 
comprehension in a research study the submitter conducted on the 36 
proposed required warnings, though it did show a significant effect on 
worry and feeling discouraged from wanting to smoke relative to a text-
only control.
    (Response) We are not selecting this image for use in a required 
warning and instead have selected the image ``hole in throat'' for the 
reasons given in section III.D of this document.
    Red puppet. In FDA's research study, the image ``red puppet'' had 
significant effects on the emotional and cognitive reaction scales in 
all three study populations. It also showed higher correct recall of 
the warning statement compared to the control in young adults at 1 week 
follow-up.
    However, the selected image, ``hole in throat,'' had numerically 
larger effects than this image on the salience measures (emotional 
reaction scale, cognitive reaction scale, difficult to look at measure) 
in all three study populations. In addition, looking across the 
different measures used in the research study, both the image ``hole in 
throat'' and the image ``cigarette injection'' had stronger overall 
research results than this image.
    FDA received a number of comments on this image, which the Agency 
has summarized and responded to in the following paragraphs.
    (Comment 91) FDA received several comments that supported the use 
of the image ``red puppet,'' including comments from individuals, a 
public health advocacy group, and from State and local public health 
agencies. Some of the comments stated that the image is likely to be 
effective, and one stated that it would impact underage smokers. 
Another noted that it was a clever image.
    FDA also received several comments that opposed the use of the 
image ``red puppet.'' Some of these comments stated that the image 
style was less effective than a photographic image. One comment 
expressed concern that the style would inappropriately appeal to youth 
without deterring them from smoking.
    Several comments expressed concern that the image would not be 
understood by some consumers, including youth and some racial and 
ethnic minorities, who might not understand and identify with the 
picture of a marionette, or draw the analogy between the manipulation 
suggested by the image of the puppet and addiction.
    A few comments stated the image does not convey a health 
consequence of smoking, while one comment stated that the results from 
FDA's research study for this image did not support its selection from 
among the images proposed for use with this warning statement.
    Three comments noted that the proposed required warning featuring 
the ``red puppet'' image was not highly rated in research studies 
conducted by the submitters. One comment noted that the image did not 
increase worry relative to a text-only label or discourage respondents 
from smoking relative to a text-only label in the submitter's study, 
while two others noted that the image was ranked as one of the least 
effective of the proposed images by respondents in the submitters' 
studies.
    (Response) We are not selecting this image for use in a required 
warning and instead have selected the image ``hole in throat'' for the 
reasons given in section III.D of this document.
    Woman in rain. In FDA's research study, the image ``woman in rain'' 
had a significant effect on the difficult to look at measure in adults 
and young adults. The image also had a significant impact on adult 
beliefs about the health risks of smoking for smokers compared to the 
control.

[[Page 36659]]

    Looking across the different measures used in FDA's research study, 
this image was relatively less effective than other images proposed for 
this warning statement, including the image selected for use in the 
required warnings ``hole in throat.''
    FDA received a number of comments on this image, which the Agency 
has summarized and responded to in the following paragraphs.
    (Comment 92) FDA received multiple comments that supported the use 
of the image ``woman in rain,'' including comments from individuals, a 
community organization, and a State public health agency. Some of the 
comments stated that the image is likely to be effective, and one 
stated that smokers would be able to relate to the image.
    FDA also received a number of comments that opposed the use of the 
image ``woman in rain.'' Some of these comments stated that the image 
would not be effective and is not emotionally arousing, while some 
stated that it shows a very weak harm (i.e., standing in the rain). 
Another comment stated that the image makes smoking seem like a normal 
behavior.
    Several comments expressed concern that the image would not be 
understood by consumers, indicating it was too vague in nature and 
requires a high analytical ability to understand.
    Several comments stated the image does not convey a health 
consequence of smoking, while three comments stated that the results 
from FDA's research study for this image did not support its selection 
from among the images proposed for use with this warning statement.
    Two comments noted that the proposed required warning featuring the 
``woman in rain'' image was not highly rated in research studies 
conducted by the submitters. One comment noted that the image was not 
rated highly on its ease of comprehension and did not increase worry 
relative to a text-only label or discourage respondents from smoking 
relative to a text-only label in the submitter's study, while another 
noted that the image was ranked as one of the least effective of the 36 
proposed images by respondents in the submitter's study.
    (Response) We did not select this image for use in a required 
warning and instead have selected the image ``hole in throat'' for the 
reasons given in section III.D of this document.
2. ``WARNING: Tobacco Smoke Can Harm Your Children''
    As discussed in section III.D of this document, we selected the 
image ``smoke approaching baby'' for use with the statement, ``WARNING: 
Tobacco Smoke Can Harm Your Children.'' FDA proposed five other images 
for use with this statement: ``Smoke at toddler,'' which appears on 
pages 11 and 12 of the document ``Proposed Required Warning Images;'' 
``smoke at baby,'' which appears on pages 13 and 14 of the document 
``Proposed Required Warning Images;'' ``girl crying,'' which appears on 
pages 15 and 16 of the document ``Proposed Required Warning Images;'' 
``warning in child lettering,'' which appears on pages 17 and 18 of the 
document ``Proposed Required Warning Images;'' and ``girl in oxygen 
mask,'' which appears on pages 19 and 20 of the document ``Proposed 
Required Warning Images.''
    Smoke at toddler. In FDA's research study, the image ``smoke at 
toddler'' had significant effects on all the salience measures 
(emotional reaction scale, cognitive reaction scale, difficult to look 
at measure) in all three study populations (adults, young adults, and 
youth).
    However, as discussed in section III.D of this document, the 
selected image, ``smoke approaching baby,'' also had significant 
impacts on all the salience measures in all three study populations, 
and also showed significant impacts on recall and behavioral intentions 
in some populations.
    FDA received a number of comments on this image, which the Agency 
has summarized and responded to in the following paragraphs.
    (Comment 93) FDA received a number of comments that supported the 
use of the image ``smoke at toddler,'' including comments from 
individuals, a medical organization, public health advocacy groups, 
academics, and State and local public health agencies. Some of these 
comments indicated that the image would cause people to reconsider 
smoking due to the harm it can cause to others, especially a child or a 
baby.
    Three comments noted that the image showed positive impacts in 
research studies conducted by the submitters. Specifically, in one 
submitter's study this image had the relatively greatest impact in 
discouraging respondents from wanting to smoke of the images proposed 
for use with this warning statement. In another submitter's study of 
the potential effectiveness of the images, this image received the 
highest overall rating of the images proposed for use with this warning 
statement. In addition, it was one of the two highest rated images of 
the FDA images proposed for use with this warning statement in another 
submitter's study.
    FDA also received several comments that opposed use of the image 
``smoke at toddler.'' Multiple comments stated that the image would be 
perceived as demeaning to smokers by suggesting they blow smoke 
directly at their children, and one comment cited the image as an 
unreal portrayal. Another comment expressed concern that the image 
would prompt denial among smokers, who would interpret the image to 
mean that their children are not at risk if they do not blow smoke 
directly at them. One comment said the image does not depict a negative 
health consequence of smoking, while another comment stated the image 
was too positive, in that the child looked too happy. Finally, another 
comment stated that other images tested in FDA's research study for use 
with this warning statement elicited higher scores on the emotional and 
cognitive reaction scales than this image.
    (Response) We are not selecting this image for use in a required 
warning and instead have selected the image ``smoke approaching baby'' 
for the reasons given in section III.D of this document.
    Smoke at baby. In FDA's research study, the image ``smoke at baby'' 
had significant effects on the emotional and cognitive reaction scales 
in all three study populations (adults, young adults, and youth) and 
significant effects on the difficult to look at measure in adults and 
youth. It also showed higher correct recall of the warning statement 
compared to the control in adults and young adults at 1 week follow-up.
    However, as discussed in section III.D of this document, the 
selected image, ``smoke approaching baby,'' had significant impacts on 
all the salience measures in all three study populations, and also 
showed significant impacts on recall and behavioral intentions in some 
populations.
    FDA received a number of comments on this image, which the Agency 
has summarized and responded to in the following paragraphs.
    (Comment 94) FDA received several comments that supported the use 
of the image ``smoke at baby,'' including comments from individuals, a 
community organization, a medical organization, academics, and a State 
public health agency. Some of these comments indicated that the image 
would cause people to reconsider smoking due to the harm it can cause 
to children, and one comment noted that the image evokes a strong 
emotional reaction, clearly communicating that it is wrong to engage in 
the behavior portrayed in the image.
    Two comments noted that the image showed positive impacts in 
research

[[Page 36660]]

studies conducted by the submitters. Specifically, this image had a 
significant impact in discouraging respondents from wanting to smoke in 
one submitter's study, and it was one of the two highest-rated images 
of the FDA images proposed for use with this warning statement in 
another submitter's study.
    FDA also received several comments that opposed the use of the 
image ``smoke at baby.'' Many of these comments objected to the graphic 
illustration style used in the image, with some stating it would be 
ineffective or less effective than a photographic image, and some 
indicating it would detract from the seriousness of the message being 
conveyed. Some comments also expressed concern that the style would 
inappropriately appeal to youth without deterring them from smoking.
    Multiple comments stated that the image would be perceived as 
demeaning to smokers by suggesting they blow smoke directly at their 
children, and one comment cited the image as an unreal portrayal. 
Another comment expressed concern that the image would prompt denial 
among smokers, who would interpret the image to mean that their 
children are not at risk if they do not blow smoke directly at them.
    A couple of comments stated that other images tested in FDA's 
research study for use with this warning statement outperformed this 
image, with one noting that other images elicited higher scores on the 
emotional reaction scale and difficult to look at measure than this 
image, and another noting that other images had higher scores on the 
quit intentions and recall measures than this image.
    One comment expressed concern that the image could be perceived to 
mean that mothers who smoke should not breastfeed their children. 
Another comment stated that the text used in the proposed required 
warning was difficult to read.
    (Response) We are not selecting this image for use in a required 
warning and instead have selected the image ``smoke approaching baby'' 
for the reasons given in section III.D of this document.
    Girl crying. In FDA's research study, the image ``girl crying'' had 
significant effects on all the salience measures (emotional reaction 
scale, cognitive reaction scale, and difficult to look at measure) in 
all three study populations (adults, young adults, and youth). It also 
showed higher correct recall of the warning statement compared to the 
control in adults at baseline, and higher correct recall of the warning 
statement at 1 week follow-up compared to the text-only control for 
adults and young adults. Youth who viewed the image also reported that 
they would be significantly less likely to be smoking 1 year from now 
compared to youth who viewed the control.
    However, the image had a significant negative impact on adult 
beliefs about the health risks of secondhand smoke exposure for 
nonsmokers, i.e., adults who viewed the image were less likely to 
believe that nonsmokers will suffer from negative health effects due to 
secondhand smoke exposure than adults who viewed the text-only control.
    As discussed in section III.D of this document, the selected image, 
``smoke approaching baby,'' had significant impacts on all the salience 
measures in all three study populations, and also showed significant 
impacts on recall and behavioral intentions in some populations. Thus, 
while ``girl crying'' showed positive effects on several important 
measures in FDA's research study, the selected image was considered to 
be a stronger choice, as it also showed positive effects on several 
important measures and did not show any negative effects.
    FDA received a number of comments on this image, which the Agency 
has summarized and responded to in the following paragraphs.
    (Comment 95) FDA received several comments that supported the use 
of the image ``girl crying,'' including comments from individuals and 
from a State public health agency. Some comments noted that the 
submitter found this image to be the most effective of the images 
proposed for use with this warning statement, and others noted it would 
appropriately elicit negative emotions in viewers.
    FDA also received several comments that opposed use of the image 
``girl crying.'' Multiple comments stated that it was not clear why the 
girl was crying, and one comment stated that the image does not depict 
a health consequence of secondhand smoke exposure. One comment 
indicated that the image was too sensational to be effective, and 
another comment cited the image as an unreal portrayal, stating that 
young children do not know they are being harmed when they are exposed 
to smoke and thus would not cry as a result of such exposure, and noted 
that this is what makes secondhand smoke exposure so insidious. One 
comment indicated that other images tested in FDA's research study for 
use with this warning statement had superior overall results to this 
image.
    (Response) We are not selecting this image for use in a required 
warning and instead have selected the image ``smoke approaching baby'' 
for the reasons given in section III.D of this document.
    Warning in child lettering. In FDA's research study, the image 
``warning in child lettering'' had significant effects on the emotional 
and cognitive reaction scales in all three study populations (adults, 
young adults, and youth). It also showed higher correct recall of the 
warning statement compared to the control in adults and young adults at 
baseline, and higher correct recall of the warning statement at 1 week 
follow-up compared to the control for adults, young adults, and youth. 
However, ``warning in child lettering'' showed lower correct recall of 
the image at baseline and follow-up for adults, young adults, and youth 
compared to the other images.
    Looking across the different measures used in FDA's research study, 
this image was relatively less effective than other images proposed for 
use with this warning statement, including the image selected for use 
in the required warnings, ``smoke approaching baby.''
    FDA received a number of comments on this image, which the Agency 
has summarized and responded to in the following paragraphs.
    (Comment 96) FDA received several comments that supported the use 
of the image ``warning in child lettering,'' including comments from 
individuals, a public health advocacy group, a medical organization, 
and a State public health agency. Some comments felt the use of child's 
handwriting in the image would be especially impactful with parents, 
and one comment noted that this image would have wide appeal, 
resonating with parents of any race or ethnicity.
    FDA also received several comments that opposed use of the image 
``warning in child lettering.'' Multiple comments objected to the image 
style, indicating that a photographic depiction would be more effective 
at deterring people from smoking, with one comment noting that the 
image style would be inappropriately appealing to youth without 
discouraging them from smoking. One comment indicated that the image 
does not depict a negative health consequence of smoking, and another 
indicated that the image was not eye-catching.
    Two comments noted that other images proposed for use with this 
warning statement had superior overall results compared to this image 
in FDA's research study and stated that FDA should not select this 
image for use in the required warning. In addition, two comments noted 
that the image was not highly rated in research studies conducted by 
the submitters. One comment noted that the image was

[[Page 36661]]

ranked as the least effective of the 36 proposed images by respondents 
in the submitter's study, while another noted that the image was ranked 
the lowest by a considerable margin of the images proposed for use with 
this warning statement in the submitter's study.
    (Response) We are not selecting this image for use in a required 
warning and instead have selected the image ``smoke approaching baby'' 
for the reasons given in section III.D of this document.
    Girl in oxygen mask. In FDA's research study, the image ``girl in 
oxygen mask'' had significant effects on all the salience measures 
(emotional reaction scale, cognitive reaction scale, and difficult to 
look at measure) in all three study populations (adults, young adults, 
and youth).
    However, the image had a significant negative impact on adult 
beliefs about the health risks of secondhand smoke exposure for 
nonsmokers, i.e., adults who viewed the image were less likely to 
believe that nonsmokers will suffer from negative health effects due to 
secondhand smoke exposure than adults who viewed the text-only control.
    As discussed in section III.D of this document, the selected image, 
``smoke approaching baby,'' had significant impacts on all the salience 
measures in all three study populations, and also showed significant 
impacts on recall and behavioral intentions in some populations. Thus, 
the selected image was considered to be a stronger choice than ``girl 
in oxygen mask,'' as it showed positive effects on several important 
measures, but did not show any negative effects.
    FDA received a number of comments on this image, which the Agency 
has summarized and responded to in the following paragraphs.
    (Comment 97) FDA received a number of comments that supported the 
use of the image ``girl in oxygen mask,'' including comments from 
individuals, a public health advocacy group, a medical organization, a 
health care professional, and a State public health agency, with some 
comments noting that the image clearly conveys the message that smoke 
exposure can harm children, and powerfully shows the consequences of 
smoking.
    FDA also received several comments that opposed use of the image 
``girl in oxygen mask.'' Some comments noted that it was unclear that 
the person portrayed in the image was a child, and suggested that the 
image would be more persuasive if the person shown were younger. One 
comment expressed concern that persons of low socioeconomic status 
would not understand the image, and a few comments suggested that the 
image should show more severe disease or more clear association between 
the girl's illness and smoke exposure.
    (Response) We are not selecting this image for use in a required 
warning and instead have selected the image ``smoke approaching baby'' 
for the reasons given in section III.D of this document.
3. ``WARNING: Cigarettes Cause Fatal Lung Disease''
    As discussed in section III.D of this document, FDA selected the 
image ``healthy/diseased lungs'' for use with the statement, ``WARNING: 
Cigarettes cause fatal lung disease.'' FDA proposed three other images 
for use with this statement: ``toe tag,'' which appears on pages 21 and 
22 of the document ``Proposed Required Warning Images;'' ``lungs full 
of cigarettes,'' which appears on pages 23 and 24 of the document 
``Proposed Required Warning Images;'' and ``Dr. [doctor] with X-ray,'' 
which appears on pages 27 and 28 of the document ``Proposed Required 
Warning Images.''
    Toe tag. In FDA's research study, the image ``toe tag'' had 
significant effects on all the salience measures (emotional reaction 
scale, cognitive reaction scale, and difficult to look at measure) in 
all three study populations (adults, young adults, and youth).
    However, as discussed in section III.D of this document, the 
selected image, ``healthy/diseased lungs,'' had the numerically largest 
effects of the images proposed for use with this warning statement on 
all the salience measures in all three study populations.
    The image ``toe tag'' prompted lower correct recall of the warning 
statement than the text-only control at baseline among youth.
    FDA received a number of comments on this image, which the Agency 
has summarized and responded to in the following paragraphs.
    (Comment 98) FDA received a number of comments that supported the 
use of the image ``toe tag,'' including comments from individuals, a 
medical organization, public health advocacy groups, academics, and 
State and local public health agencies. Some of these comments 
indicated that the image is the best choice for use with this warning 
statement. It was also noted that the image effectively communicates 
the risks of smoking and would effectively deter smokers.
    Some comments noted that the image showed positive effects in 
research studies conducted by the submitters. Specifically, this image 
was rated highly on its ease of comprehension and induced relatively 
greater worry and led to higher ratings of feeling discouraged from 
wanting to smoke than a text-only control in one submitter's study. The 
image was also one of the five images rated most effective among the 
images used in FDA's 36 proposed required warnings in another 
submitter's study of the potential effectiveness of the images.
    FDA also received several comments that opposed use of the image 
``toe tag,'' with some submitters indicating that consumers, and in 
particular minority populations, might not understand what the image of 
a toe tag signifies. Some comments stated that the image ``offend[s] 
against human dignity'' or is ``too sensational to be effective,'' 
while it was alternatively stated that the image should be more graphic 
or show more suffering. It was also noted in the comments that the 
image did not test as well as other images proposed for use with this 
warning statement in FDA's research study.
    (Response) We are not selecting this image for use in a required 
warning and instead have selected the image ``healthy/diseased lungs'' 
for the reasons given in section III.D of this document.
    Lungs full of cigarettes. In FDA's research study, the image 
``lungs full of cigarettes'' had significant effects on all the 
salience measures (emotional reaction scale, cognitive reaction scale, 
and difficult to look at measure) in all three study populations 
(adults, young adults, and youth).
    However, as discussed in section III.D of this document, the 
selected image, ``healthy/diseased lungs,'' had the numerically largest 
effects of the images proposed for use with this warning statement on 
all the salience measures in all three study populations.
    Among young adults, the image ``lungs full of cigarettes'' prompted 
higher correct recall of the warning statement at baseline and at 1 
week follow-up than the text-only control. The required warning 
featuring this image also prompted higher correct recall of the image 
at baseline and follow-up among adults and youth than some of the other 
images proposed for use with this warning statement.
    FDA received a number of comments on this image, which the Agency 
has summarized and responded to in the following paragraphs.
    (Comment 99) FDA received some comments that supported the use of 
the image ``lungs full of cigarettes,'' including comments from 
individuals and State and local public health agencies. Some of these 
comments indicated that the image is the best choice for use with this 
warning statement, while some also noted that

[[Page 36662]]

the image is particularly appropriate for use with the warning 
statement.
    As discussed in section III.C of this document, some comments 
submitted to the docket described the results of research conducted by 
the submitters to examine the potential effectiveness of FDA's proposed 
images. This image was discussed in some of these comments. 
Specifically, in one submitter's study, participants rated this image 
highly on its ease of comprehension. It also induced relatively greater 
worry and feelings of discouragement from wanting to smoke than a text-
only control. However, the image was rated as one of the least 
effective of the images proposed by FDA for use with this warning 
statement in another submitter's study of the potential effectiveness 
of the images.
    FDA also received several comments that opposed use of the image 
``lungs full of cigarettes,'' with some submitters indicating that 
consumers might not understand the image, and some comments stating 
that the image should show the consequences of lung disease on a real 
person or on real lungs and suggesting that the proposed image did not 
depict health consequences in an understandable, hard-hitting manner. 
One comment noted that the secondary message highlighted by the use of 
bold face emphasis in this proposed required warning (``I cause 
disease''), could be interpreted as blaming smokers for their 
addiction, and expressed concern that this could undermine the proposed 
required warning's ability to communicate effectively with smokers. One 
comment also stated that the image did not show desirable effects on 
some measures in FDA's research study.
    (Response) We are not selecting this image for use in a required 
warning and instead have selected the image ``healthy/diseased lungs'' 
for the reasons given in section III.D of this document.
    Dr. with X-ray. In FDA's research study, the image ``Dr. [doctor] 
with X-ray'' had significant effects on the emotional and cognitive 
reaction scales in all three study populations (adults, young adults, 
and youth). It also had significant effects on the difficult to look at 
measure in adults and youth.
    As discussed in section III.D of this document, the selected image, 
``healthy/diseased lungs,'' had significant effects on all the salience 
measures in all study populations, and had the largest numerical 
effects of the images proposed for use with this warning statement on 
the salience measures.
    Among young adults, the image ``Dr. with X-ray'' prompted higher 
correct recall of the warning statement at baseline and at 1 week 
follow-up than the text-only control, as well as higher correct recall 
of the warning statement at follow-up among youth and the adult sample 
that viewed a hypothetical advertisement featuring this proposed 
required warning.
    However, among young adults, as well as among the adult sample who 
viewed a hypothetical advertisement featuring this image, ``Dr. with X-
ray'' was negatively associated with beliefs about the health risks of 
secondhand smoke exposure to nonsmokers (i.e., participants viewing 
this image were less likely to believe that nonsmokers will suffer 
health consequences related to secondhand smoke exposure than 
participants viewing the text-only control).
    FDA received a number of comments on this image, which the Agency 
has summarized and responded to in the following paragraphs.
    (Comment 100) FDA received some comments that supported the use of 
the image ``Dr. with X-ray,'' including comments from individuals, a 
public health advocacy group, a community organization, and a State 
public health agency. These comments noted that the ``Dr. with X-ray'' 
image is particularly appropriate for use with the warning statement, 
or expressed the view that the image is the best choice for use with 
this warning statement.
    As discussed in section III.C of this document, some comments 
submitted to the docket described the results of research conducted by 
the submitters to examine the potential effectiveness of FDA's proposed 
required warnings. This image was discussed in some of these comments. 
Specifically, this image was rated highly on its ease of comprehension 
in one submitter's study, but failed to show an effect on other study 
measures (worry, discouragement from smoking). The image was one of the 
five images rated least effective among the images used in FDA's 36 
proposed required warnings in another submitter's study of the 
potential effectiveness of the images, and it was also rated as the 
least effective of the images proposed by FDA for use with this warning 
statement in another submitter's study of the potential effectiveness 
of the images.
    FDA also received several comments that opposed use of the image 
``Dr. with X-ray,'' with some submitters indicating that the X-ray 
shown in the image is unclear and that the image would not be 
understood by consumers, and some indicating that it was too vague or 
clinical in nature and did not effectively convey the full impact of 
lung disease. It was also noted in the comments that the image failed 
to show desirable effects on some measures in FDA's research study, and 
that it showed negative effects on the beliefs measure among some of 
the study participants.
    (Response) We are not selecting this image for use in a required 
warning and instead have selected the image ``healthy/diseased lungs'' 
for the reasons given in section III.D of this document.
4. ``WARNING: Cigarettes Cause Cancer''
    As discussed in section III.D of this document, FDA selected the 
image ``cancerous lesion on lip'' for use with the statement, 
``WARNING: Cigarettes cause cancer.'' FDA proposed three other images 
for use with this statement: ``Deathly ill woman,'' which appears on 
pages 29 and 30 of the document ``Proposed Required Warning Images;'' 
``white cigarette burning,'' which appears on pages 31 and 32 of the 
document ``Proposed Required Warning Images;'' and ``red cigarette 
burning,'' which appears on pages 35 and 36 of the document ``Proposed 
Required Warning Images.''
    Deathly ill woman. The image ``deathly ill woman'' had strong 
overall research results in FDA's research study, including significant 
effects on all the salience measures (emotional reaction scale, 
cognitive reaction scale, and difficult to look at measure) in all 
three study populations (adults, young adults, and youth).
    However, overall the selected image, ``cancerous lesion on lip,'' 
had slightly higher numerical scores on the emotional and cognitive 
reaction scales than this image.
    Among adults, the image ``deathly ill woman'' prompted lower 
correct recall of the warning statement at baseline and at 1 week 
follow-up. However, the image showed some of the largest effect sizes 
for image recall (baseline and follow-up) across the images proposed 
for use with this warning statement.
    FDA received a number of comments on this image, which the Agency 
has summarized and responded to in the following paragraphs.
    (Comment 101) FDA received a large number of comments that 
supported the use of the image ``deathly ill woman,'' including 
comments from individuals, public health advocacy groups, medical 
organizations, academics, and State and local public health agencies. 
Many of these comments indicated that this image is the best image for 
use with this warning statement, with some stating that the image would 
communicate effectively to women and other comments approving of the 
image's accurate portrayal of the effects cancer can have on personal 
appearance.

[[Page 36663]]

    Some comments noted that the image showed positive impacts in 
research studies conducted by the submitters. Specifically, in one 
submitter's study, participants rated this image highly on its ease of 
comprehension. It also induced relatively greater worry and feelings of 
discouragement from wanting to smoke than a text-only control. The 
submitter concludes that this image, along with ``cancerous lesion on 
lip,'' was the most effective of the images proposed for use with this 
warning statement. The image was also one of the five images rated most 
effective among the images used in FDA's 36 proposed required warnings 
in another submitter's study of the potential effectiveness of the 
images. It was also one of two images rated effective among FDA's 36 
proposed color graphic in another submitter's study of the 
effectiveness of the images at stopping someone from smoking, and it 
was identified by high school students as one of the ``top three'' 
proposed required warnings in another submitter's study.
    FDA also received comments that opposed the use of the image 
``deathly ill woman.'' Some comments noted that the image ``offend[s] 
against human dignity,'' while one stated it was ``too sensational to 
be effective.'' Conversely, some comments indicated that the image 
should show more obvious signs of illness. It was also noted in the 
comments that the image did not show desirable effects on all the 
measures in FDA's research study.
    (Response) We are not selecting this image for use in a required 
warning and instead have selected the image ``cancerous lesion on lip'' 
for the reasons given in section III.D of this document.
    White cigarette burning. In FDA's research study, the image ``white 
cigarette burning'' had significant effects on the emotional and 
cognitive reaction scales in all three study populations (adults, young 
adults, and youth). It also had significant effects on the difficult to 
look at measure in adults.
    As discussed in section III.D of this document, the selected image, 
``cancerous lesion on lip,'' had significant effects on all the 
salience measures in all study populations, and showed some of the 
numerically largest effects on these measures of all the images 
proposed for use with this warning statement.
    Among youth, the image ``white cigarette burning'' prompted higher 
correct recall of the warning statement at baseline than the text-only 
control.
    FDA received a number of comments on this image, which the Agency 
has summarized and responded to in the following paragraphs.
    (Comment 102) FDA received some comments that supported the use of 
the image ``white cigarette burning,'' including comments from 
individuals and from State and local public health agencies. These 
comments noted that the ``white cigarette burning'' image is 
particularly appropriate for use with the warning statement, or 
expressed the submitter's preference that the image be used with this 
warning statement.
    As discussed in section III.C of this document, some comments 
submitted to the docket described the results of research conducted by 
the submitters to examine the potential effectiveness of FDA's proposed 
images. This image was discussed in some of these comments. 
Specifically, this image was rated highly on its ease of comprehension 
in one submitter's study, but failed to show an effect on other study 
measures (worry, discouragement from smoking). The image was rated as 
the least effective of the images proposed by FDA for use with this 
warning statement in another submitter's study of the potential 
effectiveness of the images.
    FDA also received several comments that opposed use of the image 
``white cigarette burning,'' with some submitters indicating that the 
image does not depict the negative health consequences of smoking or 
that the image is not appropriately evocative of cancer, and some 
noting that the image is unclear and will not be understood by 
consumers. Some comments also criticized the design of the image, and 
one stated that the image is not presented in color as required by the 
Tobacco Control Act. Some comments also noted that this image of a 
burning cigarette could trigger cravings in smokers. It was also noted 
in the comments that the image failed to show desirable effects on some 
measures in FDA's research study. One comment noted that the secondary 
message highlighted by the use of bold face emphasis in this proposed 
required warning (``I cause cancer'') could be interpreted as blaming 
smokers, and expressed concern that this could undermine the proposed 
required warning's ability to communicate effectively with smokers.
    (Response) We are not selecting this image for use in a required 
warning and instead have selected the image ``cancerous lesion on lip'' 
for the reasons given in section III.D of this document.
    Red cigarette burning. In FDA's research study, the image ``red 
cigarette burning'' had significant effects on all the salience 
measures (emotional reaction scale, cognitive reaction scale, and 
difficult to look at measure) in all three study populations (adults, 
young adults, and youth).
    However, the selected image, ``cancerous lesion on lip,'' generally 
had numerically larger effects than this image on the salience 
measures.
    Among adults, young adults, and youth, the image ``red cigarette 
burning'' prompted lower correct recall of the warning statement at 
baseline and at 1 week follow-up. The proposed required warning 
featuring this image also prompted relatively lower recall of the image 
at baseline and at 1 week follow-up among adults, young adults, and 
youth than ``cancerous lesion on lip.''
    Youth viewing the image ``red cigarette burning'' reported being 
more likely to be smoking 1 year from now than youth viewing the text-
only control.
    FDA received a number of comments on this image, which the Agency 
has summarized and responded to in the following paragraphs.
    (Comment 103) FDA received some comments that supported the use of 
the image ``red cigarette burning,'' including comments from 
individuals, a public health advocacy group, and from State and local 
public health agencies. These comments noted that the ``red cigarette 
burning'' image is particularly appropriate for use with the warning 
statement, or expressed the submitter's preference that the image be 
used with this warning statement.
    As discussed in section III.C of this document, some comments 
submitted to the docket described the results of research conducted by 
the submitters to examine the potential effectiveness of FDA's proposed 
images. This image was discussed in some of these comments. 
Specifically, in one submitter's study, participants rated this image 
highly on its ease of comprehension. It also induced relatively greater 
worry and feelings of discouragement from wanting to smoke than a text-
only control. In another submitter's study, particular aspects of the 
image were evaluated, and the submitter reported that the use of the 
color red to accentuate the warning content in ``red cigarette 
burning'' was effective. However, the image was rated as one of the 
least effective of the images proposed by FDA for use with this warning 
statement in another submitter's study of the potential effectiveness 
of the images, and the image was rated as one of the five least 
effective images used in FDA's 36 proposed required warnings in another 
submitter's study of the potential effectiveness of the images.

[[Page 36664]]

    FDA also received several comments that opposed use of the image 
``red cigarette burning,'' with some submitters indicating that the 
image does not depict the negative health consequences of smoking or 
that the image is not appropriately evocative of cancer. Some comments 
also criticized the design of the image, with one stating that it 
looked like an image from a cigarette advertisement. Some comments also 
noted that this image of a burning cigarette could trigger cravings in 
smokers. It was also noted in the comments that the image failed to 
show desirable effects on some measures in FDA's research study and 
showed some undesirable effects. Some comments also suggested that 
other cancers, including bladder cancer, should be added to the cancers 
listed in the image.
    (Response) We are not selecting this image for use in a required 
warning and instead have selected the image ``cancerous lesion on lip'' 
for the reasons given in section III.D of this document.
5. ``WARNING: Cigarettes Cause Strokes and Heart Disease''
    As discussed in section III.D of this document, FDA selected the 
image ``oxygen mask on man's face'' for use with the statement, 
``WARNING: Cigarettes cause strokes and heart disease.'' FDA proposed 
three other images for use with this statement: ``hand with oxygen 
mask,'' which appears on pages 37 and 38 of the document ``Proposed 
Required Warning Images;'' ``red lightning with heart,'' which appears 
on pages 41 and 42 of the document ``Proposed Required Warning 
Images;'' and ``man in pain with hand on chest,'' which appears on 
pages 43 and 44 of the document ``Proposed Required Warning Images.''
    Hand with oxygen mask. In FDA's research study, the image ``hand 
with oxygen mask'' had significant effects on all the salience measures 
(emotional reaction scale, cognitive reaction scale, and difficult to 
look at measure) in all three study populations (adults, young adults, 
and youth).
    However, the selected image, ``oxygen mask on man's face,'' also 
had significant effects on all the salience measures, and generally had 
numerically larger effects than this image on the emotional reaction 
scale and the difficult to look at measure.
    Adults viewing the image ``hand with oxygen mask'' reported being 
less likely to quit smoking within the next month than adults viewing 
the text-only control.
    FDA received a number of comments on this image, which the Agency 
has summarized and responded to in the following paragraphs.
    (Comment 104) FDA received some comments that supported the use of 
the image ``hand with oxygen mask,'' including comments from 
individuals, a community organization, and State public health 
agencies. These comments noted that the ``hand with oxygen mask'' image 
is the best image for use with the warning statement or stated that the 
image was appropriate for use with this warning statement.
    As discussed in section III.C of this document, some comments 
submitted to the docket described results of research conducted by the 
submitters to examine the potential effectiveness of FDA's proposed 
images. This image was discussed in some of these comments. 
Specifically, this image was rated highly on its ease of comprehension 
and induced relatively greater worry and led to higher ratings of 
feeling discouraged from wanting to smoke than a text-only control in 
one submitter's study. However, the image was rated as the least 
effective of the images proposed by FDA for use with this warning 
statement in another submitter's study of the potential effectiveness 
of the images.
    FDA also received several comments that opposed use of the image 
``hand with oxygen mask,'' with some submitters indicating that the 
image is hard to understand or not appropriately compelling. Some 
comments also stated that the image would be more appropriate for use 
with a statement about lung-related health consequences (such as COPD). 
It was also noted in the comments that the image failed to show 
desirable effects on some measures in FDA's research study and showed 
some undesirable effects.
    (Response) We are not selecting this image for use in a required 
warning and instead have selected the image ``oxygen mask on man's 
face'' for the reasons given in section III.D of this document.
    Red lightning with heart. In FDA's research study, the image ``red 
lightning with heart'' had significant effects on the emotional and 
cognitive reaction scales in all three study populations (adults, young 
adults, and youth). The image also had significant effects on the 
difficult to look at measure in adults and young adults.
    However, the selected image, ``oxygen mask on man's face,'' had 
significant effects on all the salience measures in all the study 
populations, and it generally had numerically larger effects than this 
image on the salience measures.
    Among adults, young adults, and youth, the image ``red lightning 
with heart'' prompted higher correct recall of the warning statement at 
1 week follow-up than the text-only control. However, the proposed 
required warning featuring this image prompted relatively lower recall 
of the image at baseline and at 1 week follow-up among youth than the 
selected image, ``oxygen mask on man's face.''
    FDA received several comments on this image, which the Agency has 
summarized and responded to in the following paragraphs.
    (Comment 105) FDA received a few comments that supported the use of 
the image ``red lightning with heart,'' including comments from State 
and local public health agencies, which noted that this image is 
appropriate for use with the warning statement.
    As discussed in section III.C of this document, some comments 
submitted to the docket described results of research conducted by the 
submitters to examine the potential effectiveness of FDA's proposed 
images. This image was discussed in some of these comments. 
Specifically, this image was rated highly on its ease of comprehension 
in one submitter's study, but failed to show an effect on other study 
measures (worry, discouragement from smoking). The image was rated as 
one of the least effective of the images proposed by FDA for use with 
this warning statement in another submitter's study of the potential 
effectiveness of the images.
    FDA also received several comments that opposed use of the image 
``red lightning with heart,'' with some submitters criticizing the 
design of the image, which was characterized as too conceptual and not 
easily understandable. Some comments also criticized the illustration 
style, stating that it does not have the impact a photograph would 
have, and would not compel or move viewers, and may inappropriately 
appeal to youth without discouraging them from smoking. It was also 
noted in the comments that the image failed to show desirable effects 
on some measures in FDA's research study.
    (Response) We are not selecting this image for use in a required 
warning and instead have selected the image ``oxygen mask on man's 
face'' for the reasons given in section III.D of this document.
    Man in pain with hand on chest. In FDA's research study, the image 
``man in pain with hand on chest'' had significant effects on the 
emotional reaction scale in all three study populations (adults, young 
adults, and youth). The image also had significant effects on the 
cognitive reaction scale in young adults and youth, as well as in

[[Page 36665]]

adults viewing a hypothetical advertisement containing ``man in pain 
with hand on chest.'' The image also had significant effects on the 
difficult to look at measure in adults and youth.
    However, the selected image, ``oxygen mask on man's face,'' had 
significant effects on all the salience measures in all the study 
populations, and had numerically larger effects than this image on the 
salience measures.
    Among youth, the image ``man in pain with hand on chest'' prompted 
higher correct recall of the warning statement at 1 week follow-up than 
the text-only control. However, the proposed required warning featuring 
this image prompted relatively lower recall of the image at baseline 
among adults than ``oxygen mask on man's face.''
    FDA received a number of comments on this image, which the Agency 
has summarized and responded to in the following paragraphs.
    (Comment 106) FDA received several comments that supported the use 
of the image ``man in pain with hand on chest,'' including comments 
from individuals, public health advocacy groups, a health care 
professional, and a State public health agency. Several of these 
comments indicated that this image is the best choice for use with this 
warning statement, with some comments noting that the image 
appropriately shows how painful heart attacks can be.
    As discussed in section III.C of this document, some comments 
submitted to the docket described results of research conducted by the 
submitters to examine the potential effectiveness of FDA's proposed 
images. This image was discussed in some of these comments. 
Specifically, in one submitter's study, participants rated this image 
highly on its ease of comprehension. It also induced relatively greater 
worry and feelings of discouragement from wanting to smoke than a text-
only control. However, the image was rated as less effective than the 
selected image, ``oxygen mask on man's face,'' in another submitter's 
study of the potential effectiveness of the images.
    FDA also received several comments that opposed use of the image 
``man in pain with hand on chest.'' Some comments indicated that the 
image looks like a man with a headache or other ailment rather than a 
man suffering from heart disease or a stroke, and a few comments 
indicated the man's hand should be closer to his left side (where his 
heart is). Some comments stated that the image should feature a younger 
person to drive home the message that heart disease and strokes can 
affect young smokers as well as older smokers. One comment suggested 
that the man shown in the image should be replaced with a man of color. 
It was also stated in the comments that the image failed to show large 
effects on salience measures or to show desirable effects on other 
measures in FDA's research study.
    (Response) We are not selecting this image for use in a required 
warning and instead have selected the image ``oxygen mask on man's 
face'' for the reasons given in section III.D of this document.
6. ``WARNING: Smoking During Pregnancy Can Harm Your Baby''
    As discussed in section III.D of this document, FDA selected the 
image ``baby in incubator'' for use with the statement, ``WARNING: 
Smoking during pregnancy can harm your baby.'' FDA proposed one other 
image for use with this statement: ``pacifier & ashtray,'' which 
appears on pages 47 and 48 of the document ``Proposed Required Warning 
Images.''
    Pacifier & ashtray. In FDA's research study, the image ``pacifier & 
ashtray'' had significant effects on the emotional and cognitive 
reaction scales in all three study populations (adults, young adults, 
and youth). The image also had significant effects on the difficult to 
look at measure in adults and youth.
    However, the selected image, ``baby in incubator,'' had significant 
effects on all the salience measures in all the study populations, and 
had numerically larger effects than this image on all the salience 
measures.
    Among young adults, the image ``pacifier & ashtray'' prompted 
higher correct recall of the warning statement at baseline and at 1 
week follow-up than the text-only control. However, the proposed 
required warning featuring this image prompted relatively lower recall 
of the image at baseline and at 1 week follow-up among adults, young 
adults, and youth than the selected image, ``baby in incubator.''
    FDA received a number of comments on this image, which the Agency 
has summarized and responded to in the following paragraphs.
    (Comment 107) FDA received several comments that supported the use 
of the image ``pacifier & ashtray,'' including comments from 
individuals, public health advocacy groups, and State and local public 
health agencies. In general, these comments indicated that this image 
is the best choice for use with this warning statement, with some 
noting that the image is compelling and powerful.
    As discussed in section III.C of this document, some comments 
submitted to the docket described the results of research conducted by 
the submitters to examine the potential effectiveness of FDA's proposed 
images. This image was discussed in some of these comments. 
Specifically, this image was rated highly on its ease of comprehension 
compared to a text-only control in one submitter's study, but failed to 
show an effect on other study measures (worry, discouragement from 
smoking). The image was also rated as the most effective of the images 
proposed by FDA for use with this warning statement in another 
submitter's study of the potential effectiveness of the images, but an 
image used in another country was rated significantly higher than 
either of FDA's proposed images in this study (however, as discussed in 
section III.A of this document, at this time FDA does not believe it is 
necessary or appropriate to use graphic warnings used in other 
countries in place of the images developed by FDA).
    FDA also received several comments that opposed use of the image 
``pacifier & ashtray,'' with some submitters criticizing the design of 
the image, which was characterized as too symbolic and abstract to be 
understood, and as lacking in emotional impact. Some comments stated 
that the image does not show a health consequence of smoking, and some 
indicated the image is not graphic enough. A few comments also noted 
that the image would be more appropriate for a warning related to post-
partum secondhand smoke-related risks, rather than a pregnancy warning, 
because pacifiers are used post- rather than pre-partum. One comment 
stated that the background used for the textual warning statement in 
the image looks unprofessional. It was also stated in the comments that 
the image failed to show large effects on the salience measures or to 
show desirable effects on some other measures in FDA's research study.
    (Response) We are not selecting this image for use in a required 
warning and instead have selected the image ``baby in incubator'' for 
the reasons given in section III.D of this document.
7. ``WARNING: Smoking Can Kill You''
    As discussed in section III.D of this document, FDA selected the 
image ``man with chest staples'' for use with the statement, ``WARNING: 
Smoking can kill you.'' FDA proposed three other images for use with 
this statement: ``red coffin with body,'' which appears on pages 51 and 
52 of the document ``Proposed Required Warning Images;'' ``man in 
casket,'' which appears on pages 53 and 54 of the document ``Proposed 
Required Warning Images;'' and ``cigarettes = RIP,'' which appears

[[Page 36666]]

on pages 55 and 56 of the document ``Proposed Required Warning 
Images.''
    Red coffin with body. In FDA's research study, the image ``red 
coffin with body'' had significant effects on all the salience measures 
(emotional reaction scale, cognitive reaction scale, and difficult to 
look at measure) in adults and youth. It also had a significant effect 
on the cognitive reaction scale in young adults.
    However, the selected image, ``man with chest staples,'' had a 
significant effect on all the salience measures in all study 
populations, and had numerically larger effects than this image on 
these measures.
    Among adults, the image ``red coffin with body'' prompted higher 
correct recall of the warning statement at baseline than the text-only 
control.
    The image also had a significant impact on beliefs about the health 
risks of smoking for smokers relative to the text-only control in the 
adult sample that viewed a hypothetical advertisement containing the 
proposed required warning.
    FDA received a number of comments on this image, which the Agency 
has summarized and responded to in the following paragraphs.
    (Comment 108) FDA received several comments that supported the use 
of the image ``red coffin with body,'' including comments from 
individuals and a community organization. Several of these comments 
indicated that this image is the best choice for use with this warning 
statement, with some approving of the colors used in the image and some 
noting that the image gets the message across in a straightforward 
manner.
    As discussed in section III.C of this document, some comments 
submitted to the docket described the results of research conducted by 
the submitters to examine the potential effectiveness of FDA's proposed 
images. This image was discussed in some of these comments. 
Specifically, this image was rated highly on its ease of comprehension 
compared to a text-only control in one submitter's study, but failed to 
show an effect on other study measures (worry, discouragement from 
smoking). The image was rated as one of the least effective of the 
images proposed by FDA for use with this warning statement in another 
submitter's study of the potential effectiveness of the images.
    FDA also received several comments that opposed use of the image 
``red coffin with body,'' with some submitters stating that the image 
is too conceptual and not easily understandable. Several comments 
stated that the image is not impactful and is unlikely to be effective, 
with some indicating the image would be more effective if it were a 
photograph of an actual person. It was also suggested in the comments 
that the image style may inappropriately appeal to youth without 
discouraging them from smoking. Some comments noted that the image 
failed to show desirable effects on some measures in FDA's research 
study.
    (Response) We are not selecting this image for use in a required 
warning and instead have selected the image ``man with chest staples'' 
for the reasons given in section III.D of this document.
    Man in casket. In FDA's research study, the image ``man in casket'' 
had significant effects on all the salience measures (emotional 
reaction scale, cognitive reaction scale, and difficult to look at 
measure) in adults and youth. It also had a significant effect on the 
cognitive reaction scale in young adults.
    However, the selected image, ``man with chest staples,'' had 
significant effects on all the salience measures, and generally had 
numerically larger effects than this image on these measures.
    Among youth, the image ``man in casket'' prompted higher correct 
recall of the warning statement at baseline than the text-only control. 
However, among young adults, the image ``man in casket'' prompted lower 
correct recall of the warning statement at baseline than the text-only 
control.
    The image also had a significant impact on beliefs about the health 
risks of smoking for smokers relative to the text-only control in the 
adult sample that viewed a hypothetical advertisement containing the 
proposed required warning.
    FDA received a number of comments on this image, which the Agency 
has summarized and responded to in the following paragraphs.
    (Comment 109) FDA received several comments that supported the use 
of the image ``man in casket,'' including comments from individuals, a 
public health advocacy group, and a State public health agency. Several 
of these comments indicated that this image is the best choice for use 
with this warning statement, with some noting that the image grabs 
viewers' attention and clearly depicts death.
    As discussed in section III.C of this document, some comments 
submitted to the docket described the results of research conducted by 
the submitters to examine the potential effectiveness of FDA's proposed 
images. This image was discussed in some of these comments. 
Specifically, in one submitter's study, participants rated this image 
highly on its ease of comprehension. It also induced relatively greater 
worry and feelings of discouragement from wanting to smoke than a text-
only control. In another submitter's study, particular aspects of the 
image were evaluated, and the proposed required warning containing the 
image ``man in casket'' was found to be significantly more effective at 
discouraging others from smoking than a text-only statement on the side 
of a cigarette package. However, the image was rated as less effective 
than the selected image, ``man with chest staples,'' in another 
submitter's study of the potential effectiveness of the images.
    FDA also received several comments that opposed use of the image 
``man in casket.'' Multiple comments stated the image looks staged 
because the man pictured does not look like he is dead or like he 
suffered from smoking-related disease. It was also suggested in the 
comments that the image may not be understood by all cultures. The 
image was also criticized as lacking a clear association to smoking. It 
was also noted in the comments that the image failed to show desirable 
effects on some measures in FDA's research study.
    (Response) We are not selecting this image for use in a required 
warning and instead have selected the image ``man with chest staples'' 
for the reasons given in section III.D of this document.
    Cigarettes = RIP. In FDA's research study, the image ``cigarettes = 
RIP'' had significant effects on all the salience measures (emotional 
reaction scale, cognitive reaction scale, and difficult to look at 
measure) in adults and youth. It also had a significant effect on the 
emotional and cognitive reaction scales in young adults.
    However, the selected image, ``man with chest staples,'' had 
significant effects on all the salience measures in all the study 
populations, and generally had numerically larger effects than this 
image on these measures.
    Among adults, the image ``cigarettes = RIP'' prompted higher 
correct recall of the warning statement at baseline than the text-only 
control. However, the proposed required warning featuring this image 
prompted relatively lower recall of the image at baseline and at 1 week 
follow-up than the selected image, ``man with chest staples.''
    The image had a significant impact on beliefs about the health 
risks of smoking for smokers relative to the text-only control in the 
adult sample that viewed a hypothetical advertisement containing the 
proposed required warning.
    FDA received a number of comments on this image, which the Agency 
has summarized and responded to in the following paragraphs.

[[Page 36667]]

    (Comment 110) FDA received several comments that supported the use 
of the image ``cigarettes = RIP,'' including comments from individuals 
and a State public health agency. Several of these comments indicated 
that this image is the best choice for use with this warning statement, 
with some noting that the image gets the message across in a 
straightforward manner, and one stating that the image will get the 
attention of youth tobacco users.
    As discussed in section III.C of this document, some comments 
submitted to the docket described the results of research conducted by 
the submitters to examine the potential effectiveness of FDA's proposed 
images. This image was discussed in some of these comments. 
Specifically, this image was rated highly on its ease of comprehension 
compared to a text-only control in one submitter's study, but failed to 
show an effect on other study measures (worry, discouragement from 
smoking). The image was rated as the least effective of the images 
proposed by FDA for use with this warning statement in another 
submitter's study of the potential effectiveness of the images.
    FDA also received several comments that opposed use of the image 
``cigarettes = RIP,'' with some submitters stating that the image is 
too conceptual or indirect and lacks impact, and will not be effective 
in deterring smoking. Several comments expressed concern that 
consumers, including individuals from various cultures with limited 
English proficiency and children, might not understand what the shapes 
of the cigarette package and tombstone represent, or understand the 
abbreviation (``RIP'') used in the image. Some comments criticized the 
style of the image, with some characterizing it as low quality and 
others objecting on the grounds that it downplays the seriousness of 
the risk being conveyed and may inappropriately appeal to youth without 
discouraging them from smoking. It was also stated in the comments that 
the image failed to show large effects on the salience measures or to 
show desirable effects on some other measures in FDA's research study.
    (Response) We are not selecting this image for use in a required 
warning and instead have selected the image ``man with chest staples'' 
for the reasons given in section III.D of this document.
8. ``WARNING: Tobacco Smoke Causes Fatal Lung Disease in Nonsmokers''
    As discussed in section III.D of this document, FDA selected the 
image ``woman crying'' for use with the statement, ``WARNING: Tobacco 
smoke causes fatal lung disease.'' FDA proposed four other images for 
use with this statement: ``graveyard,'' which appears on pages 59 and 
60 of the document ``Proposed Required Warning Images;'' ``man smoke at 
woman,'' which appears on pages 61 and 62 of the document ``Proposed 
Required Warning Images;'' ``woman smoke at man,'' which appears on 
pages 63 and 64 of the document ``Proposed Required Warning Images;'' 
and ``man hands up & smoke,'' which appears on pages 65 and 66 of the 
document ``Proposed Required Warning Images.''
    Graveyard. In FDA's research study, the image ``graveyard'' had 
significant effects on the emotional reaction scale in all three study 
populations (adults, young adults, and youth). The image also had 
significant effects on the cognitive reaction scale in young adults and 
youth, and on the difficult to look at measure in youth.
    However, the selected image, ``woman crying,'' had significant 
effects on the salience measures in all study populations, and it 
generally had numerically larger effects than this image on all the 
salience measures.
    Among adults and youth, the image ``graveyard'' prompted lower 
correct recall of the warning statement at baseline than the text-only 
control. Among young adults, the image prompted lower correct recall of 
the warning statement at 1 week follow-up than the text-only control.
    The image ``graveyard'' had a significant impact on beliefs about 
the health risks of smoking for smokers in young adults.
    FDA received a number of comments on this image, which the Agency 
has summarized and responded to in the following paragraphs.
    (Comment 111) FDA received several comments that supported the use 
of the image ``graveyard,'' including comments from individuals, a 
community organization, and a State public health agency. Several of 
these comments indicated that this image is the best choice for use 
with this warning statement, with some noting that the image gets the 
message across in a straightforward manner, and some noting the image 
could deter people from starting to smoke.
    As discussed in section III.C of this document, some comments 
submitted to the docket described the results of research conducted by 
the submitters to examine the potential effectiveness of FDA's proposed 
images. This image was discussed in some of these comments. 
Specifically, in one submitter's study, participants rated this image 
highly on its ease of comprehension. It also induced relatively greater 
worry and feelings of discouragement from wanting to smoke than a text-
only control. This image was also rated as the most effective of the 
images proposed by FDA for use with this warning statement in another 
submitter's study of the potential effectiveness of the images, 
although an image used in another country was rated more highly than 
this image.
    FDA also received several comments that opposed use of the image 
``graveyard.'' Some comments indicated that the image would not be 
effective, noting that it is easy to disregard or, alternatively, too 
sensational to be effective. It was also stated in the comments that 
the image did not show large impacts on the emotional reaction scale 
and failed to show desirable effects on some other measures in FDA's 
research study.
    (Response) We are not selecting this image for use in a required 
warning and instead have selected the image ``woman crying'' for the 
reasons given in section III.D of this document.
    Man smoke at woman. In FDA's research study, the image ``man smoke 
at woman'' had significant effects on the emotional and cognitive 
reaction scales in adults, young adults, and youth. The image also had 
significant effects on the difficult to look at measure in youth.
    However, the selected image, ``woman crying,'' had significant 
effects on the salience measures in all study populations, and had 
numerically larger effects than this image on the emotional reaction 
scale and the difficult to look at measure in all study populations.
    The proposed required warning featuring this image prompted 
relatively lower recall of the image at baseline and at 1 week follow-
up than the selected image, ``woman crying.''
    The image ``man smoke at woman'' had a significant impact on 
beliefs about the health risks of smoking for smokers in young adults.
    FDA received a number of comments on this image, which the Agency 
has summarized and responded to in the following paragraphs.
    (Comment 112) FDA received several comments that supported the use 
of the image ``man smoke at woman,'' including comments from 
individuals and State public health agencies. Several of these comments 
indicated that this image is the best choice for use with this warning 
statement, with some noting that the image would make smokers think 
about how their habit may cause others to avoid them. It was also noted 
that the image effectively shows how innocent bystanders are affected 
by smokers.

[[Page 36668]]

    As discussed in section III.C of this document, some comments 
submitted to the docket described the results of research conducted by 
the submitters to examine the potential effectiveness of FDA's proposed 
images. This image was discussed in some of these comments. 
Specifically, in one submitter's study, participants rated this image 
highly on its ease of comprehension. It also induced relatively greater 
worry and feelings of discouragement from wanting to smoke than a text-
only control. The submitter also concluded that the image was the most 
effective of the images proposed for use with this warning statement. 
However, the image was rated as one of the less effective images 
proposed by FDA for use with this warning statement in another 
submitter's study of the potential effectiveness of the images.
    FDA also received several comments that opposed use of the image 
``man smoke at woman.'' Some comments indicated that the image is not 
realistic, stating that smokers do not blow smoke at their friends. One 
comment indicated that the image failed to portray an obvious health 
consequence of secondhand smoke, and multiple comments indicated that 
the image conveyed a bad message by showing the nonsmoker covering her 
nose and mouth, stating that these actions do not protect you from 
secondhand smoke. It was also noted in the comments that the image 
failed to show desirable effects on some measures in FDA's research 
study.
    (Response) We are not selecting this image for use in a required 
warning and instead have selected the image ``woman crying'' for the 
reasons given in section III.D of this document.
    Woman smoke at man. In FDA's research study, the image ``woman 
smoke at man'' had significant effects on the emotional reaction scale 
in adults, young adults, and youth. The image also had significant 
effects on the cognitive reaction scale in young adults and youth, and 
on the difficult to look at measure in adults and youth.
    However, the selected image, ``woman crying,'' had significant 
effects on the salience measures in all study populations, and it had 
numerically larger effects than this image on the emotional reaction 
scale and the difficult to look at measure in all study populations.
    Among adults, the image ``woman smoke at man'' prompted higher 
correct recall of the warning statement at 1 week follow-up than the 
text-only control. However, among young adults, the image prompted 
lower correct recall of the warning statement at baseline than the 
text-only control. The proposed required warning featuring this image 
also prompted relatively lower recall of the image at baseline and at 1 
week follow-up than the selected image, ``woman crying.''
    The image ``woman smoke at man'' had a significant impact on young 
adult's intentions to quit smoking in the next month compared to the 
text-only control.
    FDA received a number of comments on this image, which the Agency 
has summarized and responded to in the following paragraphs.
    (Comment 113) FDA received several comments that supported the use 
of the image ``woman smoke at man,'' including comments from 
individuals, a public health advocacy group, a medical organization, 
and State and local public health agencies. Several of these comments 
indicated that this image is the best choice for use with this warning 
statement, with some noting that the image will make smokers think 
about how their actions negatively affect social situations.
    As discussed in section III.C of this document, some comments 
submitted to the docket described the results of research conducted by 
the submitters to examine the potential effectiveness of FDA's proposed 
images. This image was discussed in some of these comments. 
Specifically, this image was rated highly on its ease of comprehension 
compared to a text-only control in one submitter's study but failed to 
show an effect on other study measures (worry, discouragement from 
smoking). The image was rated as one of the least effective of the 
images proposed by FDA for use with this warning statement in another 
submitter's study of the potential effectiveness of the images.
    FDA also received several comments that opposed use of the image 
``woman smoke at man.'' Some comments indicated that the image would 
not be effective, suggesting that it is not impactful and probably 
would not stop people from smoking. One comment indicated that the 
image fails to portray an obvious health consequence of secondhand 
smoke, and another was critical of the actions of the nonsmoker in the 
image, noting that covering your nose and mouth does not protect you 
from secondhand smoke. It was also stated in the comments that the 
image failed to show desirable effects on some measures in FDA's 
research study.
    (Response) We are not selecting this image for use in a required 
warning and instead have selected the image ``woman crying'' for the 
reasons given in section III.D of this document.
    Man hands up & smoke. In FDA's research study, the image ``man 
hands up & smoke'' had significant effects on the emotional reaction 
scale in all study populations (adults, young adults, and youth) and on 
the cognitive reaction scale in young adults and youth.
    However, the selected image, ``woman crying,'' had significant 
effects on all the salience measures in all study populations, and it 
had numerically larger effects than this image on all these measures.
    The proposed required warning featuring the image ``man hands up & 
smoke'' also prompted relatively lower correct recall of the image at 
baseline and at 1 week follow-up than the selected image, ``woman 
crying.''
    FDA received several comments on this image, which the Agency has 
summarized and responded to in the following paragraphs.
    (Comment 114) FDA received some comments that supported the use of 
the image ``man hands up & smoke,'' including comments from individuals 
and a State public health agency. These comments generally indicated 
that this image would be the best choice for use with this warning 
statement.
    As discussed in section III.C of this document, some comments 
submitted to the docket described the results of research conducted by 
the submitters to examine the potential effectiveness of FDA's proposed 
images. This image was discussed in some of these comments. 
Specifically, this image was rated highly on its ease of comprehension 
compared to a text-only control in one submitter's study, but it failed 
to show an effect on other study measures (worry, discouragement from 
smoking). The image was rated as the least effective of the images 
proposed by FDA for use with this warning statement in another 
submitter's study of the potential effectiveness of the images.
    FDA also received several comments that opposed use of the image 
``man hands up & smoke.'' Some comments indicated that the image is 
unrealistic in that it looks like the man is in fog or a house fire as 
opposed to being affected by secondhand smoke. One comment indicated 
that the image does not portray a health consequence of secondhand 
smoke; it was also stated in the comments the image is ineffective and 
unintentionally humorous. One comment stated that the image failed to 
show large effects on salience measures or to show desirable effects on 
other measures in FDA's research study and indicated it should not be 
selected.
    (Response) We are not selecting this image for use in a required 
warning and instead have selected the image ``woman crying'' for the 
reasons given in section III.D of this document.

[[Page 36669]]

9. ``WARNING: Quitting Smoking Now Greatly Reduces Serious Risks to 
Your Health''
    As discussed in section III.D of this document, FDA selected the 
image ``man I Quit t-shirt'' for use with the statement, ``WARNING: 
Quitting smoking now greatly reduces serious risks to your health.'' 
FDA proposed two other images for use with this statement: ``cigarettes 
in toilet bowl,'' which appears on pages 69 and 70 of the document 
``Proposed Required Warning Images;'' and ``woman blowing bubble,'' 
which appears on pages 71 and 72 of the document ``Proposed Required 
Warning Images.''
    Cigarettes in toilet bowl. In FDA's research study, the image 
``cigarettes in toilet bowl'' had significant effects on the emotional 
reaction scale in adults and young adults and significant effect on the 
cognitive reaction scale in all study populations (adults, young 
adults, and youth).
    Among youth, the image ``cigarettes in toilet bowl'' prompted 
higher correct recall of the warning statement at 1 week follow-up than 
the text-only control. However, the proposed required warning featuring 
this image prompted relatively lower recall of the image at baseline 
and at 1 week follow-up than the selected image, ``man I Quit t-
shirt.''
    The image ``cigarettes in toilet bowl'' had a significant impact on 
beliefs about the health risks of smoking for smokers in young adults.
    FDA received a number of comments on this image, which the Agency 
has summarized and responded to in the following paragraphs.
    (Comment 115) FDA received some comments that supported the use of 
the image ``cigarettes in toilet bowl,'' including comments from 
individuals, a community organization, and a local public health 
agency. Some comments noted that this image is the best choice for use 
with this warning statement, and it was also noted in the comments that 
the image is effective because it creates an association between 
cigarettes and other undesirable things that belong in a toilet bowl.
    As discussed in section III.C of this document, some comments 
submitted to the docket described the results of research conducted by 
the submitters to examine the potential effectiveness of FDA's proposed 
images. This image was discussed in some of these comments. 
Specifically, this image failed to show any significant effects in one 
submitter's study on measures of ease of comprehension, worry, and 
feeling discouraged from smoking compared to a text-only control. In 
addition, the image was rated as less effective than the selected 
image, ``man I Quit t-shirt,'' in another submitter's study of the 
potential effectiveness of the images.
    FDA also received several comments that opposed use of the image 
``cigarettes in toilet bowl.'' These comments noted that the image is 
not clear or does not convey a health consequence of smoking. It was 
also noted that the image is not easily understood, or alternatively, 
that it is banal. Multiple comments expressed concern about what is 
shown in the image, stating that it recommends a bad or unhealthy 
action (i.e., flushing cigarettes down a toilet, which the comments 
stated could clog the toilet and pollute the environment). Some 
comments also stated that the statement was difficult to read in the 
``cigarettes in toilet bowl'' image. It was also stated in the comments 
that the image did not show large effects on the emotional and 
cognitive reaction scales in FDA's research study and failed to show 
desirable effects on other measures.
    (Response) We are not selecting this image for use in a required 
warning and instead have selected the image ``man I Quit t-shirt'' for 
the reasons given in section III.D of this document.
    Woman blowing bubble. In FDA's research study, the image ``woman 
blowing bubble'' had a significant effect on the cognitive reaction 
scale in youth.
    The image ``woman blowing bubble'' had a negative impact on youth 
beliefs about the health risks of smoking for smokers and for 
nonsmokers (i.e., youth who viewed this image were less likely to 
believe that smokers will suffer negative health consequences or that 
nonsmokers exposed to secondhand smoke will suffer negative health 
consequences than youth who viewed the text-only control). Furthermore, 
the adult sample that viewed a hypothetical advertisement containing 
the proposed required warning reported that they were less likely to 
quit smoking in the next 30 days compared to adults who viewed the 
text-only control.
    (Comment 116) FDA received some comments that supported the use of 
the image ``woman blowing bubble,'' including comments from 
individuals, a public health advocacy group, and a State public health 
agency. Multiple comments noted that the image appropriately shows how 
quitting smoking allows for a better lung capacity or noted that it 
effectively conveys the idea that there are beneficial effects of 
quitting.
    As discussed in section III.C of this document, some comments 
submitted to the docket described the results of research conducted by 
the submitters to examine the potential effectiveness of FDA's proposed 
images. This image was discussed in some of these comments. 
Specifically, this image led to lower levels of worry and lower reports 
of feeling discouraged from smoking relative to a text-only control in 
one submitter's study. In addition, the image was rated as the least 
effective of the images proposed by FDA for use with this warning 
statement in another submitter's study of the potential effectiveness 
of the images.
    FDA also received several comments that opposed use of the image 
``woman blowing bubble.'' Multiple comments stated that the image is 
confusing and is not appropriately compelling and would not be 
effective in encouraging smokers to quit. Some comments indicated that 
the image does not effectively convey the message contained in the 
warning statement, and some noted that the image is banal or, 
alternatively, too positive. Multiple comments also stated the image is 
hard to understand, and that smokers may not comprehend the association 
between the image and the warning statement. It was also stated that 
the image would inappropriately appeal to youth without discouraging 
them from smoking, and that the image is inappropriate because it is 
sexually suggestive. It was also noted in the comments that the image 
showed negative results on some measures in FDA's research study, and 
failed to show desirable effects on other measures.
    (Response) We are not selecting this image for use in a required 
warning and have instead selected the image ``man I Quit t-shirt'' for 
the reasons given in section III.D of this document.
10. Image for Advertisements With a Small Surface Area
    As discussed in section III.D of this document, FDA selected the 
image which appears on page 75 of the document entitled ``Proposed 
Required Warning Images'' for use with the textual warning statements 
solely in advertisements with a small surface area (defined as less 
than 12 square inches). We also proposed one other image for use with 
this statement, which appears on page 74 of the document entitled 
``Proposed Required Warning Images.''
    The proposed image on page 74 depicts a burning cigarette enclosed 
by a red circle with a red bar across the image. We did not receive any 
comments on either of the proposed images.
    As explained in section III.D of this document, we have selected 
the image of a black exclamation mark enclosed within a red equilateral 
triangle for use

[[Page 36670]]

in advertisements with a small surface area because we have concluded 
that the common purpose of this image, to denote a warning of a threat 
to health or of a hazard which could result in personal injury, makes 
it the most appropriate for use in the required warning context.

IV. Comments Regarding Textual Warning Statements

A. Changes to Textual Warning Statements

    As we explained in the proposed rule, section 202(b) of the Tobacco 
Control Act, amending section 4 of FCLAA (15 U.S.C. 1333), gives us the 
authority to adjust the format, type size, color graphics, and text of 
any of the required warning statements if such a change ``would promote 
greater public understanding of the risks associated with the use of 
tobacco products.'' In addition, under section 4(d) of FCLAA, FDA may 
adjust the type size, text, and format of the warning statements as the 
Agency determines appropriate ``so that both the graphics and the 
accompanying label statements are clear, conspicuous, legible and 
appear within the specified area.'' Such adjustments, including 
adjustments to the text and format of some of the warning statements, 
were included with some of the proposed warnings (75 FR 69524 at 
69534). We did not receive comments about these adjustments. Two of the 
warning statements we have selected for this final rule are presented 
in all uppercase letters, as they were in the proposal. In addition, 
one of the proposed required warnings, ``baby in incubator,'' was 
presented without the signal word ``WARNING.'' The research literature 
on graphic health warnings indicates that signal words, such as 
``Warning,'' have been found to enhance the noticeability of safety 
warnings and convey the degree of risk (see Ref. 40 at p. 33). In the 
final rule, we are thus not removing the word ``WARNING'' from this 
required warning, such that the text in this required warning is the 
same as the text presented in section 201 of the Tobacco Control Act 
(``WARNING: Smoking during pregnancy can harm your baby'').
    Moreover, section 906(d) of the FD&C Act (21 U.S.C. 387f(d)) 
authorizes FDA to issue regulations restricting the sale or 
distribution of cigarettes and other tobacco products. As is discussed 
in more detail in section V.B.6 of this document, a reference to a 
cessation resource has been included in the final required warnings.
    Although we did not receive any comments about the adjustments we 
made to the text of some of the warning statements in the 36 proposed 
required warnings, we received numerous comments requesting other 
changes to the textual statements for the new required warnings, 
including requests to strengthen the text, to add additional 
information to the text or to otherwise modify the text of the warnings 
statements. We also received requests to substitute alternative warning 
statements for some or all of the textual statements and to expand the 
warning statements by adding additional statements regarding smoking-
related risks. The comments, and our responses, are summarized in the 
following paragraphs. We also received numerous comments about our 
proposal to include a reference to a cessation resource in the required 
warnings; these comments and our responses are summarized in section 
V.B.6 of this document.
    (Comment 117) Several comments suggested that some of the textual 
warning statements should be changed to include language asserted to be 
stronger and more direct. For example, multiple comments suggested that 
the statement, ``WARNING: Tobacco smoke can harm your children,'' 
should be reworded to be more assertive, for example, to state 
``Tobacco smoke harms your children.'' One comment referenced the 
conclusion from the 2010 Surgeon General's report that there is no 
risk-free level of exposure to secondhand smoke as support for this 
modification (Ref. 37). Similarly, multiple comments recommended that 
FDA change the warning statement, ``WARNING: Smoking during pregnancy 
can harm your baby,'' to be more strongly worded. For instance, 
comments suggested this statement could instead be worded as ``WARNING: 
Smoking during pregnancy harms your baby'' or ``WARNING: Smoking when 
pregnant harms your baby'' or ``WARNING: Smoking harms your baby'' or 
``WARNING: Smoking harms the fetus and babies.'' Multiple comments also 
suggested the warning statement ``WARNING: Smoking can kill you'' 
should not be worded in a conditional manner. One comment suggested 
that the text could instead state ``Smoking kills.''
    Similarly, FDA received a number of comments suggesting other 
modifications that individuals, public health advocacy groups, health 
care professionals, community organizations, and other groups believed 
would augment the nine statements. For example, one comment from a 
public health advocacy group suggested that the statement ``Cigarettes 
are addictive'' be modified to state ``Cigarettes are HIGHLY 
addictive,'' while another comment suggested the statement read 
``Cigarettes are addictive and shorten your life.'' Similarly, a 
comment from a health care professional suggested the warning should 
state ``Cigarettes are addictive and deadly.'' Another comment from a 
nonprofit foundation suggested that the statement ``Cigarettes cause 
strokes and heart disease'' be modified to state ``Cigarettes cause 
strokes, heart disease, and amputations.''
    (Response) Section 202(b) of the Tobacco Control Act gives FDA the 
authority to change the textual warning statements if such a change 
would promote greater public understanding of the health risks 
associated with smoking. However, at this point, we decline to make the 
recommended changes. We are adopting the nine textual statements 
mandated by Congress in section 4(a)(1) of FCLAA. The nine new textual 
warning statements objectively communicate some of the major health 
risks associated with smoking in an effective manner. The new textual 
statements represent a significant improvement over the current set of 
warnings in that they are specific, unambiguous, and succinctly 
describe documented outcomes of cigarette use and exposure. We conclude 
that these nine new statements will effectively convey the major health 
risks of smoking, which will help discourage nonsmokers from initiating 
cigarette use, and encourage current smokers to consider cessation, 
particularly when combined with graphic images depicting the negative 
health consequences of smoking.
    However, we intend to monitor the effects of these required 
warnings once they are put into use. We will conduct research and keep 
abreast of scientific developments regarding the efficacy of various 
required warnings and the types and elements of various warnings that 
improve efficacy. Such research will help inform us regarding whether 
to propose changes to the textual warning statements, such as by using 
stronger or more direct language, in a future rulemaking.
    (Comment 118) Many comments recommended that FDA include additional 
textual information to give further context for the health warnings. 
For example, comments requested that FDA add information such as 
research statistics, factual testimonials, or other explanatory text to 
further enhance the effectiveness of the new required warnings. Several 
of the comments suggested specific text for particular warning 
statements; for example, one comment suggested the warning

[[Page 36671]]

statement related to addiction be accompanied by the following 
explanatory text: ``Studies have shown that tobacco can be harder to 
quit than heroin or cocaine.'' Other comments suggested that the 
statement ``WARNING: Cigarettes cause cancer'' be modified to add 
explanatory text about specific cancers caused by cigarettes, including 
cancers of the mouth, throat, esophagus, lungs, kidney, bladder, 
pancreas, stomach, cervix, and bone marrow. Another comment suggested 
that the statement ``Cigarettes cause strokes and heart disease'' be 
accompanied by explanatory text stating ``Cigarette smoking doubles 
your chances of strokes and can cause heart attacks'' and that the 
statement ``Cigarettes cause fatal lung disease'' be accompanied by 
explanatory text stating that ``Every cigarette you smoke increases 
your chances of dying from lung disease.'' In addition, the comment 
suggested that the statement ``Tobacco smoke causes fatal lung disease 
in nonsmokers'' be accompanied by explanatory text stating ``You're not 
the only one smoking cigarettes. The smoke is not just inhaled by 
smokers, it becomes second-hand smoke, which contains more than 50 
cancer agents.'' Another comment suggested adding information to the 
required warnings that state alternatives to smoking, such as exercise 
and healthy eating.
    (Response) We decline to make such changes at this time. As stated 
previously, the nine new textual warning statements mandated by 
Congress in section 4(a)(1) of FCLAA objectively communicate some of 
the major health risks associated with smoking in an effective manner. 
In addition, research has shown that warning statements that are short 
and to the point and that are presented in larger fonts sizes are 
likely to be more effective (Ref. 40 at p. 33). If the additional 
requested information were added to the required warnings, the 
resulting warning statements would be longer, and the font size of the 
warning statements would likely decrease in order for the information 
to fit within the specified area. This could undercut the effectiveness 
of the warnings (see, e.g., Ref. 57). If research later indicates that 
adding such information to the new required warnings will promote a 
greater understanding of the risks associated with smoking, we will 
consider making these changes using our authority under section 202(b) 
of the Tobacco Control Act.
    (Comment 119) One comment suggested that the warning statements 
that reference ``tobacco smoke'' should be modified to instead 
reference ``cigarette smoke'' to apply more directly to the target 
audience.
    (Response) We disagree that this change is warranted. The 
statements in section 4(a)(1) of FCLAA, including those that reference 
``tobacco smoke,'' are scientifically accurate, and we do not believe 
that consumers will fail to understand that the warning statements 
referencing ``tobacco smoke'' apply to the products on which they 
appear (i.e., cigarettes), which are tobacco products.
    (Comment 120) FDA received a number of comments suggesting that 
some of the negative health effects that are the subject of individual 
warning statements be replaced with other warnings. For example, one 
comment from a medical organization suggested that the statement 
``WARNING: Tobacco smoke causes fatal lung disease in nonsmokers'' 
should instead focus on heart attacks, stating that the magnitude of 
fatal heart disease caused by secondhand smoke exposure is greater than 
the magnitude of fatal lung disease caused by secondhand smoke 
exposure. One comment from an individual suggested that FDA use other 
warnings about the health harms of smoking instead of the warning about 
addiction.
    Another comment suggested that there should be fewer warnings 
regarding the health risks of secondhand smoke to babies and children 
and more warnings directed at young teens and pre-teens. One comment 
stated that the warnings about smoking during pregnancy and about the 
harms of tobacco smoke to children are only relevant to those who are 
pregnant or who have children and suggested that these warnings are 
thus less impactful than the other warning statements.
    However, other comments stated that the warnings about the risks of 
smoking during pregnancy and about the health risks of secondhand smoke 
to children address important health issues, will help make smokers 
aware that they are harming innocent people around them, and will help 
smokers appreciate the severity and magnitude of some of the lesser-
known risks of smoking. One comment from an individual noted that 
secondhand smoke kills an estimated 45,000 nonsmokers who live with 
smokers from heart disease each year, as well as increasing the risk of 
SIDS, acute respiratory infections, ear problems, and severe asthma in 
children, and causing respiratory symptoms and slowing lung growth in 
children.
    (Response) We decline to amend the warning statements as suggested 
by the comments. As stated previously, the nine textual statements 
provided by Congress in section 4(a)(1) of FCLAA appropriately 
communicate important health risks of smoking. Furthermore, we disagree 
with the suggestion that there should be fewer warnings about the 
health risks of smoking during pregnancy and of secondhand smoke to 
children. These warnings comprise two of the nine warning statements, 
and we agree with the comments indicating that these warnings 
communicate information about important health issues and will help 
smokers understand some of the significant health harms caused by 
cigarettes. In addition, while these warnings may be especially 
impactful with parents and expectant parents, using a variety of 
messages, including messages that may particularly impact certain 
audiences, will strengthen the overall impact of the required warnings 
(Ref. 40 at pp. 7-8).
    Similarly, we disagree with the suggestion that the warning about 
addiction should be replaced by a warning about other health hazards. 
As discussed in the preamble to the proposed rule (75 FR 69524 at 69528 
through 69529), the magnitude of public health harm caused by 
cigarettes is inextricably linked to the addictive nature of these 
products (Ref. 16 at p. 14 and Ref. 3 at p. xi), and many people, 
particularly adolescents, have a poor understanding of how difficult it 
is to quit smoking due to the addictive nature of cigarettes (Ref. 3 at 
p. 91). Thus, we conclude this is an important and appropriate health 
warning.
    (Comment 121) One comment suggested that graphic health warnings on 
cigarette packages and advertisements should have one broad warning 
that states: ``Cigarette smoking may cause cancer, death, and other 
serious life-threatening health hazards.'' Another comment suggested 
one broad warning that states: ``Smoking Can Kill You.''
    (Response) We disagree. We are not aware of any scientific evidence 
that one broad warning statement would be more effective in 
communicating the multitude of health risks to smokers and nonsmokers 
in all age categories than the nine specific textual warnings specified 
in section 4(a) of FCLAA.
    As noted in the proposed rule, evidence shows that warnings about 
specific health risks, such as cancer, heart disease, and stroke, are 
more effective than general warnings (75 FR 69524 at 69533 through 
69534). Utilizing a single broad statement like the ones proposed in 
the comments would also fail to communicate important information about 
the detrimental effects associated with secondhand smoke--and messages 
about secondhand smoke have been effective in moving smokers to 
consider

[[Page 36672]]

the health risks associating with smoking (75 FR 69524 at 69534). For 
example, the new set of warnings includes the following statement: 
``WARNING: Tobacco smoke causes fatal lung disease in nonsmokers.'' 
This important warning would be lost if we chose to use just one of the 
suggested broad warning statements. In addition, one of the new 
required warnings clearly notifies smokers that if they quit smoking, 
they can greatly reduce serious risks to their health. Again, that 
important message would be lost if we were to use just one of the 
suggested broad statements.
    (Comment 122) One comment stated that the ninth warning statement 
provided by Congress in the Tobacco Control Act, ``WARNING: Quitting 
smoking now greatly reduces serious risks to your health,'' should 
appear on all packages after one of the other eight warning statements.
    (Response) We disagree that such a change is warranted. As 
discussed in section V.B.6 of this document, we have included a 
reference to a cessation resource in the required warnings, which we 
conclude is more appropriate than including the ninth warning statement 
in all the required warnings.
    (Comment 123) Many comments suggested that FDA add additional 
warning statements to state that cigarette smoking may increase the 
risk of other diseases such as bladder cancer, impotence, blindness, or 
COPD. One comment stated that medical studies have shown that women who 
smoke a pack of cigarettes a day double the risk of orofacial cleft 
birth defects in their children, and suggested that a warning be added 
to include this risk and pictures of children with this birth defect 
(citing, e.g., Ref. 58). One comment also suggested that the required 
warnings indicate that smoking may increase the risk of breast cancer. 
Another comment suggested including messages about short-term effects 
of smoking, such as nutritional deficiencies.
    (Response) We decline to add additional warning statements, as 
suggested in these comments. At this point, we have determined the nine 
textual statements mandated by Congress in section 4(a)(1) of FCLAA 
appropriately communicate major health risks of smoking. As stated 
previously, we intend to monitor the effects of these required warnings 
once they are put into use. We will conduct research and keep abreast 
of scientific developments regarding the efficacy of various required 
warnings and the types and elements of various warnings that improve 
efficacy. We intend to use the results of our monitoring and such 
research to determine whether changes should be made to the nine 
textual statements in a future rulemaking. We recognize that cigarettes 
cause negative health consequences in both smokers and nonsmokers 
beyond those addressed in the nine warning statements provided by 
Congress, and will take this into account in making future 
determinations as to whether the textual statements should be revised 
by rulemaking.
    (Comment 124) A few comments also suggested that when FDA initiates 
a new rulemaking to establish its next set of graphic warnings, the 
Agency should consider adding health warnings that refer to other 
smoking-related diseases that are not specifically mentioned in this 
first set of required warnings.
    (Response) We intend to periodically review the required warnings 
to assess their effectiveness and determine whether the warnings are 
suffering from wear out. During this review, we intend to examine the 
scientific literature and possibly conduct our own research to 
determine if additional textual warnings about the scientifically 
documented negative health consequences of smoking are appropriate.
    (Comment 125) One comment suggested that FDA utilize different 
warnings with featured messages targeted to specific audiences based on 
their different attitudes and beliefs. As an example, this comment 
pointed to the Canadian health warning directed at young males, which 
stresses that tobacco can make the smoker impotent (Ref. 55).
    (Response) We conclude that the nine textual statements required by 
Congress in section 4(a)(1) of FCLAA are appropriate. In addition, we 
have selected color graphics to accompany the new warning statements 
that use a variety of different fonts, typography, and layouts; depict 
a variety of human subjects; and use a variety of styles, including 
photographic and graphic illustrations. The required warnings will 
reach a wide variety of audiences including youth, young adult, and 
adult smokers and nonsmokers. For information on FDA's selection of 
images, see section III of this document.
    As previously stated, we intend to monitor the effects of these 
required warnings once they are put into use. If our monitoring finds 
that the messages are not reaching an appropriately broad population 
and that targeted messages would be more effective, we will consider 
revising the textual statements in a future rulemaking.
    (Comment 126) One comment suggested that FDA require a standard 
pack size and shape, which would help to ensure the readability of 
warnings.
    (Response) We do not believe it is necessary to adopt a standard 
pack size and shape. We have taken steps to ensure that the required 
warnings will be conspicuous and legible on cigarette packages and in 
advertisements.

B. Attribution to the Surgeon General

    Section 4(a)(1) of FCLAA contains the nine new textual warning 
statements that, when combined with a graphic image, comprise the 
required warning. Congress did not include an attribution to the 
Surgeon General in the new textual warning statements, as it has done 
in past laws on cigarette health warnings. Accordingly, when we issued 
our proposed rule and released the 36 proposed required warnings, the 
textual warning statements did not include a reference to the Surgeon 
General. A number of comments, including those from former Surgeons 
General and Commissioned Public Health Service Officers, questioned why 
the new health warnings no longer contain any attribution to the 
``Surgeon General.'' A summary of the comments and our response 
regarding this issue is included in the following paragraphs.
    (Comment 127) The comments noted that, since Surgeon General Luther 
Terry's 1964 report highlighting the adverse health effects of tobacco 
use, the Office of the Surgeon General has been inextricably linked to 
smoking prevention and that the reduction in smoking rates since the 
initial report and the advent of the first Surgeon General's warning is 
due to the public confidence associated with the Surgeon General's 
recommendations. In addition, they claimed that the new warnings would 
be less effective without the Surgeon General attribution. Two other 
comments also suggested that FDA include ``the federal government 
logo'' on the health warnings to communicate that the Department of 
Health and Human Services (HHS) endorses the health message. Another 
comment from a public health advocacy group suggested that the warning 
statements add a reference to FDA and/or the U.S. Government to 
legitimize the warnings. In contrast, one comment stated that it did 
not support continued use of the Surgeon General attribution, but if 
FDA decides to include the attribution, it should be placed on the side 
of the package where it does not detract from the new health warnings.
    (Response) We agree with comments highlighting the benefits of the 
Surgeon General's work in the area of smoking prevention, but we 
decline to add the ``Surgeon General'' attribution to the

[[Page 36673]]

required warnings at this time. Congress did not include an attribution 
to the Surgeon General as it has done in the past. In addition, there 
is inconsistency among the limited scientific literature as to whether 
the attribution of health warnings to government sources enhances their 
credibility (see, e.g., Refs. 42, 36, 57, and 59). Attribution to a 
government resource may increase believability of the information; 
however, if the government is generally disliked or mistrusted, a 
government source attribution may result in rejection of the health 
warning (Ref. 11).
    One 1997 study found that the attribution to a government source, 
including the U.S. Surgeon General, did increase the credibility and 
viewers' intentions to comply with the warnings for cigarettes (Ref. 
57). Similarly, in a study conducted prior to Israel's decision to 
require new cigarette warnings on packages, researchers found that 
consumers preferred warnings with attribution to a government source or 
medical research rather than warnings without attribution (Ref. 59).
    However, in a developmental study assessing appropriate attributes 
for new cigarette warnings in Australia, researchers found that the 
mention of ``government'' in an attribution reminded smokers that the 
government collects tax revenue from cigarettes and led smokers to 
challenge the sincerity of the government in issuing cigarette health 
warnings (Ref. 48). Similarly, researchers for the European Commission 
in the European Union looked at respondents' reactions to three 
potential attributions for cigarette warnings: (1) Government/
regulatory bodies; (2) health authorities/cancer charities; and (3) 
tobacco industry (Ref. 42). They found smokers did not respond well to 
regulatory bodies as a potential source for cigarette warning messages, 
believing that government bodies did not care about their smoking 
behavior or were motivated by self-interest (Id.).
    Moreover, even though the 1997 study did find benefits associated 
with government source attribution, researchers also noted the 
potential trade-offs associated with government attribution (Ref. 57). 
They noted the surface area restrictions associated with warnings and 
that the amount of information that one can give without losing readers 
is limited (Id.). They also noted that the addition of attribution 
information may require the use of smaller font size, which may impact 
legibility and noticeability of the warning (Id.). In fact, as we noted 
in the preamble to the proposed rule, the length and font size of the 
existing warnings contribute to their ineffectiveness, and larger font 
sizes enhance the noticeability of cigarette warnings (75 FR 69524 at 
69530 and 69534; Ref. 40 at 30-31). Therefore, given the inconsistency 
in the available research and the potential tradeoffs associated with 
including a government source attribution in the required warnings, we 
conclude that there is insufficient evidence to support addition of an 
attribution at this time.
    We will continue to work in partnership with other components 
within HHS to educate consumers about the risks of smoking. FDA and 
others also will continue to conduct research regarding the efficacy of 
required warnings. If such research indicates that adding the Surgeon 
General attribution to the cigarette required warnings will improve 
their efficacy, we will consider adding a government attribution as 
part of a future rulemaking to update the warnings.

C. Foreign Language Translations

    As we explained in the preamble to the proposed rule, consistent 
with section 4(b) of FCLAA, proposed Sec.  1141.10(b)(2) would mandate 
that the textual component of the required warning appear in the 
English language in cigarette advertisements with two exceptions. 
First, per proposed Sec.  1141.10(b)(2)(i), if an advertisement appears 
in a non-English language publication, the textual portion of the 
required warning would need to appear in the predominant language of 
the publication. Second, per proposed Sec.  1141.10(b)(2)(ii), if an 
advertisement is in an English language publication but the 
advertisement itself is presented in a language other than English, the 
textual portion of the required warning would need to be presented in 
the same foreign language principally used in the advertisement. To 
accommodate the potential need for Spanish language translations of the 
textual warning statements, we included Spanish translations with the 
proposed rule. We received several comments regarding foreign language 
translations in advertisements and one comment requesting the use of 
foreign language translations on packages. We have summarized and 
responded to these comments in the following paragraphs.
    (Comment 128) One comment indicated that the submitter was pleased 
to see Spanish translations of the warnings, but asked that FDA 
continue to work with as many languages as possible.
    (Response) We understand the importance of ensuring that the 
textual portion of the required warnings is translated accurately so 
that the message is appropriately communicated to foreign language 
speakers. As indicated in the NPRM, we included Spanish language 
translations in recognition of the fact that Spanish is the foreign 
language most commonly used for cigarette advertisements in the United 
States (75 FR 69524 at 69537 through 69538). We also will work with any 
advertiser who plans to advertise cigarettes in any non-English 
language publication, or who plans to utilize a non-English 
advertisement in an English-language publication in accordance with 
Sec.  1141.10(b)(2)(ii). Specifically, upon request, we will assist 
advertisers in generating a true and accurate translation of the 
textual statements for the nine new required warnings for use in 
advertisements that are subject to Sec.  1141.10(b)(2).
    (Comment 129) One comment expressed concerns that foreign language 
translations sometimes can be ``too literal'' and could inappropriately 
impact the meaning of the warning statement.
    (Response) We are sensitive to this concern, and the final rule 
requires that any translation of the required warning statements 
results in a true and accurate foreign language version of the warning 
statements. As stated in the previous response, we will assist any 
advertiser who plans to advertise cigarettes with a foreign language 
translation of the required warnings.
    (Comment 130) One comment stated that all cigarette advertisements 
in predominantly Spanish speaking areas, such as Puerto Rico, and in 
Spanish language publications should include warnings in Spanish. 
Another comment recommended that the required warnings in 
advertisements be in the language of the publication or advertisement.
    (Response) We agree in certain circumstances. As stated in the 
proposed rule and required in Sec.  1141.10(b)(2), any advertisement 
that appears in a Spanish language publication must present the textual 
portion of the required warning in Spanish (see Sec.  
1141.10(b)(2)(i)). In addition, for advertisements in English language 
publications, if the advertisement itself is presented in Spanish, the 
required warning in the advertisement also must be in Spanish (see 
Sec.  1141.10(b)(2)(ii)). However, if an English language publication 
that includes English language advertisements is sold in predominantly 
Spanish speaking areas, the textual component of the required warnings 
will still be required to appear in

[[Page 36674]]

English, as specified by section 4 of FCLAA.
    We conclude that these requirements will appropriately ensure that 
the target audience of any advertisement is able to read and understand 
both the promotional content of the advertisement and the important 
warning information.
    (Comment 131) One comment requested that the required warnings on 
all cigarette packages exported to Puerto Rico and Latin America be in 
Spanish.
    (Response) We decline to adopt this request. Section 4(b)(2) of 
FCLAA and Sec.  1141.10(b)(2) require translation of required warnings 
for certain advertisements only. Neither FCLAA nor the Tobacco Control 
Act requires foreign language warnings on cigarette packages sold or 
distributed within the United States, including within the Commonwealth 
of Puerto Rico. Furthermore, with limited exceptions, FCLAA does not 
apply to packages of cigarettes for export from the United States.

V. Description of the Final Rule

A. Overview of the Final Rule

    This final rule adds new part 1141 to Title 21 of the Code of 
Federal Regulations, requiring new warnings on cigarette packages and 
in cigarette advertisements. These new required warnings consist of the 
nine textual warning statements set forth in section 201 of the Tobacco 
Control Act accompanied by color graphic images depicting the negative 
health consequences of smoking. We have selected nine images, such that 
each required warning consists of one of the nine textual warning 
statements and an accompanying color graphic.
    As required by section 201 of the Tobacco Control Act, the rule 
requires the new warnings to appear prominently on cigarette packages 
and in advertisements, occupying at least 50 percent of the area of the 
front and rear panels of cigarette packages and the top 20 percent of 
the area of advertisements. We also have exercised our authority under 
sections 201 and 202 of the Tobacco Control Act, which allow FDA to 
adjust the type size, text, and format of the textual warning 
statements. For example, under section 4(d) of FCLAA (as amended by 
section 201 of the Tobacco Control Act), FDA may adjust the type size, 
text, and format as we determine appropriate so that both the textual 
warning statements and the accompanying graphics are clear, 
conspicuous, legible, and appear within the specified area. Such 
adjustments, including adjustments to the type size and the addition of 
information regarding a cessation resource, are included for the 
required warnings in this final rule. In addition, we are requiring a 
reference to 1-800-QUIT-NOW as part of the required warnings in 
accordance with section 906(d) of the FD&C Act as appropriate for the 
protection of the public health.

B. Description of Final Regulations and Responses to Comments

1. Section 1141.1--Scope
    In the proposed rule, proposed Sec.  1141.1 set forth the scope of 
the proposed regulations. In particular, proposed Sec.  1141.1(b) 
limited the applicability of the proposed requirements by clarifying 
that they would not apply to manufacturers or distributors of 
cigarettes that do not manufacture, package, or import cigarettes for 
sale or distribution in the United States. Proposed Sec.  1141(c) 
described situations where a cigarette retailer would not be in 
violation of the proposed rule for displaying or selling cigarette 
packages that do not comply with the rule, so long as certain 
conditions were met (75 FR 69524 at 69535). We received several 
comments regarding the scope of the regulation, which we have 
summarized and responded to in the following paragraphs.
    (Comment 132) One comment requested that all imported cigarettes 
and tobacco products have required warnings to come into U.S. ports and 
be sold in the United States and its territories, including Puerto 
Rico.
    (Response) We agree that imported cigarette packages must bear a 
required warning in accordance with section 4 of FCLAA and part 1141. 
Section 1141.10 provides that it is unlawful for any person to import 
for sale or distribution within the United States any cigarettes the 
package of which fails to bear one of the required warnings on both the 
front and rear panels. Section 1141.3 defines United States to include 
specified U.S. territories, including Puerto Rico. In addition, as 
explained in section V.B.2 of this document, we are revising the 
definition of importer to clarify that the term importer includes any 
person who imports any cigarette, regardless of where it was 
manufactured. With respect to whether other tobacco products should 
have required warnings, we have determined that issue is outside the 
scope of this rulemaking.
    (Comment 133) One comment supported the imposition of the required 
warnings on all cigarette packages manufactured in the United States, 
including all exported cigarette packages. The comment said that it 
would be unconscionable for FDA to protect residents in the United 
States and not the rest of the world when they are smoking U.S.-made 
products. According to this comment, cigarettes that are being exported 
are essentially bought in the United States and these products are 
under the FDA's jurisdiction.
    (Response) We disagree that it is appropriate to impose a 
requirement that cigarettes that are manufactured in the United States 
for export bear a required warning. Section 4(a) of FCLAA applies to 
cigarettes packages that are ``for sale or distribution within the 
United States.'' Section 12 of FCLAA provides:

    Packages of cigarettes manufactured, imported, or packaged (1) 
for export from the Unites States or (2) for delivery to a vessel or 
aircraft, as supplies, for consumption beyond the jurisdiction of 
the internal revenue laws of the Untied States shall be exempt from 
the requirements of this Act, but such exemptions shall not apply to 
cigarettes manufactured, imported, or packaged for sale or 
distribution to members or units of the Armed Forces of the United 
States located outside of the United States.

(15 U.S.C. 1340). In addition, many other countries impose their own 
warning requirements on cigarette packages sold in those countries.
    (Comment 134) One comment requested that FDA exercise enforcement 
discretion for retailers and distributors selling cigarettes that do 
not bear a specified warning label because retailers do not control the 
labeling of the products supplied by manufacturers. The comment claimed 
that if a product is provided by a licensed supplier, and not altered 
by the distributor, the distributor should likewise be relieved of 
liability.
    (Response) FCLAA provides a very limited exemption for retailers 
and we do not agree that it is appropriate to broaden the exemption to 
distributors. Nor do we agree that it is appropriate to adopt a broad 
enforcement discretion policy for retailers and distributors. By 
choosing to distribute and sell cigarettes, distributors are under an 
obligation to make sure that the products they receive from 
manufacturers, importers, and other distributors and subsequently 
distribute or sell comply with the law, including checking to see 
whether the packages include a required warning on the front and rear 
panel. Retailers, however, are not in violation if they display or sell 
a cigarette package that includes a health warning, even if it is not 
one of the nine required warnings, as long as other

[[Page 36675]]

statutory requirements are met (see 15 U.S.C. 1333(a)(4)). The preamble 
to the proposed rule made clear that manufacturers, importers, and 
distributors have the primary responsibility for ensuring that the 
required warnings on cigarette packages comply with all the provisions 
of part 1141.
    (Comment 135) One comment expressed concern regarding the exemption 
of retailers from an obligation to ensure packages depict required 
warnings. This comment claimed that the exemption hampers enforcement, 
because an inspector needs to be able to seize noncompliant packaging 
at retail.
    (Response) We decline to revise the language of proposed Sec.  
1141.1(c). As we explained in the preamble to the proposed rule, the 
limited retailer exemption is in accordance with section 4(a)(4) of 
FCLAA. The exemption for retailers is limited to situations where the 
cigarette package contains a health warning, is supplied to the 
retailer by a license- or permit-holding tobacco product manufacturer, 
importer, or distributor, and is not altered by the retailer in a way 
that is material to the requirements of section 4(a) of FCLAA. We note, 
however, that Sec.  1141.1(c) describes situations where a retailer is 
not considered in violation of part 1141; this exemption does not apply 
to manufacturers, importers, or distributors that provide retailers 
with noncompliant cigarette packages. Thus, although a retailer would 
not be held liable for selling or offering for sale a cigarette package 
that is not in full compliance with the requirements of part 1141, so 
long as the retailer fits within the exemption set forth in Sec.  
1141.1(c), the manufacturer, importer, or distributor that provided the 
noncompliant packages would be liable for violating FCLAA and these 
regulations. Furthermore, the misbranding provisions in Sec.  1141.14 
apply to the cigarettes themselves. Therefore, if we discover 
misbranded cigarette packages in a retail establishment, but the 
retailer fits within the exemption set forth in Sec.  1141.1(c), we 
could still initiate a seizure action under section 304 of the FD&C Act 
(21 U.S.C. 334).
    (Comment 136) One comment requested that FDA revise its 2010 
Regulations Restricting the Sale and Distribution of Cigarettes and 
Smokeless Tobacco to Protect Children and Adolescents (75 FR 13225, 
March 19, 2010) (``reissued 1996 rule'') to ensure that the Agency does 
not exceed the scope of the Tobacco Control Act by imposing liability 
on retailers and distributors for labeling or advertising in specific 
situations. This comment contended that the Tobacco Control Act 
provides specific situations in which retailers should not be held 
liable for labeling or advertising and those situations are not 
recognized in the reissued 1996 rule.
    (Response) Section 201 of the Tobacco Control Act, amending section 
4 of FCLAA to require graphic warnings, does contain a specific 
exemption for retailers in certain circumstances, and proposed Sec.  
1141.1(c) and (d) recognized this exemption. Section 102 of the Tobacco 
Control Act required FDA to reissue the 1996 Regulations Restricting 
the Sale and Distribution of Cigarettes and Smokeless Tobacco to 
Protect Children and Adolescents (61 FR 44396, August 28, 1996) with 
certain specified exceptions. We have complied with this requirement 
(75 FR 13225). However, section 102 of the Tobacco Control Act did not 
specify that the reissued 1996 rule contain an exemption for retailers 
or distributors. Consequently, this graphic warning rulemaking did not 
propose any revisions to the reissued 1996 rule (currently codified at 
21 CFR part 1140).
    (Comment 137) Multiple comments advocated for the placement of 
graphic warnings on all tobacco products, including smokeless tobacco 
products.
    (Response) We decline to require warnings on other tobacco products 
in this rulemaking. In section 4(d) of FCLAA, Congress directed FDA to 
issue regulations to require color graphic images to accompany the 
warnings statements required by section 4(a)(1) of FCLAA. This section 
of FCLAA requires that the statements be included on cigarette 
advertisements and cigarette packages. While we may be able to require 
warnings on other tobacco products under other authority, such action 
is outside the scope of this rulemaking.
2. Section 1141.3--Definitions
    Proposed Sec.  1141.3 included definitions for the following terms:
     Cigarette
     Commerce
     Distributor
     Front panel and rear panel
     Importer
     Manufacturer
     Package
     Person
     Required warning
     Retailer
     United States
We received only a few comments regarding definitions described in the 
proposed rule. In light of these comments, we are revising the 
definition of ``importer.''
    As explained in the preamble to the proposed rule, proposed Sec.  
1141.3 defined ``importer,'' for purposes of part 1141, as any person 
who introduces into commerce any cigarette that: (1) Was not 
manufactured in the United States and (2) is intended for sale or 
distribution to consumers in the United States. Proposed Sec.  1141.3 
defined ``retailer'' as any person who sells cigarettes to individuals 
for personal consumption, or who operates a facility where vending 
machines or self-service displays of cigarettes are permitted (75 FR 
69524 at 69536).
    (Comment 138) One comment asked that FDA expand the definition of 
importer to include persons who introduce into commerce cigarettes 
manufactured in the United States, exported from the United States, and 
subsequently imported. According to this comment, legislation in 2000 
substantially curtailed this practice, but it is still possible.
    (Response) We agree that any person who introduces into commerce 
cigarettes that were imported into the United States, regardless of 
where those cigarettes were manufactured, should be considered an 
importer. We are revising the definition of importer to clarify this 
point.
    (Comment 139) With respect to the definition of retailer, one 
comment requested that FDA revise the definition to clarify that 
Internet sellers are included in this definition. The comment noted 
that it appears the retailer definition is broad enough to cover 
Internet sellers, but clarification would avoid any arguments to the 
contrary.
    (Response) We have determined that revisions to the definition of 
retailer are not needed. The definition is clear that any person, 
including an Internet seller, who sells cigarettes to individuals for 
personal consumption is a retailer. The comment provided no examples of 
possible arguments for why an Internet seller would not meet the 
definition of retailer and provided no alternate language for the 
definition. It may be possible that an Internet seller would not be 
considered a retailer because it is not selling cigarettes to 
individuals for personal consumption. In that case, however, the 
Internet seller would likely meet the definition of distributor and, if 
so, would be responsible for complying with all responsibilities of 
distributors under part 1141 and section 4 of FCLAA.
3. Section 1141.10--Required Warnings
    The Tobacco Control Act directs FDA to require that color graphic 
images depicting the negative health

[[Page 36676]]

consequences of smoking accompany each of the textual warning 
statements that must be randomly displayed on cigarette packages (i.e., 
in each 12-month period, all of the different warnings must appear in 
as equal a number of times as is possible on each brand of the product 
and be randomly distributed in all areas of the United States in which 
the product is marketed) and rotated quarterly in cigarette 
advertisements under FCLAA. Accordingly, in proposed Sec.  1141.10, we 
proposed that cigarette packages and advertisements contain such a 
combination graphic-textual warning.
    Proposed Sec.  1141.10 provided that the warnings required by this 
section be obtained from two documents entitled ``Cigarette Required 
Warnings--English and Spanish'' and ``Cigarette Required Warnings--
Other Foreign Language Advertisements.'' ``Cigarette Required 
Warnings--English and Spanish'' was proposed to contain the required 
warnings that must be included on all cigarette packages, and in 
cigarette advertisements in which the text of the required warning must 
be set forth in the English language or the Spanish language. 
``Cigarette Required Warnings--Other Foreign Language Advertisements'' 
was proposed to contain the electronic files that were to be used to 
generate the required warnings for advertisements in which the text of 
the required warning must be set forth in a foreign language (other 
than Spanish).
    The material that was proposed to be contained in the two documents 
entitled ``Cigarette Required Warnings--English and Spanish'' and 
``Cigarette Required Warnings--Other Foreign Language Advertisements'' 
is now contained in a single document entitled ``Cigarette Required 
Warnings.'' We have provided this information in a single document 
because each of the electronic files for use in advertisements 
contained in ``Cigarette Required Warnings'' allows users to select an 
English or Spanish textual warning statement or to remove the textual 
warning statement and insert a true and accurate foreign language 
(other than Spanish) translation of the warning statement into the 
file. It is thus unnecessary to provide separate documents with 
electronic files for English and Spanish language advertisements and 
for advertisements in which the text of the required warning must be 
set forth in a foreign language (other than Spanish). Section 1141.10 
has been updated to reference this single document, ``Cigarette 
Required Warnings,'' rather than the two proposed documents 
(``Cigarette Required Warnings--English and Spanish'' and ``Cigarette 
Required Warnings--Other Foreign Language Advertisements'').
    Section 1141.10(a) sets forth the requirement specific to cigarette 
packages, explaining that the new required warning must comprise at 
least the top 50 percent of the front and rear panels of the package, 
except for cartons where the warnings shall comprise 50 percent of the 
left side of the front and rear panels. This regulation implements 
section 4(a)(2) of FCLAA and is in line with the provisions of the 
Framework Convention on Tobacco Control (FCTC) (Ref. 60). Section 
1141.10(a)(3) specifically provides that the ``required warning shall 
appear directly on the package and shall be clearly visible underneath 
the cellophane or other clear wrapping.'' Section 1141.10(b) sets forth 
the requirements for advertisements, including the requirement that the 
warnings comprise at least 20 percent of the area of the 
advertisements. Section 1141.10(c) provides that the required warnings 
shall be indelibly printed on or permanently affixed to the package or 
advertisement. For the final rule, we have deleted the language from 
Sec.  1141.10(a)(2) and (b)(3) that specified that the electronic 
images must be adapted as necessary to meet the requirements of section 
4 of FCLAA and part 1141. As explained in the NPRM (75 FR 69524 at 
69536 through 69538), this language was used to indicate that regulated 
entities should modify the size of the required warnings to ensure they 
are the required size and occupy the required area of the cigarette 
package or advertisement. However, Sec.  1141.10(a)(4) and (b)(5) set 
forth the size and placement requirements for required warnings on 
packages and advertisements, so this language in proposed Sec.  
1141.10(a)(2) and (b)(3) was not necessary. In addition, Sec.  
1141.10(a)(1) and (b)(1) make clear that the required warnings on 
cigarette packages and in cigarette advertisements must be ``in 
accordance with section 4 of the Federal Cigarette Labeling and 
Advertising Act.''
    We also have made minimal changes to Sec.  1141.10(b)(4), which 
used similar language. Specifically, proposed Sec.  1141.10(b)(4) 
indicated that the required warnings for foreign language 
advertisements (other than Spanish) must be adapted as necessary to 
meet the requirements of section 4 of FCLAA and part 1141. For clarity, 
we have modified this language to indicate that the textual warning 
statement that is inserted into the electronic images must comply with 
the requirements of section 4(b)(2) of FCLAA. As explained in the NPRM 
(75 FR 69524 at 69538), proposed Sec.  1141.10(b)(4) would have 
required regulated entities to obtain color graphics for foreign 
language required warnings, other than Spanish language warnings, from 
the electronic files contained in ``Cigarette Required Warnings--Other 
Foreign Language Advertisements,'' and regulated entities would have to 
insert a true and accurate foreign language translation of the textual 
warning required by FCLAA into the electronic file to generate the 
required warning (as explained previously, these electronic files are 
now contained in the document entitled ``Cigarette Required 
Warnings''). While the electronic file obtained from ``Cigarette 
Required Warnings'' contains some of the elements required by FCLAA 
(e.g., a rectangular border to enclose the required warnings and the 
color graphic to accompany the label statement), the textual warning 
statement that regulated entities insert into the electronic file in 
accordance with Sec.  1141.10(b)(4) must comply with the requirements 
of section 4(b)(2) of FCLAA. This section provides, among other things, 
format specifications related to the textual warning statements in 
cigarette advertising, including required type sizes and color 
specifications (i.e., the text of the label statement shall be black if 
the background is white and white if the background is black), and 
requires that the statements appear in conspicuous and legible type.
    In addition, we wish to clarify our intent regarding whether the 
same warning statement must appear on both the front and rear panels of 
an individual cigarette package. We believe that section 4(a)(1) of 
FCLAA is ambiguous as to whether it mandates the use of the same 
required warning on both the front and rear panels of an individual 
cigarette package or allows two different required warnings to be used, 
one on the front panel and the other on the rear panel. We believe that 
the latter interpretation is reasonable. It is consistent with 
Congress' intent that all of the required warnings, each of which 
conveys somewhat different health information, are required to be 
displayed in the marketplace at the same time (see section 4(c)(1) and 
(c)(3) of FCLAA). While it is possible that two copies of the same 
statement on a single package might increase the likelihood of the 
warning being noticed and remembered, we also note that different 
statements on a single package could lead to greater consumer exposure 
as well as delay the wear out of the required warnings. Proposed

[[Page 36677]]

Sec.  1141.10(a)(1), along with the description of this provision in 
the preamble to the proposed rule (75 FR 69524 at 69536), however, 
implied that the same required warning must appear on both the front 
and the back of the package. Therefore, we are revising Sec.  
1141.10(a)(1) to state, ``It shall be unlawful for any person to 
manufacture, package, sell, offer to sell, distribute, or import * * * 
any cigarettes the package of which fails to bear * * * one of the 
required warnings on the front and the rear panels.''
    We received comments regarding the format of required warnings on 
packages and advertisements, the applicability of the requirements to 
cigarette cartons, and the need for the warnings to remain clearly 
visible and permanently affixed to packages. A summary of these 
comments and our responses is provided in the following paragraphs.
    (Comment 140) Many comments, including those from health 
institutions, nonprofit organizations, academics, and consumers, agreed 
that the significant enhancements to the cigarette health warnings 
required by Sec.  1141.10 will make them considerably more noticeable 
and memorable than warnings that currently appear on cigarette packages 
and in cigarette advertisements. However, many comments also noted that 
the FCTC Article 11 Guidelines urge parties to cover as much of the 
principal display areas as possible and that evidence suggests that 
warnings larger than 50 percent of the principal display areas may be 
even more effective (citing Ref. 41). The comments noted that 
researchers also have found that smokers correlate the size of the 
warning label to the importance of the message--the larger the message, 
the greater magnitude of the risk (citing Ref. 61). Accordingly, these 
comments requested that FDA consider increasing the size of the graphic 
warnings such that they occupy more than 50 percent of the front and 
rear panels of cigarette packages.
    (Response) We decline to revise the 50 percent area requirement at 
this time. We have currently determined that this requirement is 
sufficient to achieve our goals, and this requirement is consistent 
with the specification set forth by Congress in section 4(a)(2) of 
FCLAA.
    (Comment 141) A few comments expressed the belief that there was no 
adequate justification for the amount of space mandated for the new 
required warnings (i.e., 50 percent of the front and back panels of 
packages and the top 20 percent of the area of advertisements). One 
comment noted that Congress enacted the 50 percent requirement without 
committee testimony or other fact-finding as to whether a smaller-sized 
warning would be effective. The comments asserted that the current size 
and placement of the warnings on cigarette packages and advertising 
have contributed to ``complete awareness levels of the dangers of 
cigarettes.''
    (Response) We disagree. As we stated in the preamble to the 
proposed rule, our assessment of the literature and our experience as a 
public health agency supports the requirement that the new warnings 
comprise the top 50 percent of the area of each of the front and rear 
panels of cigarette packages and the top 20 percent of the area of 
cigarette advertisements in the United States (75 FR 69524 at 69533). 
For example, researchers have found that larger graphic warnings are 
likely to have the greatest impact and that ``larger (label) size means 
higher visibility and better ability to compete with other package 
elements'' (Ref. 40 at p. 30). Smokers are more likely to recall larger 
warnings, and have been found to correlate the size of the warning with 
the seriousness of the risk (Ref. 61). One Canadian study found that 
smokers judged warnings that covered 80 percent of the package to be 
most effective (Ref. 11). In a New Zealand study gauging responses to 
different sized graphic health warnings (one sized 50 percent of the 
front of the pack, and another sized 30 percent of the front of the 
pack), participants strongly preferred the larger sized warning (Ref. 
40 at p. 31). Participants felt that the larger sized warning was more 
prominent, more likely to stand out from product branding, and that 
some of the messages on the front of the pack remained visible when the 
pack was open (Id. at p. 30). The 50 percent requirement also is 
consistent with the FCTC (i.e., the required warnings should occupy 50 
percent or more of the principal display areas of packages), which was 
among the substantial evidence considered by Congress when enacting the 
Tobacco Control Act (FCTC art. 11.1(b)). ``Congress also informed its 
warning requirements by looking at the use of a nearly identical 
warning requirement in Canada.'' Commonwealth Brands v. United States, 
678 F. Supp. 2d 512, 531 (W.D. Ky. 2010), appeal pending sub nom., 
Discount Tobacco City & Lottery, Inc. v. United States, Nos. 10-5234 & 
10-5235 (6th Cir.).
    In addition, as described more fully in section II.C of this 
document, the existing warnings have not been effective in 
communicating the health risks of smoking, resulting in significant 
portions of the population that misunderstand or underestimate the 
health risks of smoking. The new size and placement requirements are 
needed to increase the salience of cigarette health warnings, which are 
now considered ``invisible,'' in order to educate the public about the 
health risks of smoking, which in turn, can positively impact smoking 
intentions and behaviors (Ref. 3 at p. 291).
    (Comment 142) Some comments suggested that the regulation include a 
font size requirement.
    (Response) We note that the proposal included a requirement related 
to font size and this is retained in the final rule. The final rule 
mandates that the required warnings be accurately reproduced from the 
document incorporated by reference entitled ``Cigarette Required 
Warnings.'' The required font style and font size already will be 
included in the options within the downloadable files that allow the 
user to select English and Spanish language warning statements.
    For advertisements in foreign languages other than Spanish, 
companies must comply with the font size requirements in section 
4(b)(2) of FCLAA and any format requirements included in the document 
incorporated by reference (see section V.B.4 of this document). In all 
situations, the textual statements must be conspicuous and legible as 
required by section 4 of FCLAA.
    (Comment 143) One comment from an industry group took issue with 
FDA's authority to require the new graphic warnings on cigarette 
cartons, claiming that Congress' intent was to require the new graphic 
warnings on individual cigarette packs only, not cartons. The submitter 
recommended that FDA expressly exempt cartons from this requirement.
    (Response) We disagree with this comment. FCLAA defines the term 
``package'' to mean a ``pack, box, carton, or container of any kind in 
which cigarettes are offered for sale, sold, or otherwise distributed 
to consumers.'' (section 3(4) of FCLAA (15 U.S.C. 1332(4)) (emphasis 
added)). Similarly, section 900(13) of the FD&C Act defines the term 
``package'' to mean a ``pack, box, carton, or container of any kind or, 
if no other container, any wrapping (including cellophane), in which a 
tobacco product is offered for sale, sold, or otherwise distributed to 
consumers.'' (21 U.S.C. 387(13) (emphasis added)). Given these 
definitions, it is clear that when Congress decided to require graphic 
warnings that occupy 50 percent of the front and back panels of 
cigarette ``packages,'' it intended for this requirement to apply to 
both individual

[[Page 36678]]

packs and cartons. Therefore, Sec.  1141.10(a)(4) continues to mandate 
that the required warnings must constitute 50 percent of the left side 
of the front and rear panels of cigarette cartons.
    (Comment 144) One comment recommended that FDA require the nine new 
textual warning statements, included in section 4(a) of FCLAA, to be 
displayed in the same manner as the display of the existing warnings, 
because that format has contributed to the public being fully informed 
about the health risks of smoking.
    (Response) We disagree. First, as explained in section II.C of this 
document, the public is not adequately informed about the health risks 
of smoking and frequently underestimates those risks. Second, Congress 
mandated that the format of the new health warnings change from the 
small warning on the side panel of the pack, covering only 4 percent of 
the pack, to health warnings that ``comprise the top 50 percent of the 
front and rear panels of the package'' and ``at least 20 percent of the 
area of the advertisement.'' (15 U.S.C. 1333(a)(2) and (b)(2)). This is 
consistent with the FCTC (FCTC art. 11.1(b)). Therefore, we decline to 
change the format of the required warnings from that included in the 
proposed rule.
    (Comment 145) One comment suggested that the required warnings on 
cigarette advertisements cover at least 50 percent of the 
advertisement's principal surface and match the advertisement's primary 
language.
    (Response) As stated in the preamble to the proposed rule and as 
required by section 4 of FCLAA, Sec.  1141.10(b)(5) mandates that the 
required warnings comprise at least the top 20 percent of the area of 
the advertisement. Section 4 of FCLAA also requires that the warning 
statement appear in conspicuous and legible type. At this time, we 
conclude these requirements are sufficient to ensure that the required 
warnings are appropriately clear, conspicuous, and legible by 
consumers.
    Moreover, as stated in the preamble to the proposed rule and as 
indicated in section IV.C of this document, while the textual portion 
of the required warning in a cigarette advertisement must generally be 
in English, if an advertisement is presented in a language other than 
English, the textual portion of the required warning must be presented 
in the language principally used in the advertisement (see Sec.  
1141.10(b)(2)(ii)). Therefore, we have determined that modifications to 
the codified text are not necessary.
    (Comment 146) Proposed Sec.  1141.10(a)(5) provided that the 
``required warning shall be positioned such that the text of the 
required warning and the other information on that panel of the package 
have the same orientation.'' One comment expressed concern that this 
provision could be problematic if a manufacturer places the brand name 
and other information vertically on the front and/or back of the 
cigarette package. The comment believed that this provision would 
require the warning, or the text of the warning, to appear sideways on 
the cigarette package.
    (Response) The intent of this provision is to ensure that the 
textual statement in the required warning and other information on the 
front and rear panels of the package have the same orientation. As 
explained in the NPRM, this will in turn ensure that the warnings are 
noticed and read by consumers that are reading the other information 
found on the package (75 FR 69524 at 69537). Therefore, in the unusual 
circumstance where a manufacturer chooses to place its brand name or 
other information such that viewers do not read along the horizontal 
axis (i.e., from left to right) to read this information, the 
manufacturer must place the required warning in the same orientation.
    (Comment 147) Two comments suggested that the FDA require health 
warnings on 100 percent of only the front or the rear panel of the 
cigarette package.
    (Response) We disagree. First, section 4(a)(2) of FCLAA 
specifically requires that the cigarette health warnings ``comprise the 
top 50 percent of the front and rear panels of the package.'' Second, 
Article 11 of the FCTC states that the health warnings ``should be 50% 
or more of the principal display areas but shall be no less than 30% of 
the principal display areas'' (Ref. 60). FDA's new warnings implement 
Congress' directive and are consistent with the FCTC.
    (Comment 148) A few comments suggested that FDA require health 
warning statements on cigarette papers and/or filters.
    (Response) We decline to require warnings on cigarette papers and/
or filters. In section 4(d) of FCLAA, Congress directed FDA to issue 
regulations to require color graphic images to accompany the warnings 
statements required by section 4(a)(1) of FCLAA. FCLAA requires that 
the statements be included on advertisements and cigarette packages, 
not individual cigarette papers or filters. While we may be able to 
require warnings on papers or filters under other authority, that is 
outside the scope of this rulemaking.
    (Comment 149) One comment suggested that FDA amend the regulation 
to prohibit distributors from obscuring any portion of the warning 
label with revenue stamps.
    (Response) As written, the proposed rule would prohibit 
distributors from obscuring any portion of the required warning with 
revenue stamps. Cigarette packages must comply with the requirement in 
Sec.  1141.10(a)(3) that the new required warnings be clearly visible. 
Moreover, in order for the required warnings to appear conspicuously 
and legibly as mandated by section 4 of FCLAA, the warnings must not be 
obscured. Thus, if the placement of revenue stamps by a distributor 
causes the required warnings to not be clearly visible or legible, the 
distributor would be in violation of these regulations. Therefore, we 
do not agree that any revisions to Sec.  1141.10 are necessary.
    (Comment 150) One comment suggested that FDA require the use of 
onserts affixed to cigarette packages in addition to the new required 
warnings, stating that they would enhance the effectiveness of the new 
health warnings. Similarly, another comment stated that, in addition to 
the new required warnings, FDA should require that cigarette packages 
contain inserts with animated warnings containing supplementary or 
distinct warning messages to enhance the overall warning impression and 
further engage individuals.
    (Response) A requirement to add onserts or inserts is beyond the 
scope of this rulemaking and, therefore, we decline to require them 
here.
    (Comment 151) One comment stated that there is no empirical basis 
for concluding that the nine warning statements required under section 
4 of FCLAA should be written in large text on the front and back panels 
of packages in order to convey the health risk information.
    (Response) We disagree with this comment and conclude that there is 
a sufficient empirical basis for concluding that the warning statements 
should be in large text that is conspicuous and legible. Research has 
shown that increasing the salience of warnings increases the likelihood 
of consumers reading warnings and that the salience of a visual warning 
can be enhanced by using large, bold print (Ref. 62). In addition, 
after Australia changed their health warnings to six rotated textual 
warnings with a cessation resource and additional explanatory text in 
1995,

[[Page 36679]]

researchers found that the increased text size was the most salient 
feature (Ref. 63). Furthermore, the IOM Report, which provides a 
summary of the available research on the efficacy of graphic warnings, 
found that larger, graphic health warnings (including large text and a 
large graphic) would promote greater public knowledge of the health 
risks and would help reduce consumption of tobacco products (Ref. 3). 
The placement of the large text and graphic image on the front and back 
panels of cigarette packages is consistent with the FCTC, i.e., that 
health warnings should occupy 50 percent or more of the principal 
display areas of packages (FCTC art. 11.1(b)).
    (Comment 152) One comment claimed that the format of the new 
required warnings is inconsistent with FDA's drug warning label regime. 
For example, the comment stated that even for very severe risks, the 
drug regulations do not require warning information to appear in large 
text or to occupy a large portion of the packaging. The comment also 
noted that, in drug advertising, the FDA requires important risk 
information to be included in a section of the advertisement entitled 
``Brief Summary.''
    (Response) We have acknowledged that the warning requirements for 
cigarettes are, and should be, different than the warnings for other 
FDA-regulated products. As we explained in the preamble to the proposed 
rule, ``(1) The warning information for cigarettes is different in its 
applicability than the warning information for other products, (2) the 
disclosure requirements for other products have a different purpose 
than the cigarette warnings, and (3) the mechanisms for exposure to 
warning information are different for tobacco products than for other 
products FDA regulates'' (75 FR 69524 at 69539). In contrast to medical 
products regulated by FDA, there is no population that cigarettes are 
medically appropriate for, and there is no safe method of using 
cigarettes; the required warnings for these products thus have an 
inherently different purpose than medical product warning information. 
The different warning schemes that apply to tobacco products versus 
medical products are necessary to most effectively communicate the 
health risks for tobacco products and for other FDA-regulated products.
    (Comment 153) One comment claimed that FDA did not provide an 
adequate justification for requiring the same health warning messages 
in multiple media, including print advertisements, point-of-sale 
displays, cartons, and the front and back of individual cigarette 
packs. This comment claimed that the publication of health warning 
messages in multiple media will not foster awareness of the information 
(because it is already known) or belief in it (because it is already 
believed).
    (Response) We disagree. As explained in section II.D of this 
document, despite existing warning requirements on packages and in 
advertisements, consumers lack knowledge of the health risks and 
underestimate the health risks of smoking. It is critical that the 
negative health consequences of cigarette smoking, which is the leading 
cause of preventable death and disease in the United States, be 
clearly, accurately, and effectively conveyed in all advertisements and 
on all cigarette packages sold or distributed in the United States.
    This is consistent with the requirements of FCLAA. As explained 
more fully in response to Comment 143, FCLAA's requirements apply to 
cigarette packages (including cartons), and to advertisements 
generally.
    Further, with its passage of the Tobacco Control Act, Congress 
noted the pervasiveness of tobacco advertising and how it impacts use, 
especially promotions directed to attract youths to tobacco products, 
and found that comprehensive advertising restrictions will have a 
positive effect on the smoking rates of young people (section 2(15) and 
2(25) of the Tobacco Control Act). Therefore, the requirement that the 
warnings appear in all advertisements, regardless of the medium used 
for the advertisement, is also consistent with Congress' intent.
    (Comment 154) One comment noted that the Federal government 
warnings on alcoholic beverages are mandated on packages only, 
presented in small font, and not required on the prominent faces of 
containers or packaging. According to the comment, this suggests that 
Congress believes a configuration like the one for alcoholic beverages 
also would be sufficient for cigarette warnings, particularly given the 
more widespread use of alcoholic beverages in this country.
    (Response) We disagree. Congress clearly intended for the warnings 
for cigarettes and alcoholic beverages to be different, as evidenced by 
the different statutory schemes that govern the warning requirements 
for cigarettes and alcohol products. For cigarettes, Congress clearly 
set out the location of the health warnings for cigarette packages and 
advertisements, the area of the package or advertisement that must be 
covered by the warnings and the requirements for text and background 
color of the warnings. In addition, Congress provided specific font 
size requirements for the cigarette warnings (while also affording FDA 
the authority to initiate a rulemaking proceeding to adjust the format, 
type sizes, and certain other aspects of the health warnings under 
sections 4(b)(4) and (d) of FCLAA and section 202(b) of the Tobacco 
Control Act. In contrast, Congress' health warning requirements for 
alcoholic beverages, published at 27 U.S.C. 215, do not set forth area, 
location, and color requirements with as much specificity.
    (Comment 155) One comment from an individual consumer expressed 
concerns that manufacturers may alter their packaging to subvert Sec.  
1141.10(c), which mandates that the required warnings on packages and 
advertisements must be irremovable or permanent.
    (Response) The regulation, as drafted, should address the comment's 
concern. Section 1141.10(c) of the final rule, which is unchanged from 
what appeared in the proposed rule, states that the ``required warnings 
shall be indelibly printed on or permanently affixed to the package or 
advertisement.'' Therefore, regardless of the type of packaging used by 
manufacturers, all cigarette packages must contain required warnings 
that are irremovable or permanently affixed to the cigarette packages.
4. Section 1141.12--Incorporation by Reference of Required Warnings
    Proposed Sec.  1141.12 proposed that two documents, ``Cigarette 
Required Warnings--English and Spanish'' and ``Cigarette Required 
Warnings--Other Foreign Language Advertisements,'' be incorporated by 
reference in accordance with 5 U.S.C. 552(a) and 1 CFR part 51. Draft 
versions of both documents were made available in the docket with the 
NPRM.
    We did not receive comments regarding the use of the incorporated 
by reference mechanism provided in 5 U.S.C. 552(a) and 1 CFR part 51 
and the proposed codified language, or regarding the two draft 
documents proposed for incorporation by reference. However, as 
explained in section V.B.3 of this document, the material that was 
proposed to be contained in the two documents entitled ``Cigarette 
Required Warnings--English and Spanish'' and ``Cigarette Required 
Warnings--Other Foreign Language Advertisements'' is now contained in a 
single document entitled ``Cigarette Required Warnings.'' As a result, 
we have made nonsubstantive changes to the language used in Sec.  
1141.12 to indicate that we are

[[Page 36680]]

incorporating ``Cigarette Required Warnings'' by reference (rather than 
``Cigarette Required Warnings--English and Spanish'' and ``Cigarette 
Required Warnings--Other Foreign Language Advertisements''). In 
addition, we also have updated the incorporation by reference document 
to include the final electronic files \5\ for the required warnings and 
to add additional formats and instructions for regulated entities to 
use to place the required warnings on various sizes of cigarette 
packages (including cartons) and in different sizes and shapes of 
advertisements, as is discussed in more detail in section VI of this 
document.
---------------------------------------------------------------------------

    \5\ As described in section VI.A of this document, the final 
electronic files for the required warnings are built as Encapsulated 
PostScript (.eps) files, which is a format that is commonly used by 
professional printers. Because members of the public may not have 
software that can easily view these files, we are placing in the 
docket Ref. 64, which is composed of .pdf versions of each of the 
formats for each of the English and Spanish language required 
warnings, as well as the instructions contained in ``Cigarette 
Required Warnings.'' We note, however, that these .pdf files do not 
have the same functionality as the .eps files. Unlike .pdf files, 
.eps files have separate layers for text and images and the use of 
these layers can be manipulated by users. In addition, .pdf files 
are not included for foreign language advertisement warnings (other 
than Spanish) because regulated entities are responsible for 
generating a true and accurate translation of the textual warning 
statement in the required language for such warnings, and thus the 
final versions of such warnings are not contained in ``Cigarette 
Required Warnings.''
---------------------------------------------------------------------------

    ``Cigarette Required Warnings,'' including the electronic files for 
all of the required warnings and the instructions for their use, is 
available from a variety of sources. For example, this material is 
available on a Web site located at http://www.fda.gov/cigarettewarningfiles. In addition, regulated entities can request a 
copy of ``Cigarette Required Warnings'' by submitting a request to FDA 
at the following e-mail address_[email protected]--or 
by contacting the Center for Tobacco Products, Food and Drug 
Administration, Office of Health Communication and Education, ATTN: 
Cigarette Warning File Requests, 9200 Corporate Blvd., Rockville, MD 
20850, 1-877-CTP-1373.
5. Section 1141.14--Misbranding of Cigarettes
    Proposed Sec.  1141.14(a) provided that a cigarette shall be deemed 
to be misbranded unless its labeling and advertising bear one of the 
required warnings. Under section 903(a)(1) and (a)(7)(A) of the FD&C 
Act (21 U.S.C. 387c(a)(1) and (a)(7)(A)), a tobacco product, including 
a cigarette, is deemed misbranded if its labeling or advertising is 
false or misleading in any particular. Under section 201(n) of the FD&C 
Act (21 U.S.C. 321(n)), in determining whether something is misleading, 
it: ``Shall be taken into account * * * not only representations made 
or suggested * * * but also the extent to which the labeling or 
advertising fails to reveal facts * * * material with respect to 
consequences which may result from the use of the article to which the 
labeling or advertising relates * * * under such conditions of use as 
are customary or usual.'' As explained in the NPRM (75 FR 69524 at 
69539), the required warnings are clearly material with respect to 
consequences that may result from the use of cigarettes.
    Proposed Sec.  1141.14(b) provided that a cigarette advertisement 
or package will be deemed to include a brief statement of relevant 
warnings for the purposes of section 903(a)(8) of the FD&C Act if it 
bears one of the required warnings. It also proposed that a cigarette 
distributed or offered for sale in any State shall be deemed to be 
misbranded under section 903(a)(8) of the FD&C Act unless the 
manufacturer, packer, or distributor includes in all advertisements and 
packages issued or caused to be issued by the manufacturer, packer, or 
distributor with respect to the cigarette one of the required warnings. 
We received two comments on the issue, which we have summarized and 
responded to in the following paragraphs.
    (Comment 156) One comment from a tobacco product manufacturer 
stated that FDA should replace the word ``labeling'' with the word 
``packages'' in Sec.  1141.14(a). The comment indicated that FDA should 
avoid using the word ``labeling'' because that term has a broader 
meaning under the FD&C Act than it does under FCLAA, and therefore its 
use in the regulation could create unnecessary ambiguity. The comment 
also stated that FCLAA only requires warnings on cigarette packages and 
advertisements.
    (Response) We agree that the requirements for inclusion of health 
warnings set forth in FCLAA apply to each package (i.e., pack, box, 
carton, or container of any kind in which cigarettes are offered for 
sale, sold, or otherwise distributed to consumers) and each 
advertisement of cigarettes. The package warnings required by FCLAA are 
one part of a product's ``labeling,'' as the term ``labeling'' 
encompasses the package label. We have revised Sec.  1141.14(a) to 
replace the word ``labeling'' with the word ``packages'' for clarity. 
We note, however, that section 903 of the FD&C Act, ``Misbranded 
Tobacco Products,'' provides other ways that tobacco products can be 
misbranded that extend to tobacco product labeling as well as package 
labels and advertising. Therefore, in addition to complying with the 
requirements of FCLAA and this rule, regulated entities must comply 
with the requirements of section 903 of the FD&C Act to avoid 
misbranding their tobacco products.
    (Comment 157) One comment from a public health advocacy group 
stated that clarifying changes should be made to the language in Sec.  
1141.14 to ensure the regulation accomplishes its intended purpose. 
Specifically, the comment stated that cigarettes can be deemed 
misbranded under the FD&C Act unless they meet a number of criteria, 
and that not all of the criteria relate to health warning requirements. 
Thus, a regulated entity could comply with the warning requirements, 
but its cigarette product could still be deemed misbranded under the 
FD&C Act if it failed to meet other criteria in section 903 of the FD&C 
Act. The comment suggested the language in section Sec.  1141.14 should 
clarify this point.
    (Response) We agree that cigarettes can be deemed misbranded under 
the FD&C Act for a number of reasons. We also agree that, although 
compliance with the requirements of part 1141 is necessary to comply 
with certain provisions of section 903 of the FD&C Act, this does not 
guarantee that a cigarette product satisfies all the provisions of 
section 903 of the FD&C Act. However, we do not agree that changes to 
the codified text at Sec.  1141.14 are necessary, as the text does not 
indicate that cigarettes will not be deemed misbranded for any reason 
if they include required warnings, but rather that cigarettes will be 
deemed misbranded if they fail to include required warnings.
6. Section 1141.16--Disclosures Regarding Cessation
    Section 1141.16 of the NPRM proposed that one or more of the 
required warnings include specified information about an appropriate 
smoking cessation resource. As explained in the NPRM, the goal is to 
provide a place where smokers and other members of the public can 
obtain smoking cessation information from staff trained specifically to 
help smokers quit by delivering current, unbiased, and evidence-based 
information, advice, and support. The NPRM identified a number of 
possible alternatives for a cessation resource, including use of an 
existing or new quitline or Web site.

[[Page 36681]]

Although we did not include a specific cessation resource on the 
proposed images published with the NPRM, we proposed that the final 
rule would include one or more required warnings containing a cessation 
resource. We proposed that the resource must meet specific criteria 
designed to ensure that the cessation information, advice, and support 
provided are unbiased and evidence-based.
    As explained more fully in the following paragraphs, we have 
decided, based on our authority in section 906(d) of the FD&C Act, to 
require that all nine required warnings refer to a cessation resource, 
and we have included this resource in the nine graphic warnings in 
``Cigarette Required Warnings,'' which is incorporated by reference 
(IBR document) as described in section V.B.4 of this document. This 
final rule specifies the criteria that will be required of any 
responsible entity providing services through the chosen cessation 
resource. The resource we have selected is the existing National 
Network of Tobacco Cessation Quitlines (Network), which uses the 
telephone portal 1-800-QUIT-NOW. This telephone portal, provided by the 
National Cancer Institute (NCI), routes calls to the appropriate State 
quitline, based on the area code of the caller. The Network includes a 
designated quitline run by or on behalf of each of the 50 states as 
well as the District of Columbia, Puerto Rico, and Guam (hereinafter 
referred to as ``State quitlines'' or ``State-run quitlines'').\6\ We 
conclude that this resource will provide the broadest access for 
smokers throughout the United States to unbiased, evidence-based 
cessation information, advice, and support. The Centers for Disease 
Control and Prevention (CDC) already provides significant support and 
oversight to these State-run quitlines. Beginning with the effective 
date of this rule, CDC's cooperative agreements with State health 
departments will specify that the State quitlines must meet the 
criteria described in Sec.  1141.16(b) to qualify for cessation funding 
under the cooperative agreement. HHS will monitor the quitlines for 
compliance with the criteria, and if it determines that a State 
quitline does not meet the criteria, it will take appropriate steps to 
bring the State quitline into compliance. What is appropriate will 
depend on the circumstances of the particular situation. For example, 
it might involve CDC working with the State quitline to ensure staff 
are adequately trained. If warranted, it could also include more 
serious measures such as CDC working with NCI to re-route calls to 
another resource. Because the record indicates that quitlines that are 
members of the Network generally comply with the criteria already, we 
anticipate that any measures to bring quitlines into compliance will be 
rare.
---------------------------------------------------------------------------

    \6\ Calls to 1-800-QUIT-NOW from U.S. territories that do not 
currently have a quitline (e.g., the U.S. Virgin Islands or American 
Samoa) are routed to a quitline that is run by NCI.
---------------------------------------------------------------------------

    a. Rationale and authority for requiring inclusion of a cessation 
resource. The NPRM explained that reducing the number of Americans who 
smoke by increasing the likelihood that smokers will quit smoking would 
provide substantial public health benefits by reducing the life-
threatening consequences associated with continued cigarette use. The 
NPRM also cited studies finding that health warnings are more effective 
if they are combined with cessation-related information. Consequently, 
FDA proposed requiring information about an appropriate smoking 
cessation resource under section 906(d) of the FD&C Act as appropriate 
for the protection of the public health (75 FR 69524 at 69540 through 
69541). We received a number of comments regarding our rationale and 
authority to require a cessation resource on the graphic health 
warnings, which we summarized and responded to in the following 
paragraphs.
    (Comment 158) A large majority of comments that addressed the issue 
strongly supported inclusion of a cessation resource on all the 
required warnings. These include comments from public health advocacy 
groups, medical organizations, academics, State and local public health 
agencies, and representatives of quitlines. The comments provided a 
variety of reasons supporting inclusion of a cessation resource on the 
required warnings. Many comments asserted that a majority of smokers 
want to quit, and referring smokers to a smoking cessation resource 
will help them to quit. Some comments cited statistics regarding the 
number of smokers who actually attempt to quit--about 40 percent of 
smokers try to quit in a calendar year--and the very low percentage of 
smokers who are successful--95 percent of those who try to quit on 
their own relapse (citing, e.g., Ref. 65 and Ref. 66). One comment from 
a State public health agency asserted that smokers contemplating 
quitting are motivated by smoking cessation messages to call a State 
tobacco quitline.
    Many comments argued that including a cessation resource is 
consistent with the guidelines for implementing Article 11 of the FCTC. 
One comment also stated that including a cessation resource would be 
consistent with Article 14 and Article 12 of the FCTC. In addition, 
numerous comments cited evidence from other countries, particularly 
Australia, New Zealand, the Netherlands, Brazil, Singapore, and the 
United Kingdom, where adding a smoking cessation quitline number to 
cigarette warnings significantly increased calls to the quitline 
(citing, e.g., Refs. 67, 68, 69, 70, 71, 72, and 73). As one comment 
noted, these results show, consistent with behavior change theory, that 
providing a quitline number may be a critical component of the required 
warning that facilitates behavioral action. According to one comment 
from an academic institution, an evaluation of the impact of including 
a supportive cessation message accompanied by quitline numbers and Web-
based cessation information in seven European countries (Denmark, 
France, Iceland, The Netherlands, Norway, Poland, and Sweden) found a 
significant increase in quitline call volume in all countries except 
Norway. One comment from a submitter representing quitlines stated that 
it is feasible for the cigarette industry to include a cessation 
resource on every package of cigarettes, noting that approximately 20 
nations currently require a quitline number on their tobacco packages 
and advertisements.
    Many comments cited statistics that smokers who use evidence-based 
services of telephone quitlines have a two to three times higher rate 
of success in quitting than smokers making unassisted quit attempts 
(citing, e.g., Ref. 66). One comment from a local public health agency 
asserted that media campaigns and educational efforts, while effective, 
still do not reach all smokers. According to this comment, after 
extensive outreach, about 25 percent of smokers in that city had never 
heard of the quitline being promoted and 25 percent of smokers reported 
that it is not easy for a person interested in quitting smoking to 
obtain information about ways to quit.
    Several comments noted that the purpose of graphic warnings is to 
inform smokers about the risks of smoking and motivate smokers to want 
to quit, but this message will be more effective if there is 
information in the graphic warnings on how smokers can obtain help 
quitting. Some comments argued that health warnings should not just 
inform smokers about the dangers of tobacco use, but also provide 
assurance that quitting is possible and assistance is available. One 
comment cited research that shocking, fear-arousing images can be more 
effective when combined with encouragement or

[[Page 36682]]

empowering messages (citing, e.g., Ref. 74). Another comment from an 
academic institution claimed that when people perceive that there is a 
strategy for them to take positive action to reduce the threat in a 
fear message, fear appeals successfully changed health-related 
attitudes and behaviors (citing, e.g., Refs. 75, 76, 77, and 78). 
However, if people do not believe they have an effective means of 
avoiding a threat, they may suppress thoughts about the risk, and, as a 
result, not process the threat information (citing, e.g., Refs. 79, 80, 
and 81). As one comment from an academic institution explained, under 
fear appraisal theory, a fear communication message will cause aversive 
anxiety, which individuals will try to ameliorate through behaviors 
that reduce the perceived threat. This comment asserted that the 
positive effects of a fear message depend upon the existence of an 
available coping option that is perceived to be potentially effective 
at reducing the threat. In addition, comments cited research that 
smokers may be more likely to attempt to quit when they know a quitline 
is available (Ref. 82).
    One comment from a submitter representing a State quitline claimed 
that health care providers are more likely to address tobacco use in 
their patients when they know of an effective program to which they can 
refer their patients, and that adding a cessation resource to the 
required warnings will dramatically increase awareness of this 
resource. Several comments from submitters representing State quitlines 
noted that they receive referrals from clinicians via fax referral 
services.
    One comment from an academic researcher submitted results from a 
study that tested one of the proposed required warnings included in the 
proposed rule with and without a cessation resource. This study found 
that when youth and adult participants were asked to rank order six 
images tested for use with one of the warning statements, based on 
which image would be most effective for discouraging smoking, the image 
with the cessation resource was ranked as the most effective by more 
study participants than any other image.
    (Response) We agree with comments that there is strong support for 
including a smoking cessation resource on the required warnings. As 
required by section 906(d) of the FD&C Act, we find that addition of a 
cessation resource is appropriate for the protection of the public 
health because of the benefits, and lack of risks, to the population as 
a whole. This is due, in part, to the increased likelihood that 
existing smokers will become aware of the cessation resource and, 
consequently, the increased likelihood that existing smokers who want 
to quit will be successful. It is also due to the likelihood that the 
reference to a smoking cessation resource will enhance the 
effectiveness of the warnings required under FCLAA at conveying 
information about the risks to health from smoking.
    As stated in the comments, the majority of smokers want to quit and 
about 40 percent of smokers attempt to quit each year. In addition, the 
warnings required under FCLAA and this regulation convey information 
and promote greater understanding about the significant health risks 
associated with smoking, which will likely lead additional smokers to 
decide that they want to quit smoking to address these risks. Also, as 
discussed in the comments, the vast majority of those attempts are 
unsuccessful. By including a cessation resource on required warnings, 
the many smokers who want to quit will receive information about a 
resource that has been demonstrated to be effective in helping smokers 
to quit (see section V.B.6.c of this document). Media campaigns are 
helpful in reaching some smokers who want to quit, and can be used in 
conjunction with the inclusion of a cessation resource on the required 
warnings. It is important to ensure that this information reaches a 
broad number of smokers. Inclusion of a cessation resource on the 
required warnings is likely to have a broader reach than media 
campaigns alone. The evidence from one comment is that, even after an 
extensive media campaign, approximately one quarter of smokers surveyed 
were not aware of the existence of the quitline or that help was 
available to obtain information about ways to quit. The cessation 
information will be there each time a consumer looks at a package of 
cigarettes or a cigarette advertisement; a pack-a-day smoker 
potentially would be exposed to the cessation information more than 
7,000 times per year. This evidence highlights that cigarette packages 
are useful communication tools for ensuring that smokers are aware of 
cessation resources.
    Based on experience in other countries, we anticipate that 
including a reference to a cessation resource as part of the required 
warnings will increase the utilization of that resource. Many foreign 
countries have included cessation resources on cigarette package 
warnings. As described in the comments, these countries have generally 
experienced a large increase in the number of calls to the quitlines 
following their appearance on cigarette packages. For example, in the 
Netherlands, the number of callers to the quitline increased more than 
threefold after a smoking cessation message (``Ask for help with 
smoking cessation'') and the national quitline number were included on 
cigarette packages (Ref. 72). Similarly, in Australia, the number of 
calls to the quitline nearly doubled, compared with the previous 2 
years, following the introduction of new color graphic warnings with a 
prominent quitline number. The increase in call volume persisted in the 
following year, although it was about 40 percent lower than in the year 
in which the graphic warnings were first introduced. Although there was 
a series of mass media campaign activities that accompanied the new 
graphic warnings, one study concluded it was very unlikely that the 
mass media campaign alone explained the observed increase in calls 
because the introduction of the graphic warnings had an independent 
effect (Ref. 67). In New Zealand, after the introduction of pictorial 
warnings with a supportive cessation message and quitline information, 
the average number of new monthly calls increased and the percentage of 
first-time callers who reported obtaining the quitline number from 
tobacco product packaging doubled (Ref. 83). In Brazil, there was a 
progressive increase in calls to a quitline in the 6 months following 
the requirement for graphic warnings and the inclusion of a quitline 
number on cigarette packages. Interviews with people who called the 
quitline showed that over 92 percent knew about the quitline number 
because it appeared on cigarette packs (Ref. 73). We also note that 
Canada has recently proposed including a quitline number on the graphic 
warnings that will appear on its packages.
    Although we are not aware of any studies regarding the inclusion of 
cessation information on graphic warnings in cigarette advertisements, 
it seems likely that adding a reference to a cessation resource to 
cigarette advertisements would have a similar effect as including the 
reference on cigarette packages.
    Inclusion of a cessation resource on the required warnings is also 
consistent with the advice of the FCTC. Although the United States has 
not yet ratified the FCTC and therefore is not bound by the treaty, the 
United States is a signatory and the Guidelines for implementation of 
the Treaty provide further support for the inclusion of a cessation 
resource. The Guidelines for implementation of

[[Page 36683]]

Article 11 of the FCTC (Packaging and labeling of tobacco products) 
explain that the provision of advice on cessation and specific sources 
for cessation help on tobacco packaging, such as a Web site address or 
a toll-free telephone number, can be important in helping tobacco users 
to change their behavior, and is expected to increase demand for 
cessation-related services.
    In addition to providing information to increase the likelihood 
that smokers will become aware of the cessation resource and use it to 
successfully quit, including a cessation resource will also help to 
make the required warnings more effective at conveying information 
about the health risks of smoking. As noted in the NPRM, studies have 
found that health warnings are more effective when they are combined 
with cessation-related information (75 FR 69524 at 69541). Risk 
communication research indicates that messages that arouse fear about 
the health risks of smoking should be combined with information on 
concrete steps that can be taken to reduce those risks (Ref. 81 
(Messages that arouse fear ``appear to be effective when they depict a 
significant and relevant threat * * * and when they outline effective 
responses that appear easy to accomplish * * *.''); see also Ref. 55 
(explaining the importance of giving smokers who are motivated to quit 
smoking upon seeing a graphic health warning an immediate way to act on 
this impulse and access cessation assistance)). In addition, the 
results from one study conducted by an academic researcher and 
submitted to the docket also suggest that adding a cessation resource 
to the required warnings is beneficial. When youth and adult 
participants were asked to rank order six images (including one image 
with and without a cessation resource) tested for use with one of the 
warning statements, based on which image would be most effective for 
discouraging smoking, the image with the cessation resource was ranked 
as the most effective by more study participants than any other image.
    (Comment 159) Several tobacco industry comments claimed that it was 
difficult to comment on the issue of a cessation resource, because the 
proposed rule did not identify the resource FDA proposed to reference 
or suggest alternative resources from among which FDA would choose. 
Tobacco industry comments also claimed that the NPRM did not indicate 
how FDA proposed to reference the resource or integrate it into the 
proposed warning images. For these reasons, some tobacco industry 
comments contended that the NPRM did not provide adequate notice for 
requiring inclusion of a cessation resource, and that FDA should not 
require a cessation resource without providing an additional 
opportunity to comment on specific proposed cessation resources.
    (Response) We disagree. The Administrative Procedure Act requires 
that a notice of proposed rulemaking include ``either the terms or 
substance of the proposed rule or a description of the subjects and 
issues involved'' (5 U.S.C. 553(b)(3)). Consistent with this 
requirement, the NPRM provided adequate notice that FDA was considering 
the inclusion of a cessation resource in the required warnings and the 
factors it would consider in choosing a specific smoking cessation 
resource. Proposed Sec.  1141.16 specifically stated that one or more 
of the required warnings ``shall include a reference to a smoking 
cessation assistance resource'' (75 FR 69524 at 69564). The preamble to 
the proposed rule explained the goal ``would be to provide a place 
where smokers and other members of the public can obtain smoking 
cessation information from staff trained specifically to help smokers 
quit by delivering unbiased and evidence-based information, advice, and 
support'' (75 FR 69524 at 69540). The preamble also explained the range 
of alternatives available, including use of an existing or new quitline 
or Web site (75 FR 69524 at 69540; see Small Refiner Lead Phase-Down 
Task Force v. EPA, 705 F.2d 506, 549 (DC Cir. 1983) (``Agency notice 
must describe the range of alternatives being considered with 
reasonable specificity.'')). In addition, proposed Sec.  1141.16(b) 
identified specific criteria that any referenced cessation resource 
would need to meet as well as two additional criteria that the resource 
would need to meet if the resource was a toll-free telephone number 
(proposed Sec.  1141.16(d)) and two additional, but different, criteria 
that the resource would need to meet if it was a Web site (proposed 
Sec.  1141.16(c)). The NPRM further explained that the reference to a 
smoking cessation resource was proposed to ``be included as part of one 
or more of the required warnings and therefore would not appear outside 
of the areas specified for the required warning'' (75 FR 69524 at 
69541). Thus, the ``notice was sufficiently descriptive of the subjects 
and issues involved so that interested parties [could] offer informed 
criticism and comments'' (Air Transport Ass'n of America v. Civil 
Aeronautics Bd., 732 F.2d 219, 224 (DC Cir. 1980) (quoting National 
Small Shipments Traffic Conference, Inc. v. CAB, 618 F.2d 819, 834 (DC 
Cir. 1980)) (internal quotations omitted)).
    Our choice of a specific smoking cessation resource, 1-800-QUIT-NOW 
and the State quitlines to which it links, is a logical outgrowth of 
the proposed rule. We received many comments that discussed whether FDA 
should use a toll-free telephone number and/or a Web site. We also 
received a comment advocating that the Agency include information about 
contacting a physician for help quitting (see Comment 170). Numerous 
comments identified an existing resource (primarily 1-800-QUIT-NOW) as 
the preferred cessation resource for the required warnings. As 
discussed in section V.B.6.b of this document, many comments addressed 
the specific criteria proposed for the cessation resource and several 
comments provided reasons why 1-800-QUIT-NOW meets the criteria 
identified in the NPRM. In addition to comments received about whether 
to include a resource and, if so, what resource, as discussed in 
section V.B.6.d of this document, the proposed rule was sufficiently 
detailed for comments to raise issues regarding implementation details, 
such as the words surrounding the cessation resource.
    We are generally adopting the criteria identified in the NPRM, 
including the criteria specific to a toll-free number. Our changes to 
the criteria are minor clarifications that were informed by comments. 
Thus, the requirement that the graphic warnings include a reference to 
a cessation resource is a logical outgrowth of the proposed rule and 
further notice and opportunity for comment is not necessary (Air 
Transport Ass'n of America, 732 F.2d at 224 (``An Agency adopting final 
rules that differ from its proposed rules is required to renotice when 
the changes are so major that the original notice did not adequately 
frame the subjects for discussion. * * * The agency need not renotice 
changes that follow logically from or that reasonably develop the rules 
it proposed originally'') (quoting Connecticut Light and Power Co. v. 
NRC, 673 F.2d 525, 533 (DC Cir. 1982))). An agency is permitted to add 
specific details to a rule in response to comments even if the proposed 
rule described the requirement in a more general manner (Chemical 
Manufacturers Ass'n v. EPA, 870 F.2d 177, 202 (5th Cir. 1989) (finding 
that EPA provided adequate notice for final rule appendices, one of 
which established limits for the discharge of certain metals, even 
though the appendices were not included in the

[[Page 36684]]

proposed rule, because there was adequate notice that the agency was 
considering establishing limitations ``and this was all the APA 
demands''); Trans-Pacific Freight Conference of Japan/Korea v. Federal 
Maritime Comm'n, 650 F.2d 1235, 1248-49 (DC Cir. 1980) (finding that 
the final rule merely enumerates more specifically the type of 
information which the Commission sought, but parties were on notice 
that a requirement of more detailed reports was under consideration)).
    b. Criteria for cessation resource. The NPRM included three 
paragraphs in proposed Sec.  1141.16 detailing criteria that would 
apply, on an ongoing basis, to any cessation resource chosen in the 
final rule. The purpose of these proposed criteria was to ensure that 
the cessation information, advice, and support provided by the 
cessation resource are unbiased and evidence based (75 FR 69524 at 
69540). Proposed Sec.  1141.16(b) described 10 criteria that would be 
applied to any cessation resource chosen. Proposed Sec.  1141.16(c) 
described two additional criteria that would apply if the cessation 
resource chosen were a Web site, and proposed Sec.  1141.16(d) 
described two additional criteria that would apply if the cessation 
resource chosen were a toll-free telephone number. In addition, the 
preamble to the proposed rule provided examples and additional 
explanation to help clarify the proposed criteria (75 FR 69524 at 
69540).
    As discussed more fully in section V.B.6.c of this document, we 
have decided that the appropriate cessation resource is a toll-free 
telephone number (1-800-QUIT-NOW). Therefore, our final rule does not 
include the criteria proposed for a cessation resource that is a Web 
site. We have incorporated the two criteria proposed for a cessation 
resource that is a toll-free telephone number into Sec.  1141.16(b) as 
paragraphs 11 and 12, deleted the proposed criteria for a Web site, and 
added a paragraph clarifying an issue raised in the comments.
    In the following paragraphs, we summarize and respond to comments 
regarding our general criteria for a cessation resource, as well as 
criteria relating to a cessation resource that is a telephone quitline. 
However, because we are not choosing a Web site as the cessation 
resource, we do not respond to specific suggestions regarding the 
criteria in proposed Sec.  1141.16(c) and other comments about criteria 
for a cessation resource that is a Web site.
    (Comment 160) One comment suggested that the rule does not need to 
specify criteria for the cessation resource. Instead, this comment 
proposed that FDA rely on the most recent version of the Public Health 
Service Guideline on Treating Tobacco Use and Dependence (2008 PHS 
Guideline) (Ref. 66). The rationale for this suggestion was that this 
guideline is regularly updated to reflect new effective treatments for 
tobacco dependence and, therefore, the criteria would not become out-
of-date. In addition, the comment asserted that the 2008 PHS Guideline 
is the gold standard for tobacco cessation in the United States, 
because it is produced by leading cessation experts, updated on a 
regular basis, and published by HHS.
    (Response) We agree with the comment that the 2008 PHS Guideline is 
a valuable resource for evidence-based smoking cessation treatments. 
However, the purpose of FDA's criteria is not to reference particular 
treatment strategies. Rather, these criteria are designed to ensure 
that the resource's information, advice, and support are unbiased and 
evidence-based. By setting forth a requirement that the cessation 
resource provide evidence-based treatment strategies, the resource will 
be able to employ newer strategies as more research is done on the most 
effective approaches to smoking cessation treatments.
    (Comment 161) Comments representing tobacco product manufacturers 
claimed that the criteria set forth in proposed Sec.  1141.16 are 
unspecific or that this section uses vague terminology. One comment 
argued that the terminology is subject to conflicting interpretations.
    (Response) We disagree. The criteria in the proposed rule, and 
generally adopted in this final rule, are extensive and detailed. In 
addition, the notice and comment process gave the public an opportunity 
to raise questions about our use and interpretation of specific terms. 
The proposed rule provided adequate detail for a number of comments to 
request revisions and clarifications. We have responded to the 
significant issues raised in the comments. As explained more fully in 
response to Comments 163 and 164, in the final rule, we revised the 
criteria to clarify that quitlines may tailor their services to meet 
the needs of individual callers and added more explanation and examples 
to the preamble to further clarify issues raised by comments. The 
criteria we are adopting will ensure that smokers using the referenced 
cessation resource receive unbiased and evidence-based services suited 
to their individual needs.
    (Comment 162) Several comments that supported the choice of 1-800-
QUIT-NOW as the cessation resource expressed concern that State 
quitlines would be subject to two sets of potentially inconsistent 
requirements because the CDC already maintains standards for these 
quitlines. These comments proposed that FDA specify that quitlines 
authorized by CDC for connection to the 1-800-QUIT-NOW network are 
qualified to be the cessation resource included on the required 
warnings.
    (Response) We believe that it is important to establish criteria 
for the cessation resource as part of this rule to ensure that the 
standards reflected in these criteria will be followed for as long as 
the rule is in effect. We do not believe there will be any conflict 
between these criteria and CDC's requirements for State quitlines that 
are associated with our chosen resource (1-800-QUIT-NOW). We have 
worked closely with CDC regarding the choice of the cessation resource 
and the criteria that will be required. Moreover, CDC will include the 
criteria in this rule in its State grantee funding requirements, and 
will work with leading quitline experts to review, and where necessary, 
update existing scripting such as to accurately reflect current FDA-
approved cessation medications.
    (Comment 163) Many comments from public health advocacy groups and 
representatives of quitlines expressed concern about the criterion in 
proposed Sec.  1141.16(b)(7) regarding providing information, advice, 
and support that is evidence-based, unbiased, and relevant to tobacco 
cessation. In particular, comments were concerned about the sentence in 
the preamble to the proposed rule that states that a cessation resource 
cannot include derogatory statements regarding cigarette manufacturers, 
importers, distributors, or retailers, or advocate public policy 
changes (75 FR 69524 at 69540). These comments asserted that the term 
``derogatory statements'' is vague and could lead to challenges from 
industry. The comments asserted that the tobacco industry has made 
similar challenges in the context of interpreting the Master Settlement 
Agreement of 1998.
    (Response) We disagree that the term ``derogatory statements'' is 
vague. Moreover, neither the proposed nor the final version of Sec.  
1141.16(b) or (c) includes that term. Instead, Sec.  1141.16(b)(7) 
states a cessation resource must ``[p]rovide information, advice, and 
support that is evidence-based, unbiased (including with respect to 
products, services, persons, and other entities), and relevant to 
tobacco cessation.'' The focus of the cessation resource should be 
about changing a

[[Page 36685]]

smoker's behavior by providing factual information and evidence-based 
advice and support about tobacco cessation. Our purpose in adding to 
the preamble the example about derogatory statements was to emphasize 
that our chosen cessation resource must not provide biased information 
about, for example, tobacco companies. The preamble to the proposed 
rule contrasted derogatory statements as well as statements advocating 
public policy changes with factual information relevant to tobacco 
cessation. We conclude that this distinction should be retained in the 
final rule. Nonetheless, as discussed in the response to Comment 164, 
the final rule clarifies the distinction between providing factual 
information, advice, and support and providing biased opinions or 
advice.
    (Comment 164) One comment representing quitlines expressed concern 
that many of the cessation resource criteria described in proposed 
Sec.  1141.16(b) and the preamble to the proposed rule may interfere 
with the ability of counselors at a telephone quitline to tailor 
information to a specific caller. Specifically, this comment requested 
that FDA delete many of the criteria or clarify that they refer to the 
capacity of the quitline overall, and not to each interaction with a 
caller. Also, this comment requested that FDA either delete the term 
``unbiased'' in proposed Sec.  1141.16(b)(7), or define that term to 
include the concept of tailoring a call to the needs of an individual 
caller. In addition, this comment asked that FDA remove the word 
``unbiased'' from proposed Sec.  1141.16(d)(1) regarding staff training 
for a telephone quitline.
    (Response) We agree that this issue needs to be clarified. It was 
not our intent that the criteria described in proposed Sec.  1141.16 
would limit the ability of the cessation resource to tailor an 
interaction to the needs of the individual smoker seeking help. In 
fact, as discussed below, we believe that one of the many benefits of 
choosing a telephone quitline as the cessation resource is the ability 
of the resource to tailor counseling sessions to individual callers. 
Although we do not agree that it is appropriate to delete any of the 
general criteria or the word ``unbiased'' from Sec.  1141.16(b)(7), we 
have revised the rule to reorganize the criteria described in proposed 
Sec.  1141.16(b) and (d). The final rule includes a paragraph (b) 
describing the types of services that a cessation resource must provide 
generally. The criteria in Sec.  1141.16(b)(1) through (b)(7) were 
previously described in proposed Sec.  1141.16(b)(1) through (b)(7), 
however, we revised the introductory language to clarify that a 
quitline may tailor individual calls as appropriate to meet the smoking 
cessation needs of individual callers. Thus, for example, if a caller 
says that he or she has attempted to quit many times and knows what to 
expect, the quitline does not need to provide factual information about 
what smokers can expect when trying to quit. Instead, the quitline 
might focus the counseling on practical advice about how to deal with 
common issues faced by users trying to quit or evidence-based 
information about effective relapse prevention strategies. In addition, 
we changed ``users'' to ``smokers'' in Sec.  1141.16(b)(3) for 
consistent terminology with the rest of the paragraph.
    The final rule also contains a paragraph (c) in Sec.  1141.16 that 
addresses general requirements for the cessation resource, rather than 
the types of information to be provided to consumers seeking 
information or assistance. Section 1141.16(c) is primarily composed of 
the criteria in proposed Sec.  1141.16(b)(8) through (b)(10) and (d). 
Except for the requirements regarding staff training and the 
maintenance of appropriate controls, this paragraph lists prohibitions 
for the cessation resource. For example, the cessation resource must 
not provide or otherwise encourage the use of any drug or other medical 
product that FDA has not approved for tobacco cessation. As described 
more fully in the response to Comment 166, we have clarified that the 
cessation resource may tailor information about cessation products to 
meet the particularized needs of an individual caller and may provide 
particular FDA-approved cessation products to callers, based on 
availability of those products to the resource. With respect to the 
comment expressing concern about the use of the term ``unbiased'' in 
the staff training criterion precluding the ability to tailor 
information, the revisions to paragraph (b) address concerns about the 
ability of cessation resource staff to tailor information to the needs 
of an individual caller. The criterion in paragraph (c) about staff 
training, when read in conjunction with paragraph (b), does not 
preclude tailoring of information during individual calls. Therefore, 
it is unnecessary to delete the term ``unbiased'' from Sec.  
1141.16(c)(8) to address this concern. We conclude that the revised 
criteria in paragraphs (b) and (c) of Sec.  1141.16 will ensure that 
the cessation resource has the flexibility to provide counseling about 
smoking cessation that is appropriate to the needs of an individual 
caller while still ensuring that the resource does not provide 
opinions, advice, or support that are biased or not supported by 
appropriate evidence.
    (Comment 165) One comment representing quitlines suggested that FDA 
either delete the criterion described in proposed Sec.  1141.16(b)(10) 
that prohibits the cessation resource from encouraging ``the use of any 
non-evidence-based smoking cessation practices,'' or replace the word 
``practices'' with ``treatment.'' This comment explained that practices 
such as coping strategies for dealing with cravings have not been as 
rigorously tested as medications and may not be considered evidence-
based. This comment asserted that the criterion in proposed Sec.  
1141.16(b)(3), requiring a cessation resource to provide practical 
advice about how to deal with common issues faced by users trying to 
quit, adequately addresses this issue.
    (Response) We understand the concerns expressed by this comment and 
agree that a cessation resource should be permitted to discuss coping 
strategies for dealing with cravings (e.g., chewing gum) that may not 
have been rigorously tested in a scientific manner. However, because 
the distinction between treatment and practices is unclear, we conclude 
that a broad term such as ``practices'' is appropriate in order to 
ensure that evidence-based research is being used to provide callers 
with effective services. Using the broader term ``practices'' also 
avoids the possibility that definitional questions about whether 
something is a treatment will interfere with the ability of the 
cessation resource to provide effective cessation services to smokers. 
Deleting proposed Sec.  1141.16(b)(10) completely, or replacing the 
word ``practices'' with ``treatment,'' may result in cessation 
resources encouraging non-evidence-based practices even though 
evidence-based practices are available. Section 1141.16(b)(3) permits 
the cessation resource to provide practical advice, and the practices 
described in the comment would be considered ``practical advice'' 
rather than ``non-evidence-based practices.'' In addition, as discussed 
in the comment, a cessation resource is permitted to tailor each 
counseling session to the needs of the individual caller.
    (Comment 166) FDA received several comments relating to the 
cessation resource providing or discussing particular smoking cessation 
drug products. One comment representing a manufacturer of smoking 
cessation drug products suggested that the Agency permit the resource 
to provide one or more FDA-approved over-the-counter

[[Page 36686]]

cessation products, but not include language in the rule that prohibits 
the cessation resource from ``advertising or promoting a particular 
product.'' This comment claimed that there is evidence that 
recognizable brands of smoking cessation products can be important 
tools to promote cessation (Ref. 84). Comments representing telephone 
quitlines and a public health advocacy group requested that FDA clarify 
that simply mentioning a particular cessation product does not 
constitute advertising or promoting a particular product, so long as 
the resource makes clear it does not recommend the use of one cessation 
product or brand over another.
    (Response) The final rule has been revised to clarify that a 
cessation resource may tailor a discussion of cessation medications for 
an individual caller. As noted in the preamble to the proposed rule, 
under the criteria the cessation resource may provide one or more FDA-
approved over-the-counter cessation products, provided that it does so 
in a manner that does not advertise or promote a particular product (75 
FR 69524 at 69540). We agree that, in the context of individual 
counseling, one medication may be suggested over another, based on an 
individual smoker's health needs and prior experience with cessation 
medications. For example, a quitline counselor may take into account 
warnings, precautions, and contraindications identified in the labeling 
of a specific drug product in relation to an individual caller. Also, a 
quitline counselor may suggest a particular medication based on the 
caller's prior experience with cessation medications (e.g., not 
recommend a medication that previously caused significant side effects 
or did not work; recommend a medication that worked well in the past). 
In addition, a cessation resource may provide one or more FDA-approved 
over-the-counter cessation products, based on availability of the 
product(s) to the resource. A cessation resource may also mention the 
availability of free medication, provided it does so in a manner that 
does not advertise or promote a particular product. However, the 
resource must not advocate or promote a cessation product, such as by 
recommending the use of particular cessation products or brands over 
others to callers generally. All products that have been approved with 
smoking cessation claims have been found by FDA to be safe and 
effective for the approved indication. Even if there might be benefits 
associated with brand recognition for a smoking cessation drug product, 
we do not believe that it is appropriate for the cessation resource 
that we include in a required warning to promote any particular 
product.
    (Comment 167) Several comments proposed that additional criteria be 
added to the criteria proposed in the NPRM. One comment suggested 
adding an additional criterion that the cessation resource must provide 
evidence-based advice regarding the protection of children and other 
nonsmokers from secondhand smoke. This comment reasoned that two of the 
warning statements address the dangers of secondhand smoke and the 
cessation resource should be prepared to counsel smokers who seek 
assistance after seeing these messages. Another comment recommended 
adding a criterion to prohibit the cessation resource from promoting a 
tobacco industry cessation program. This comment claimed that research 
has demonstrated that tobacco industry sponsored cessation resources 
either have no effect on smoking prevalence or actually cause increased 
smoking (Refs. 85 and 86). One comment from a submitter representing 
quitlines recommended the addition of a new criterion that would 
require the cessation resource to provide proactive, multi-call 
counseling services. The comment claimed that there is evidence these 
types of services are effective.
    (Response) We recognize that there could be additional criteria for 
a cessation resource that would require the resource to provide broader 
services. However, we have designed the criteria in this final rule to 
focus on the minimum services that must be provided by an effective 
cessation resource and the minimum standards the resource must meet. We 
are mindful that existing cessation resources have varied budgets and 
do not want to require additional standards that, while possibly 
beneficial, would disqualify some effective treatment programs that do 
not have the resources to provide these services. We note, however, 
that the criteria described in Sec.  1141.16 (b) and (c) do not 
preclude any cessation resource from providing additional unbiased, 
evidence-based cessation information, advice, and support. With respect 
to prohibiting the promotion of a tobacco industry cessation program on 
the basis that they are not effective, we conclude that the addition of 
a separate criterion is unnecessary. The cessation resource that will 
appear in the required warnings--1-800-QUIT-NOW--is run by government 
entities, and the criteria are designed to ensure that the resource 
provides cessation information, advice, and support that are unbiased 
and evidence-based.
    (Comment 168) One comment recommended that an additional role of a 
cessation resource should be to direct smokers (who request it) to 
local specialist face-to-face treatment services and to provide 
accessible information on Medicaid, Medicare, and other large insurers' 
coverage for tobacco dependence treatment.
    (Response) Our primary objective in requiring that referenced 
cessation resources comply with the criteria is to ensure that the 
cessation resource chosen provides evidence-based counseling to help 
smokers quit. Our criteria are designed to ensure that the cessation 
resource will continue to meet certain minimum standards. While not 
required by the criteria in this regulation, a referenced cessation 
resource is not precluded from providing additional relevant factual 
information, such as information about reimbursement for tobacco 
dependence treatments.
    c. Choice of cessation resource. The NPRM did not specify a 
particular cessation resource. Rather, it noted that there are a number 
of possible alternatives, including use of an existing or new quitline 
or Web site, where smokers and other members of the public can obtain 
current unbiased, factual smoking cessation information (75 FR 69524 at 
69540). Based on the information before the Agency, including the 
information provided in the comments, we have chosen the Network, which 
uses the toll-free telephone number 1-800-QUIT-NOW (1-800-784-8669), as 
the cessation resource to include on all nine required warnings. The 
Network is the single point of access to reach State-based quitlines in 
all 50 states, the District of Columbia, Puerto Rico, and Guam. Since 
2005, CDC and NCI have partnered with States to create the Network. NCI 
manages the 1-800-QUIT-NOW telephone number, along with appropriate 
telecommunications and routing infrastructure, to ensure that calls are 
transferred to the appropriate State or territory quitline based on the 
area code of the caller. Calls from U.S. territories that do not have a 
quitline are routed to an NCI-run quitline. CDC and individual States 
or territories provide the funding for the quitlines. CDC provides 
funding through cooperative agreements as part of the National Tobacco 
Control Program.
    As discussed more fully in the context of comments and responses in 
the following paragraphs, we find that this cessation resource, which 
was strongly

[[Page 36687]]

favored in many comments, will provide people in the United States with 
access to unbiased, evidence-based smoking cessation information, 
advice, and support. We have determined that including this cessation 
resource as part of the required warnings will increase the likelihood 
that smokers will quit smoking and thereby provide substantial public 
health benefits by reducing the life-threatening consequences 
associated with continued cigarette use. Therefore, we conclude that 
including a reference to 1-800-QUIT-NOW as part of all the required 
warnings is appropriate for the protection of the public health.
    (Comment 169) Comments favoring inclusion of a cessation resource 
generally preferred the use of a telephone quitline. In particular, 
most of these comments advocated the use of 1-800-QUIT-NOW. The 
comments pointed to a robust body of evidence showing that proactive 
telephone counseling is effective in helping smokers to quit 
successfully. Several comments cited statistics from individual State 
quitlines about the types of services provided and success rates. In 
addition, several comments asserted that quitlines associated with 1-
800-QUIT-NOW generally meet the criteria for a cessation resource 
specified in the NPRM.
    Many comments discussed the advantages of choosing 1-800-QUIT-NOW. 
In support of the choice of a telephone quitline over a Web-based 
cessation resource, several comments noted the broad penetration of 
telephone access, including among low income and minority populations. 
These comments noted that Internet access has much lower penetration 
among the American public, particularly in many groups with high rates 
of smoking (e.g., low income, low level of education). Many comments 
that advocated the use of 1-800-QUIT-NOW noted that it has an existing 
infrastructure that is available in all 50 states, the District of 
Columbia, Puerto Rico, and Guam. One comment stated that all quitlines 
associated with 1-800-QUIT-NOW are at least several years old.
    Several comments argued that inclusion of 1-800-QUIT-NOW on 
cigarette packages could address issues relating to poorer smoking 
cessation outcomes among racial and ethnic minorities, as well as 
populations with low income and/or low education. One academic noted 
that smokers in these groups try to quit as often as other smokers but 
are less likely to use effective treatments (citing Ref. 87). The 
comment claimed that adding 1-800-QUIT-NOW to the required warnings 
holds unprecedented potential to close the gaps and disparities in 
treatment awareness and use. One comment representing a State quitline 
argued that quitlines can help address racial or ethnic disparities in 
access to effective tobacco treatment. For example, African-Americans 
have been significantly overrepresented among quitline callers in 
California, relative to the proportion of African-American tobacco 
users in that State. Several comments stated that quitlines provide 
services in languages other than English, particularly Spanish, and 
provide materials to important population groups (e.g., youth, pregnant 
women, racial/ethnic populations). One comment representing a State 
quitline asserted that quitlines can help address disparities related 
to socioeconomic status. In California, utilization of quitline service 
is highest among low socioeconomic status tobacco users. This comment 
also claimed that the attractiveness of quitlines to tobacco users with 
low socioeconomic status is related to the fact that services are 
provided without a charge and are accessible by telephone, eliminating 
the need to arrange for transportation or child care. According to this 
comment, these factors can be significant barriers for individuals with 
modest resources. Another quitline provider stated that quitlines are 
disproportionately used by the chronically ill and those who are 
socially and economically stressed. This comment claimed that, 
arguably, these groups have the greatest need for support because they 
have a higher prevalence of smoking and are disproportionately affected 
by tobacco-related health concerns.
    One comment representing a public health advocacy group pointed out 
that designation of a single quitline number would avoid the difficulty 
of manufacturers having to print different dialing information 
depending on where the cigarette package will be sold.
    (Response) We agree with comments that a telephone quitline is the 
most effective means of ensuring that all Americans have access to 
unbiased, evidence-based smoking cessation information, advice, and 
support. We have decided to use the Network as the cessation resource 
and its portal number, 1-800-QUIT-NOW, will be included as part of 
electronic files for the required warnings that are available in the 
IBR document described in section V.B.4 of this document.
    A key factor in our decision is that the evidence regarding the 
effectiveness of telephone quitlines is well documented. The 2008 PHS 
Guideline found that quitlines significantly increase abstinence rates 
compared to minimal or no counseling interventions. The 2008 PHS 
Guideline also found that use of quitline counseling in conjunction 
with cessation medication significantly improves abstinence rates 
compared to the use of medication with minimal or no counseling (Ref. 
66 at pp. 91-92; see also Ref. 88). Consequently, quitlines are an 
important part of the HHS Tobacco Control Strategic Action Plan (Ref. 
89).
    In addition, there is evidence that knowing about the availability 
of a quitline increases quit attempts and successful cessation even 
among smokers who do not call the quitline (Ref. 88 (finding 
``[t]elephone quitlines provide an important route of access to support 
for smokers, and call-back counselling enhances their usefulness'')). 
For example, one study of the effect of a smokers' hotline as an 
adjunct to self-help manuals found ``it is unlikely that higher 
abstinence rates among users [of the hotline] accounted for the total 
differences in outcome between hotline and manual only counties. It is 
possible that simply knowing that telephone help was there if needed 
enhanced abstinence even among nonusers'' (Ref. 82). A CDC report 
hypothesized that a possible explanation is that ``knowledge of 
cessation services, engendered through promotion, increases tobacco 
users' belief in the normalcy of quitting, which may lead to increased 
quit attempts among people who have access to the services, even those 
who do not use them'' (Ref. 90).
    Another factor that we considered in choosing a telephone quitline 
is that telephone access within the United States is nearly universal. 
According to a 2010 Federal Communications Commission statistical 
report, household telephone subscribership in the United States was 96 
percent in March 2010. This report shows that, even among households 
with annual incomes as low as $25,000, telephone penetration was over 
90 percent in 2009, including among African-Americans and Hispanics 
(Ref. 91). Currently, Internet use and broadband penetration is much 
lower than telephone penetration in the United States, particularly 
among low income groups, certain racial and ethnic minorities, and 
households with low education levels (Ref. 92).
    Beyond their wide accessibility, quitlines are also successful in 
helping certain high risk populations and other important demographic 
groups. One comment asserted that low income and uninsured smokers, 
those with the

[[Page 36688]]

lowest levels of formal education, and those in racial/ethnic 
populations with the highest smoking rates try to quit as often as 
other smokers, but are far less likely to use effective treatments. For 
example, smokers in several racial and ethnic groups attempt to quit as 
often as or more often than nonminority smokers but use effective 
treatments less often and have lower success rates (Ref. 66 at p. 156). 
Similarly, low socioeconomic status smokers or those with limited 
education express significant interest in quitting and appear to 
benefit from treatment. However, these smokers are less likely to 
receive cessation assistance (Id. at p. 151). One study concluded that 
non-Hispanic black and Hispanic smokers who attempted to quit smoking 
were significantly less likely to use cessation aids, and that this has 
implications for successful quitting among minority smokers (Ref. 87). 
Several comments, however, explained that at least some quitlines 
receive a disproportionate numbers of calls from certain minority or 
disadvantaged populations (see, e.g., Ref. 93). In light of the overall 
low rates of calls to quitlines (approximately 1 percent of smokers 
call quitlines, although this percentage varies by State and how much 
the State promotes its quitline), even a disproportionately high volume 
of calls from important demographic groups is not enough to alter the 
overall quit rates for these groups. However, as discussed in section 
V.B.6.a of this document, there is strong evidence that there will be 
an increase in call volume to quitlines after the required warnings 
appear on cigarette packages and in cigarette advertising. This 
increase in use of quitlines could have an important impact on high 
risk and other important demographic groups if they continue to 
constitute a significant percentage of calls to quitlines.
    In addition, a telephone quitline provides an excellent opportunity 
to tailor counseling sessions and provide additional materials for 
specific populations. The 2008 PHS Guideline also found that 
individually tailoring materials to address smoker-specific variables 
(e.g., support sources available, time lapse since quitting, concerns 
about quitting) has been shown to be effective and have broad reach 
(Ref. 66 at p. 92). Several comments noted that virtually all State 
quitlines associated with 1-800-QUIT-NOW provide specialized materials 
to special populations, including pregnant women, racial and ethnic 
populations, and youth. Quitlines can also provide information (e.g., 
about the negative health consequences of smoking or the health 
benefits of quitting) to smokers who are not ready to quit but who want 
additional information.
    With respect to our choice of the Network and its telephone number, 
1-800-QUIT-NOW, for the quitline cessation resource, we have determined 
that this resource will fulfill the goal to provide a place where 
smokers and other members of the public can obtain smoking cessation 
information from staffed trained specifically to help smokers quit by 
delivering current, unbiased, and evidence-based information, advice, 
and support. The quitlines that compose the Network, the 
telecommunications infrastructure supporting the Network, and the 
telephone number, 1-800-QUIT-NOW, are already well established and 
provide smoking cessation services to people throughout the United 
States. Comments that advocated the use of a specific quitline referred 
to 1-800-QUIT-NOW as the preferred cessation resource. By using an 
existing resource, infrastructure, and telephone number, we can 
leverage the Network's established structure and experience providing 
cessation services. This choice also avoids the costs associated with 
establishing a new quitline.
    In addition, we agree with comments that the individual State and 
territory quitlines that are associated with 1-800-QUIT-NOW generally 
meet the criteria specified in Sec.  1141.16(b). We understand, 
however, that these quitlines have some differences in funding 
resources and consequently provide differing levels of service. For 
example, some State quitlines provide longer hours of service than 
others. Based on the statistics provided in some comments, it is 
possible that not all of the individual State and territory quitlines 
associated with 1-800-QUIT-NOW meet all of the criteria we are adopting 
in Sec.  1141.16(b). To assure that these criteria are met, CDC will 
include these criteria beginning with its 2013 National Tobacco Control 
Program funding opportunity announcement and HHS will monitor the 
quitlines for compliance with the criteria on an ongoing basis and will 
take appropriate steps to address any noncompliance.
    (Comment 170) One medical organization suggested that the reference 
to the smoking cessation resource in the required warnings should also 
include a message encouraging smokers to contact their physician or 
health care provider. This comment cited studies to support the 
proposition that physician advice is effective in encouraging smoking 
cessation (citing, e.g., Ref. 94). This comment also noted that both 
Australian and European Union graphic warnings recognize the role that 
physicians play in assisting patients' cessation efforts.
    (Response) We agree that physicians, particularly primary care 
physicians, and other health care providers are a very helpful resource 
for encouraging smokers to quit (Ref. 66 at p. 35). However, we decline 
to include language on the required warnings encouraging smokers to see 
their doctor.
    Many Americans do not have an ongoing relationship with a 
physician. Recent evidence indicates that the United States may be 
suffering from a shortage of primary care physicians, making it less 
likely that they would be available to provide cessation information to 
smokers (see Ref. 95 for statistics on decreasing numbers of U.S. 
medical school graduates selecting a family medicine career). In 
addition, unlike the selected quitline, we would not have a practical 
means to monitor health care provider compliance with the criteria the 
Agency is establishing in Sec.  1141.16(b). Studies indicate that rates 
of physician adherence to similar practice guidelines for smoking 
cessation advice vary widely (see Ref. 96). For these reasons, it is 
preferable to include a reference to 1-800-QUIT-NOW on the required 
warnings. We note, however, that quitlines frequently refer people to 
their primary care physicians (e.g., if a caller has further questions 
about the use of medications).
    In addition, there is limited space available for including 
information about a cessation resource. The size of the required 
warnings is relatively small and the textual warning statement and 
color graphic image included in each warning must be clear, 
conspicuous, and legible as required by section 4 of FCLAA. In light of 
the limited space available, we have determined that including an 
additional message encouraging smokers to contact their physician or 
health care provider is not appropriate at this time.
    (Comment 171) Some comments urged FDA to include a Web site as a 
cessation resource. Generally these comments suggested that a Web site 
would be a useful cessation resource in addition to a telephone 
quitline. For example, one public health advocacy group noted that 
there are advantages to utilizing both quitlines and Internet 
resources. According to this comment, while quitlines provide 
individualized telephone counseling, a Web site provides support 24 
hours per day. One comment from a public health advocacy group claimed 
that about 10 million smokers search online for smoking cessation 
assistance every year, and it is

[[Page 36689]]

particularly important for the required warnings to include Web-based 
resources because there are a large number of Internet sites that 
ostensibly offer quitting assistance but do not offer evidence-based 
cessation help. Several comments acknowledged that the 2008 PHS 
Guideline did not find enough evidence to recommend computer-based 
interventions, but noted that the 2008 PHS Guideline also concluded 
that these interventions remain promising. Some comments also noted 
that Internet use is low in many groups with high rates of smoking 
(e.g., low income, racial and ethnic minority groups). However, several 
comments advocating inclusion of a Web site resource noted that many 
cessation services, including many quitlines and health plans, are 
utilizing the Internet to provide combined telephone counseling and 
Web-based cessation treatment. One comment suggested that as American 
culture adopts different forms of communication, it will be important 
to assess the effectiveness of using new technologies and approaches. 
This comment encouraged FDA to fund research to learn which approaches 
will encourage the most people to quit smoking.
    One comment from the tobacco industry claimed that reference to a 
smoking cessation Web site may raise additional implementation issues 
and requested an opportunity to comment in advance of such a 
requirement. This comment did not identify any specific issues 
associated with reference to a smoking cessation Web site.
    (Response) We recognize that Web sites are another important source 
of smoking cessation information and interventions. Although the 2008 
PHS Guideline did not recommend the use of Web-based interventions, it 
concluded that ``[g]iven the potential reach and low costs of such 
interventions * * * they remain a highly promising delivery system for 
[treating] tobacco dependence'' (Ref. 66 at p. 94). We also recognize 
that Internet use is highest among younger populations, and thus might 
be a useful tool to intervene with young smokers, given that maximum 
cessation benefits are gained by quitting at a younger age. 
Furthermore, Web sites can provide information to smokers who are not 
ready to quit but who are seeking additional information about 
cessation.
    However, we have decided not to include a Web site as the cessation 
resource incorporated in the required warnings. For the reasons 
explained more fully above, we find that a telephone quitline is a 
better overall cessation resource than a Web site. There is stronger 
scientific support that telephone quitlines are effective, they are 
more widely available to a broader cross section of Americans, 
particularly groups with higher rates of smoking and lower access to 
cessation services, and there is a strong national quitline 
infrastructure in place. In light of the limited space available on the 
required warnings and the need to ensure that the graphic images and 
textual warning statements are clear, conspicuous, and legible, we do 
not think it is appropriate at this time to include both a telephone 
quitline and a Web site address on all required warnings. We intend to 
evaluate this possibility in the future when we are designing and 
testing revised versions of the required warnings.
    d. Implementation issues. Proposed Sec.  1141.16(a) stated that a 
required warning must include a reference to a smoking cessation 
assistance resource as specified in the IBR document. The preamble to 
the proposed rule explained that the smoking cessation information 
would be included as part of the required warning and would not appear 
outside of the areas specified for the required warning. In other 
words, the cessation resource would be within the top 50 percent of the 
front and rear panels of cigarette packages and within the 20 percent 
of the area of advertisements occupied by the required warning (75 FR 
69524 at 69541). We received several comments regarding how a cessation 
resource should appear in the required warning and other implementation 
issues relating to inclusion of a cessation resource in the required 
warning. These comments and our responses are summarized in the 
following paragraphs.
    (Comment 172) A comment representing small tobacco product 
manufacturers expressed confusion about whether FDA would add the 
reference to a cessation resource to the required warnings or whether a 
manufacturer would have to select the cessation resource and 
incorporate it into the required warning. The comment noted a 
preference that FDA provide the specific language for the cessation 
resource. However, one small tobacco product manufacturer asked that 
FDA provide a variety of options for cessation resources and include 
those options in the electronic files for the required warnings 
provided by the Agency.
    (Response) We have selected 1-800-QUIT-NOW as the cessation 
resource that must appear on the required warnings. The required 
warnings in the IBR document include the reference to the cessation 
resource, 1-800-QUIT-NOW. We disagree with the request that we provide 
a variety of options for cessation resources and include those options 
in the electronic files for the required warnings. Such an approach 
could be confusing to consumers, because the required warnings would 
appear with a different cessation resource on different packages of 
cigarettes and in different advertisements. Also, it would be difficult 
to monitor many cessation resources to ensure that each one meets the 
criteria established in Sec.  1141.16(b) and (c). By choosing one, 
existing toll-free telephone number that is under the control of NCI, 
provides access to consumers throughout the country, and includes State 
quitlines that have cooperative agreements with CDC, we have assurances 
that our cessation resource criteria will be followed.
    (Comment 173) Several comments mentioned that an increase in the 
volume of calls to State quitlines may increase funding needs. These 
comments suggested that additional resources should be provided to 
State quitlines.
    (Response) We expect that inclusion of 1-800-QUIT-NOW on the 
required warnings will increase the volume of calls to State quitlines. 
While some quitlines may currently have some additional capacity, there 
will likely be need for additional resources. In the fiscal year 2012 
President's Budget, there is $25 million from the Prevention and Public 
Health Fund allocated for CDC to spend on the National Network of 
Tobacco Cessation Quitlines. Additionally, the Centers for Medicare and 
Medicaid Services is working with the State Medicaid Directors to 
permit tobacco quitlines as an allowable Medicaid administrative 
activity.
    (Comment 174) One comment encouraged FDA to require that the 
cessation resource be displayed as a telephone number (1-800-784-8669) 
in addition to 1-800-QUIT-NOW because some wireless phones do not have 
letters on the keypad. However, another comment representing a quitline 
expressed the view that it is important to use the letters in 1-800-
QUIT-NOW rather than the telephone number because it is itself a cogent 
cessation message.
    (Response) We agree there would be benefits to identifying the 
cessation resource using 1-800-QUIT-NOW as well as the telephone number 
1-800-784-8669. However, as explained previously, there is very limited 
space for identifying the cessation resource. The use of 1-800-QUIT-NOW 
is a way to provide the number for people to call

[[Page 36690]]

while in the same space providing information about what the number is 
for. Using less space for the cessation resource helps ensure the 
required warning remains clear, conspicuous, and legible and appears 
within the specified area. Moreover, the use of letters is likely to be 
easier for people to remember. The Agency also believes most telephones 
in use still include letters on keypads and that toll-free telephone 
numbers are frequently identified using these letters. As stated 
previously, we will also conduct research and keep abreast of 
scientific developments regarding the efficacy of various required 
warnings and the types and elements of various warnings that improve 
efficacy, including elements related to identifying cessation 
resources.
    (Comment 175) Several comments addressed the words that would 
signal the appearance of a cessation resource. These comments described 
experience from New Zealand that showed increases in both quitline 
number recognition and the number of callers reporting cigarette 
packages as the source for learning the quitline number after the 
introduction of new graphic warnings with a redesigned reference to a 
cessation resource (i.e., ``You CAN quit smoking. Call Quitline 0800 
778 778, or talk to a quit smoking provider''). The prior warning said 
``For more information call'' next to a telephone number. According to 
one study, there was a 24 percent increase in reported recognition of 
the quitline number after this change (Ref. 69). Also, in the first 
full year after the introduction of the new graphic warnings, the 
volume of calls to the quitline increased significantly and 26 percent 
of callers reported cigarette packages as the source of the number 
(compared to 7.5 percent the prior year) (Id., Wilson 10/10). One 
academic researcher suggested a short, direct ``call to action'' phrase 
to motivate cessation behavior. Similarly, another comment from an 
academic institution suggested that the warnings provide the smoker 
with avenues to take in order to quit and simultaneously instill 
confidence in the user that he or she can take action.
    (Response) As stated previously, there is limited space for the 
cessation resource on the required warnings. Therefore, we have 
determined that the cessation resource will be identified solely by the 
telephone number 1-800-QUIT-NOW. In the limited space available, we 
have determined that this telephone number and its context provide 
sufficient information such that viewers will understand that a call to 
the telephone number will provide information, advice, and support 
regarding smoking cessation.
    (Comment 176) One comment from an academic institution encouraged 
FDA to require, in addition to a quitline number, clear encouragement 
of action steps for quitting. This comment recognized that space on the 
required warnings is limited and suggested that package inserts and 
onserts are one way of accomplishing this without compromising the 
visual impact of the graphic warnings.
    (Response) A requirement to add onserts or inserts is beyond the 
scope of this rulemaking and, therefore, we decline to require them 
here.

VI. Comments Regarding Implementation Issues

A. Technical Issues Regarding Compliance

    Section 1141.12 refers to ``Cigarette Required Warnings,'' which is 
incorporated by reference (IBR) in accordance with 5 U.S.C. 552(a) and 
1 CFR part 51. The IBR document includes electronic files of images 
that must be included on all cigarette packages, and in all cigarette 
advertisements.
    In response to the proposed rule, some comments, including comments 
from cigarette manufacturers and tobacco industry trade associations, 
raised issues relating to the electronic files and the implementation 
of the graphic warnings on cigarette packages and in cigarette 
advertisements. Those comments, and FDA's responses, are discussed in 
the following paragraphs.
    (Comment 177) Comments from two tobacco product manufacturers 
stated that they would need to make certain technical adjustments to 
the single sized graphic warnings published with the proposed rule in 
order to ensure that the warning fits packaging of varying sizes and 
shapes. According to the comments, if FDA provided only the single 
warning format published with the proposed rule, the company would need 
to adjust the height-to-width ratio (i.e., aspect ratio) of that 
warning in order to cover 50 percent of the front and rear panels of 
various package configurations. However, adjusting the aspect ratio, 
such as by elongating or compressing the warning, could distort the 
graphic image and/or textual warning statement. These comments 
recommended that FDA ensure that manufacturers are able to adapt the 
graphic warnings to fit cigarette packages of varying sizes and shapes 
and provide guidance about how to adapt the warnings.
    (Response) We agree that the size and shape of certain packages 
might require companies to adapt the electronic files provided in the 
IBR document. To help prevent distortion of the image and text and to 
minimize the need for adaptation, we are providing electronic files in 
different formats designed to fit packaging of various sizes and 
shapes. We are adding language to the IBR document that provides 
instructions as to when each of the formats must be used. The 
instructions are based on the aspect ratio of the display area where 
the required warning must appear. This language also describes the 
requirements companies must follow when adapting the electronic files 
provided in the IBR document. For example, the requirements state that 
each of the different elements of the warning (i.e., the image, the 
textual warning statement and reference to the cessation resource) 
must, to the extent possible, maintain the relative scale and 
proportions of the elements as displayed in the relevant electronic 
file, and the positions of each of these elements must be maintained 
relative to each other.
    (Comment 178) Two comments from cigarette manufacturers requested 
clarification concerning how companies should incorporate the required 
warnings on packages with hinged lids. These comments stated that the 
content of warnings printed on the hinged lids can shift up or down by 
about 1 mm at the point where the lid meets the front of the pack due 
to normal variations in production of the packaging. These comments 
recommended that FDA design the warnings with all text located either 
above or below the hinged lid, or allow for minor variations in how the 
graphic warnings appear on cigarette packs due to this manufacturing 
variability.
    (Response) We agree that the integrity of the warning must be 
maintained on packages to ensure that the warning is clear and legible. 
To clarify the requirements that companies must follow when they adapt 
the electronic files for hinged lid packages, we have added language to 
the IBR document that permits companies to separate two lines of text 
within the textual warning statement so that the line at the location 
where the lid is to open cuts across the background space between two 
lines rather than through a line of text. This provision will allow 
companies to adapt the electronic files provided in the IBR document to 
ensure that the textual warning statement is not severed when the 
package is opened and is clear, conspicuous, and legible in accordance 
with section 4 of FCLAA. According to this language in the IBR 
document, companies are specifically prohibited from severing any word 
in the textual

[[Page 36691]]

statement and are required to ensure that the integrity of the warning 
will be restored when the package is closed. We note that product 
packages with hinged lids are widely prevalent in countries that 
already require graphic warnings and, based on that experience, we 
conclude that this new provision should provide companies with the 
flexibility that they need for displaying the warnings on packages with 
hinged lids.
    (Comment 179) Two comments, from a cigarette manufacturer and a 
tobacco company trade association, raised a concern about incorporating 
the required warnings on ``soft pack'' style packaging. These comments 
stated that ``soft pack'' style packaging is manufactured through a 
process in which the top of the package is folded down after cigarettes 
are inserted and held together by a small overwrap closure, or 
``stamp.'' Historically, the closure is made of opaque paper and 
applied with glue to hold the package in place. According to these 
comments, the closure hangs down approximately 0.375 inches over the 
top center of the front and back panels of the package. The closure 
would obstruct any text or image appearing under it. According to these 
comments, it is not technically feasible to make a clear or transparent 
closure that will adhere to the package. One comment recommended that 
FDA amend the proposed rule to permit that graphic warnings for soft 
packs appear at the bottom of the individual pack, or to specifically 
allow the closures at the top center of the pack. The other comment 
recommended that FDA use enforcement discretion to permit the closure 
on soft packs until a technologically feasible solution is developed.
    (Response) We recognize the technological difficulty of 
incorporating the required warnings on ``soft pack'' style packaging. 
Given the paramount need to incorporate the warning without obstructing 
any of the discrete elements of the warning (i.e., the image and the 
textual warning statement) or the reference to a cessation resource, 
the final rule permits companies to adapt the warnings on ``soft pack'' 
style packaging by moving the warning below the closure in accordance 
with the requirements included in the IBR document. The IBR document 
states that this is only permitted when it is not technologically 
feasible to incorporate the required warnings on ``soft pack'' style 
packaging without the need to adapt the warning as set out in the 
electronic files provided in the IBR document. The requirements 
included in the IBR document allow companies using ``soft pack'' style 
packaging only to move the upper boundary of the display area of the 
warning so that it runs along a line that is parallel to and not more 
than 0.375 inches from the top edge of the package. The companies 
compress the vertical size of the image and then shift it down (so that 
it stays within the top 50 percent of the package). This language also 
requires companies who do this to ensure that, to the extent the file 
must be adapted to fit the dimensions of the warning area below the 
closure, the proportions of the required warning must be maintained. In 
addition, the instructions in the IBR document specify that the closure 
and the portion of the packaging that appears between the top edge of 
the package and the upper boundary of the display area of the required 
warning must be either solid black or solid white. This will allow 
companies to continue to produce ``soft pack'' style packaging with 
closures at the top center of the pack without obstructing the required 
warning. However, if we determine that it would be technologically 
feasible to incorporate the required warnings on ``soft pack'' style 
packaging without the need to adapt the warning as set out in the 
electronic files provided in the IBR document, we plan to notify the 
regulated companies and the public of this conclusion and give 
regulated companies a reasonable amount of time to modify their 
packaging before any regulatory action is taken under this rule. We 
decline to change the final regulation to permit graphic warnings on 
``soft pack'' style packaging to appear at the bottom 50 percent of the 
packaging. We have determined that requiring that the warnings appear 
in the upper portion of the package, as specified by the Tobacco 
Control Act, will result in warnings that are more prominent, more 
salient, and more effective than warnings appearing at the bottom of 
the package.
    (Comment 180) Two comments, from a cigarette manufacturer and a 
tobacco company trade association, noted that cigarette packages are 
typically wrapped in clear cellophane with a tear tape located in the 
upper 50 percent of the package. The tear tape permits an individual to 
open the package, and usually is removed once the package is opened for 
the first time. One comment stated that the cellophane tear tape will 
obstruct the required warning when the cigarette package has not yet 
been opened for the first time, and recommended that FDA expressly 
permit the use of tear tapes and require that warnings for ``soft 
pack'' style packaging appear at the bottom of the packaging. The other 
comment recommended that FDA permit the use of tear tapes and that the 
Agency use enforcement discretion to allow companies to potentially 
obstruct the required warning before the package is opened for the 
first time.
    (Response) We have determined that companies can use cellophane 
tear tapes, and the final regulation does not prohibit such use on 
cigarette packaging. We further have determined that it is 
technologically feasible to use clear tear tape in a manner that does 
not obstruct the required warning before the cigarette package is 
opened for the first time, and note that clear tear tape is widely used 
on product packaging in other countries that require graphic warnings. 
We are not aware that this has created any substantial technical 
difficulty in the production of cigarette packages, nor are we aware 
that clear tear tape has led to any significant obstruction of the 
graphic warnings. If a company has a unique problem with regard to its 
packaging, it should raise this issue with us, and the difficulty can 
be addressed on an individual basis. We decline to change the final 
regulation to allow the required warnings to appear on the bottom 50 
percent of the packaging. We have determined that requiring that the 
warnings appear in the upper portion of the package, as specified by 
the Tobacco Control Act, will result in warnings that are more 
prominent, more salient, and more effective than warnings appearing at 
the bottom of the package.
    (Comment 181) Comments from two companies raised concerns about 
their ability to incorporate the required warnings in advertisements of 
varying sizes and shapes. These comments noted that the proposed FDA 
rule requires that companies maintain the aspect ratio of the warnings 
as set forth in the electronic files. The comments stated that it would 
not be possible to maintain the clarity of the warning in certain 
advertisements if companies are required to use the 4:3 aspect ratio 
set out in the advertisement format published with the proposed rule. 
One company recommended that FDA provide warnings with different aspect 
ratios (1:1, 1.5:1, 1:2, 2:1, and 2.5:1) to address this concern. The 
other company recommended that FDA either eliminate the requirement 
that companies maintain the aspect ratios set out in the electronic 
files or allow companies to adjust the layout of the warnings so long 
as the manufacturer includes both the image and the textual warning 
statement.
    (Response) We have revised the proposed IBR document and the

[[Page 36692]]

electronic files provided in the final IBR document include warnings 
designed with a variety of different aspect ratios. Specifically, the 
files are designed with aspect ratios of 1:1, 1.5:1, 1:2, 2:1, and 
2.5:1. As provided in Sec.  1141.10, the required warnings must be 
accurately reproduced in advertisements. Therefore, companies should 
choose an aspect ratio that is appropriate for the dimensions of their 
advertisement such that the required warning can be reproduced 
accurately once it is sized (i.e., expanded or compressed) to occupy 
the required area of the advertisement. These files will permit 
companies to incorporate the required warnings into their 
advertisements without significant distortion or loss of clarity.
    (Comment 182) One comment from a tobacco product manufacturer 
recommended that FDA provide 5.5 inch wide and 27 inch wide formats for 
advertisements. The comment stated that expanding a required warning 
more than 150 percent or compressing it down to less than 30 percent of 
the original image will result in a loss of image clarity. The comment 
stated that providing required warnings in the 5.5 inch and 27 inch 
sizes will allow it to incorporate the warnings into the range of 
advertisements it uses without any loss of clarity.
    (Response) The electronic files provided in the IBR document 
include formats for advertisements in 5.5 inch wide and 27 inch wide 
sizes.
    (Comment 183) One comment from a tobacco product manufacturer noted 
that FCLAA requires advertising warnings to have a rectangular border 
that is the width of the first down stroke of the capital ``W'' of the 
word ``WARNING'' in the textual warning statements. The comment went on 
to state that FDA's various proposed required warnings have different-
sized ``W's'' in the word ``WARNING,'' and requested that FDA permit 
manufacturers to apply a uniform border width across the nine required 
warnings for consistency.
    (Response) The electronic files provided in the IBR document have a 
uniform border built into the formats for required warnings to be used 
in advertisements. We have exercised our authority under section 201 of 
the Tobacco Control Act to adjust the statutory requirement that the 
border of the warning be the width of the first down stroke of the 
letter ``W'' in the word ``WARNING'' in the textual warning statement. 
A uniform border requirement for all advertisements will ensure that 
the warnings are clear, conspicuous, and legible, and appear within the 
specified areas, especially given the variety of font styles included 
in the nine selected warnings.
    (Comment 184) Several comments requested that FDA provide fonts for 
the textual warning statements in each of the required warnings.
    (Response) For English and Spanish language warnings, the font size 
and font style is built into the electronic files provided in the IBR 
document. For advertisements in foreign languages other than Spanish, 
companies must comply with the font size requirements in section 
4(b)(2) of FCLAA and any format requirements included in the IBR 
document. In all situations, it is the advertiser's responsibility to 
ensure that the textual statements appear in conspicuous and legible 
type and that the required warning complies with the format 
specifications set forth in section 4 of FCLAA.
    (Comment 185) One comment requested that FDA provide instructions 
on how companies should combine and display the images developed for 
use in small advertisements less than 12 square inches with the 
required textual warning statements.
    (Response) We recognize that the small size of these advertisements 
presents additional challenges. We are providing an electronic file of 
the graphic that must be used for warnings appearing in advertisements 
that are less than 12 square inches. Companies may combine the graphic 
and the textual warning statement or otherwise adjust the layout of the 
warning so long as each warning includes the specified graphic and an 
appropriate textual warning statement. It is the advertiser's 
responsibility to ensure that the textual warning statement appears in 
conspicuous and legible type and that the combined warning complies 
with the format specifications set out in section 4 of FCLAA.
    (Comment 186) Several comments recommended that FDA require that 
companies reproduce the color graphics in the industry standard four-
color (CMYK) printing process.
    (Response) The electronic files provided in the IBR document were 
built with CMYK printing standards. The directions in the IBR document 
specify the use of CMYK printing standards.
    (Comment 187) One comment requested that FDA make available 
``printers proofs'' for each of the required warnings in order to 
ensure optimal clarity.
    (Response) We have determined that the electronic files provided in 
the IBR document will be adequate to ensure necessary clarity. Thus, we 
do not believe it is necessary to provide ``printers proofs'' for the 
warnings.
    (Comment 188) One comment requested that FDA adopt required 
warnings with consistent dimensions to allow for accurate incorporation 
into manufacturers' packages and advertisements.
    (Response) We decline to adopt this recommendation. As discussed 
previously, our selection of the nine final required warnings was based 
in part on our desire for a diverse set of warnings in a variety of 
different styles (e.g., photographic and illustrative, different fonts 
and font sizes) and diversity of human images (e.g., race, gender, age) 
in order to reach the broadest range of target audiences. We have 
determined that this variety will enhance the effectiveness of the 
warnings and help to delay potential wear out of the warnings. Because 
of the diversity of styles and images, some warnings have slightly 
different dimensions than others.
    (Comment 189) One comment recommended that FDA provide layered high 
resolution .tif or .eps files, with text supplied as a separate layer. 
Another comment recommended that FDA provide images as .jpeg files.
    (Response) The electronic files included in the IBR document are 
built as .eps files, with separate layers for text and images. 
Companies will be able to convert the files into .jpeg files if needed.

B. Textual Statement Color Formats

    In the document entitled ``Proposed Required Warning Images'' 
included in the docket for the NPRM, FDA provided two formats for each 
proposed required warning; one with the warning statement in white text 
on a black background and one with the warning statement in black text 
on a white background, under section 4(a)(2) and (b)(2) of FCLAA. 
Several comments offered suggestions regarding the use of the color 
combinations, which we have summarized and responded to in the 
following paragraphs.
    (Comment 190) A few comments suggested that FDA specify that the 
required warnings on cigarette packages and advertisements contain 
required warnings in either the white text on black background format 
or the black text on white background format, whichever the Agency 
chooses to most effectively communicate the warnings.
    (Response) We disagree. Section 4(a)(2) of FCLAA states that for 
cigarette packages, the ``text shall be black on a white background, or 
white on a black background.'' Similarly, for advertisements, section 
4(b)(2) of

[[Page 36693]]

FCLAA states that the text of the statement in the required warning 
``shall be black if the background is white and white if the background 
is black.'' We interpret these statutory requirements to mean that 
companies can use either of these two text/background color 
combinations on the package or in the advertisement.
    (Comment 191) One comment recommended that the word ``CANCER'' 
always appear in red as part of the health warnings on cigarette 
packages and advertisements.
    (Response) We disagree. As stated previously, section 4(a)(2) and 
(b)(2) of FCLAA prescribe the colors for the textual statements on 
packages and advertisements (e.g., white text on black background or 
black text on white background). FDA has the authority to change the 
format of the textual statements if such a change would promote greater 
understanding of the health risks associated with cigarette smoking. If 
we determine at a later date, that requiring the word ``CANCER'' to 
appear in red font will promote a greater understanding of smoking's 
risks, we may propose new iterations of the required warnings in future 
rulemakings.

C. Random Display and Rotation of Warnings

    The proposed rule did not specifically address the statutory 
requirements for the warnings on cigarette packages to be randomly 
displayed in each 12-month period and for quarterly rotation of 
warnings in advertisements, under section 4 of FCLAA. However, FDA 
received several comments on this issue. These comments, and FDA's 
responses, are included in the following paragraphs.
    (Comment 192) One comment expressed concern that cigarette 
manufacturers may only use some of the nine new required warnings on 
their cigarette packages and requested that FDA require companies to 
use all the required warnings in equal numbers.
    (Response) We agree that all cigarette manufacturers must use all 
of the nine required warnings on their cigarette packages. Section 
4(c)(1) and (c)(3)(B) of FCLAA expressly requires that the nine 
required warnings must be randomly displayed in as equal a number of 
times as possible on each brand of cigarette product and be randomly 
distributed in all areas of the United States so that all of the 
required warnings appear in the marketplace at the same time.
    (Comment 193) One comment recommended that retailers be exempted 
from any requirement to rotate the required warnings for each brand 
they sell in stores.
    (Response) We decline to address this issue here, as it is beyond 
the scope of the current rulemaking.
    (Comment 194) Several comments recommended that FDA rotate the 
graphic warnings to prevent overexposure. The comments also noted that 
different warnings will have different impacts on the various segments 
of the population, further emphasizing the need to rotate the warnings.
    (Response) It is unclear whether these comments were referring to 
the quarterly rotation of the required warnings in advertisements or 
the need to refresh the warnings on a regular basis. We agree that 
rotation of the warnings is important to delay wear out and to ensure 
that all population segments are exposed to the different warnings in 
as equal a number of times as is possible. In accordance with section 
4(c)(2) of FCLAA, the required warnings must be rotated quarterly in 
cigarette advertisements. See section II.E of this document for 
additional information regarding FDA's efforts to delay or prevent wear 
out.
    (Comment 195) One comment recommended that FDA monitor the rotation 
of required warnings in cigarette advertisements to ensure compliance 
by all manufacturers, distributors, importers, and retailers.
    (Response) We agree with this comment. We will monitor rotation and 
ensure compliance, which will include the review and approval of 
warning plans submitted to the Agency in accordance with section 4(c) 
of FCLAA.
    (Comment 196) One comment suggested that manufacturers be given 
broad discretion in complying with the requirements that they include 
the required warnings on all cigarette packages such that in each 12-
month period all of the different warnings appear in as equal a number 
of times as is possible on each brand of the product (see 15 U.S.C. 
1333(c)). The comment stated that its printing machines, and in 
particular the print cylinders, used to produce ``soft pack'' style 
packaging only allows the company to print five images per roll and 
does not allow for warnings to be die cut and collated. Because ``soft 
pack'' style packaging only accounts for about 10 percent of all 
packages distributed and sold, this style of packaging frequently is 
printed in small batches and for some, is printed only once per year. 
The comment stated that in light of these production constraints, it 
would be impossible to apply and distribute ``soft pack'' style 
packages displaying the nine required warnings randomly and in 
approximately equal numbers. The comment recommended that, for ``soft 
pack'' style packages, FDA apply a policy of enforcement discretion 
that relieves companies of the obligation to display the nine required 
warnings randomly and equally as long as companies have taken 
reasonable steps to distribute the warnings as randomly and equally as 
possible. Another comment expressed general concerns about a 
manufacturer's ability to comply with the requirement that the warnings 
be randomly displayed in as equal a number of times as possible.
    Several comments requested additional guidance on the filing of 
warning plans, including how to hold parties responsible for meeting 
FCLAA and the Tobacco Control Act's rotation and random display 
requirements.
    In addition, one comment asked that FDA adopt a formal process for 
approval of required warnings on packages and warning plans. Some 
comments from manufacturers suggested that, to add predictability for 
companies on the transition to the new warnings, FDA should consider 
adopting a procedure to allow pre-approval or pre-submission review of 
cigarette packaging and advise manufacturers of any deficiencies so the 
manufacturer can remedy them before production. One comment requested 
that FDA use Federal Trade Commission (FTC) procedures for pre-approval 
review of packaging.
    (Response) We have opted not to address these issues as part of 
this rulemaking proceeding. Under section 4(c) of FCLAA, warning plans 
must be submitted to FDA for approval. As noted in the NPRM, we intend 
to separately address the requirements of section 4(c) of FCLAA related 
to the submission of plans regarding the random display of warnings on 
packages and rotation in advertisements (75 FR 69524 at 69538). This is 
still our plan, and we believe the issues raised in these comments 
would be better addressed in that context.
    (Comment 197) One comment suggested that FDA provide sample pre-
approved layouts for required warnings on cigarette packages.
    (Response) By providing the electronic files of the required 
warnings, we are providing formats that the companies must use for 
their packages. The final rule includes a document incorporated by 
reference, entitled ``Cigarette Required Warnings,'' which contains the 
final images to be required on cigarette packages. Cigarette 
manufacturers also should refer to Sec.  1141.10(a), which mandates 
that the required warnings be on the top 50

[[Page 36694]]

percent of both the front and back of the cigarette packages.
    (Comment 198) One comment requested that FDA issue a tobacco 
product advertising guide for industry. This comment noted that while 
product labeling and advertising present some similar issues, there are 
specific issues that relate solely to advertising communications with 
consumers. Another comment suggested that FDA should issue separate 
advertising guidance for industry that includes recommendations for 
display of required warnings in each common advertising form.
    One comment stated that FDA should require that cigarettes 
displayed at the point of sale should be required to be displayed in a 
manner so that the graphic warnings are visible.
    One comment submitted on behalf of several nonprofit organizations 
suggested that FDA modify proposed Sec.  1141.10 to include two 
paragraphs regarding the use of images of cigarette packs in 
advertisements and in other communications. They requested that FDA add 
one paragraph to state that any image of a cigarette pack in an 
advertisement must include a required warning on the cigarette pack 
image. In addition, they requested that FDA add a paragraph to state 
that no manufacturer, importer, distributor, or retailer may alter any 
image used to depict cigarette packs as legally distributed or sold to 
consumers in any public communication (including, but not limited to, 
movies, Web sites, and television programs) so that the required 
warning on the cigarette pack image is removed or obscured in any way.
    (Response) We recognize that the range of advertising materials 
covered by the new graphic warning rules may create additional 
complexities. As stated previously, we intend to issue separate 
regulatory documents to provide information on compliance with the 
random display and rotation requirements. We will consider whether any 
other actions that are within the scope of our authority under the 
Tobacco Control Act may be warranted, such as addressing requests for 
additional guidance regarding advertising or suggested regulatory 
changes.

VII. Legal Authority and Responses to Comments

A. FDA's Legal Authority

    As set forth in the preamble to the proposed rule (75 FR 69524 at 
69524 through 69525), the Tobacco Control Act provided FDA with the 
authority to regulate tobacco products, and section 201 of the Tobacco 
Control Act modifies section 4 of FCLAA to require that nine new health 
warning statements appear on cigarette packages and in cigarette 
advertisements and to require that ``the Secretary [of Health and Human 
Services] shall issue regulations that require color graphics depicting 
the negative health consequences of smoking'' to accompany the nine new 
health warning statements.
    Under section 4(d) of FCLAA (as amended by section 201(a) of the 
Tobacco Control Act), FDA may adjust the type size, text, and format of 
the required warnings as FDA determines appropriate so that both the 
textual warning statements and the accompanying graphics are clear, 
conspicuous, and legible and appear within the specified area. 
Furthermore, section 202(b) of the Tobacco Control Act amends section 4 
of FCLAA to permit FDA to, after notice and an opportunity for the 
public to comment, adjust the format, type size, color graphics, and 
text of any health warning statement if such a change would promote 
greater public understanding of the risks associated with the use of 
tobacco products.
    In addition, provisions of the FD&C Act provide authority to 
require disclosures. For example, section 906(d) of the FD&C Act (21 
U.S.C. 387f(d)) authorizes FDA to issue regulations restricting the 
sale or distribution of cigarettes and other tobacco products, 
including restrictions on the advertising and promotion of such 
products, if FDA determines the restriction is appropriate for 
protecting the public health.
    These requirements are supplemented by the FD&C Act's misbranding 
provisions, which require that product advertising and labeling include 
proper warnings (see 21 U.S.C. 321(n); 387c(a)(1), (a)(7)(A), 
(a)(7)(B), and (a)(8)(B)). In addition, under section 701(a) of the 
FD&C Act (21 U.S.C. 371(a)), FDA has authority to issue regulations for 
the efficient enforcement of the FD&C Act.
    While we did not receive comments regarding our authority to issue 
these regulations under the provisions referenced in the previous 
paragraphs, we did receive comments regarding the constitutionality of 
the warning requirements, which are summarized and responded to in 
sections VII.B and VII.C of this document.

B. First Amendment Commercial Speech Issues

    FDA received several comments related to First Amendment commercial 
speech issues. These comments are summarized and responded to in the 
following paragraphs.
    (Comment 199) Several comments from the tobacco industry, 
advertising industry associations, and private citizens expressed 
concern that the graphic warning requirements proposed by FDA violate 
the First Amendment of the United States Constitution. Specifically, 
comments alleged that the proposed required warnings are 
unconstitutional because, rather than conveying factual information to 
consumers, they contain ``disturbing,'' ``lurid'' images that are 
designed to elicit emotions, such as ``loathing, disgust, and 
repulsion.'' Thus, the comments state, they force tobacco companies to 
``stigmatize their own products'' and compel them to convey the 
government's ``ideological message'' that ``the risks associated with 
smoking cigarettes outweigh the pleasure that smokers derive from 
them'' and that no one should use these lawful products. The comments 
also asserted that the warning requirements are unjustified because the 
health risks of smoking are already well known, and that they are 
unduly burdensome because the size and positioning requirements for the 
warnings on packages and advertisements would effectively rule out the 
companies own attempts to convey information about their products. For 
these reasons, the comments asserted that the graphic warning 
requirements constitute compelled speech regulation that is content-
based and presumptively invalid and that the requirements can only be 
upheld if they satisfy strict scrutiny, i.e., if they further a 
compelling government interest by the least restrictive means 
available. The comments stated that the graphic warning requirements 
cannot satisfy this standard because they will have no material impact 
on consumers' beliefs about the health risks of smoking or on smoking 
behavior and because the government bypassed less speech-restrictive 
alternatives in favor of the requirements.
    The comments from the tobacco industry also stated that the warning 
requirements violate the First Amendment because they restrict tobacco 
companies' speech. They stated that requiring the warnings to occupy 
the top 50 percent of the front and back display panels of cigarette 
packages and the top 20 percent of cigarette advertisements impairs the 
communication value of the tobacco product manufacturers' trademarks 
and trade dress and narrows their avenues of communications with adult 
smokers, which are already limited because of the

[[Page 36695]]

Master Settlement Agreement and the other requirements of the Tobacco 
Control Act. Indeed, one of the comments argued that relegating tobacco 
companies' message to the bottom half of cigarette packages would 
render their speech on packaging ``wholly ineffective'' and that the 
collective requirements with respect to packaging and advertisements 
would ``effectively rule out'' the companies' attempts to convey 
information about their products to consumers. The comments asserted 
that the warning requirements do not satisfy the test governing 
restrictions on commercial speech articulated by the Supreme Court in 
Central Hudson Gas & Electric Corp. v. Public Service Commission, 447 
U.S. 557 (1980), which requires that government restrictions on 
commercial speech directly advance a substantial government interest 
and be no more extensive than necessary to serve that interest. Similar 
to their assertions with respect to compelled speech, the comments 
asserted that, to the extent that the warning requirements restrict 
speech, they do not pass muster under the First Amendment because they 
will have no material impact on consumers' beliefs about, or 
understanding of, the health risks of smoking or on smoking behavior, 
and because the government bypassed less speech-restrictive 
alternatives in favor of the requirements.
    Other comments, including comments from a law firm, a public health 
advocacy group, and a private citizen, disagreed that the warning 
requirements violate the First Amendment. Specifically, two comments 
noted that the warning requirements have been upheld by a Federal court 
in Commonwealth Brands v. United States, 678 F. Supp. 2d 512, 529-32 
(W.D. Ky. 2010), appeal pending sub nom., Discount Tobacco City & 
Lottery, Inc. v. United States, Nos. 10-5234 & 10-5235 (6th Cir.). One 
comment noted that the court rejected an argument that the new warnings 
required under the Tobacco Control Act are too large and too prominent 
and stated that Congress has made findings with respect to the required 
size of the warnings, their placement on packages and advertisements, 
and the text of the warnings based on a substantial record. The comment 
also stated that Congress' findings are supported by the voluminous 
authority cited in FDA's NPRM. Another comment stated that, although 
tobacco companies will have to redesign their packages as a result of 
the warning requirements, they will still be able to communicate with 
their customers through packaging, advertising, and other channels. In 
addition, the comment stated that the warning requirements do not 
offend manufacturers' First Amendment rights because the required 
warnings are factual disclosures that accurately depict the real 
consequences of smoking cigarettes and the benefits and importance of 
quitting. The comment asserted that the warning requirements support 
the public interest by providing consumers with truthful information 
that is helpful in making informed purchasing decisions. The comment 
also stated that the government constitutionally regulates the 
advertising and labeling for a wide variety of industries in the 
interest of providing consumers with accurate information about 
products that affect their health and that no product affects 
consumers' health more than cigarettes. Finally, one comment stated 
that requiring warnings for cigarettes is well established legally and 
that the addition of graphic images to the warnings represents a 
difference in form that will not change the fundamental message content 
of the warnings. As a result, the comment concluded that there is no 
constitutional basis to delay the implementation of the warning 
requirements.
    (Response) We have carefully considered these comments and we 
disagree that the warning requirements violate the First Amendment 
under either of the theories set forth in the comments. To the extent 
that the warning requirements compel commercial speech, they are 
permissible under Zauderer v. Office of Disciplinary Counsel of Supreme 
Court of Ohio, 471 U.S. 626 (1985), and to the extent that they 
restrict commercial speech, they satisfy the Central Hudson 
requirements.
    The Warning Requirements Permissibly Compel Disclosure of Factual 
Information. The comments do not dispute that required warnings and 
other disclosure requirements ``trench much more narrowly on an 
advertiser's interests than do flat prohibitions on speech'' and may 
appropriately be required ``in order to dissipate the possibility of 
consumer confusion or deception'' (Zauderer, 471 U.S. at 651 (citation 
omitted)). Accordingly, regulations that compel ``purely factual and 
uncontroversial'' commercial speech are subject to more lenient review 
than regulations that restrict accurate commercial speech and will be 
sustained if they are ``reasonably related'' to the government's 
asserted interest (Id.; see also Milavetz, Gallop & Milavetz, P.A. v. 
United States, 130 S. Ct. 1324, 1339 (2010) (disclosure requirements 
are subject to ``less exacting scrutiny'' than affirmative limitations 
on speech)). ``Commercial disclosure requirements are treated 
differently from restrictions on commercial speech because mandated 
disclosure of accurate, factual, commercial information does not offend 
the core First Amendment values of promoting efficient exchange of 
information or protecting individual liberty interests'' (Nat'l 
Electric Manufacturers Ass'n v. Sorrell, 272 F.3d 104, 113-14 (2d Cir. 
2001), cert. denied, 536 U.S. 905 (2002)). Instead, such disclosure 
advances ``the First Amendment goal of the discovery of truth and 
contributes to the efficiency of the `marketplace of ideas' '' (Id. at 
114). ``Protection of the robust and free flow of accurate information 
is the principal First Amendment justification for protecting 
commercial speech'' (Id.).
    The nine new health warning statements and the accompanying graphic 
images selected by FDA convey information that is factual and 
uncontroversial. Therefore, the warning requirements are subject to the 
``reasonable relationship'' test in Zauderer, rather than strict 
scrutiny as suggested by some of the comments.
    The comments do not dispute that the warning statements are true. 
Indeed, as detailed in the NPRM and in section II.A.2 of this final 
rule, there is substantial scientific evidence to support the 
information conveyed in the new required warnings. The NPRM summarizes 
a large body of scientific evidence showing that cigarettes cause a 
wide range of negative health consequences, including various types of 
cancer; all the major cardiovascular diseases, including heart disease 
and stroke; COPD and other respiratory diseases; and a variety of 
negative health effects in infants born to women who smoke and in 
nonsmokers exposed to secondhand smoke (75 FR 69524 at 69527 through 
69529). The NPRM also sets forth scientific evidence describing the 
negative effects of nicotine addiction and the major and immediate 
health benefits of smoking cessation (75 FR 69524 at 69528 through 
69529). As the court in Commonwealth Brands correctly observed, the 
content of the warnings ``is objective and has not been controversial 
for many decades'' (Commonwealth Brands, 678 F. Supp. 2d at 531).
    The images we have selected to accompany the nine warning 
statements also convey information that is factual and uncontroversial 
regarding the negative health consequences of smoking. These images are 
consistent with the information conveyed in the

[[Page 36696]]

accompanying textual warning statements; each image depicts themes and 
subjects that provide visual context for the textual warning 
statements. The images also play a crucial role in the communication of 
the textual warning information; as discussed extensively in the NPRM, 
the addition of graphic images to health warning messages causes 
consumers to notice and attend to the warning information in the first 
instance, and increases recall of the warning message and the depth of 
cognitive processing of the message (75 FR 69524 at 69531).
    The comments did not dispute that the images proposed to accompany 
the warning statements accurately depict the negative health 
consequences of smoking. Rather, they faulted our proposed images for 
being ``disturbing'' or eliciting emotions. For example, one of the 
comments cited as disturbing several of the images selected by FDA in 
this rule, including the images entitled ``hole in throat,'' depicting 
a man smoking through a tracheostomy opening; ``healthy/diseased 
lungs,'' depicting healthy lungs juxtaposed with lungs damaged by 
smoking; ``cancerous lesion on lip,'' depicting a lesion consistent 
with that caused by oral cancer; and ``man with chest staples,'' 
depicting a man with an autopsy scar. The comment did not assert, 
however, that the effects shown in the images are false, i.e., that 
they are not manifestations of negative health consequences of smoking, 
such as throat, lung, and oral cancer, and death. The fact that the 
images are disturbing or evoke emotion does not mean that they are not 
factual representations of the effects of smoking. In fact, the severe, 
life-threatening and sometimes disfiguring health effects of smoking 
conveyed in the required warnings are disturbing and the images we have 
selected appropriately reflect this fact. As such, it is not surprising 
that the warnings regarding the negative health consequences of smoking 
would evoke emotions such as fear of being stricken with life-
threatening cancer or disgust at what it might be like to have that 
happen. If the required warnings failed to elicit emotional reactions, 
they would also fail to communicate the described negative health 
consequences of smoking in a truthful, forthright manner.
    Some comments also stated that ``non-factual cartoon images'' 
proposed by FDA remove any doubt that the proposed warnings convey an 
ideological message. For this final rule, one of the images we have 
selected is, indeed, a graphic illustration. That image shows a ``baby 
in incubator'' and accompanies the warning statement, ``Smoking during 
pregnancy can harm your baby.'' As set forth in the NPRM, there is 
ample evidence to show that smoking during pregnancy has negative 
effects, including increasing rates of preterm delivery and shortened 
gestation and increasing the likelihood of low birth weight infants, 
among other things (75 FR 69524 at 69528). Thus, the image ``baby in 
incubator'' accurately depicts the health consequences smoking during 
pregnancy can have for infants born to mothers who smoke. The style of 
the depiction--here, a graphic illustration--does not make it less 
factual. The style is just a means to convey the information.
    The remaining images we have selected also factually depict the 
negative health consequences of smoking when viewed in context with 
their accompanying warning statements. As explained in section III of 
this document, the image ``smoke approaching baby'' accompanying the 
statement ``WARNING: Tobacco smoke can harm your children'' effectively 
conveys the factual message that exposure to tobacco smoke is harmful 
for children by realistically showing a baby being exposed to 
secondhand smoke. The image ``oxygen mask on man's face,'' which 
accompanies the statement ``WARNING: Cigarettes cause strokes and heart 
disease,'' accurately depicts a typical intervention for a patient 
suffering acute cardiac distress or stroke. The image ``woman crying,'' 
which is paired with the statement ``WARNING: Tobacco smoke causes 
fatal lung disease in nonsmokers,'' is a realistic portrayal of the 
emotional suffering experienced as a result of disease caused by 
secondhand smoke exposure. Finally, the image ``man I Quit t-shirt,'' 
which is paired with the statement ``WARNING: Quitting smoking now 
greatly reduces serious risks to your health,'' realistically portrays 
an image of a man that is consistent with and supportive of this 
factual warning statement, although, unlike the other required 
warnings, this warning is framed in a positive manner (i.e., it conveys 
factual information about the negative health consequences of smoking 
by educating consumers about the positive health consequences of 
refraining from smoking).
    The comments also asserted that some of the proposed images, 
including some now selected by FDA in this final rule, appear to use 
technologically-enhanced photographs to emphasize the effects of 
sickness and disease. While we acknowledge that some of the photographs 
were technologically modified to depict the negative health 
consequences of smoking, the effects shown in the photographs are, in 
fact, accurate depictions of the effects of sickness and disease caused 
by smoking, and the comments did not dispute this fact.
    As one of the comments noted, the addition of graphics to warnings 
for cigarettes is a difference in form only and does not change the 
fundamental content of the messages, which convey factual information 
about the health consequences of smoking. The court in Commonwealth 
Brands was correct when it stated that it ``does not believe that the 
addition of a graphic image will alter the substance of such [warning] 
messages, at least as a general rule'' (Commonwealth Brands, 678 F. 
Supp. 2d at 532). Rather, these images alter the effectiveness of the 
warnings by enhancing their ability to communicate factual information 
to consumers.
    Despite the factual nature of the messages conveyed by the required 
warnings as described previously, some comments asserted that the 
government's goal is to force cigarette companies to stigmatize their 
products by including the government's ideological, antismoking message 
on their packages and advertisements. These comments claimed that the 
size of the warnings and the FDA study endpoints assessing consumers' 
emotional and cognitive reactions to the required warnings and whether 
the warnings were ``difficult to look at,'' belie any suggestion that 
they are purely factual.
    We disagree with these comments. The size of the warnings and their 
ability to evoke cognitive and emotional responses are consistent with 
the government's interest in ensuring that the required warnings 
effectively communicate factual information about the negative health 
consequences of smoking to consumers. The NPRM (75 FR 69524 at 69531 
through 69534) and section II.D of this final rule summarize the 
significant research literature supporting FDA's conclusion that 
larger, graphic warnings more effectively communicate health risks to 
consumers than the existing smaller, text-only warnings on cigarette 
packages and in advertisements.
    Likewise, our decision to use images that elicit strong cognitive 
and emotional responses is consistent with established models of risk 
communication. Our research study included three measures to assess the 
salience (i.e., noticeability and readability) of the proposed required 
warnings: Emotional reactions, cognitive reactions, and whether the 
warning was difficult to look at. Use of

[[Page 36697]]

these measures is well-established in the scientific literature. As 
discussed in the study report (Ref. 49, study report) and in comments 
discussed in section III of this document, risk information is most 
readily conveyed by warnings that elicit strong responses on these 
measures--eliciting strong emotional and cognitive reactions to graphic 
warnings enhances recall and information processing, which helps to 
ensure that the warnings are better understood and remembered. These 
responses in turn influence short-term outcomes, such as later recall 
of the message and changes in knowledge, attitudes, and beliefs related 
to the dangers of tobacco use and exposure to secondhand smoke, and 
eventually lead to long-term changes in behavior. Thus, contrary to the 
comments discussed previously, our use of these reaction measurements 
does not demonstrate the Agency's intent to stigmatize tobacco 
products. Rather, these measures are appropriate indicators of how 
effectively health warning messages are communicated, and were used in 
FDA's research study to provide valuable information regarding the 
relative ability of the 36 proposed required warnings to effectively 
convey the very real adverse health consequences of smoking to the 
public.
    Indeed, the court in Commonwealth Brands rejected an argument that 
the purpose of the new, larger warnings with their graphic image 
component is to ``browbeat potential tobacco consumers'' with the 
government's antismoking message. The court stated that ``the 
government's goal is not to stigmatize the use of tobacco products on 
the industry's dime; it is to ensure that the health risk message is 
actually seen by consumers in the first instance'' (Commonwealth 
Brands, 678 F. Supp. 2d at 530 (emphasis in original)). We agree with 
these findings of the district court.
    Because the warning requirements compel the disclosure of 
information that is purely factual and noncontroversial, they are 
permissible under Zauderer if they are reasonably related to the 
government's asserted interest. As stated repeatedly in the NPRM and 
this rule (see, e.g., section II.D of this document), the Agency's 
primary interest is to effectively convey the negative health 
consequences of smoking on cigarette packages and in advertisements, a 
necessary part of which, as the court in Commonwealth Brands 
recognized, is ``to ensure that the health risk message is actually 
seen by consumers in the first instance.'' The warning requirements are 
clearly reasonably related to this interest.
    Both the research literature and FDA's study of the proposed 
required warnings indicate that the required warnings are effective at 
communicating the health consequences of smoking to consumers. We have 
cited extensive literature in the NPRM and in section II.D of this 
final rule discussing the greater effectiveness of larger, graphic 
warnings over the current warnings at getting consumers' attention (see 
75 FR 69524 at 69531 through 69532). For example, in one study in which 
students were shown images of the Canadian graphic warnings and the 
current warnings in use in the United States, the Canadian graphic 
warnings significantly increased aided recall of the warnings, 
increased depth of message processing, and increased the perceived 
strength of the message (75 FR 69524 at 69531, citing Ref. 97). In 
addition, as discussed in section III of this document, FDA's study 
report (Ref. 49) demonstrates that eight of the nine required warnings 
selected for the final rule showed highly significant effects relative 
to the text-only control on all the salience measures (emotional 
reaction scale, cognitive reaction scale, and difficult to look at 
measure) across all of the target audiences (youth, young adults, and 
adults). The ninth warning, which communicates the message that 
``Quitting smoking now greatly reduces serious risks to your health,'' 
also showed strong effects relative to the text-only control, with 
significant effects in at least some audiences on the emotional and 
cognitive reaction scales. Again, these results with respect to the 
salience measures are important because they have been shown to enhance 
recall and information processing, which helps to ensure that warnings 
are better understood and remembered.
    As set forth previously, to the extent that the warning 
requirements compel speech, they are permissible under Zauderer because 
they require disclosure of factual information and are reasonably 
related to FDA's goal of effectively communicating the health 
consequences of smoking to consumers. Accordingly, it is not necessary 
to address the strict scrutiny analyses set forth in the comments.
    We are not persuaded to the contrary by the comments' assertions 
that the warning requirements are unjustified and unduly burdensome. 
The industry comments discussed previously contended that the warnings 
are unjustified because the health risks of smoking are already 
universally known and overestimated and the FDA study results show that 
the required warnings will have no impact on smoking beliefs or 
behavior. To support their argument, they cite Ibanez v. Florida 
Department of Business and Professional Regulation, 512 U.S. 136 
(1994), and International Dairy Foods Ass'n v. Boggs, 622 F.3d 628 (6th 
Cir. 2010), for the proposition that courts have found disclosure 
requirements to be unjustified where the possibility that disclosure 
will prevent consumer confusion is only speculative.
    We disagree with these comments. As discussed in section II.C of 
this document, there is significant evidence to show that consumers 
lack knowledge about or underestimate the health risks of smoking. 
Examples of such evidence include: A 2007 survey that found that two in 
three smokers underestimate the chance of developing lung cancer; 
several studies in which only a minority of smokers surveyed believed 
that they were at increased risk for cancer and heart disease; various 
studies indicating that Americans who are aware of certain risks, such 
as cancer, are unaware of the many other health risks associated with 
smoking; surveys showing that young adults do not appreciate the 
addictive nature of cigarettes; studies showing that knowledge of 
smoking risks is even lower among certain demographic groups, such as 
people with lower incomes and fewer years of education; and research 
demonstrating that Americans grossly underestimate the effects of 
secondhand smoke on nonsmokers (see section II.C of this document for 
more extensive discussion of this research).
    In addition, we included in the NPRM an extensive discussion of how 
the current cigarette warnings have gone unnoticed and fail to 
appropriately convey crucial information to consumers about the health 
risks of smoking (75 FR 69524 at 69525 and 69529 through 69531). For 
example, in 1994, the Surgeon General reported that the current 
warnings, which have been required on cigarette packages and in 
cigarette advertisements for many years, are given little attention or 
consideration by viewers (75 FR 69524 at 69525). The same report found 
that warnings on billboard advertisements were so small that passing 
motorists could read them only with ``great difficulty'' (see also the 
discussion of billboard advertisements at 75 FR 69524 at 69525). 
Likewise, as noted in section I.A of this document, a major study into 
tobacco policy in the United States by the IOM in 2007 concluded that 
U.S. package warnings are both ``unnoticed and stale'' and found that 
they fail to communicate relevant information in an effective way (Ref. 
3 at 291). The Chair of the IOM's Committee on Reducing Tobacco Use 
described the warnings on cigarette packs as ``invisible'' in

[[Page 36698]]

testimony in 2007 on a precursor to what was enacted as the Tobacco 
Control Act (75 FR 69524 at 69530). Research regarding warning 
statements in cigarette advertisements has shown similar results (Id., 
and studies cited therein). As discussed in the NPRM, the IOM expressed 
concern about the ability of consumers with less education to recall 
the information included in text-based messages. The IOM further 
explained that smokers are more likely to recall larger warnings as 
well as warnings that appear on the front of packages instead of the 
side, as is the case for the current warnings (75 FR 69524 at 69531). 
As the court in Commonwealth Brands likewise concluded, the evidence 
before Congress clearly demonstrates that the new warning requirements 
are justified (678 F. Supp. 2d at 530-31).
    Substantial evidence showing consumer ignorance regarding the 
health risks of smoking and the ineffectiveness of the current warnings 
at communicating such risks clearly supports the need for the required 
warnings. The results of our research study showing significant effects 
on salience measures for all of the required warnings, along with the 
substantial international evidence showing that larger, graphic 
warnings effectively communicate health risks, demonstrate that, unlike 
the disclosures in the cases cited in the comments, the required 
warnings will have more than a speculative effect on consumer confusion 
about the risks of smoking.\7\
---------------------------------------------------------------------------

    \7\ In Zauderer, the asserted government interest was preventing 
consumers from being misled by a legal advertisement, and thus, the 
Court noted that warnings or disclaimers could be appropriately 
required ``in order to dissipate the possibility of consumer 
confusion or deception'' (Zauderer, 471 U.S. at 651 (citations 
omitted)). In articulating the applicable level of First Amendment 
scrutiny for disclosure requirements, the Court stated that such 
requirements must be ``reasonably related to the State's interest in 
preventing deception of consumers'' (Id.). However, appellate courts 
have held that Zauderer's holding was not limited to disclosure 
requirements that addressed potentially deceptive advertising, but 
rather applied to disclosures aimed at better informing consumers 
about the products that they purchase (see Sorrell, 272 F.3d at 115 
(applying the Zauderer standard and upholding a disclosure statute 
aimed at increasing consumer awareness of the presence of mercury in 
various products because the statute's goal was consistent with the 
policies underlying First Amendment protection of commercial speech 
and the distinction between compelled and restricted commercial 
speech); see also New York State Restaurant Assoc. v. New York City 
Board of Health, 556 F.3d 114, 133-36 (2d Cir. 2009) (upholding 
under Zauderer a requirement that restaurants disclose calorie 
content on menus because it was reasonably related to the city's 
goal of reducing obesity); Pharm. Care Mgmt. Ass'n v. Rowe, 429 F. 
3d 294, 310 n. 8 (1st Cir. 2005) (stating that the court did not 
find any cases limiting Zauderer to ``potentially deceptive 
advertising directed at consumers'')).
    Thus, even if there were no consumer confusion regarding the 
health risks of smoking that needed to be addressed by the required 
warnings, the government would still have an interest in updating 
the warnings and better informing consumers about the effects of the 
products that they purchase--particularly products such as 
cigarettes, which have such a significant impact on health. 
Accordingly, the Zauderer standard would still apply.
---------------------------------------------------------------------------

    Equally unavailing is the assertion that the warning requirements 
are unduly burdensome because the required size and positioning of 
warnings on packages and in advertisements effectively rule out tobacco 
companies' own attempts to convey information. Because this part of the 
compelled speech argument overlaps with the assertion that the warning 
requirements restrict speech in violation of the First Amendment, it is 
addressed in the following paragraphs.
    The Warning Requirements Are Permissible Under Central Hudson. To 
the extent that the challenged provisions restrict commercial speech, 
the restrictions are analyzed under the framework established in 
Central Hudson Gas & Electric Corp. v. Public Service Commission, 447 
U.S. 557 (1980). ``The First Amendment's concern for commercial speech 
is based on the informational function of advertising'' (Id. at 563). 
Consequently, there is no protection for ``commercial messages that do 
not accurately inform the public about lawful activity'' or that are 
``related to illegal activity'' (Id. at 563-64). If the communication 
is neither misleading nor related to unlawful activity, the government 
may impose restrictions that directly advance a substantial government 
interest and are not more extensive than is necessary to serve that 
interest (Id. at 566). That standard does not require the legislature 
to employ ``the least restrictive means'' of regulation or to achieve a 
perfect fit between means and ends (Board of Trustees v. Fox, 492 U.S. 
469, 480 (1989)). It is sufficient that the legislature achieve a 
``reasonable'' fit by adopting regulations ```in proportion to the 
interest served''' (Id., quoting In re R.M.J., 455 U.S. 191, 203 
(1982); accord Pagan v. Fruchey, 492 F.3d 766, 771 (6th Cir. 2007) (en 
banc)).
    The Supreme Court has emphasized that ``[t]he Constitution gives to 
Congress the role of weighing conflicting evidence in the legislative 
process'' (Turner Broadcasting System, Inc. v. FCC, 520 U.S. 180, 199 
(1997)). ``Even in the realm of First Amendment questions where 
Congress must base its conclusions upon substantial evidence, deference 
must be accorded to its findings as to the harm to be avoided and to 
the remedial measures adopted for that end, lest [a court] infringe on 
traditional legislative authority to make predictive judgments when 
enacting nationwide regulatory policy'' (Id. at 196). Thus, ``the 
question is not whether Congress, as an objective matter, was correct'' 
in its determinations (Id. at 211). ``Rather, the question is whether 
the legislative conclusion was reasonable and supported by substantial 
evidence in the record before Congress'' (Id.).
    Comments from tobacco product manufacturers argued that the warning 
requirements restrict tobacco companies' speech because the warnings 
must occupy the top 50 percent of the front and back display panels of 
cigarette packages and 20 percent of the area of cigarette 
advertisements. They stated that these size and positioning 
requirements are unduly burdensome and will significantly impair their 
ability to convey information about their products to adult consumers. 
In essence, their argument is that the new warnings are too large and 
too prominent, which, as recognized by some of the comments discussed 
previously, has already been rejected by the court in Commonwealth 
Brands (see Commonwealth Brands, 678 F. Supp. 2d at 531).
    It is important to note that the comments did not identify any 
specific statements that will be restricted by the warning 
requirements. Nonetheless, we will assume for the purpose of argument 
that any speech that possibly could be restricted as a result of this 
rule would be nonmisleading and relate to lawful activity and, thus, 
would be commercial speech protected by the First Amendment.
    The comments did not dispute that the government has a substantial 
interest in effectively communicating the health risks of smoking to 
the public or, as the court in Commonwealth Brands characterized it, in 
``ensur[ing] that the health risk message is actually seen by consumers 
in the first instance'' (Id. at 530). This substantial interest 
satisfies the first step of the Central Hudson analysis.
    With respect to the second step, we have repeatedly discussed in 
the NPRM and this final rule evidence demonstrating that the required 
warnings will directly advance that interest. Such evidence includes 
the FDA study results showing significant effects on salience measures 
for all of the nine required warnings (see section III of this 
document) and the international experience demonstrating the enhanced 
communication value of larger, graphic warnings (see 75 FR 69524 at 
69531 through 69533). It also

[[Page 36699]]

includes studies showing the improved effectiveness of Canada's larger, 
graphic warnings at communicating health risks. For example, national 
surveys conducted on behalf of Health Canada indicate that 
approximately 95 percent of youth smokers and 75 percent of adult 
smokers report that the Canadian pictorial warnings have been effective 
in providing them with important health information (see Ref. 3 at p. 
294). In another study of adult smokers, more than half of the study 
participants reported that the pictorial warnings made them think about 
the health risks of smoking (Ref. 44). A study comparing Canadian and 
United States warnings found that while ``83 percent of Canadian 
students mentioned health warnings in a recall test of cigarette 
packages,'' only ``7 percent of U.S. students'' did the same (see Ref. 
3 at C-3 to C-4).
    The comments that argued that the warning requirements are 
unconstitutionally restrictive ignored this evidence. Instead, they 
suggested that, to satisfy this step, FDA's research study would have 
to have shown a material impact on consumers' beliefs about, or 
understanding of, the health risks of smoking or smoking behavior.
    We disagree. The evidence showing that the required warnings will 
directly advance the government's primary goal of effectively 
communicating the negative health consequences of smoking by first 
ensuring that the warnings will be seen and processed by consumers is 
sufficient to satisfy the second step of Central Hudson. A showing with 
respect to other goals, such as impacts on consumer beliefs or smoking 
behavior, is not necessary for purpose of this analysis. However, we 
note that there is significant evidence that these goals will also be 
advanced by the warning requirements.
    The comments repeatedly cited to FDA's study report to support the 
proposition that the required warnings will have no effect on consumer 
beliefs or behavior. However, such an assertion fails to take into 
account the study design and the extensive evidence in the literature 
indicating that the required warnings will positively impact beliefs 
and behavior. As we note in section III of this document, it is not 
surprising that the proposed required warnings, as a whole, did not 
elicit strong responses on the beliefs and intentions measures because 
study participants had only a single exposure to one warning; the study 
was not designed to show long-term effects on behavior. However, the 
study cannot be viewed in isolation from the overall body of scientific 
evidence regarding the positive effects of larger, graphic health 
warnings on smoking beliefs and behavior, which we summarized in the 
NPRM (75 FR 69524 at 69531 through 69534).
    Finally, the comments stated that the warning requirements do not 
satisfy the third step of the Central Hudson test because the mandated 
size and positioning of the warnings on packages and advertisements 
will effectively rule out tobacco companies' ability to convey 
information about their products. They stated that the requirements are 
more extensive than necessary to achieve the government's interests and 
suggested that less-speech restrictive alternatives, including 
alternatives to the warning size and positioning requirements included 
by Congress in the Tobacco Control Act, would be equally as effective.
    The comments provided no basis for setting aside Congress' judgment 
as to the appropriate specifications. As the court in Commonwealth 
Brands explained, Congress considered extensive evidence, starting with 
the 1994 Surgeon General's Report and ending with the 2007 IOM Report, 
which is discussed in the NPRM (75 FR 69524 at 69530), demonstrating 
that the existing warnings are ``unnoticed'' and ``stale'' and decided 
that the content and format of the warnings needed to be revised 
(Commonwealth Brands, 678 F. Supp. 2d at 530-31). In so doing, Congress 
chose specifications for the warnings that accord with FCTC, which 
calls for warnings that ``shall be rotating,'' ``shall be large, clear, 
visible and legible,'' ``should be 50% or more of the principal display 
areas but shall be no less than 30% of the principal display areas,'' 
and ``may be in the form of or include pictures or pictograms'' (FCTC 
art. 11.1(b)). The FCTC has been signed by the United States and 
ratified by 167 countries. As the Commonwealth Brands court correctly 
found, ``Congress also informed its warning requirements by looking at 
the use of a nearly identical warning requirement in Canada'' 
(Commonwealth Brands, 678 F. Supp. 2d at 531). Like the required 
warnings, the Canadian warnings occupy the top half of the two main 
panels of cigarette packages.
    Thus, Congress based its legislative decision to revise the 
warnings in the first instance and to mandate certain size and 
placement specifications for the warnings on substantial evidence in 
the record. At this time, we do not intend to change those 
specifications. Although comments from tobacco companies asserted that 
the larger size leaves inadequate room for their own commercial 
messages, they identified no information that is suppressed by virtue 
of the larger warnings, even though they have complied with similar 
requirements in other countries for years. The tobacco companies retain 
more than half of their cigarette packaging and 80 percent of their 
advertisements for their own commercial speech.
    Moreover, extensive disclosure requirements are by no means unique 
to cigarettes. For example, for products such as pain relievers, 
certain allergy medications, and products to treat a variety of cold 
symptoms, the required warnings together with other FDA-required 
information typically encompass more than 50 percent of the product 
packaging.\8\
---------------------------------------------------------------------------

    \8\ See 21 CFR 201.66; see also http://www.accessdata.fda.gov/drugsatfda_docs/label/2009/022032s003lbl.pdf (example of packaging 
for OTC heartburn medication).
---------------------------------------------------------------------------

    For these reasons, ``the warning requirement is sufficiently 
tailored to advance the government's substantial interest under Central 
Hudson'' (Id. at 532).
    The reliance by two comments on the Seventh Circuit's decision in 
Entertainment Software Association v. Blagojevich, 469 F.3d 641 (7th 
Cir. 2006), does not persuade us to the contrary. In that case, the 
court invalidated a State law requiring video-game retailers to place a 
four-square-inch label with the numerals ``18'' on any ``sexually 
explicit'' video game. Unlike here, the court concluded that the 
sticker ``communicates a subjective and highly controversial message--
that the game's content is sexually explicit,'' a term capable of 
multiple definitions, and expressly rejected the comparison to the 
``surgeon general's warning of the carcinogenic properties of 
cigarettes, the analogy the State attempts to draw'' (Id. at 652). 
``Applying strict scrutiny,'' the court noted that ``[t]he State has 
failed to even explain why a smaller sticker would not suffice'' (Id.). 
Here, by contrast, Congress has required accurate and objective 
warnings in a format that accords with the provisions of the FCTC, to 
which the United States is a signatory, and whose effectiveness has 
been demonstrated by international experience, after concluding 
existing, yet smaller, warnings were ineffective at conveying important 
health information.
    We also disagree with the assertion in the comments that the 
warning requirements fail to meet the third step of Central Hudson 
because the government failed to consider numerous less speech-
restrictive alternatives. One of the comments suggested that the 
government disseminate information

[[Page 36700]]

about health risks as one alternative for communicating health risks to 
consumers. However, government dissemination of the message already 
occurs--for example, HHS currently has several hundred tobacco-related 
Web sites, which provide informative messages regarding, for example, 
the harmful effects of tobacco use (Ref. 89), and CDC's Office on 
Smoking and Health funds health departments in all 50 states, the 
District of Columbia, and seven U.S. territories for comprehensive 
tobacco prevention and control and provides access to tobacco control 
advertising material for use in this comprehensive effort (see Ref. 
98). However, as discussed in section II.C of this document, evidence 
shows that the health risks are still misunderstood or underestimated 
by consumers. Moreover, government advertising cannot take the place of 
displaying effective warnings on product packaging, which ``can provide 
a clear, visible vehicle to communicate risk at the most crucial time 
for smokers and potential smokers''--the very instant that they are 
deciding whether to purchase or consume a cigarette (75 FR 69524 at 
69529). Indeed, ``[p]ack-a-day smokers are potentially exposed to 
warnings more than 7,000 times per year'' (Id.; Refs. 11, 99, and 100).
    To the extent that the comments discussed other suggested 
alternatives (e.g., increased enforcement of sales to minors, increased 
funding for tobacco control programs, increased taxes) in the context 
of their ability to reduce youth smoking, the suggestions provided are 
misplaced in an analysis of requirements whose primary purpose is 
effective communication of health risks. These suggested alternatives 
were not aimed at communicating health risks and were not effective at 
doing so. In any event, all of these alternatives have been implemented 
by the government in one form or another and have been insufficient. 
This is reflected in the findings of the Commonwealth Brands court:

    Plaintiffs' argument is premised on the idea that ``[b]efore a 
government may resort to suppressing speech to address a policy 
problem, it must show that regulating conduct has not done the trick 
or that as a matter of common sense it could not do the trick.'' 
(Plaintiffs' Brief, p. 26) (quoting BellSouth, 542 F.3d at 508); see 
also Western States, 535 U.S. at 373. However, that is precisely 
what Congress has done here. Contrary to Plaintiffs' contention, 
this is not a case where Congress went ``straight to [their] 
speech.'' (Plaintiffs' Brief, p. 19). This is a case where Congress, 
after decades of implementing various measures that did not affect 
Plaintiffs' speech, decided to add label and advertising 
restrictions to its comprehensive regulation of the tobacco 
industry. That decision seems eminently reasonable, too, since every 
other tool in the government's arsenal is made less effective and 
more costly by Plaintiffs' use of advertising ``to stimulate 
underage demand.'' (Government's Response, p. 40). Accordingly, the 
Court rejects Plaintiffs' contention that the existence of 
``numerous obvious non-speech-restrictive alternatives'' renders the 
Act's speech restrictions unconstitutional for lack of tailoring. 
(678 F. Supp. 2d at 538).
    For all of the reasons set forth in the previous paragraphs, we 
conclude that the warning requirements do not violate the First 
Amendment.
    (Comment 200) One tobacco industry comment also claimed that 
requiring a reference to a cessation resource in the required warnings 
would violate the First Amendment because it is compelled speech that 
does not convey factual information about the product that is being 
sold. This comment claimed that requiring a cessation resource 
communicates a subjective policy message that consumers should not buy 
or use the product.
    (Response) We disagree. As explained previously, the requirement in 
this rule for graphic warnings on cigarette packages and advertisements 
is consistent with the First Amendment. Contrary to the comment, the 
reference to a cessation resource, when considered in context with the 
rest of the required warnings, conveys factual information to consumers 
and is permissible under the Zauderer standard for compelled 
disclosures because it is reasonably related to our interest in 
increasing the likelihood that existing smokers will become aware of 
the cessation resource and, consequently, increasing the likelihood 
that those who want to quit will be successful. It is also reasonably 
related to our interest in effectively communicating the health risks 
of smoking to consumers.
    As discussed in detail in section V.B.6 of this document, the rule 
requires each required warning to include a reference to the existing 
National Network of Tobacco Cessation Quitlines (Network), which uses 
the telephone portal 1-800-QUIT-NOW. This rule will require that the 
cessation resource be displayed on the required warning images: ``1-
800-QUIT-NOW''.
    The NPRM cited evidence that more than 70 percent of smokers in the 
United States report that they want to quit, and approximately 44 
percent report that they try to quit each year (75 FR 69524 at 69529; 
Ref. 66 at p. 15). However, as a result of nicotine addiction, only a 
very small percentage of these smokers achieve success (75 FR 69524 at 
69528 through 69529).
    Instead of advocating a subjective policy message as suggested by 
the comment, including a cessation resource on required warnings will 
provide factual information for the many smokers who have already 
developed a desire to quit, either prior to or after viewing the health 
risk information in the required warnings. The reference is designed to 
inform such smokers and others that a resource exists that can help 
smokers to quit and to inform them how they can access that resource. 
The factual nature of this information is underscored by our 
explanation in the NPRM that the Agency's goal is ``to provide a place 
where smokers and other members of the public can obtain smoking 
cessation information from staff trained specifically to help smokers 
quit by delivering unbiased and evidence-based information, advice, and 
support'' (75 FR 69524 at 69540 (emphasis added)). In addition, our 
adoption of detailed criteria designed to ensure that the resource's 
information, advice, and support are unbiased and evidence-based 
further emphasizes that the required reference to a cessation resource 
is factual in nature.
    We disagree that a reference to a cessation resource does not 
convey information about the product being sold. The reference must be 
considered in context with the rest of the required warnings, which 
consist of textual statements and accompanying graphic images conveying 
to consumers factual information regarding the negative health 
consequences of smoking and the benefits of quitting. The reference to 
a smoking cessation resource naturally complements this information; 
instead of leaving consumers who are motivated to quit by the health 
risk information unassisted, it provides them with a concrete step to 
take action on this information.
    Because the reference to a smoking cessation resource conveys 
factual information, it is permissible under Zauderer if it is 
reasonably related to the government's asserted interest. Here, the 
reference is reasonably related to FDA's interest in increasing the 
likelihood that existing smokers will become aware of the cessation 
resource and, consequently, increasing the likelihood that they will 
successfully quit smoking. As set forth in the discussion of the 
comments in section V.B.6 of this document, foreign countries that have 
included cessation resources on cigarette package warnings have 
generally experienced large increases in volume of calls to quitlines 
following their appearance on cigarette packages. In addition, as also 
discussed

[[Page 36701]]

in section V.B.6 of this document, the effectiveness of telephone 
quitlines is well documented; there is evidence that significant 
numbers of smokers are unaware of such assistance, even after extensive 
media campaigns; and there is evidence that knowing about the 
availability of a quitline increases quit attempts and successful 
cessation even among smokers who do not call the quitline.
    Moreover, requiring a smoking cessation resource is also reasonably 
related to FDA's interest in effectively communicating the health risks 
of smoking to consumers. As noted in the NPRM (75 FR 69524 at 69541) 
and in section V.B.6 of this final rule, there is evidence to show that 
including a reference to a smoking cessation resource in graphic 
warnings can enhance the effectiveness of graphic warnings at conveying 
health risk information to the public. We have determined that it is 
also important to inform smokers about a specific tool they can use to 
help them to quit smoking at the time they are looking at the warnings 
and thinking about the health consequences of smoking and the positive 
health benefits of quitting. Risk communication research indicates that 
messages that arouse fear about the health risks of smoking should be 
combined with information on concrete steps that can be taken to reduce 
those risks (Ref. 81 (Messages that arouse fear ``appear to be 
effective when they depict a significant and relevant threat * * * and 
when they outline effective responses that appear easy to accomplish * 
* *.'')). As one comment stated, providing information about how to 
reduce a risk that arouses fear helps to prevent consumers from 
suppressing thoughts about such risks, and thereby, failing to process 
the risk information. For this reason, too, we do not agree that the 
requirement to refer to a smoking cessation resource on cigarette 
packages and advertisements violates the First Amendment.

C. Takings Under the Fifth Amendment

    We received a comment related to the Takings Clause of the Fifth 
Amendment. That comment is summarized and responded to in the following 
paragraphs.
    (Comment 201) One comment submitted by several tobacco companies 
argued that the new health warning requirements unconstitutionally 
deprive them of their property rights in violation of the Takings 
Clause of the Fifth Amendment. The tobacco companies asserted that the 
new required warnings constitute a per se physical taking of their 
packaging and advertising space, as well as a regulatory taking of 
their property interests in their trademarks.
    (Response) We disagree that the rule effects a taking under either 
theory. The Takings Clause provides that ``private property [shall not] 
be taken for public use, without just compensation.'' A takings 
analysis begins with a threshold determination of what interest a 
person has in the thing that is allegedly taken (see Ruckelshaus v. 
Monsanto Co., 467 U.S. 986, 1001 (1984)). In order to assert a taking, 
a person must first identify a specific, concrete property interest 
that has been invaded or destroyed by the government (Penn Central 
Transp. Co. v. New York City, 438 U.S. 104, 124-25 (1978)). Once a 
concrete property interest is identified, it is necessary to determine 
whether the government's action constitutes a taking of that interest.
    The graphic warning requirements do not effect a per se taking. To 
conclude that a categorical, or per se, taking has occurred when the 
government directly appropriates or physically invades property is 
another way of saying that the government action so onerously burdens 
an important property right that the inquiry ends there. As the Supreme 
Court has explained: ``A permanent physical invasion, however minimal 
the economic cost it entails, eviscerates the owner's right to exclude 
others from entering and using her property--perhaps the most 
fundamental of all property interests'' (Lingle v. Chevron U.S.A. Inc., 
544 U.S. 528, 539 (2005); see also Loretto v. Teleprompter Manhattan 
CATV Corp., 458 U.S. 419, 433 (1982) (citation omitted) (``[T]he land-
owner's right to exclude [is] `one of the most essential sticks in the 
bundle of rights that are commonly characterized as property.' '')).
    Viewed in this light, a requirement that tobacco companies display 
graphic health warnings as part of the package label on their products 
cannot be equivalent to the ``physical invasion'' of real property in 
the cases that the comment cites to support its per se takings argument 
(see Loretto, 458 U.S. at 441 (``Our holding today is very narrow.'')). 
The warnings involve personal property of a type that is already 
subject to extensive government regulation. Indeed, given the 
ubiquitous nature of government-mandated warnings on all kinds of 
consumer products, manufacturers of inherently dangerous products such 
as cigarettes cannot be said to have a categorical right to exclude 
health warnings from their products' labels.\9\ Therefore, the tobacco 
companies have failed to identify the sort of property right the 
destruction of which would result in a per se taking.
---------------------------------------------------------------------------

    \9\ For example, for products such as pain relievers, certain 
allergy medications, and products to treat a variety of cold 
symptoms, the required warnings together with other FDA-required 
information typically encompass more than 50 percent of the product 
packaging (see 21 CFR 201.66).
---------------------------------------------------------------------------

    Furthermore, as the Supreme Court has explained, the Takings Clause 
exists ``to bar Government from forcing some people alone to bear 
public burdens which, in all fairness and justice, should be borne by 
the public as a whole'' (Armstrong v. United States, 364 U.S. 40, 49 
(1960); see Monongahela Nav. Co. v. United States, 148 U.S. 312, 325 
(1893)). The tobacco companies' argument amounts to an assertion that 
they must be compensated because they have been required to allow 
health warnings on their property. The point of the warnings is to 
protect the public health by informing consumers about the many harmful 
effects of the companies' products, which kill an estimated 443,000 
Americans every year. Therefore, the proposition that the public must 
pay for the cost of the warnings on tobacco products is simply not 
compatible with how ``the burden of common citizenship'' is 
proportioned in our system of modern government (see Keystone 
Bituminous Coal Ass'n v. DeBenedictis, 480 U.S. 470, 488-91 (1987); 
Pennsylvania Coal Co. v. Mahon, 260 U.S. 393, 413 (1922) (``Government 
hardly could go on if to some extent values incident to property could 
not be diminished without paying for every such change in the general 
law.'')).
    In addition, the graphic warning requirements do not effect a 
regulatory taking. The tobacco companies also argue that the warnings 
constitute a regulatory taking because they have a reasonable 
expectation that their property rights will be protected based on 
statutory and common law protections provided to trademarks and trade 
dress. The tobacco companies do not identify the specific statutory or 
common law protections that led to their expectation that their 
property would be protected. Also lacking is an explanation of how the 
rule would interfere with such expectations. In any event, we do not 
agree that the rule effects a regulatory taking of the tobacco 
companies' property.
    The Supreme Court has declined to prescribe a ``set formula'' for 
identifying takings and instead has characterized a takings analysis as 
an ``essentially ad hoc, factual'' inquiry (Penn Central, 438 U.S. at 
124). Nonetheless, the Court has identified three factors for 
consideration in assessing whether a regulatory taking has occurred: 
(1) The character of the

[[Page 36702]]

governmental action; (2) the regulation's economic impact; and (3) the 
extent to which the regulation interferes with reasonable investment-
backed expectations (Ruckelshaus, 467 U.S. at 1005). The force of any 
one of these factors may be ``so overwhelming * * * that it disposes of 
the taking question'' (Id.).
    With respect to the first Penn Central factor, the character of the 
government action, the government is ``given the greatest leeway to act 
without the need to compensate those affected by their actions'' when 
the government has acted for ``the protection of health and safety'' 
(Rose Acre Farms, Inc. v. United States, 559 F.3d 1260, 1281 (Fed. Cir. 
2009)). Indeed, the Supreme Court has rejected takings claims arising 
out of health and safety legislation even where a property interest has 
been destroyed (see Penn Central, 438 U.S. at 125-27 (citing cases)). 
Thus, as explained previously, this factor of the analysis weighs 
strongly in favor of finding that no taking will occur as a result of 
this rule.
    The second factor to consider is the economic impact of the 
government action. The analysis involves looking not just at what has 
been lost, but at the nature and extent of the interference with rights 
in the property as a whole (see Penn Central, 438 U.S. at 130-31). 
Thus, it is necessary to assess the impact of the rule on tobacco 
companies' trademarks, packages, and advertisements as a whole. In 
assessing whether a regulation effects a taking, the Supreme Court has 
considered whether the regulation denies an owner the ``economically 
viable'' use of its property. Mere denial of the most profitable or 
beneficial use of property does not require a finding that a taking has 
occurred (see, e.g., Keystone, 480 U.S. at 498-99). Here, tobacco 
companies have not shown how the rule deprives them of the use of their 
intellectual property or packaging to such a severe extent to effect a 
taking (see Village of Euclid v. Ambler Realty Co., 272 U.S. 365, 384 
(1926) (75 percent diminution in value insufficient to prove taking); 
Hadacheck v. Sebastian, 239 U.S. 394, 405 (1915) (92.5 percent 
diminution insufficient to prove taking)). Manufacturers, importers, 
distributors, and retailers will still be able to use packages and 
advertisements to sell cigarettes. Indeed, manufacturers still have use 
of 50 percent of the front and rear panels of cigarette packages, as 
well as the side panels and the top and bottom panels, to use their 
trademarks and otherwise promote their products. Eighty percent of the 
area of each advertisement will likewise be available. Accordingly, the 
second factor of the analysis also supports the conclusion that no 
taking will occur as a result of the rule.
    The vague suggestion that the rule interferes with tobacco 
companies' ``reasonable investment-backed expectations'' is similarly 
unpersuasive. To be reasonable, expectations must take into account the 
power of the State to regulate in the public interest (Pace Resources, 
Inc. v. Shrewsbury Township, 808 F.2d 1023, 1033 (3d Cir.), cert. 
denied, 482 U.S. 906 (1987)). The nature of the property, and whether 
it has historically been, or potentially could be, subject to 
regulation also aids in determining whether any expectation in 
remaining free from regulation is reasonable. ``[I]n the case of 
personal property, by reason of the State's traditionally high degree 
of control over commercial dealings, [the property owner] ought to be 
aware of the possibility that new regulation might even render his 
property economically worthless * * *.'' (Lucas v. South Carolina 
Coastal Council, 505 U.S. 1003, 1027-28 (1992)). This is particularly 
true with respect to cigarettes, which are lethal and addictive--
features the industry masked for decades while stimulating underage 
demand (see United States v. Philip Morris USA, Inc., 566 F.3d 1095, 
1124 (DC Cir. 2009); United States v. Philip Morris USA, Inc., 449 F. 
Supp. 2d 1, 580 (Finding 2717) (D.D.C. 2006); Ref. 54 at p. 211). 
Commerce in tobacco products has been regulated for decades, subject to 
increasingly more restrictive Federal, State, and local measures over 
time. Indeed, Congress has mandated warnings on cigarette packs since 
1965 (see Federal Cigarette Labeling and Advertising Act of 1965 
(FCLAA), Pub. L. 89-92, 79 Stat. 282). Congress later amended FCLAA to 
update the text of the cigarette warnings and mandate them in cigarette 
advertisements as well (see Comprehensive Smoking Education Act of 
1984, Pub. L. 98-474, 98 Stat. 2200). In light of this long history of 
regulation, companies that package and advertise cigarettes lack a 
reasonable investment-backed expectation that they will be able to 
continue to use their property without modification of the regulatory 
requirements that protect the public health. Any expectation that the 
industry would escape comprehensive regulation, such as the Tobacco 
Control Act, was eminently unreasonable.
    For these reasons, the third factor of the takings analysis, like 
the first two factors, compels the conclusion that the rule does not 
amount to a regulatory taking of property that requires compensation 
under the Fifth Amendment.

VIII. Implementation Date

    In the preamble to the proposed rule, FDA stated that the final 
rule would become effective 15 months after the date the final rule 
publishes in the Federal Register. This time period is consistent with 
section 201(b) of the Tobacco Control Act, which specifies that the 
requirements for health warnings on cigarette packages and in 
advertisements are effective 15 months after the issuance of the 
regulations that FDA issues in this rulemaking.
    In particular, we proposed that as of the effective date, no 
manufacturer, importer, distributor, or retailer of cigarettes may 
advertise or cause to be advertised within the United States any 
cigarette product unless the advertising complies with the final rule. 
With respect to cigarette packages, we explained that cigarettes must 
not be manufactured after the effective date unless their packages 
comply with the regulation. If any packaged cigarette product was 
manufactured prior to the effective date and does not comply with the 
final rule, a manufacturer may continue to introduce that package into 
commerce in the United States for an additional 30 days after the 
effective date of the final rule. After 30 days following the effective 
date, a manufacturer may not introduce into domestic commerce any 
cigarette the package of which does not meet the requirements of the 
final rule (75 FR 69524 at 69541). We noted that this limitation 
applied only to manufacturers and requested comments regarding 
mechanisms for enforcing this rule and its effective date, including 
ways to differentiate cigarette packages sold from inventory 
manufactured prior to the effective date rather than from inventory 
manufactured after the effective date.
    We received several comments about the effective date, particularly 
requesting clarification regarding its application to manufacturers, 
distributors, and retailers after the 30-day period in which 
manufacturers may continue to sell noncompliant packages. Based on the 
comments and our review of the language in section 201(b) of the 
Tobacco Control Act, we find:
     The effective date should be 15 months after the date of 
publication in the Federal Register of this final rule;
     No manufacturer, importer, distributor, or retailer may 
advertise any cigarette product after the effective date if the 
advertisement does not comply with this rule;
     After the effective date, no person may manufacture for 
sale or distribution within the United States any cigarette

[[Page 36703]]

the package of which does not comply with this rule;
     Beginning 30 days after the effective date of this rule, a 
manufacturer may not introduce into domestic commerce any cigarette, 
irrespective of the date of manufacture, if its package does not comply 
with the requirements of this rule;
     After the effective date, an importer, distributor, or 
retailer may not sell, offer to sell, distribute, or import for sale or 
distribution within the United States any cigarette the package of 
which does not comply with this regulation, unless the cigarette was 
manufactured prior to the effective date; and
     After the effective date, however, a retailer may sell 
cigarettes the packages of which do not have a required warning if the 
retailer demonstrates it falls outside the scope of this rule as 
described in Sec.  1141.1(c).

In the following paragraphs, we describe the individual comments 
concerning the effective date and respond to these comments.
    (Comment 202) Several comments expressed the view that 15 months is 
an excessive amount of time to allow the tobacco industry before it 
must comply with the new requirements of this rulemaking. For example, 
some comments contended that tobacco companies have employed marketing 
and advertising experts and are continuously changing cigarette 
packaging and advertisements. These comments also noted that the 
tobacco industry has known that they will need to update packaging and 
advertising to comply with this regulation since the passage of the 
Tobacco Control Act. Some comments estimated the number of Americans 
that will become new smokers or die due to smoking during the 15 months 
prior to the effective date. Other comments recognized that the statute 
specifies a 15-month effective date, but requested that FDA make clear 
that cigarette packages manufactured after the effective date must 
comply with the requirements of the regulation.
    (Response) The Tobacco Control Act specifies a 15-month 
implementation period for cigarette manufacturers to include required 
warnings on their packages and for all cigarette advertisements to 
comply with this rule. We agree this is an appropriate amount of time 
for implementation of the rule.
    (Comment 203) One tobacco product manufacturer indicated in its 
comment that all manufacturers should be required to implement the same 
warning requirements within the same time periods, and that there 
should not be a separate implementation period for small manufacturers.
    (Response) As in the proposed rule, the implementation date in the 
final rule is the same for all manufacturers, regardless of size.
    (Comment 204) One comment requested that FDA delay implementation 
of the rule until Constitutional issues raised in the comment are 
resolved either administratively or through litigation.
    (Response) We disagree that the effective date of this rule should 
be delayed beyond the 15 months proposed in the NPRM. As explained in 
section VII of this document, we disagree that there are any 
Constitutional deficiencies associated with this rule and, therefore, 
there is no need to revise the rule or issue a new proposed rule to 
address these alleged deficiencies. Furthermore, section 201(b) of the 
Tobacco Control Act specifies that the requirements for health warnings 
on cigarette packages and in advertisements for cigarettes are 
effective 15 months after the issuance of this final rule.
    (Comment 205) Several comments addressed the 30-day period for 
manufacturers to sell noncompliant packages that were manufactured 
prior to the effective date. One comment asserted that it is 
unnecessary to permit this 30-day sell-off period if there is adequate 
time for manufacturers to make necessary changes to cigarette packages 
prior to the effective date. The comment cited the United Kingdom as an 
example of a jurisdiction where tobacco product manufacturers had 
adequate lead time (1 year to implement changes to cigarette packages 
and 2 years to introduce picture warnings on other tobacco products) to 
meet implementation deadlines so that only compliant packages were sold 
after the compliance deadline. Other comments recognized that the 
statute grants manufacturers 30 days to sell noncompliant cigarette 
packages; however, these comments emphasized that FDA does not have the 
discretion to lengthen the 30-day period. Comments also stressed that 
any additional delay of implementation would needlessly delay the 
important public health benefits of the rule.
    (Response) As explained previously, section 201(b) of the Tobacco 
Control Act specifies that manufacturers have an additional 30 days to 
sell cigarette packages that do not meet the requirements of the 
regulation if those packages were manufactured prior to the effective 
date.
    (Comment 206) A small tobacco product manufacturer requested that 
FDA specify the meaning of the term ``introduce into domestic 
commerce.'' The comment asked whether the term means out of the 
manufacturer's possession. The comment raised this question in the 
context of expressing concern that distributors and retailers might 
want to return product to a manufacturer if there is doubt about a 
distributor or retailer being permitted to sell cigarette packages that 
do not have a required warning, but were introduced intro domestic 
commerce by the manufacturer during the 30-day sell through period for 
manufacturers.
    (Response) We agree with this comment that when a cigarette package 
has been sold by the manufacturer and is in the possession of a 
distributor or retailer, the product would be considered introduced 
into domestic commerce. However, we do not agree that a definition of 
``introduce into domestic commerce'' is needed at this time. The 
comment recognized that there was similar language in the context of a 
statutory prohibition on the use of ``light,'' ``low,'' and ``mild'' 
descriptors and related FDA guidance for industry, however, that 
guidance did not define the phrase ``introduce into domestic 
commerce.'' We are not aware of confusion regarding this phrase in the 
context of ``light,'' ``low,'' and ``mild'' descriptors and decline to 
define that phrase here.
    (Comment 207) Public health advocacy groups expressed concern that 
manufacturers will seek to sell a disproportionate number of 
noncompliant cigarette packages immediately prior to the expiration of 
the 30-day sell-off period and, therefore, FDA should take steps to 
ensure that all these sales are fully documented. The comment 
recommended that FDA impose certain requirements for selling 
noncompliant cigarette packages, such as a requirement to mark these 
packages with a statement that the product was manufactured prior to 
September 22, 2012, or with a readily identifiable symbol. This comment 
also recommended that each manufacturer be required to certify that all 
cigarettes so marked were manufactured before that date and submit an 
accounting of the number of packages on hand as of the effective date, 
the number of cigarette packages introduced into commerce during the 
30-day period, and the number of packages on hand as of the expiration 
of the 30-day period. This comment also suggested that FDA not permit 
manufacturers to introduce into commerce in any calendar month a number 
of noncomplying cigarette packages that exceeds 10 percent of the 
average total number of cigarette packages introduced per month during 
the preceding year.

[[Page 36704]]

    (Response) We disagree that such specific requirements are 
necessary to address a one-time sell-off period of 30 days. We 
recognize that some manufacturers may try to increase their sales of 
cigarette packages prior to the effective date and prior to the 
expiration of the sell-off period. However, there will be some limit to 
the demand for these cigarette packages. Manufacturers may increase 
manufacturing prior to the effective date at their own risk. After the 
30-day sell-off period, a manufacturer may not sell noncompliant 
cigarette packages and would need to repackage or destroy any 
noncompliant cigarettes packages intended to be sold in the United 
States.
    (Comment 208) One comment requested that importers be required to 
comply with all requirements applicable to manufacturers. According to 
this comment, importers should be prohibited from introducing 
noncomplying cigarettes imported after the effective date and should be 
required to meet the same requirements as manufacturers with respect to 
cigarettes manufactured prior to the effective date and sold after the 
effective date.
    (Response) This comment did not provide a statutory interpretation 
that would justify this approach. Section 201(b) of the Tobacco Control 
Act states the effective date ``shall be with respect to the date of 
manufacture'' and that 30 days after the effective date, a manufacturer 
is precluded from introducing into domestic commerce any product that 
is not in conformance with section 4 of FCLAA. No similar statutory 
provision applies to importers or distributors.
    (Comment 209) Public health advocacy groups requested that FDA 
clarify that manufacturers are not prohibited from introducing into 
commerce cigarette packages that comply with the regulation prior to 
the effective date.
    (Response) We agree that manufacturers are not precluded from 
introducing into commerce cigarette packages that contain required 
warnings in accordance with the regulation prior to the effective date. 
We also note that a cigarette manufacturer, importer, or retailer may 
include a required warning in an advertisement prior to the effective 
date. However, because the health warning requirements in FCLAA do not 
change until the effective date of this rule, any manufacturer, 
importer, or retailer that, prior to the effective date, includes a new 
required warning on a cigarette package or advertisement must also 
comply with the warning requirements under the current version of FCLAA 
and any warning plan approved by the FTC.
    (Comment 210) Many comments requested clarification regarding 
whether there is any limitation on the period during which distributors 
and retailers may sell cigarettes that were manufactured prior to the 
effective date that are not compliant with the rule. Several comments 
submitted by organizations representing manufacturers and retailers 
asked that FDA clarify that distributors and retailers have an 
unlimited period to sell cigarette packages that do not comply with the 
regulation as long as the cigarettes were manufactured prior to the 
effective date. Several comments noted that this approach would be 
consistent with FDA's treatment of cigarettes with the descriptors 
``light,'' ``low,'' and ``mild.'' One manufacturer commented that any 
restraint on the ability of distributors or retailers to sell through 
their lawfully acquired product would unfairly deprive them of the 
benefit of their investment. Small tobacco product manufacturers noted 
that small manufacturers cannot afford to have distributors and 
retailers returning product based on a potential labeling concern. 
Retailer comments contended that limiting a sell-off period may cause a 
severe financial burden on small retailers because manufacturers 
generally do not allow cigarettes to be returned. Retailers also 
claimed that cigarettes do not have an indefinite shelf life and both 
distributors and retailers generally turn over their cigarette 
inventory in a timely manner. One comment suggested that retailers 
should be allowed to sell noncompliant cigarette packages at least 
through their ``sell by'' date, as indicated on the cigarette package 
by the manufacturer.
    On the other hand, one comment claimed it is essential that there 
be a fixed implementation deadline at the retail level or old stock can 
be expected to remain on retail store shelves for 6 months and more 
after the effective date.
    (Response) As explained in the NPRM, section 201(b) of the Tobacco 
Control Act describes no limitation on the period during which 
distributors and retailers may sell cigarette packages that were 
manufactured prior to the effective date of this rule. In addition, 
there is no requirement that manufacturers include a ``sell by'' date 
on all cigarette packages. We note, however, that distributors, 
importers, and retailers are responsible for complying with this rule. 
After the rule's effective date, they may not sell, offer to sell, 
distribute, or import for sale or distribution within the United States 
any cigarette the package of which does not comply with this 
regulation, unless the cigarette was manufactured prior to the 
effective date. After the effective date, however, retailers may sell 
cigarettes the packages of which do not have a required warning if they 
demonstrate they meet the provisions of Sec.  1141.1(c) and are exempt 
from the requirements of 21 CFR part 1141 that apply to the display of 
health warnings on cigarette packages.

IX. Federalism

    FDA has analyzed this final rule in accordance with the principles 
set forth in Executive Order 13132. Section 4(a) of the Executive order 
requires agencies to ``construe * * * a Federal statute to preempt 
State law only where the statute contains an express preemption 
provision or there is some other clear evidence that the Congress 
intended preemption of State law, or where the exercise of State 
authority conflicts with the exercise of Federal authority under the 
Federal statute.'' This rule is being issued under section 4 of FCLAA, 
as amended by the Tobacco Control Act, and sections 701(a), 903, and 
906 of the FD&C Act (21 U.S.C. 371(a), 387c, and 387f), as amended by 
the Tobacco Control Act. Federal law includes an express preemption 
provision that preempts any requirement, except under the Tobacco 
Control Act, for a ``statement relating to smoking and health, other 
than the statement required by section 4 of [FCLAA], * * * on any 
cigarette package.'' (section 5(a) of FCLAA (15 U.S.C. 1334(a))). It 
also includes an express preemption provision that preempts any 
``requirement or prohibition based on smoking and health * * * imposed 
under State law with respect to the advertising or promotion of any 
cigarettes the packages of which are labeled in conformity with the 
provisions of [FCLAA],'' which includes section 4 of FCLAA (section 
5(b) of FCLAA). However, section 5(b) of FCLAA does not preempt any 
State or local statutes and regulations ``based on smoking and health, 
that take effect after [June 22, 2009], imposing specific bans or 
restrictions on the time, place, and manner, but not content, of the 
advertising or promotion of any cigarettes'' (section 5(c) of FCLAA).
    In addition, section 916(a)(2) of the FD&C Act (21 U.S.C. 387p) 
expressly preempts any State or local requirement ``which is different 
from, or in addition to, any requirement under [Chapter IX of the FD&C 
Act] relating to,'' among other things, misbranding and labeling. This 
express preemption provision, however, ``does not apply to

[[Page 36705]]

requirements relating to'' among other things ``the sale, distribution, 
* * * access to, [or] the advertising and promotion of * * * tobacco 
products.''

X. Environmental Impact

    FDA has determined under Sec.  25.30(k) (21 CFR 25.30(k)) that this 
action is of a type that does not individually or cumulatively have an 
impact on the human environment. Therefore, neither an environmental 
assessment (EA) nor an environmental impact statement (EIS) is 
required. We received one comment on this issue, which we have 
summarized and responded to in the following paragraphs.
    (Comment 211) One comment expressed concern regarding FDA's 
statement in the proposed rule that this action does not individually 
or cumulatively have an impact on the human environment. The comment 
stated that there is an impact on the environment due to the fact that 
a reduction in the number of cigarettes consumed will result in a 
reduction of cigarette-related waste. The comment explained that 
cigarette butts pose a greater health hazard than most other litter, 
because they contain toxins that can be leached into water systems. The 
comment requested that this be included in FDA's analysis to understand 
the large positive impact the required warnings will have on the human 
environment.
    (Response) We have considered this comment, but have concluded that 
neither an EA nor an EIS is required under Sec.  25.30(k). We have 
determined that a categorical exclusion applies in this instance, 
because (1) the action meets the criteria of the exclusion, i.e., there 
are no increases in existing levels of use or changes in intended use, 
and (2) there are no extraordinary circumstances.
    According to the National Environmental Policy Act of 1969 (NEPA) 
and the Agency's corresponding regulations, FDA must prepare an EIS for 
major Federal actions ``significantly affecting the quality of the 
human environment'' (see 40 CFR 1501.4; 21 CFR 25.22). If the action 
``may'' have such a significant environmental effect, an agency must 
prepare an EA to provide sufficient evidence and analysis for the 
agency to determine whether to prepare an EIS or a finding of no 
significant impact (FONSI) (see 40 CFR 1501.3; 21 CFR 25.20). Agencies 
can establish categorical exclusions for categories of actions that do 
not individually or cumulatively have a significant effect on the human 
environment and for which, therefore, neither an EA nor an EIS is 
required (see 40 CFR 1508.4). However, FDA will require at least an EA 
for any specific action that ordinarily would be excluded if 
extraordinary circumstances indicate that ``the specific proposed 
action may significantly affect the quality of the human environment'' 
(see 21 CFR 25.21; 40 CFR 1508.4).
    A regulation to modify labeling regulations constitutes a major 
Federal action under NEPA (see 40 CFR 1508.18), and typically requires 
at least an EA under 21 CFR 25.20(f). However, regulations establishing 
labeling requirements for marketed articles are categorically excluded, 
if the action will not result in (1) increases in the existing levels 
of use of the article or (2) changes in the intended use of the article 
(Sec.  25.30(k)). Therefore, FDA would not be required to file an EA if 
it meets these requirements.
    We have determined that this regulation meets the requirements for 
a categorical exclusion. First, this regulation is clearly not expected 
to increase cigarette usage. In fact, this regulation is expected to 
cause a reduction in overall smoking rates and initiation, and we 
estimate that this rule will reduce the number of smokers by 213,000 in 
2013, with smaller additional reductions through 2031. Second, the rule 
will not affect the way in which cigarettes are used among smokers and 
it does not change the intended use of cigarettes.
    In addition, we have determined that there is no potential for 
serious harm to the environment resulting from the final rule that 
would otherwise constitute an extraordinary circumstance (see 21 CFR 
25.21). Our action to regulate cigarette labeling does not lead to an 
increase in the level of use of these articles or a change in the 
intended use of these articles or their substitutes. The primary effect 
of this regulation will be to reduce smoking initiation and increase 
cessation efforts. Accordingly, there is no extraordinary circumstance 
that requires the filing of an EA.

XI. Analysis of Impacts

A. Introduction and Summary

    FDA has examined the impacts of the final rule under Executive 
Order 12866, Executive Order 13563, the Regulatory Flexibility Act (5 
U.S.C. 601-612) and the Unfunded Mandates Reform Act of 1995 (Pub. L. 
104-4). Executive Orders 12866 and 13563 direct agencies to assess all 
costs and benefits of available regulatory alternatives and, when 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety, and other advantages; distributive impacts; and 
equity). This rule is an economically significant regulatory action 
under Executive Order 12866.
    The Regulatory Flexibility Act requires agencies to analyze 
regulatory options that would minimize any significant impact of a rule 
on small entities. This rule will have a significant economic impact on 
a substantial number of small entities.
    Section 202(a) of the Unfunded Mandates Reform Act of 1995 requires 
that agencies prepare a written statement, which includes an assessment 
of anticipated costs and benefits, before proposing ``any rule that 
includes any Federal mandate that may result in the expenditure by 
State, local, and Tribal governments, in the aggregate, or by the 
private sector, of $100,000,000 or more (adjusted annually for 
inflation) in any one year.'' The current threshold after adjustment 
for inflation is $136 million, using the most current (2010) Implicit 
Price Deflator for the Gross Domestic Product. This rule will result in 
a 1-year expenditure that meets or exceeds this amount.
    Conducting an impact analysis under Executive Order 12866, 
Executive Order 13563, the Regulatory Flexibility Act, and the Unfunded 
Mandates Reform Act involves assembling any available information that 
is relevant to the assessment of a regulation's benefits and costs. It 
is not uncommon in scientific pursuits for there to be a lack of 
definitive information on some aspects of the question under 
investigation, and the impact analysis of this final rule is no 
exception. In light of this situation, we identify and present a range 
of possible benefits and costs.
    The benefits, costs, and distributional effects of the final rule 
are summarized in table 1a of this document. As the table shows, the 
midpoint of the estimates for benefits annualized over 20 years is 
approximately $630.5 million at a 3-percent discount rate and $221.5 
million at a 7-percent discount rate. The midpoint for costs annualized 
over 20 years is approximately $29.1 million at a 3-percent discount 
and $37 million at a 7-percent discount rate.
    The total benefits and costs of the final rule can also be 
expressed as present values. The midpoint of the estimates for the 
present value of benefits over 20 years is approximately $9.4 billion 
at a 3-percent discount rate and $2.3 billion at a 7-percent discount 
rate. The midpoint of the estimates for the present value of costs over 
20 years is approximately $434 million at a 3-percent discount rate and 
$392 million

[[Page 36706]]

at a 7-percent discount rate. With both discount rates, our midpoint 
estimates indicate that the benefits of the rule greatly exceed the 
costs. Executive Order 13563, section 1(b), requires that, to the 
extent permitted by law, agencies proceed with a regulation ``only upon 
a reasoned determination that its benefits justify its costs.'' The 
regulation is consistent with this requirement.
BILLING CODE 4160-01-P
[GRAPHIC] [TIFF OMITTED] TR22JN11.000


[[Page 36707]]


[GRAPHIC] [TIFF OMITTED] TR22JN11.001

BILLING CODE 4160-01-P
    Our primary estimate of annualized net benefits equals $601.4 
million, with a 3-percent discount rate, or $184.5 million, with a 7-
percent discount rate. As shown in table 1b of this document, these net 
benefits are associated with 16,544 smoking preventions and 5,802 
quality-adjusted life-years (QALYs) saved, annualized at a 3-percent 
discount rate, or 19,687 smoking preventions and 1,749 QALYs saved, 
annualized at a 7-percent discount rate.
[GRAPHIC] [TIFF OMITTED] TR22JN11.003

    FDA's estimate of the benefits of the rule is determined by the 
predicted reduction in the number of U.S. smokers and the consequent 
reduction in the number of people who will ultimately become ill or die 
from diseases caused by smoking. In the first step of our analysis, we 
conclude that graphic warnings on cigarette packages will reduce 
smoking rates (both by encouraging smokers to quit and by deterring 
nonsmokers from starting). This conclusion is based on an analysis of 
the experience of Canada, which introduced graphic warnings on 
cigarette packages in December 2000. By comparing smoking rates in the 
United States with those in Canada and accounting for other relevant 
differences between the two countries, we are able to isolate the 
effect of graphic warnings on smoking rates from the effects of other 
interventions to reduce smoking in Canada and the United States. This 
comparison yields an estimate of how the graphic warnings required by 
this rule will reduce smoking rates in the United States. FDA estimates 
that this rule will reduce the number of smokers by 213,000 in 2013, 
with smaller additional reductions through 2031.
    This estimated drop in the smoking rate in turn allows us to 
estimate benefits that will accrue to dissuaded smokers and to other 
members of society. Some individuals whose smoking status is not 
affected by the required graphic warning labels will receive benefits 
from the rule-induced reductions in smoking-related fires and certain 
financial outlays, such as life insurance premiums that are not 
actuarially fair,\10\ that implicitly subsidize smoking. Individuals 
who are dissuaded from smoking by the rule receive benefits equal to 
the value of cessation or avoided initiation. We use two methods of 
estimating this value, one that extrapolates from the price of actual 
cessation programs and one that measures the excess value of health 
improvements, over and above what smokers give up by not engaging in 
the activity of smoking. Our estimates of health improvements include 
the monetized value of life extensions, the monetized benefits from 
improved

[[Page 36708]]

health status (avoided nonfatal health consequences or morbidity from 
smoking), and reductions in medical costs. We do not have direct 
estimates for the value smokers attach to the activity of smoking, 
which adds some uncertainty to the second benefits estimation method. 
We therefore present several benefits estimates for which there is some 
justification in the literature or in comments on the proposed rule. 
For each discount rate and value of a statistical life-year (VSLY), our 
primary benefits result is the midpoint between the lower and upper 
bound values generated by the multiple estimation methods. Table 2 of 
this document shows the benefits broken down into the value of gained 
life-years, improved health status, medical cost reductions, other 
financial effects, and reduced fire-related losses. Most of the public 
health benefits from the rule will be realized in the future, perhaps 
several decades after the rule takes effect.
---------------------------------------------------------------------------

    \10\ The term ``actuarially fair'' refers to insurance premiums 
that are exactly equal to expected losses.
---------------------------------------------------------------------------

    The estimated totals may understate the full public health benefits 
of the rule because they fail to quantify reductions in external 
effects attributable to passive smoking and the reduction in infant and 
child morbidity and mortality caused by mothers smoking during 
pregnancy. These benefits are likely to be significant, but FDA has 
been unable to obtain reliable data with which to quantify them with 
greater precision than an order-of-magnitude approximation which will 
be discussed in the ``Benefits'' section of this Analysis of Impacts. 
In particular, we were not able to project future levels of exposure to 
secondhand smoke (passive smoking) from historical trends. We were also 
unable to quantify reductions in the cost of excess cleaning and 
maintenance costs caused by smoking.
[GRAPHIC] [TIFF OMITTED] TR22JN11.004

    The total estimated costs of implementing cigarette graphic warning 
labels include $319.5 million to $518.4 million in one-time costs and 
$6.6 to $7.1 million in annual recurring costs. Annualized over 20 
years, the total costs range from $27.4 million to $40.8 million with a 
3-percent discount rate and from $34.7 million to $52.7 million with a 
7-percent discount rate, as shown in table 3 of this document. These 
totals include the costs to manufacturers of changing cigarette labels, 
the administrative and recordkeeping costs to manufacturers of ensuring 
equal and random display of the nine different warning labels over 
time, the costs to large manufacturers of market-testing new cigarette 
package labels, and the costs to manufacturers and retailers of 
removing point-of-sale advertising that does not comply with the rule. 
There are also costs to the Government of administering and enforcing 
the rule. FDA could not quantify every regulatory cost. Some commercial 
sectors will experience costs for short-term dislocations of current 
business activities, but the costs will be mitigated for those 
businesses that anticipate the industry's adjustments to the final 
rule.
    In addition to the costs described previously, the rule will lead 
to private costs in the form of reduced revenues for many firms in the 
affected sectors. These sector-specific revenue reductions are for the 
most part distributional effects and cannot be counted as social costs.
[GRAPHIC] [TIFF OMITTED] TR22JN11.005


[[Page 36709]]


    As tobacco industry revenues decline, State and Federal tobacco tax 
revenues will also fall. If excise tax rates on tobacco products remain 
at current levels, annual State tax revenues will fall by approximately 
$25.1 million and annual Federal tax revenues by $19.3 million.
    In the following section, FDA responds to comments on the economic 
analysis of the proposed rule. The full economic analysis of the final 
rule begins in section XI.C of this document.

B. Comments on the Preliminary Regulatory Impact Analysis

1. General
    In the Preliminary Regulatory Impact Analysis (PRIA), FDA estimated 
various benefits, costs and transfers brought about by the graphic 
warning label rule. We received comments on the PRIA from approximately 
seven tobacco manufacturers or industry groups, one advertising 
industry group, four nonprofit organizations, a group of researchers 
and an individual researcher affiliated with a medical school, two 
economists submitting on behalf of the tobacco industry, one additional 
economist, and several private citizens. Two comments related to the 
scope of the effects that should have been estimated in the PRIA and to 
a parameter choice that affected several portions of the analysis.
    (Comment 212) One comment stated that FDA's use of a 7-percent 
discount rate is not appropriate.
    (Response) The use of both 3-percent and 7-percent discount rates 
is standard practice in regulatory impact analysis and is required by 
OMB Circular A-4 (Ref. 103).
    (Comment 213) One comment stated that FDA should measure the scope 
of the following potentially rule-induced phenomena: Increases in the 
purchase of illicit cigarettes (counterfeits, contraband, cheap whites, 
etc.), increases in the presence of nondomestic products (duty-free, 
etc.), and decreases in the presence of legal domestic products.
    (Response) FDA has performed a quantitative analysis of the 
regulation's effect on domestic cigarette consumption (sections XI.D.1 
and Technical Appendix X6) and a qualitative analysis of the 
international effects of the regulation (section XI.H of this 
document). FDA agrees that it would be useful to include the effect of 
the rule on illicit cigarette trading in the regulatory impact 
analysis. However, due to data limitations, FDA has been unable to 
quantify this effect.
2. Need for the Rule
    In the preliminary impact analysis of the graphic warning label 
rule, FDA cited our statutory mandate as the primary need for the 
regulation. We received a comment stating that we had failed to discuss 
the economic rationale for the rule.
    (Comment 214) One comment stated that FDA, in the preliminary 
Analysis of Impacts, failed to identify the market failure that the 
regulation is addressing. The comment went on to state that warning 
labels are a means of disseminating information, and if consumers are 
already fully informed about a particular product, there can be no 
increase in consumer welfare due to the addition or revision of a 
warning label.
    (Response) An absence of adequate information is a well-established 
market failure, one which provides a rationale for disclosure 
requirements. There is evidence that smokers may not be fully informed 
of the risks associated with cigarette smoking and that large graphic 
warning labels can be more effective at providing information than 
small, text-only warnings. There is also evidence that those who have 
an accurate understanding of the statistical risks may underestimate 
their personal risks; and even where consumers have an accurate 
understanding, the risk might not be considered at the time of purchase 
(Ref. 183).
    Evidence on some of these points is provided by O'Hegarty et al. 
(Ref. 111), who find that young American consumers are aware of some 
health consequences of smoking, such as the increased probability of 
lung cancer, but not of others, such as the increased probability of 
stroke. Other evidence on this question comes from Khwaja et al. (Ref. 
112), who find that smokers aged 50 to 65, unlike their nonsmoking 
counterparts, underestimate their personal probability of dying within 
the next 10 years. Borland and Hill (Ref. 63, Borland 1997) find that 
Australia's requirement of larger warning labels increased tobacco 
consumers' knowledge that smoking causes cancer, heart and circulatory 
illnesses, and pregnancy-related problems. O'Hegarty et al. (Ref. 111) 
report that American focus group members anticipate that Canadian-style 
large, graphic warning labels would be more effective at communicating 
health information than the labels currently required in the United 
States. Evidence from the International Tobacco Four-Country Survey 
(Ref. 26, Hammond 2006) supports this conclusion, with Canadian smokers 
more likely than smokers from the United States, United Kingdom, or 
Australia--countries that required only text warnings at the time of 
the survey--to know that smoking causes heart disease, stroke, and 
impotence and that cigarettes contain such chemicals as carbon monoxide 
and cyanide.
    The U.S. Census indicates that nearly 11 million respondents in the 
year 2000 did not speak English well or very well (Ref. 102); the non-
English-speaking population has likely increased in the intervening 
years. Moreover, the Department of Education reports that, in 2003, 30 
million American adults, aged 16 and over, possessed ``below basic'' 
prose literacy skills (Ref. 113). Images of smoking's consequences and 
translation of warnings into Spanish and other languages can provide 
health information to consumers who lack English literacy.
    FDA also notes that the economics and psychology literatures 
suggest several rationales, other than incomplete or imperfect 
information, for policy intervention in the realm of smoking. The 
growing literature on myopia, self-control, and time-inconsistency 
examines situations in which consumers may overvalue (relatively 
modest) short-term benefits and undervalue (relatively large) mid-term 
or long-term harms. The theoretical and empirical evidence suggests the 
possibility that through their decisions at early stages, smokers may 
impose significant costs on their future selves, producing net losses 
in terms of welfare; if so, these costs might legitimately be taken 
into account for purposes of policy. Helping to inaugurate the modern 
literature, Thomas Schelling suggests in a series of papers that 
smoking and similar behaviors characterized by attempts to quit and 
relapses can be interpreted as a contest between two selves: One self 
trying to stop smoking for health reasons and the other self wanting to 
continue to smoke. These alternating preferences violate the assumption 
of stable preferences and can provide a rationale for policy 
interventions (Refs. 106, 107, and 108).
    Discussing another potential rationale for policy intervention, 
Gruber and K[ouml]szegi (2001) (Ref. 104) state: ``While the rational 
addiction model implies that the optimal tax on addictive bads should 
depend only on the externalities that their use imposes on society, the 
time inconsistent alternative suggests a much higher tax that depends 
also on the `internalities' that use imposes on consumers.'' With the 
graphic warning label rule, FDA is undertaking a policy option that, 
like a tax, can induce lower cigarette consumption, and we reach a 
conclusion similar to that of Gruber and

[[Page 36710]]

K[ouml]szegi; we find that individuals who are dissuaded from smoking 
are made better off (i.e., they receive a net benefit) as a result of 
government policy intervention. (We note that Gruber and Mullainathan 
(Ref. 182), using subjective well-being data, find that one regulatory 
tool--excise taxation--has a positive effect on the happiness of those 
with a propensity to smoke, a result consistent with the results we 
present in this analysis.)
    Bernheim and Rangel (Ref. 105) find that the benefits of smoking 
(realized by smokers themselves) are less than the realized health 
costs, but chemical reactions in the brain cause the consumer to 
mistakenly forecast more benefits when making consumption choices than 
he or she actually realizes from consuming the addictive product. These 
authors suggest that this overestimation occurs through a flawed 
hedonic forecasting mechanism in which particular environmental cues 
lead a smoker to move into a ``hot'' state in which he or she 
overestimates the pleasure from smoking. This analysis suggests that 
graphic warning labels may be able to serve as counter-cues that 
prevent movement into the hot state and allow the addict to continue to 
exercise self-control.
    Laux (Ref. 109) identifies other reasons that smokers may not fully 
internalize the costs of their addictive behavior, including teen 
addiction as an intrapersonal (two selves) externality, partially 
myopic adult behavior, and peer effects.
    According to the model developed by Gul and Pesendorfer (Ref. 110), 
if graphic warning labels reduce the temptation associated with the 
addictive product, they will reduce smoking and increase social 
welfare.
3. Benefits
    In the preliminary impact analysis, FDA estimated a variety of 
welfare-enhancing effects of the graphic warning label rule; these 
included reductions in smoking-related mortality, morbidity, medical 
expenditures, and fire damage. We received many comments on the 
methods, assumptions, choice of sources, and results that were reported 
in the benefits analysis.
    (Comment 215) One comment stated that FDA's preliminary estimate of 
the rule-induced smoking rate reduction was too low, in that it ignored 
the rule's effect on initiation, in favor of a cessation-only analysis.
    (Response) For both the proposed rule and the final rule, FDA has 
analyzed the national adult smoking rate (i.e., the nation's smoking 
population divided by the nation's total population). The smoking rate 
at any particular moment is a function of all past initiation, 
cessation, birth, death, and migration of smokers and nonsmokers across 
national borders. Therefore, our approach includes the effect of the 
rule on initiation.
    (Comment 216) One comment stated that FDA's preliminary estimate, 
that only 82,000 individuals would be dissuaded from smoking between 
2014 and 2031, was too low.
    (Response) FDA's estimate that the rule-induced reduction in U.S. 
smoking population will occur mostly during the first year after 
implementation of graphic warning labels is a product of the simplicity 
of our empirical model. We agree that a time trend of the effect of the 
rule is to be preferred over a single average effect. However, our 
attempts to estimate linear or quadratic time trends have produced 
highly implausible results, especially for projections furthest into 
the future. We are then left with a best estimate of how the rule would 
decrease the U.S. smoking rate in which the number of dissuaded smokers 
is smaller for any year from 2014 to 2031 than for 2013. This estimated 
change is not a decrease from year to year (e.g., 2013 to 2014), but a 
net decrease for a given year in the presence of the rule compared with 
the same year in the absence of the rule.
    (Comment 217) Two comments stated that FDA's preliminary estimate 
of smoking rate reduction was too low, in that it ignored the fact that 
someone who is dissuaded from smoking in 1 year will likely remain a 
nonsmoker in future years.
    (Response) FDA notes that the likelihood that an individual 
dissuaded from smoking in a particular year will likely continue to be 
a nonsmoker in subsequent years was accounted for by our preliminary 
estimate, which had the U.S. smoking rate continuing to be lower than 
it otherwise would have been in years 2014 through 2031, not just in 
2013. The same characterization holds for the estimate in FDA's Final 
Regulatory Impact Analysis.
    (Comment 218) One comment stated that ``Canada has used graphic 
warnings for years, and in the last decade their smokers dropped from 
23% to 22% of the population.''
    (Response) Canada's smoking rate has decreased by around seven 
percentage points, not one, since the implementation of graphic warning 
labels in late 2000. Even if the one percentage point statistic was 
correct, a one percentage point decrease in the smoking rate would not 
be a small change when applied to the large population of the United 
States; in fact, it would imply that there would be more than 3 million 
dissuaded American smokers.
    (Comment 219) One comment stated that the required label change 
would have very little impact on smoking rates because minors, who form 
the bulk of new smokers, obtain their cigarettes from parents rather 
than from retail establishments.
    (Response) Due to lack of data, FDA's estimates of the amount of 
smoking cessation or avoided initiation brought about by the rule 
include only adults aged 18 and above, or young persons who reach age 
18 by the year 2031. The number of minors dissuaded from smoking by the 
rule may be substantial. Whether they obtain cigarettes from friends, 
through theft, or by purchasing them from retail establishments 
operating in violation of youth access laws, young people will be 
exposed to new graphic warning labels because the labels are printed 
directly on cigarette packages.
    (Comment 220) One comment stated that FDA's preliminary estimate of 
the rule-induced smoking rate reduction was too high, in that it did 
not address potential competitive responses of the cigarette companies 
to the proposed rule. The comment went on to state that, under the 
proposed rule, graphic warning labels would take up a substantial 
portion of the area in packaging and advertising where firms establish 
brand recognition, thus reducing consumers' ability to distinguish 
premium from discount brands. This would cause premiums for branded 
cigarettes to decrease and price competition to intensify, which in 
turn would likely lead to an increase in cigarette usage.
    (Response) FDA believes that, even if well-known brands only have 
half a package with which to advertise themselves, they still have name 
recognition. We expect that consumers will continue to be able to find 
their preferred brands; as a result, any change in prices due to 
competitive pressures is likely to be small.
    The cigarette producers' strategic responses suggested by the 
comment should have occurred in Canada when that country implemented 
graphic warning labels. Because FDA's estimate of the effect of graphic 
warning labels is based on the Canadian experience, we implicitly 
account for any decrease in the price of cigarettes caused by 
competition between premium and discount brands. Our point estimate 
indicates that the net effect of graphic warning labels is a decrease 
in the national smoking rate in spite of this possible offsetting 
effect.

[[Page 36711]]

    (Comment 221) One comment stated that FDA's preliminary estimate of 
the rule-induced smoking rate reduction was too high, in that it failed 
to recognize or control for other regulatory changes (such as smoking 
bans) affecting cigarette consumption at the State, provincial, or 
municipal levels.
    (Response) FDA acknowledges that our model does not explicitly 
allow for many potential confounding factors, but we note that our 
estimates of the effect of graphic warning labels could as easily be 
underestimates as overestimates. More specifically, our model will 
produce an overestimate if: Smoking-reducing phenomena (other than 
graphic warning labels) were growing in prevalence or effectiveness at 
a faster rate in Canada after 2000 than before 2001, smoking-reducing 
phenomena (other than graphic warning labels) were more prevalent or 
effective in Canada than in the United States after 2000, or smoking-
reducing phenomena (other than graphic warning labels) were less 
prevalent or effective in Canada than in the United States before 2001. 
In the opposite cases, our model will produce an underestimate. In the 
absence of extensive high-quality data, we assume that trends in 
smoking-reducing phenomena (other than graphic warning labels) were 
about the same before and after the year 2000 and about the same in 
Canada and the United States.
    (Comment 222) One comment stated that FDA's preliminary estimate of 
the rule-induced smoking rate reduction was too high, in that it did 
not account for potential differences in responder bias between United 
States and Canadian surveys created by different levels of stigma 
associated with smoking in the two countries.
    (Response) FDA generates its estimate not only by comparing Canada 
with the United States but also by comparing each country with itself. 
Specifically, we find the difference between each country's actual 1994 
through 2009 smoking rates with rates predicted by a pre-2000 trend 
(which accounts for changes in cigarette taxes), and then calculate how 
the average difference for 2001 through 2009 compares with the average 
difference for 1994 through 2000. The trend at least partially controls 
for any steady change over time in responder bias within a given 
survey, and the within-country comparison of pre-2001 and post-2000 
rates controls for any difference in responder bias between the two 
countries.
    (Comment 223) One comment stated that FDA's preliminary estimate of 
the rule-induced smoking rate reduction was too high, in that it did 
not account for differences in cigarette prices over time in the United 
States and Canada.
    (Response) For the analysis of the final rule, FDA has incorporated 
changes in Canadian and United States tax rates into its estimates.
    This comment suggests elsewhere that graphic warning labels will 
cause prices to decrease. FDA agrees that this is a possibility. Thus, 
for the non-tax portion of cigarette prices, we are faced with what 
economists call an endogeneity problem; it is difficult to determine, 
in an empirical analysis in which price is used directly as a control 
variable, the direction and magnitude of causality. However, if the 
changes in the non-tax portion of prices in the United States and 
Canada follow the same pattern post-2000 as they did pre-2001, and if 
the relationship between smoking status and cigarette prices was also 
relatively constant between the two time periods, then our smoking rate 
trends successfully control for the effect of non-tax price changes on 
smoking rates.
    (Comment 224) One comment stated that FDA's preliminary estimate of 
the rule-induced smoking rate reduction was too high, in that it did 
not account for the fact that Canada's Tobacco Act's prohibitions on 
advertising and promotion came into full effect after the introduction 
of the graphic cigarette labels. The comment went on to state that 
other local regulations (such as restrictions on the retail display of 
tobacco products and advertisements) that came into effect in Canada 
after the year 2000 also may have had an effect on smoking rates in 
Canada, and thereby would have inflated FDA's estimate of the expected 
rule-induced reduction in smoking rates.
    (Response) From 2001 to 2008, at least 41 states, plus the District 
of Columbia, enacted or substantially updated legislation regarding 
tobacco advertising and promotion, youth access or sampling and 
distribution (Ref. 114). FDA concludes, therefore, that the U.S. 
experience provides a reasonably good control for the effect of local 
and regional policy changes on national smoking rates.
    (Comment 225) One comment stated that FDA's preliminary estimate of 
the rule-induced smoking rate reduction was too high, in that it failed 
to account for the fact that, in April 2001, the Government of Canada 
launched a Federal public education, outreach, and mass media campaign 
that had a goal of reducing tobacco-related death and disease among 
Canadians.
    (Response) The U.S. experience provides a reasonably good control 
for the effect of media campaigns on smoking rates because antismoking 
initiatives have been active in the United States in the past decade. 
For example, the ``Truth'' Campaign, a nationwide advertising effort 
aimed at discouraging youth smoking, launched in the United States in 
2000 and continued into the 2000s.
    (Comment 226) One comment stated that FDA's preliminary estimate of 
the rule-induced smoking rate reduction was too high, in that it failed 
to account for the fact that individuals over age 65 are less likely to 
be smokers than younger individuals and Canada's population is aging 
more rapidly than that of the United States. Specifically, during the 
period 2001 through 2009, Canada's over-65 population grew by 21 
percent while the U.S. over-65 population grew by only 12 percent. 
Canada's over-65 population represented 13.9 percent of its total 
population in 2009, up from 12.9 percent in 2001. This compares to the 
U.S. over-65 population which increased to 12.9 percent in 2009, up 
from 12.4 percent in 2001.
    (Response) FDA notes that the comment's finding (that individuals 
over age 65 have a lower probability of being smokers than individuals 
aged 65 and below) does not necessarily imply that aging causes 
individuals to cease smoking. Smoking rates are much lower in the over-
65 age category than in the 65-and-under category because smokers are 
less likely than nonsmokers to survive to and live past the age of 65.
    Possible reasons for the aging of a nation's population include: A 
decrease in the birth rate, net emigration of relatively young people, 
net immigration of relatively old people, a decrease in the death rate 
of relatively old people, or an increase in the death rate of 
relatively young people. If the changes in these population phenomena 
in the United States and Canada follow the same pattern post-2000 as 
they did pre-2001, and if the relationship between smoking status and 
the population phenomena was also relatively constant between the two 
time periods, then our smoking rate trends successfully control for the 
effect of population changes on smoking rates. (Of course, there is a 
correlation between smoking rates and death rates, but it operates with 
sufficient lag so as not to confound our results to a meaningful 
degree.)
    (Comment 227) Several comments suggested that the lack of 
statistical significance of FDA's estimate of the effect of graphic 
warning labels on Canada's smoking rate implies that there is no sound 
basis for concluding that the proposed (and now final) rule's benefits 
exceed costs and that this creates a

[[Page 36712]]

violation of Executive Order 12866, which requires government agencies 
to show the quantitative benefits exceed the quantitative cost from a 
regulation. One comment further noted that FDA did not, in the 
preliminary analysis, report whether its secondary methodology (in the 
Uncertainty Analysis) produced an estimate that was statistically 
significant.
    (Response) Executive Order 12866 states that: ``Each agency shall 
assess both the costs and the benefits of the intended regulation and, 
recognizing that some costs and benefits are difficult to quantify, 
propose or adopt a regulation only upon a reasoned determination that 
the benefits of the intended regulation justify its costs.'' The point 
estimates indicate that the benefits of the rule justify the costs. 
Although our analysis concludes, on this basis, that graphic warning 
labels will be effective at reducing smoking, we recognize there is 
large uncertainty about the size of the effect. The lack of statistical 
significance in FDA's smoking rate estimate reflects this uncertainty, 
as well as the noisiness of data derived from surveys and the small 
number of observations.
    The use of a point estimate (which indicates that graphic warning 
labels have decreased the smoking rate in Canada) is appropriate for 
the main portion of our analysis as long as we state clearly the lack 
of statistical significance. Moreover, in the final analysis, we report 
the results of Monte Carlo simulations to better show the uncertainty. 
In doing so, we follow the advice of Vining and Weimer (Ref. 115): ``In 
view of the large number of uncertain effects and shadow prices 
involved in applying BCA [benefit-cost analysis] to social policies, 
analysts must take special care in dealing with uncertainty. Rather 
than setting estimates of effects equal to zero when their estimates 
are statistically insignificant, a more appropriate approach is to take 
account of the uncertainty of these effects in Monte Carlo 
simulations.''
    In addition to reporting Monte Carlo results, FDA has added 
additional discussion which will allow the interested reader to examine 
our empirical approaches in greater detail.
    (Comment 228) One comment stated that FDA has no explicit measures 
linking each graphic warning label with expected reductions in the 
risks of cigarette smoking. An example of such linking would include 
answering the following questions: What percentage of smoking mothers 
blow smoke into their children's faces, what is the probability that 
such behavior leads to cancer, and how much cancer reduction will be 
effected by the graphic warning label that depicts a baby being exposed 
to secondhand smoke?
    (Response) The research study commissioned by FDA and included in 
the docket analyzes the reactions of consumers to each image. We cannot 
yet know the effectiveness of each image on improving health outcomes 
(such as avoidance of cancer) because the images have not yet appeared 
on cigarette packages or advertisements. Our best estimate of the 
images' collective effect comes from Canada's experience with a 
collection of graphic warning labels.
    (Comment 229) One comment stated that FDA should use worldwide data 
if its model of smoking reduction cannot achieve statistical 
significance using only Canadian data.
    (Response) FDA disagrees because, culturally and geographically, 
Canada provides a closer comparison for the United States than any 
other country. Moreover, in most countries, graphic warning labels have 
been implemented for only a few years, so any international additions 
to our data set would likely contribute only a small number of data 
points while simultaneously necessitating the addition of extra 
variables (for example, geographic and time fixed effects) into the 
model, thus producing only a small overall increase in degrees of 
freedom and introducing potential errors due to more omitted variables.
    (Comment 230) One comment stated that FDA should use data from New 
York City's experience with a graphic image media campaign, which 
reduced smoking prevalence in that State by 1.4 percentage points 
between 2005 and 2006.
    (Response) FDA prefers the Canada-United States empirical model 
over a potential New York model both because Canada's graphic warning 
policy is much more similar to the present rule than is New York's 
television-based campaign and because Canada's policy has been in place 
for a longer period of time than New York's, thus providing more data 
points. Furthermore, we note that the New York experience would likely 
yield a much lower (than 1.4 percentage points) estimate of the effect 
of graphic images if only the excess smoking rate changes, beyond New 
York's own trend and the changes experienced simultaneously in 
comparable cities or States, were included.
    (Comment 231) Several comments stated that Sloan and coauthors' 
estimates of the number of life-years lost by smokers are too low and 
recommended that FDA use other, higher estimates that appear in the 
scholarly literature.
    (Response) The comments making this point have confused the life-
years lost for a lifetime smoker (compared with a nonsmoker or quitter) 
with the measure that FDA needs for its analysis: the adjusted life 
expectancy changes that make up the incremental effects of reduced 
smoking rates induced by the final rule.
    Regarding life-years lost for a lifetime smoker (compared with a 
nonsmoker or quitter), Sloan and coauthors' estimates (Ref. 116) do not 
differ much from those reported in other studies. Specifically, Sloan 
et al. use results from the Taylor et al. (Ref. 117) study, which 
reports that men who quit smoking at age 35 gain 8.5 years of life 
expectancy and male never-smokers gain 10.5 years. In comparison, Doll 
et al. (Ref. 118) find that if an individual avoids smoking entirely or 
quits at age 30, he increases his life expectancy by 10 years. 
Strandberg et al. (Ref. 119) find that smoking shortens life expectancy 
for males by 7 to 10 years.
    Sloan et al. adjust the Taylor et al. results to account for the 
probability that an individual who smokes at a given age will quit 
sometime later in his or her life and for confounding factors, such as 
differences in demographic characteristics and behaviors between 
average smokers and nonsmokers. Unlike Sloan et al., the studies cited 
in comments estimate the longevity gains to an individual from not 
smoking or from quitting at a given age but do not incorporate the 
probabilities of quitting at each age or isolate the effect of 
cigarette consumption from other risk factors that tend to be 
correlated with smoking. These studies are therefore inappropriate for 
a regulatory impact analysis estimating the incremental effects of 
warning labels on lifetime mortality consequences related to smoking at 
a particular age.
    (Comment 232) Two comments expressed concern that Sloan and his 
coauthors' analysis is outdated. One of the comments went on to state 
that Sloan et al.'s literature review contains some studies that have 
been funded by the tobacco industry and their ``defense of rational 
addiction'' may be undermining FDA's effort to ``ensure that its 
economic analysis is based on empirical evidence, not theoretical 
predictions from the rational addiction model.''
    (Response) The Sloan et al. results that FDA uses are empirical, 
not theoretical. In producing these empirical results, Sloan and 
coauthors use data from the 1990s; while this is somewhat out-of-date, 
no analysis as

[[Page 36713]]

detailed as that of Sloan et al. has been released more recently. The 
comment critiques some of the literature reviewed by Sloan and 
coauthors but not the methods Sloan et al. use to produce their life 
tables and other results. FDA has thus continued to use these results 
in its Final Regulatory Impact Analysis.
    (Comment 233) One comment stated that the FDA provided in its 
preliminary Analysis of Impacts virtually no details on its calculation 
of the benefit of expected life-years saved.
    (Response) FDA has added a more detailed explanation to the final 
Analysis of Impacts.
    (Comment 234) One comment stated that, in its estimate of rule-
induced emphysema reductions, FDA did not provide any documentation 
supporting its calculations.
    (Response) FDA has replaced its analysis of rule-induced emphysema 
reductions with an analysis of general health effects. Simultaneous 
with this change has been an expansion of our explanation of 
methodology.
    (Comment 235) Several comments stated that morbidity effects other 
than emphysema were inappropriately excluded from FDA's preliminary 
analysis.
    (Response) FDA has expanded its morbidity estimates for the final 
Analysis of Impacts. Instead of analyzing individual diseases, we have 
calculated rule-induced changes in general health status (categorized 
as poor, fair, good, very good, or excellent).
    (Comment 236) Several comments stated that benefits due to 
reductions in secondhand smoke exposure and mothers smoking during 
pregnancy were inappropriately excluded from FDA's preliminary 
analysis.
    (Response) FDA did not exclude discussion of these effects from the 
preliminary Analysis of Impacts, but we were not able to quantify them 
due to the difficulty of projecting future secondhand smoke exposure 
levels from historical trends. Similarly, we were not able to project 
future reductions in maternal smoking during pregnancy. In the Final 
Regulatory Impact Analysis, FDA has again been unable to quantify these 
benefits.
    (Comment 237) One comment stated that FDA's analysis includes only 
health benefits that accrue in the distant future, not immediate 
benefits of cessation or avoided initiation.
    (Response) FDA's preliminary and final estimates of morbidity and 
mortality effects include discounted totals of all future effects, both 
short-term and long-term. For example, we obtained our life expectancy 
estimates from Sloan et al.'s life tables. Calculated for 24-year-olds, 
these tables include survival probability differences for smokers and 
nonsmokers as early as the 25th birthday.
    (Comment 238) One comment stated that FDA's assumptions regarding 
the distribution of benefits over dissuaded smokers' lifetimes were 
incorrect.
    (Response) In many cases, FDA's sources reported smoking-related 
effects only as present values calculated with a single discount rate 
and for a particular age group. In order to expand our results to other 
age groups or discount rates, it was necessary that we make assumptions 
about the timing of benefits. The absence of data prevents FDA from 
confirming the degree of inaccuracy of our assumptions. For the final 
analysis, we have expanded our discussion of the likely direction of 
estimation error that may be caused by our assumptions and, in one 
case, have accounted for uncertainty related to assumption-making in 
our Monte Carlo analysis.
    (Comment 239) One comment stated that Sloan et al.'s estimates of 
smoking-attributable medical cost ($3,757 per female and $2,617 per 
male) are too low. The comment went on to recommend the use of Thomas 
Hodgson's estimate (Ref. 120) that this cost, in 2009 dollars and 
discounted at a 3 percent rate, is $18,967.
    (Response) FDA believes that Sloan et al.'s estimates are to be 
preferred over Hodgson's because Hodgson does not adjust for 
confounding effects (by analyzing ``nonsmoking smokers,'' a theoretical 
comparison group Sloan et al. used to account for the effects of other 
risky behaviors) and Sloan et al.'s data sets are more recent (from the 
1990s, rather than 1978 through 1988).
    The comment calculates the present-dollar value of Hodgson's 
medical cost estimates using the medical component of the consumer 
price index (CPI). For the Final Regulatory Impact Analysis, FDA will 
do the same because medical costs have risen at a very different rate 
than overall price levels and thus the measure of inflation we used in 
the PRIA--the gross domestic product (GDP) deflator--is not the best 
available option for updating medical costs.
    (Comment 240) One comment stated that FDA's medical cost results 
were not adjusted for inflation in the preliminary Analysis of Impacts.
    (Response) FDA's medical cost estimates were adjusted for inflation 
in the analysis of the proposed rule; however, our language on this 
issue was unclear and has been revised for the analysis of the final 
rule.
    (Comment 241) One comment stated that, in the preliminary analysis, 
FDA provided only a very high-level and cursory description of how it 
arrived at its estimate of reduced fire costs.
    (Response) For the final analysis, FDA has expanded the discussion 
of how fire loss reductions were calculated.
    (Comment 242) One comment stated that FDA's assumption that the 
introduction of self-extinguishing cigarettes would reduce the 
incidence of smoking-related fires, with or without the proposed rule, 
by 50 percent was arbitrary.
    (Response) FDA agrees that the 50 percent assumption lacked 
empirical support. For the final analysis, we use a data-driven 
estimate of the effectiveness of self-extinguishing cigarettes at 
preventing accidental fires.
    (Comment 243) Two comments stated that FDA's preliminary benefits 
analysis inappropriately excluded effects of the rule on employee 
productivity.
    (Response) FDA estimates morbidity and mortality effects using a 
willingness-to-pay approach, estimated using the QALY metric as the 
base. Willingness-to-pay to avoid morbidity, as we use it in this 
analysis, includes the subjective value of avoiding an illness that 
affects mobility, self-care, usual activities (including work), pain or 
discomfort, and anxiety or depression. These elements encompass the 
value of market and nonmarket productivity, and much else. Therefore, 
in general, the value to smoking employees of productivity effects is 
implicitly included in both morbidity and mortality benefits; adding 
productivity effects separately would almost certainly lead to double 
counting of some of the benefits that accrue to dissuaded smokers. 
Economic theory predicts that, for employers, rule-induced productivity 
effects generate no long-term net benefit or cost because greater firm 
output will be offset by the greater wages commanded by the more 
productive employees.
    (Comment 244) One comment stated that ``FDA's analysis could 
benefit from a more fulsome explanation of the concept of QALY.''
    (Response) FDA has edited the final analysis accordingly.
    (Comment 245) FDA received several comments in regard to its 
downward adjustment of benefits estimates to account for consumer 
surplus loss. One comment stated that such an adjustment should not be 
performed at all because doing so requires an inaccurate assumption 
that smokers enjoy smoking. Three comments suggested that, if an 
adjustment is performed, it should not be 50 percent of gross health 
benefits, as suggested in FDA's cited reference, because that analysis 
assumes perfect

[[Page 36714]]

rationality on the part of smokers. Another comment objected to the 
model in the cited reference because it is very simplified and 
stylized, with a linear demand curve for smoking. One of the comments 
suggested FDA should instead consider modern economic analyses of 
addiction that account for time inconsistencies in preferences, 
including the work of Fritz Laux (Ref. 109) or Jonathan Gruber and 
Botond K[ouml]szegi (Ref. 104). Another of the comments suggested past 
regulatory changes and their effect on smoking be used to measure 
demand and the lost surplus associated with those changes to get a more 
empirically relevant measure of the effect of the proposed rule.
    (Response) The concept of consumer surplus is a basic tool of 
welfare economics. If consumers respond to price, information, or other 
market changes, there will be a change in consumer surplus. Although 
some economists describe consumer surplus as a measure of the pleasure, 
satisfaction, or usefulness that a product provides to consumers, 
others simply say that whatever generates a demand for the product 
generates consumer surplus. Moreover, how we qualitatively describe 
consumer surplus does not affect how it is measured--the measurement is 
independent of the description. In an analysis of benefits based on 
willingness-to-pay, we cannot reject this tool and still fulfill our 
obligation to conduct a full and an objective economic analysis under 
Executive Orders 12866 and 13563.
    Although it does not affect our use of consumer surplus, we note 
that virtually all studies of the economics of smoking and addiction 
assume that smoking is pleasurable to smokers. In their 2001 paper in 
The Quarterly Journal of Economics, Gruber and K[ouml]szegi state that 
``smoking is a short-term pleasure'' (emphasis added) (Ref. 104). 
Economists Warner and Mendez state: ``Many members of the tobacco 
control community dismiss the notion that smoking can be pleasurable. 
But those people were never smokers or, if they were, have selective 
memory. For some smokers, the relief of withdrawal symptoms might 
suffice as a `pleasure.' But smokers derive much more from their 
cigarettes, including everything from `mouth feel' to the nicotine drug 
rush, from relaxation to self-image (think Marlboro Man), and from 
enhanced ability to concentrate to companionship'' (Ref. 121).
    FDA's approach to the economics of smoking treats it as an 
addiction and draws on many economic theories of addiction, including 
the studies cited in the comments, as already detailed in our response 
to comments on market failure.
    FDA agrees that the model we used in the PRIA to explain changes in 
consumer surplus is not detailed enough to fully explain the 
assumptions about consumer behavior underlying our estimates. In the 
revised analysis, we have made some important changes in the 
presentation and the model used to adjust our estimates and account for 
uncertainty. The key assumption made explicit in the new model is that, 
on average, smokers are informed of, and able to internalize, some but 
not all health and life expectancy effects of their smoking. Full 
graphical and algebraic analyses have been added to the final analysis, 
as has a discussion of the implications of Gruber and K[ouml]szegi's 
work in the context of the new model. Moreover, we have supplemented 
our benefits analysis with another approach, in which we replace the 
steps of summing all health effects and then subtracting lost consumer 
surplus with a direct estimation of the value to smokers and potential 
smokers of cessation and avoided initiation, as shown by their 
willingness-to-pay for cessation programs.
    (Comment 246) One comment stated that FDA's preliminary benefits 
analysis inappropriately excluded the effects of the rule on employer 
and government cleaning and maintenance costs.
    (Response) Reductions in the cost of cleaning and maintenance were 
not included in the analysis because we did not find reliable data.
    (Comment 247) One comment stated that FDA should conduct its 
uncertainty analysis by performing a Monte Carlo simulation.
    (Response) FDA agrees and has conducted a Monte Carlo simulation 
for the Final Regulatory Impact Analysis.
    (Comment 248) Two comments stated that FDA's preliminary analysis 
inappropriately excluded the effects of the rule on government-funded 
health care and Social Security expenditures.
    (Response) In our analysis of the proposed rule, FDA did not 
exclude government health care costs. In section VIII.C.6 of the PRIA, 
FDA reported estimates of reductions in smoking-related medical 
expenditures, paid for both by smokers themselves and by nonsmokers via 
insurance premiums or, notably, taxes used to fund government health 
care. For the Distributional Effects portion of the Final Regulatory 
Impact Analysis, we have expanded the discussion of this effect of the 
rule to include greater detail.
    We have also added a discussion of Social Security payments to the 
Distributional Effects section of the final analysis. We note, however, 
that the cost to taxpayers of Social Security are exactly offset by 
payments to Social Security recipients or users of any other government 
programs and services funded with Social Security contributions, so 
this effect does not generate a substantial net social cost or benefit, 
with the exception of a probably small deadweight loss.
    (Comment 249) One comment stated that the FDA's preliminary 
analysis did not, as required by the Office of Management and Budget, 
provide a year-by-year schedule of undiscounted cash flows that 
displays the timing of estimated rule-induced benefits.
    (Response) FDA has added stream-of-benefits and -costs tables as 
appendices to the final analysis.
4. Costs
    In the analysis of the proposed rule, FDA focused on three main 
costs to industry: The cost of changing cigarette package labels, the 
cost of conducting market testing for redesigned packages, and the cost 
of removing noncompliant point-of-sale advertising. FDA received 
several comments about costs, which are summarized and responded to in 
the following paragraphs.
    (Comment 250) One comment took issue with FDA's characterization of 
the up-front costs associated with a major label change as ``large'' by 
pointing out: ``In the context of tobacco marketing, with the companies 
spending $12.5 billion on marketing and promotion in 2006, the amounts 
of money being described are not `large.'''
    (Response) FDA has removed the term ``large.''
    (Comment 251) One comment asserted that the cost section was 
systematically biased, and that all costs were upper bound estimates as 
opposed to ``best'' point estimates.
    (Response) FDA did not rely on upper bound estimates of any costs. 
The label change costs (the largest single cost component FDA 
estimated) and the market testing costs have low, medium, and high 
estimates. For the other cost components, we use our best estimates.
    (Comment 252) One comment argued that because tobacco manufacturers 
spend large amounts of money on marketing activities, changing labels 
is just an ordinary cost of business to them, and one that they can 
``write off.'' Furthermore, the comment argued that manufacturers can, 
to some extent, pass the costs on to consumers. The comment ends by 
stating: ``It is not appropriate for the FDA to fear that its 
regulatory efforts on this industry might impose costs on them, and to 
use these costs as a reason not to proceed with its

[[Page 36715]]

regulations. The agency is supposed to act in the public interest, not 
the interest of a particular industry to protect it from protecting the 
public in the first place.''
    (Response) The baseline expenditures of the tobacco industry are 
irrelevant. There is a cost to society when its scarce resources are 
expended to comply with this rule. The costs the comment refers to are 
economic or opportunity costs. Cost estimation is concerned with the 
value of the resources used to carry out some activity, not their 
incidence (i.e., who ultimately pays), which is a separate question. As 
acknowledged in the proposed rule (section VIII.D, Costs), although 
cigarette manufacturers are legally responsible for complying with this 
rule, the costs may be borne at least in part by tobacco consumers. The 
potential for ``passing costs on'' to consumers is a matter of economic 
incidence but does not negate the fact that there are costs, nor does 
it change those costs.
    In the cost-benefit analysis we estimate costs and benefits that 
accrue to citizens and residents of the United States (Ref. 103) 
regardless of who we think may bear them. The ``interest of a 
particular industry'' is a subject we rightly leave to the 
``Distributional Effects'' section of our analysis.
    (Comment 253) A comment stated that FDA should estimate ``the 
marginal cost of changing the warning labels that the cigarette 
companies would incur accounting for ongoing expenses associated with 
producing cigarette packages and assuming that the companies 
implemented the new labels using economical strategies.''
    (Response) The labeling cost model's baseline already accounts for 
ongoing expenses associated with producing cigarette packages. 
Manufacturers change product labels at regular intervals without 
regulatory changes in labeling requirements. Based on both product type 
and compliance period, the model provides an estimate of the percent of 
UPCs that can be coordinated with a previously scheduled labeling 
change. For those UPCs, the only costs assumed by the model are a small 
fraction of the administrative labor cost and recordkeeping costs.
    If anything, this approach taken by the model quite possibly 
understates the labeling costs for so-called coordinated UPCs. For 
example, even though a graphic designer can redesign a label to satisfy 
both regulatory and nonregulatory goals at once, such a redesign would 
plausibly take longer than a redesign to satisfy only nonregulatory 
requirements, and time devoted to regulatory compliance must be taken 
away from other activities. However, because this rule requires a set 
of 9 plates for the 9 different graphic labels, we manually adjust the 
model to add back the 8 extra plates.
    (Comment 254) A comment asserted that although there are 3,324 
different UPCs, each UPC would not have to be redesigned because 
product varieties within a brand family share essential trade dress and 
package design features. The comment asserted that using a number equal 
to 10 percent of the number of UPCs, 332, would still result in an 
overestimate of costs.
    (Response) Although products within a brand family share certain 
package design features, the packages for different UPCs still contain 
unique features. Thus, every individual UPC represents a separate 
design job. Furthermore, the labeling cost model presents an average 
cost per UPC of similar types within a product category, not the cost 
of changing one UPC. The model therefore accounts for the existence of 
brand families with similar label designs.
    (Comment 255) A comment asserted that FDA overestimates production 
and printing costs by ``not accounting for the realities of how such 
work is actually done.'' The comment provided the following quote from 
an unknown large job printer: ``In looking at the costs associated with 
each label, this might be fairly accurate for 1 label, but they don't 
take into account the economies of scale. After the first one, the 
second and subsequent package costs will go down exponentially. The 
only costs that might remain static would be the costs of printing 
plates, which depending on how they print them, could be reduced if 
they gang run several different packages of similar production runs 
together on the same sheet. All the non-production costs would be 
amortized over the whole.''
    (Response) The labeling cost model does not measure the cost of 
changing one label, but the average cost when a large number of labels 
are changed at once. Due to resource constraints, the economic cost 
could be higher when a large number of labels are changed at once. The 
comment did not provide either alternate cost estimates for FDA to 
consider, or potential sources for such data.
    (Comment 256) A comment asserted that design costs should not be 
inflated due to the requirement to use nine different warnings because 
all warnings would occupy the same portion of each package, so the 
redesign would only have to be done once regardless of which warning 
would be used.
    (Response) The comment appears to misunderstand which cost elements 
are affected by the need for nine labels. The term ``Design costs,'' as 
used in the labeling cost model, could refer to all per-UPC costs 
associated with a labeling change or specifically to graphic design 
labor costs. FDA inflated some, but not all, per-UPC labeling change 
costs by a factor of nine.
    For graphic design labor costs, FDA agrees that the part of the 
package design that is under the control of the manufacturer will 
probably be the same regardless of which of the nine warning labels is 
used. Therefore, the work of designing the new package label only has 
to be done once for each UPC; in the cost estimates, graphic design 
labor costs were not inflated by a factor of nine.
    Likewise, FDA assumed that the need to incorporate nine different 
warnings on every package would have a negligible impact on 
administrative labor costs, prepress labor costs, and recordkeeping 
labor costs. These costs therefore were not inflated by a factor of 
nine.
    It was only for materials costs, which specifically includes 
prepress materials and printing plate costs, that FDA assumed costs 
increased by a factor of nine due to the need to incorporate nine 
separate warning labels. We employed this assumption because nine times 
as many printing plates will be needed upfront.
    (Comment 257) A comment argued that some of the costs attributed to 
the label change would be incurred on an ongoing basis. The example 
provided is that printing plates wear out after a few million 
impressions and have to be replaced at regular intervals. The comment 
argued our cost estimates need to be adjusted to account for this. An 
analysis follows which claims to demonstrate that the average cigarette 
label printing plate has to be replaced every 3 weeks.
    (Response) The calculation provided in the comment contains errors. 
Once those errors are fixed, the calculation no longer supports the 
assertion that printing cylinders are being constantly replaced, as 
discussed in the following paragraphs. Furthermore, the model accounts 
for possible coordination with previously scheduled labeling changes, 
which provides the most likely opportunity for cigarette manufacturers 
to avoid some of the incremental cost from new printing plates 
(cylinders). New cylinders must be engraved when a nonregulatory 
labeling change takes place. Given the expense of the printing 
cylinders, manufacturers would avoid engraving new cylinders right 
before a

[[Page 36716]]

nonregulatory labeling change. In other words, we would expect some 
coordination between cylinder wear out and nonregulatory changes.
    Rotogravure plates are the longest lasting, good for making 
millions of labels. The comment assumed a life of only 3 million labels 
and did not justify this point estimate. For rotogravure, this estimate 
is too low.
    In attempting to determine weekly sales per UPC, the comment 
divided weekly cigarette sales (in packs) by their estimate of the 
number of brands, not by the number of UPCs. Dividing by the number of 
UPCs, even under the assumption that plates wear out after 3 million 
labels, yields a life of 29 weeks for the average brand. Updating this 
analysis for the revised number of cigarette UPCs yields a life of 38 
weeks for the average brand.
    Additional calculations can be performed for the ``average'' brand, 
but it is important to keep in mind that most brands are not average. A 
few products will have high volume. A large number of lesser-known 
products will have low volume.
    Because manufacturers will have to buy nine plates up front for 
each UPC, those nine plates would have a life of 346 weeks, or 6.6 
years, based on the comment's assumptions about the life of a 
rotogravure plate and the updated UPC count. Manufacturers of the 
average product would not wear out all these plates before they changed 
labels again for nonregulatory reasons.
    (Comment 258) Multiple comments argued that FDA should not include 
10 percent rush charges in calculating the cost of changing labels in 
15 months. In particular, the argument was made that cigarette 
manufacturers have known this was coming before publication of the 
final rule.
    (Response) Although it is true that manufacturers have known this 
rule was coming, in some form, since the passage of the Tobacco Control 
Act, it is only with the publication of the final rule that they will 
know its exact form, i.e., what the images will be. Tobacco companies 
will need to see the final images and the exact provisions of the final 
rule before the bulk of the work for a labeling change can be 
undertaken.
    In evaluating the need for rush charges, it is important to keep in 
mind that the labeling model is designed to measure the cost of 
changing a large number of labels at once. Resources are scarce and a 
large number of labeling changes cannot be simultaneously rushed 
without increasing costs.
    The previous labeling cost model assumed 10 percent rush charges 
for compliance periods shorter than 2 years. The new labeling cost 
model assumes constant rush charges equal to 40 percent for compliance 
periods of 3 to 15 months. In reality, rush charges are likely to 
decline continuously as the compliance period increases. The rush 
charges under a 3-month compliance period could exceed 40 percent, and 
the rush charges for a 15-month compliance period are likely to be far 
less. FDA has therefore retained the original assumption of 10 percent 
rush charges for a 15-month compliance period.
    (Comment 259) One comment stated that FDA has underestimated costs 
because of technical implementation difficulties associated with 
providing for equal, random, simultaneous display of nine different 
images.
    (Response) FDA does not agree that there is a technical 
infeasibility. Similar requirements have been successfully implemented 
in other countries. The cost analysis for the label change includes 
administrative labor and recordkeeping costs, part of which would be 
associated with devising and implementing a method for ensuring equal 
random display. However, FDA is now persuaded that there will be some 
ongoing cost associated with equal, random display. In other words, 
once a system for compliance is designed and implemented, it will 
require some work to ensure continuing compliance with equal, random 
display. Therefore, in the Final Regulatory Impact Analysis FDA has 
added recordkeeping costs and administrative costs as ongoing costs in 
years 2 through 20 after the final rule takes effect.
    (Comment 260) Comments argued that market testing costs undertaken 
by the tobacco industry should not be counted. Various arguments were 
presented: Such costs would be beyond the minimal cost required to 
implement the law ``effectively and in good faith.'' Such costs would 
be incurred in order to ``undermine the effect of Congressionally-
mandated warning labels.'' Such costs would not be societal costs at 
all, but distributional effects because the cost to the tobacco 
companies would be a benefit to employees or contractors paid to do the 
work. If FDA includes market testing costs, it should also include 
legal fees for potential challenges to this rule and lobbying fees to 
get the statute repealed.
    (Response) We do not simply estimate the cost of minimal 
compliance. In benefit-cost analyses of regulations, we assume agents 
react to a new regulation by changing behavior in many ways. The 
analysis itself then compares the expected outcomes with and without 
the rule. Regardless of whether the rule requires it, if manufacturers 
conduct market testing as a direct result of this rule, the costs are 
attributable to this rule. Resources devoted to this market testing 
have an opportunity cost, so there is a social cost. We have been 
unable to obtain reliable data with which to quantify potential costs 
incurred to challenge the rule in litigation. Lobbying costs associated 
with the repeal of the statute do not represent incremental costs of 
this rule and therefore are appropriately excluded from the analysis.
    (Comment 261) A comment stated that cigarette manufacturers and 
retailers change advertisements and labels frequently and only the 
incremental cost of replacements that would not have otherwise been 
made should be attributed to this rule. The comment asserted that this 
incremental cost is negligible.
    (Response) FDA only looked at the cost of removing point-of-sale 
advertisements. Other forms of cigarette advertisements are now 
relatively rare. The comment assumes that some or all manufacturers and 
retailers could perform the removal of noncompliant point-of-sale 
advertising at zero cost by coordinating it with the usual replacement 
schedule for point-of-sale advertising. Manufacturers and retailers 
would only remove noncompliant advertising early if the benefit from 
keeping them longer did not justify the modest cost (between $12 and 
$198 per establishment) of removing the advertising at the deadline. 
FDA expects that the most likely response will be for most 
establishments to continue displaying noncompliant advertisements up 
until the enforcement deadline and resources will therefore be expended 
to achieve compliance at the deadline.
    (Comment 262) One comment stated that the cost analysis needs to 
include reduced government revenue from lost taxes due to lowered 
cigarette sales.
    (Response) FDA notes that, leaving aside potential deadweight loss, 
there are two principal effects of tax reductions: Gains to former 
payers and losses to former recipients. Because these effects exactly 
offset each other, there is no net social cost or benefit associated 
with the reduction in excise tax collections induced by the rule. As 
such, we discuss rule-induced changes in tax collections in the 
Distributional Effects section of our analysis (section XI.G.5 of this 
document).
    (Comment 263) One comment stated that the disturbing nature of the 
graphic warning labels will cause adverse mental reactions in those who 
view them, especially cashiers at cigarette-

[[Page 36717]]

selling retail establishments because they must handle these products 
daily.
    (Response) FDA is not aware of any scientific evidence that mental 
or emotional costs would be incurred by the general public as a result 
of this regulation, and the comment did not provide any.
5. Distributional Effects
    In the analysis of the proposed rule, FDA estimated a variety of 
effects that are experienced as transfers away from some segments of 
society and as roughly equal transfers to other segments of society. 
FDA received several comments about these distributional effects.
    (Comment 264) One comment stated that FDA's preliminary analysis of 
the rule's effect on tax collections ignored offsetting effects due to 
increased sales of other taxable goods and services even though the 
Joint Committee on Taxation estimates this offset at 25 percent of a 
policy's direct effect.
    (Response) FDA agrees with the comment and has adjusted its 
analysis of rule-induced changes in tax collections accordingly.
    (Comment 265) One comment stated that, in its preliminary analysis 
of the rule's impact on tax collection, FDA suggested that inelastic 
demand for cigarettes means that some or all lost tax revenue could be 
offset through higher tax rates. The comment went on to note that FDA 
undertook no analysis of whether State and local governments could or 
would increase excise taxes on cigarettes in response to the graphic 
warning label rule and that the political environment, as demonstrated 
by recent elections, may not be amenable to tax increases.
    (Response) FDA did not claim any increases in State or Federal 
cigarette taxes are likely to occur. Instead, we merely pointed out 
that cigarette demand has been shown to be inelastic; therefore, an 
increase in tax levels will increase revenue. For the final analysis, 
we have removed some of our more confusing language on this issue. We 
continue to assume that tax rates will rise at the rate of inflation 
because, without such an assumption, we need a reliable forecast of 
inflation in order to express the stream of future tax revenue changes 
in current dollars. However, we have added discussion of alternative 
approaches, including the possible forecasting of inflation using the 
difference between interest rates for Treasury Inflation-Protected 
Securities (TIPS) and standard Treasury bills.
    (Comment 266) One comment stated that, to the extent that State and 
local excise taxes are based on the price of cigarettes, increased 
price competition that could result from the proposed rule would reduce 
tax revenues beyond what FDA reports in its analysis.
    (Response) At present, all State and Federal cigarette taxes are 
applied per unit, not ad valorem; therefore, changes in the pre-tax 
price of cigarettes will not change the total excise tax collection 
separately from changes caused by decreases in the quantity sold. Sales 
taxes, on the other hand, are applied to cigarettes on the basis of 
price. FDA has not quantified the effect of the rule on sales tax 
collections, but we expect it to be small, both because sales taxes 
make up a very small portion of total cigarette-related tax collections 
and because any rule-induced change in cigarette prices is also likely 
to be small.
    (Comment 267) One comment stated that, in its preliminary analysis, 
FDA failed to note that research indicates that U.S. employment will 
increase if smoking decreases.
    (Response) In the PRIA (sectionVIII.F.2), FDA stated that decreases 
in smoking may cause increases in national employment, citing (Ref. 
122) the same paper to which the comment refers.
    (Comment 268) One comment stated that FDA, in its preliminary 
analysis, estimated that the proposed rule would result in 500 to 600 
displaced jobs among manufacturers, warehouses and wholesalers but 
failed to note that these lost jobs probably would occur during a 
period of high unemployment, when the displaced individuals would 
likely have difficulty obtaining new jobs with similar remuneration. 
The comment went on to state that the average unemployment duration in 
November 2010 was 34.5 weeks and that one could, by multiplying the 
average wage by the average duration of unemployment, obtain a rough 
estimate of lost wages.
    (Response) The wages lost are not the appropriate cost to attribute 
to the rule; instead, we must include the difference between wages lost 
from tobacco-related jobs and the value of next-best options. FDA is 
unable to quantify this difference. For instance, average unemployment 
tenure from late 2010 would likely give a skewed estimate of length of 
rule-induced unemployment because compliance with the rule is not 
required until 2012. Unemployment may change substantially between now 
and then, especially because the United States is currently in the 
early stages of recovery from a recession.
    (Comment 269) One comment stated that manufacturing, warehouse, and 
wholesaler jobs displaced by the rule would be permanent losses to the 
economy. In addition to failing to note this permanence, FDA did not 
account for any job losses in the retail sector. The comment went on to 
state that convenience stores are highly dependent on tobacco sales, 
both in terms of cigarette sales' portion of profit margins and as a 
generator of customer traffic to spur the sale of ancillary products. 
Even the small reductions in revenue caused by the graphic warning 
label rule could cause retailers to reduce employment, with some stores 
possibly going out of business entirely.
    (Response) The portion of dissuaded smokers' budgets that would, in 
the absence of the rule, have been spent on cigarettes will, in the 
presence of the rule, be spent on other goods and services, thus 
creating jobs in other segments of the economy. Only the difference 
between losses borne by individuals losing cigarette-related jobs and 
gains realized by individuals obtaining employment in other sectors 
represents a net social cost. FDA believes this difference to be small 
and possibly negative (that is, the losses are less than the gains), as 
found by Warner et al. (Ref. 122).
    (Comment 270) One comment stated that, in its preliminary analysis, 
FDA incorrectly concluded that there would be no rule-induced losses 
experienced by tobacco growers. The comment went on to state that FDA's 
assumption that acreage taken out of tobacco production could be easily 
shifted to other crops, with no net loss, is not consistent with 
economic theory because economic theory indicates that land currently 
planted in tobacco is being used in its highest-valued use. Another 
comment suggested that FDA work with the Department of Agriculture on 
estimating the impact of the rule on tobacco farmers.
    (Response) FDA agrees that a transition from tobacco cultivation to 
the next-best option entails some loss for farmers, but only the 
difference between first- and second-best uses of land represents a net 
social cost in terms of reduced efficiency.
    (Comment 271) One comment stated that the requirement that 
cigarette manufacturers print half of their packaging with images 
supplied by the government would be a burden to all cigarette 
companies, the costs of which would ultimately be paid by consumers.
    (Response) FDA has estimated the cost to cigarette producers of 
adding graphic warning labels; however, we have not assessed whether 
cigarette consumers or shareholders of cigarette-producing firms will 
bear the burden of the cost. We expect that the costs will be shared by 
consumers and producers but we are unable to estimate the

[[Page 36718]]

portions borne by each group. In the cigarette market, increases in 
variable costs are borne almost entirely by consumers. In the case of 
the addition of graphic warning labels, however, most of the cost does 
not vary with the quantity of cigarettes produced. We therefore expect 
that producers will be unable to pass all of the cost on to consumers 
through increased prices. Consumer prices could, however, be affected 
in the long run. For example, one possibility is that some cigarette 
product lines will be discontinued and this decrease in supply would 
lead to increased prices paid by consumers. FDA lacks the detailed 
market data that would be necessary for predicting which of these or 
other possible outcomes would likely be realized.
    (Comment 272) One comment argued that retailers must lose profit 
when reallocating space away from cigarettes to other products because 
it was suboptimal to make such an allocation in the absence of the 
rule.
    (Response) This comment ignores the fact that the final rule will 
reduce demand for cigarettes and increase demand for other products. 
While it is clear by observation that allocating shelf space away from 
cigarettes to other products in the absence of this rule would be 
suboptimal, this need not imply that retailers' profits will be lower 
after they optimally respond to changes in the demand for cigarettes 
and the demand for other products.
    (Comment 273) Some comments argued that retailers (including small 
retailers such as convenience stores) may not be able to simply shift 
shelf space to other goods.
    (Response) FDA argued in the distributional effects section of the 
proposed rule, section VIII.F.3, that the retail sector (as a whole) 
will shift shelf space to other products to take advantage of the 
increase in demand for noncigarette products. FDA acknowledges that 
this substitution may not take place wholly within each retail 
establishment. If cigarette-reliant retailers have some (but less than 
complete) success shifting shelf space to take advantage of the 
increase in demand for noncigarette products, they will suffer an 
overall loss in revenue that is less than their loss of cigarette sales 
revenue. Other parts of the retail sector would gain sales. This would 
be a purely distributional effect within the retail sector. Such an 
effect would be small because this rule is only projected to reduce 
cigarette consumption by less than one quarter of a percent.
6. Impact on Small Entities
    In the initial regulatory flexibility analysis, FDA considered the 
potential effects on small cigarette manufactures of having to change 
all cigarette labels in accordance with this rule. FDA also considered 
the potential impact on small retailers of having to remove 
noncompliant point-of-sale advertising. FDA received comments from 
industry pertaining to these matters, which are summarized in the 
following paragraphs.
    (Comment 274) A comment stated that FDA ``grossly underestimates'' 
costs, referring specifically to the estimates of the label change 
costs and their impact on small manufacturers. The comment argued that 
the necessary changes will cost at least $500,000 to $1 million, 
including such factors as package redesign, dye cuts, and the number of 
colors needed for the artwork. Further, ``these changes represent 
global changes for the manufacturers' products, and that change will 
have a far greater effect on the small manufacturer as opposed to 
larger entities.'' Many aspects of compliance will require the work of 
outside contractors.
    (Response) It is not clear whether the comment intends to argue 
that the cost is on average $500,000 to $1 million per UPC, when many 
UPC labels are being changed at once, or that the total cost would be 
at least this much per firm, among some subset of small manufacturers. 
FDA does not agree that the average cost per UPC could be nearly this 
high. Although FDA estimates much higher total costs for the average 
small manufacturer, $500,000 to $1 million could describe the total 
costs for a subset of especially small manufacturers.
    The cost estimate with which the comment takes issue was based on a 
combination of the old FDA labeling cost model and early estimates of 
some values from the new FDA labeling cost model. Costs have been 
updated in the analysis for the final rule to more fully reflect the 
estimates of the new model. Interviews with manufacturers and trade 
associations were conducted in the process of building the new model. 
FDA believes the model provides the best estimate of the average cost 
of changing a product label. FDA inflates materials costs by a factor 
of nine to account for the requirement to use nine separate warnings.
    The comment also argued that FDA has underestimated the costs to 
small businesses but is not specific enough about whether there are 
additional factors, beyond the results of the labeling cost model, with 
which the comment disagrees.
    FDA agrees that small tobacco product manufacturers are more likely 
to hire outside contractors for tasks required to comply with this 
rule. However, from a societal point of view, it makes no difference to 
costs whether a manufacturer conducts the functions required for 
compliance in-house or contracts them out.
    (Comment 275) A comment argued that small manufacturers do not 
carry a small inventory of supplies, but must buy materials in bulk to 
be cost effective (often as much as 6-months worth). The comment stated 
therefore that it is untrue that all label inventories will be 
exhausted during the 15-month compliance period. Small manufacturers 
will have to discard large amounts of advertising and labeling 
material. Another similar comment argued that small manufacturers 
purchase long-term quantities of ``advertising pieces such as pole 
signs and shelf talkers,'' in order to get better prices. FDA should 
take this into account and give small manufacturers time to use up 
existing inventories of printed materials. The comment suggested that 
manufacturers could provide FDA with inventory counts and usage rates.
    (Response) FDA believes the first comment combines two separate 
issues: Label inventory assumptions (the matter at hand in the quote 
from the preliminary analysis) and advertising inventory assumptions.
    FDA stands by its conclusion that the costs of discarded label 
inventory will be small under a 15-month compliance period. With modern 
just-in-time inventory control methods, firms keep far less inventory 
on hand than in decades past. However, rather than assume that there is 
zero cost for discarded inventory, FDA will accept the new labeling 
cost model's default assumptions regarding discarded inventory. This 
assumption results in a low inventory cost being attributed to this 
final rule, as very little inventory is expected to remain after a 15-
month compliance period. While it may be the case that some small 
manufacturers keep large amounts of inventory on hand, the evidence 
used to construct the labeling cost model implies that most 
manufacturers would not have much (if any) label inventory remaining 
after 15 months and the output of the labeling model accurately 
represents the average inventory cost.
    While it is possible that some manufacturers will have some point-
of-sale advertising materials in inventory that will be discarded as a 
result of this

[[Page 36719]]

rule, FDA doubts that this inventory cost is substantial. Manufacturers 
will have 15 months to use up existing inventory. Cigarette 
manufacturers are known to be sophisticated advertisers, and effective 
advertising changes to reflect the times. Therefore, the value of 
existing advertisements would decline over time as they become more 
dated and less effective. Additionally, the comments themselves do not 
provide data with which to estimate any effect that may exist.
    (Comment 276) One comment estimated that the label change cost 
would be between $2.1 million and $5.5 million per average small 
tobacco product manufacturer, based on an average number of UPCs per 
firm of 44. The comment asserted that small manufacturers cannot absorb 
the cost of changing all their cigarette labels and many will leave the 
cigarette manufacturing business. Two relief options were suggested: 
Phasing in the rotational warnings over a longer period of time or 
running the warnings sequentially rather than simultaneously.
    (Response) According to this comment, small tobacco product 
manufacturers have fewer UPCs each than FDA originally estimated. If 
the UPC estimate from the comment holds, the compliance costs for small 
firms would be lower than FDA originally estimated. FDA has retained 
the original method for estimating the number of UPCs for small firms 
so as to take care not to understate the burden on them.
    FDA acknowledges that this rule may put some small manufacturers at 
risk of going out of business. However, we do not have the information 
necessary to estimate this risk. In the initial regulatory flexibility 
analysis, FDA considered the relief that would be provided by allowing 
small (or all) tobacco product manufacturers additional time to comply 
with the rule, even though this not in keeping with the statutory 
mandate. Running nine warnings sequentially rather than in parallel is 
a complicated alternative for which it is difficult to estimate the 
amount of relief provided. A very large reduction in costs would only 
materialize if the warnings were only changed as often as the usual 
frequency of nonregulatory label changes (every couple of years). 
However, FDA has now included an analysis of the potential impact of a 
related relief option, that of letting small manufacturers randomly 
assign one label to each distinct UPC.
    (Comment 277) Some comments argued that some small retailers, such 
as convenience stores, may go out of business as a result of reduced 
cigarette sales and loss of revenue from ancillary products, and that 
this effect of the rule on small entities needs to be reflected in the 
analysis. Beyond the effect on the retailers themselves, closure of 
convenience stores would result in loss of convenience to nearby 
customers and could also adversely affect suppliers.
    (Response) Although in the small entity analysis we are only able 
to quantify the cost of removing noncompliant advertising, we 
acknowledge that small retailers selling cigarettes could also lose 
some net sales revenue (to other retailers), to the extent that 
shifting shelf space to other goods less than fully offsets the 
reduction in revenue from cigarettes. We expect any such loss of 
revenue to be modest because the expected reduction in cigarette 
consumption is modest to begin with. Convenience store closures as a 
result of this final rule are therefore unlikely.
    (Comment 278) One comment recommended that FDA reconsider exempting 
small cigarette producers.
    (Response) The initial regulatory flexibility analysis considered 
exempting small manufacturers from the label change requirements as a 
relief option. Exempting small manufacturers from all or part of this 
regulation would cause a significant proportion of consumers to be 
exposed to cigarette packages or advertising lacking the new graphic 
warnings. In 2008, the combined market share of all but the four 
largest firms was 10.3 percent (Ref. 123). This situation would be 
inconsistent with the public health objective of the rule as well as 
FDA's statutory mandate.

C. Need for the Rule

    Written with the goal of ameliorating the large toll on public 
health that is directly attributable to the consumption of tobacco, the 
Tobacco Control Act mandates the publication of this rule. Section 201 
of the Tobacco Control Act modifies section 4 of FCLAA to require that 
nine new health warning statements, along with color graphics depicting 
the negative health consequences of smoking, appear on cigarette 
packages and in cigarette advertisements. As discussed in detail in 
FDA's response to comments in section XI.B.2 of this document, the 
economics literature suggests several sources of market failure \11\ 
that the new graphic warning labels will address; these include myopia, 
lack of salience, time inconsistency, and incomplete information. In 
the following analysis, we do not attempt to choose among the many 
models of smoking and addiction that potentially cause market failure, 
but the models have similar policy implications.
---------------------------------------------------------------------------

    \11\ A situation in which a market left to itself does not 
allocate resources efficiently.
---------------------------------------------------------------------------

D. Benefits

    We estimate the benefits of the final rule by comparing expected 
life-cycle events of smokers with those of nonsmokers. Nonsmokers tend 
to live longer and develop fewer cancers, cardiovascular, pulmonary, 
and other diseases, so the benefits in our analysis include the 
discounted value of life-years gained, health status improvements and 
medical services freed for other uses. We also include an estimate of 
the monetary value of the property and lives saved as a result of the 
rule-induced reduction in the number of accidental fires caused by 
smoking. There are other benefits, such as reductions in nonsmokers' 
morbidity and mortality associated with both passive smoking and 
mothers smoking during pregnancy, that are likely generated by the 
final rule, but FDA has been unable to obtain reliable data with which 
to quantify them. In particular, we were not able to project future 
levels of exposure to secondhand smoke from historical trends, nor 
predict future decreases in maternal smoking during pregnancy.
1. Reduced Cigarette Smoking Rates
    The changes outlined in this rule are projected to decrease smoking 
initiation and increase smoking cessation. For each of the first 20 
years of the rule's implementation (2012 through 2031),\12\ FDA 
calculates the predicted decrease in the number of U.S. smokers by 
multiplying together the following:
---------------------------------------------------------------------------

    \12\ The effects of antismoking policies occur over a long 
period of time, so we want to include at least one full generation 
in our analysis. Using a 20-year time horizon allows us to do this 
while still avoiding the extreme uncertainty regarding effects 
occurring in the more distant future.
---------------------------------------------------------------------------

    (a) The estimated effect (percentage point change) of cigarette 
warning labels on the national cigarette smoking rate and
    (b) The population in a particular year in the absence of the 
regulation (as projected by the U.S. Census Bureau).
    To obtain estimates of the effect of cigarette warning labels on 
smoking rates (item (a) in the list above), we look to the experience 
of Canada, which has required the use of graphic warning labels since 
December 2000 (Ref. 124). The advantage of this approach lies in our 
ability to observe actual consumer behavior--in the form of smoking 
rates--before and after a graphic warning label requirement went into

[[Page 36720]]

effect. The warning labels to be required in the final rule are 
generally similar to those developed by Health Canada and authorities 
in other foreign countries. As in Canada, the labels required by the 
rule will occupy at least half the front and rear display panels of a 
cigarette package. Moreover, under the rule, there will be a mix of 
warning statements and images that depict the negative consequences of 
smoking. Although the rule will follow much the same approach as the 
Canadian warning label requirements, it will differ in some ways: 
Canada has 16 labels in rotation, rather than 9; warning statements 
appear in English on one side of a Canadian package and in French on 
the other; and health and cessation information is included on leaflets 
within Canadian cigarette packages (Ref. 125). These details, combined 
with general differences in legal and social trends, indicate that 
Canada's experience with warning labels can give only a general idea of 
the changes in smoking rates to be expected as a result of the rule. In 
addition, other smoking control initiatives, including new restrictions 
on smoking in indoor public places, also occurred in both the United 
States and Canada during the period of our analysis. These and other 
confounding factors make our estimate of the effect of new graphic 
warning labels highly uncertain.
    Health Canada (Refs. 126 and 127) reports Canadian smoking rates 
for ages 15 and above for years from 1994 through 2009. FDA obtained 
smoking rates for adults, aged 18 and above, in the United States from 
the National Health Interview Survey (Ref. 128) and from ``Health, 
United States, 2005,'' published by the National Center for Health 
Statistics (Ref. 129). We used the results from these two reports to 
calculate the United States-Canada smoking rate difference for 
individual years. As shown in table 4 of this document, the smoking 
rate in Canada was, as of the most recent survey estimates, more than 
three percentage points lower than the rate in the United States and 
approximately seven percentage points lower than Canada's own smoking 
rate in the year before graphic warning labels were implemented in that 
country. It would be unjustified, however, to conclude that the 
introduction of graphic warning labels in the United States will cause 
the U.S. smoking rate to fall by seven, or even the three percentage 
points needed to reach the Canadian rate. Many factors, such as tobacco 
advertising restrictions, youth access restrictions, educational 
campaigns regarding the health effects of smoking, restrictions on 
smoking in indoor public places, and taxes on tobacco products have 
influenced smoking rates in the two countries. In order to estimate the 
incremental effect of the present rule, we need to isolate the impact 
of graphic warning labels on the Canadian smoking rate.
    In order to accomplish this, as discussed in detail in Technical 
Appendix X1, we begin by using data from Health Canada (Refs. 126 and 
127), the National Center for Health Statistics (Ref. 129), and the 
National Health Interview Survey (Ref. 128) to estimate pre-2001 
smoking rate trends for both the United States and Canada. Because tax-
induced changes in the price of cigarettes have been shown to 
substantially reduce smoking, in each trend estimation we include the 
effects of Federal and State or provincial cigarette tax changes on 
national smoking rates. (After decreasing substantially in the early 
1990s, Canada's real average cigarette excise tax level grew by 9 
percent between 1995 and 2000 and by 123 percent between 2001 and 2009. 
Real average cigarette tax levels in the United States grew by 29 
percent between 1995 and 2000 and by 117 percent between 2001 and 
2009.) Using the estimated trends, we predict smoking rates for the 
United States and Canada, and the difference between them, for years up 
to and including 2009. We then subtract the predicted United States-
Canada smoking rate differences from the actual differences observed in 
the data. Implicit in this method is the assumption that these 
otherwise-unexplained differences may be attributed solely to the 
presence in Canada of graphic warning labels. We do not account for 
potential confounding variables or for possible substitution by 
consumers from cigarettes to other products (such as little cigars) 
that may produce similar health effects; our method is therefore a 
rudimentary approach to estimating the smoking reduction that will be 
effected by the new graphic warning labels and may be producing results 
that are off by one or more orders of magnitude.

[[Page 36721]]

[GRAPHIC] [TIFF OMITTED] TR22JN11.006

    Using this rudimentary approach, FDA estimates that the average 
unexplained difference between United States and Canadian national 
smoking rates is 0.088 percentage points higher for the 2001 through 
2009 period than for 1994 through 2000. Applying this estimate to 
population projections (Ref. 130 provides annual projections only 
through 2030, so we assume cohort populations will remain the same from 
2030 to 2031); summing over all age groups yields an estimate that the 
rule will reduce (either through cessation or avoided initiation) the 
United States' smoking population by approximately 213,000 in 2013, 
with the total decrease rising to approximately 246,000 in 2031 due to 
the predicted smoking rate decrease being applied to a growing 
population. FDA has not quantified rule-induced decreases in cigarette 
consumption among smokers who do not quit entirely, although such 
decreases have the potential to improve health outcomes for affected 
individuals.
2. Quantifying Benefits That Accrue to Dissuaded Smokers
    a. Smokers' willingness-to-pay for cessation programs. One method 
for estimating dissuaded smokers' net internal benefits involves using 
the amount smokers are willing to pay to participate in cessation 
programs. This willingness-to-pay will equal the value of cessation 
(i.e., the value of health and other benefits of cessation minus any 
value that smokers attribute to the activity of smoking) multiplied by 
the participation-related probability of success. Warner et al. (Ref. 
131) report that the choke price, or the price at which no smokers 
would participate in cessation programs, may be around $350 (in 2000 
dollars), while a maximum of 10 percent of the smoking population would 
participate in cessation programs even if those programs had a money 
price of zero. With a linear demand curve, these parameters produce an 
average willingness-to-pay among potential cessation program 
participants of $175. Warner and coauthors report that approximately 15 
percent of smoking cessation program participants successfully quit 
without eventual relapse. These parameters indicate that the average 
value of cessation is $175/0.15 = $1,167, or $1,444 when updated for 
inflation (using Ref. 132).
    We estimate in section XI.D.1 of this document that the final 
graphic warning label rule would reduce the U.S. adult smoking 
population by 213,000 in 2013. In the absence of the rule, the baseline 
2013 smoking population would be approximately 49.5 million, so a 
decrease of 213,000 represents a 0.43 percent effectiveness of graphic 
warning labels. The value to an individual smoker of graphic warning 
labels equals their effectiveness multiplied by the value of cessation, 
or 0.0043*$1,444 = $6.22. Multiplying by the predicted 2013 smoking 
population yields an aggregate value of the rule of $6.22*49.5 million 
= $307.9 million. For each year from 2014 to 2031, we perform an 
analogous calculation, but we replace the entire smoking population 
with only the particular year's newly exposed cohort (consisting of 18-
year-olds and new immigrants). This results in a present value of net 
intrapersonal benefits of $370.3 million, calculated with a 3-percent 
discount rate, or $322.4 million, calculated with a 7-percent discount 
rate.
    While these values can provide rough estimates of the benefits of 
the final rule, there are several reasons to believe they are only 
approximations and probably reflect lower bounds. First, we are 
implicitly assuming that the value of avoided smoking initiation is 
equal to the value of cessation and that the value of cessation is 
equal across the entire smoking population. In fact, we have 
willingness-to-pay data only from those smokers who are potential 
participants in cessation programs. The value of avoided initiation is 
likely much higher than the value of cessation, which would tend to 
make the present estimates of rule-induced benefits too low. A second 
reason willingness-to-pay for cessation programs represents a lower 
bound on the rule's benefits is because it captures only the 
misinformation and time-inconsistent preferences that smokers 
themselves recognize and act upon via participation in cessation 
programs.
    b. Gross and net health benefits. We now turn to the literature on 
time inconsistency, which is one of the principal forms of market 
failure relevant to tobacco, to develop an alternative approach to 
estimating rule-induced benefits that accrue to dissuaded smokers. The 
papers we will

[[Page 36722]]

discuss use the term ``optimal internality tax,'' but the key point is 
that taxes and cessation programs are both tools that cause a reduction 
in smoking, and the dollar prices of those tools represent estimates of 
the amounts that smokers would be willing to pay to gain the net 
intrapersonal benefits associated with smoking reduction.
    Gruber and K[ouml]szegi (Ref. 104) estimate the tax rate that would 
allow time-inconsistent smokers to consume the quantity that would be 
optimal under perfect rationality and in the absence of other forms of 
market failure. They first estimate an internal health cost of $30.45 
per pack. From this cost, they calculate an internality tax that ranges 
from $0.98 to $2.89 (depending on technical parameters of their model), 
with an average of $2.17. Because the demand for smoking is downward-
sloping, a decrease in the smoking rate will decrease the optimal 
internality tax. In Technical Appendix X5, we account for this 
complication. Because we find that Gruber and K[ouml]szegi's results 
imply that net internal benefits of the rule equal roughly 7 (=100-93) 
percent of the gross internal (health) benefits, the average optimal 
tax over the relevant portion of the demand curve is 0.07*$30.45 = 
$2.05 per pack. Multiplying this optimal tax by the predicted rule-
induced reduction in cigarette consumption would yield an estimate of 
benefits that accrue to dissuaded smokers.
    In other writings, Gruber (Ref. 133) suggests that, because his 
work with K[ouml]szegi considered only a limited degree of time 
inconsistency, the optimal internality tax on cigarettes could be much 
higher than the level estimated with K[ouml]szegi, perhaps between 5 
and 10 dollars per pack. (Even this amount does not, however, account 
for other forms of market failure that might be relevant to tobacco 
use.) The midpoint of the 5 to 10 dollar range, $7.50, yields a net 
internal benefits result equal to roughly 24 percent of rule-induced 
internal health benefits. Other models of addiction and smoking would 
imply different net internal benefits, depending on the implied 
severity of the market failure. One comment on the proposed rule, from 
a scholar who has done a great deal of professional research on the 
economics of smoking, suggested that smokers would assess the value of 
quitting smoking as 90 percent of the value of health gained from 
smoking. Although this and other public comments suggested high ratios 
of net to gross health benefits, none provided evidence supporting 
their suggestions.
    The applicability of any of the suggested net-to-gross internal 
benefits ratios requires an estimate of the gross benefits realized by 
individuals who are dissuaded from smoking. Gruber and K[ouml]szegi 
admit that their $30.45 per pack estimate is not exhaustive, so we now 
turn to quantifying morbidity, mortality, and other effects of smoking 
cessation and avoided initiation.
    i. Expected life-years saved. The largest health consequence of 
smoking is the increased rate of mortality from pulmonary and 
cardiovascular disease, cancer, and certain other illnesses. As a 
result, the largest benefits of this rule stem from the increased life 
expectancies for those individuals who, in the absence of the rule, 
would be smokers and thus susceptible to premature mortality from one 
of these often-fatal diseases. We calculate the number of life-years 
saved using differences in the probabilities of survival for smokers 
and nonsmokers. Sloan et al. (Ref. 116) construct life tables for 
various categories of individuals, including ``nonsmoking smokers'' and 
typical 24-year-old smokers. A nonsmoking smoker is someone who does 
not use cigarettes but otherwise exhibits the lifestyle and personal 
characteristics of the average smoker.\13\ A typical 24-year-old smoker 
does not necessarily smoke for his or her entire life, but instead 
faces cessation probabilities that are in line with values observed for 
all ages in the National Health Interview Survey; the life expectancy 
effects of cessation at older ages are netted out of life expectancy 
effects of avoiding smoking at age 24 (results reported below). Sloan 
et al.'s life tables allow us to calculate how many additional deaths, 
per 100,000 population, may be expected among typical smokers than 
among nonsmoking smokers between the 24th and 25th birthdays, the 25th 
and 26th, and so on until the 100th birthday. (FDA assumes that 
differences in yearly survival probabilities for smokers and nonsmokers 
are negligible below age 24 and above age 100.)
---------------------------------------------------------------------------

    \13\ In their multivariate regression analysis, Sloan et al. 
control for alcohol intake, body mass index, financial planning 
horizon, race, education, and marital status.
---------------------------------------------------------------------------

    Overall, Sloan et al. find that an average (or what Sloan et al. 
call ``typical'') 24-year-old female smoker can expect to live another 
55.5 years, while a comparable nonsmoker can expect another 57.8 years 
of life, producing an overall regulation-induced gain of 2.4 
undiscounted life-years per individual who is prevented from starting 
to smoke. Comparing male 24-year-old typical and nonsmoking smokers, 
life expectancy increases from 49.8 to 54.2 years, producing a gain of 
4.4 undiscounted years. The gap between male and female life expectancy 
results may be due to different physiological responses to equal 
amounts of smoking, different lifetime cessation patterns, or different 
smoking intensities. Taylor et al. (Ref. 117), for instance, find that 
male smokers are more likely than female smokers to consume more than a 
pack a day. Sloan et al. do not report how much of the male-female 
difference in their estimated life expectancy effects may be attributed 
to each possible mechanism. In spite of this limitation, FDA considers 
Sloan et al.'s methodology to be the most suitable in the literature 
for purposes of the present analysis due to other studies' omissions of 
a nonsmoking smoker adjustment, a lifetime cessation probability 
adjustment, or both.
    We assume that each person who reaches ages 18 to 24 during the 20 
years (2012 to 2031) of our analysis and is dissuaded from smoking 
extends his or her life by the gender-specific amount Sloan and 
coauthors report. For older individuals, whose post-smoking cessation 
survival probabilities cannot be plausibly assumed to equal those of 
individuals who were nonsmokers at age 24, we predict life extensions 
using former smoker life tables that we construct using Sloan et al.'s 
results and cessation probabilities from the 1998 National Health 
Interview Survey (Ref. 128). The details of these adjustments appear in 
Technical Appendix X2.
    ii. Benefits of reduced premature mortality. OMB Circular A-4 (Ref. 
103) advises that the best means of valuing benefits of reduced 
fatalities is to measure the affected group's willingness-to-pay to 
avoid fatal risks. Three life-year values (also known as values of a 
statistical life-year, or VSLY) used frequently in the literature and 
in previous analyses are $100,000, $200,000, and $300,000 (Refs. 134 
and 135; 74 FR 33030, July 9, 2009), which we update to $106,308, 
$212,615, and $318,923 in 2009 prices. These values constitute our 
estimates of willingness-to-pay for a year of life preserved in the 
present. The economic assessment of a future life-year requires 
discounting its value to make it commensurate with the value of present 
events. As required by OMB Circular A-4, we use 3-percent and 7-percent 
discount rates to calculate the present value of the life-years we 
predict will be saved.
    For each dissuaded smoker, we multiply a VSLY by the relevant age- 
and gender-specific life extension and

[[Page 36723]]

then discount appropriately to arrive at a per-person value of reduced 
mortality. For 24-year-olds, this value ranges from $9,280 (for a 
female applying a VSLY of $106,308 and a 7-percent discount rate to her 
2.4 life-years gained due to smoking avoidance) to $363,333 (for a male 
applying a VSLY of $318,923 and a 3-percent discount rate to his 4.4 
life-years gained due to smoking avoidance). Multiplying the per-person 
values by the predicted number of dissuaded smokers and discounting the 
results back to year 2011 yields estimates of rule-induced mortality 
benefits that range from $1.45 to $22.56 billion.
[GRAPHIC] [TIFF OMITTED] TR22JN11.007

    These totals may understate the full value of rule-induced 
reductions in mortality because they do not account for increasing 
trends in life expectancy. Sloan et al.'s results, from which our 
mortality estimates are derived, are based on data from the late 1990s. 
Arias (Ref. 136) reports that between 1999 to 2001 and 2006 (the most 
recent year for which life tables have been developed), life expectancy 
at age 25 increased from 50.54 to 51.5 years, or 1.90 percent, for 
males and from 55.41 to 56.1 years, or 1.25 percent, for females. If 
these percentage changes are approximately correct for the typical 
smoker and nonsmoking smoker populations, then our estimates of 
smoking-related life expectancy effects would need to be adjusted 
upward accordingly (or perhaps by different percentages because life 
expectancy has continued to change since 2006).
    A further reason to believe the values in table 5 of this document 
may be underestimates is their lack of quantification of any reduction 
in either the external effects attributable to passive smoking or the 
infant and child fatalities caused by mothers smoking during pregnancy. 
Sloan et al. (Ref. 116) indicate that, historically, the inclusion of 
spouse and infant deaths from exposure to secondhand smoke or mothers 
smoking while pregnant increased estimates of smoking's mortality 
effects by approximately 26.3 percent. We do not incorporate this 
adjustment into our analysis, however, because recent restrictions on 
indoor public smoking and educational campaigns have significantly 
reduced, though not eliminated, nonsmokers' exposure to secondhand 
smoke. In other words, an analysis of the rule's impact on health 
benefits that accrue to individuals other than smokers themselves 
requires three pieces of estimation: (1) The rule-induced change in the 
number of U.S. smokers, (2) the relationship between the number of 
smokers and exposure of nonsmoking individuals to the harmful effects 
of cigarettes, and (3) the effect of cigarette exposure on nonsmokers' 
mortality. The ever-changing level of nonsmoker cigarette exposure 
means that a simple extrapolation from the recent past provides a much 
less reliable prediction of the near future for element (2) than for 
other pieces of this analysis. Any estimation of (2) would therefore be 
highly data-intensive and subject to an unacceptable level of potential 
error. In general, FDA has been unable to obtain data with which to 
solve this problem; it is for this reason that we do not quantify 
health benefits that will accrue to individuals other than smokers 
themselves.
    We do, however, note that the Robert Wood Johnson Foundation (Ref. 
137) reports that the percentage of the U.S. population living in homes 
where smoking was permitted decreased from 56.9 percent in 1992 to 1993 
to 20.9 percent in 2006 to 2007. This may indicate that the ratio of 
spouse and infant mortality effects (related to passive smoking) to 
smoker mortality effects is now approximately 36.7 (= 20.9/56.9) 
percent as large as the 26.3 percent ratio derived from Sloan et al.'s 
results (which were calculated using data from the 1990s). Using this 
very rough approximation yields a present value of spouse and infant 
mortality benefits ranging from $140.3 million (= 0.263*0.367*$1.45 
billion) to $2.18 billion (= 0.263*0.367*$22.56 billion). Although 
there are serious weaknesses with this estimation approach that make it 
inappropriate to include in our overall benefits analysis, the results 
may give a sense of the magnitude of mortality benefits generated by 
the rule via reductions in spousal and fetal smoking exposure.
    iii. Improved health status (or reduced morbidity). In the previous 
section, we estimated the benefits that will accrue as a result of the 
rule-induced reduction in premature deaths from cancer, pulmonary and 
cardiovascular disease, and other smoking-caused illnesses. Cigarette 
smoking also imposes costs on smokers in the form of pain, distress, 
and impaired function even before these illnesses cause fatalities. As 
with premature death, individuals are assumed to be willing to give up 
valuable resources in order to avoid reductions in quality of life 
associated with smoking-related illnesses.
    Sloan et al. (Ref. 116) examine survey respondents' self-reported 
health status (which can be categorized as poor, fair, good, very good, 
or excellent) and estimate that a 24-year-old smoker can expect, on 
average, an extra 1.086 discounted years (using a discount rate of 3 
percent and averaging over Sloan's estimates for males and females) or 
0.521 discounted years (using a discount rate of 7 percent and again 
averaging over males and females) of fair or poor health over his or 
her lifetime, as compared with a nonsmoking smoker.
    In order to quantify the value of rule-induced reductions in years 
spent in fair or poor health, we scale our estimates of the VSLY 
($106,308, $212,615, and $318,923, as discussed in the previous section 
of this document) by a ratio representing the trade-off individuals are 
willing to make between time spent in best-possible and lesser levels 
of health. Nyman et al. (Ref. 138) estimate this trade-off by matching 
survey respondents' self-reported subjective health statuses with their 
EuroQol-5D (EQ-5D) health index scores. The EQ-5D survey responses--to 
questions about five areas of health, including mobility, self-care, 
pain, anxiety, and ability to perform usual activities--are mapped so 
that a score of one represents best measurable health, a score of zero 
represents death, and fractional values represent intermediate levels 
of health. Nyman et al.'s analysis indicates that, relative to the 
health index score of an individual with excellent health, a very good 
health score will be lower by 0.03,

[[Page 36724]]

a good health score will be lower by 0.078, a fair health score will be 
lower by 0.194 and a poor health score will be lower by 0.392. 
Weighting by Nyman et al.'s reported percentages of respondents in each 
health category, FDA finds that the health index score for the average 
individual in good, very good, or excellent health is lower than the 
index for excellent health by 0.036 and the health index score for the 
average individual in fair or poor health is lower than the index for 
excellent health by 0.244; the difference between these averages is 
0.208. This result may be interpreted as follows: The harm experienced 
by an individual whose health changes, for 1 year, from good, very 
good, or excellent to fair or poor is equal, on average, to the harm 
experienced by an individual in the best possible health whose death is 
hastened by 0.208 years. Thus, the welfare effect of smoking-related 
health status changes may be found by multiplying a plausible life-year 
value (such as $106,308, $212,615, or $318,923) by 0.208; this 
multiplication yields estimates of $21,800, $43,600, and $65,400 for 
the amounts individuals are willing to pay to avoid a year of reduced 
health status.
    The U.S. Census Bureau (Ref. 130) predicts that the nation's 24-
year-old cohort will be 2.17 million females and 2.25 million males in 
2013 and rise steadily to approximately 2.25 million females and 2.33 
million males in 2031. FDA's estimate of a 0.088 percentage point 
reduction in the U.S. smoking rate thus translates to a decrease of 
3,906 24-year-old smokers in 2013, with the decrease rising to 
approximately 4,154 in 2037. Multiplying these estimates of the rule-
induced reduction in the number of smokers by Sloan et al.'s 
predictions of discounted reduced health-years per smoker and the 
quality-of-life loss per year of fair or poor health derived from Nyman 
et al., and discounting appropriately, yields a rule-induced welfare 
gain of $0.5 to $4.7 billion. Detailed results appear in table 6 of 
this document.
[GRAPHIC] [TIFF OMITTED] TR22JN11.008

    Sloan and coauthors do not report the effect of smoking on fair or 
poor health years for dissuaded smokers of ages other than 24; in the 
absence of a reliable estimate of the morbidity effect of smoking 
cessation for individuals aged 25 and above, FDA takes the conservative 
approach of estimating benefits only for adults who are at or below 
that age sometime during the first 20 years of the rule's 
implementation. Smoking cessation brought about by this rule will 
improve health status, in some cases substantially, for many 
individuals who are over age 24 at the time of the rule's 
implementation. Our omission of these benefits to older individuals 
produces an underestimate of the rule's morbidity benefits (which is 
why we describe our estimate as conservative) but there are several 
reasons to believe the magnitude of the underestimate may not be 
overwhelmingly large. First, although individuals aged 24 and below 
make up a fairly small portion of the smokers we estimate will be 
dissuaded from smoking in 2013, they make up the vast majority of 
smokers newly dissuaded in years 2014 to 2031 because it is young 
people and a few immigrants who will be exposed to graphic warning 
labels for the first time in those later years. Overall, then, our 
morbidity results include effects for 98,355, or 33.8 percent, of our 
estimated 291,103 (undiscounted) smoking dissuasions. Second, the 
reduction in health risk experienced by smokers who quit at ages 25 and 
above will be smaller than the benefits experienced by individuals who 
quit at age 24 and below or who avoid smoking initiation altogether. 
Third, in a study conducted with a methodology very different from the 
one used in this regulatory impact analysis, Stewart et al. (Ref. 139) 
estimate that smoking avoidance can increase discounted life expectancy 
by 1.73 years and quality-adjusted life expectancy by 2.17 years; this 
implies that, in the realm of smoking avoidance, the magnitude of 
morbidity benefits is around 25 percent of the magnitude of mortality 
benefits. Compared with this independent evidence, FDA's morbidity 
results, which are 15.3 percent (undiscounted), 21.0 percent 
(discounted at a 3-percent rate) or 34.5 percent (discounted at a 7-
percent rate) as large as mortality effects, appear to be only moderate 
underestimates.
    iv. Medical services. Sloan et al. (Ref. 116) estimate that smokers 
use more medical services over their life cycles than do comparable 
nonsmokers, with a specific net cost of $3,757 per female 24-year-old 
smoker and $2,617 per male 24-year-old smoker (in 2000 dollars and with 
a 3-percent discount rate). Of the female smoker's net cost, $2,031 
will be borne by the smoker herself and the remainder by nonsmokers in 
the form of increases in private insurance premiums or taxes used to 
fund government health programs such as Medicaid. Of the male smoker's 
net cost, $1,372 will be borne by the smoker himself and the remainder 
by nonsmokers. We adjust these cost estimates for inflation using the 
most recent medical care CPI (Ref. 140).
    Sloan and coauthors do not report expected medical costs for former 
smokers, so estimating benefits for individuals aged 25 and above who 
cease smoking as a result of the rule requires some assumptions. For 
this analysis, we assume that smoking-related annual excess medical 
costs are the same whether smokers are compared with never-smokers or 
former smokers and that the payments, reported by Sloan et al. as 
present values for 24-year-olds, are distributed equally from ages 24 
to 100 (in other words, we annualize Sloan et al.'s estimated present 
value over the 77 years between ages 24 and 100). With these 
assumptions, given FDA's projected 20-year reductions in smoking 
prevalence, we anticipate that the regulation will cause smoking-
related medical expenditures to fall by $859.9 million, of which $458.2 
million will be realized as savings by smokers themselves and $401.7 
million by nonsmokers. With a 7-percent discount rate, the total 
decrease in expenditure becomes $491.3 million, with $261.2 million of 
those savings accruing to smokers and $230.1 million to nonsmokers. 
Further details about the nonsmoker portion of expenditures appear in 
the Distributional Effects portion of this analysis.
    In the absence of the rule, some portion of smoking-related medical 
expenditures accrues to health service providers as economic rent (also 
known

[[Page 36725]]

as producer surplus \14\). Any reduction of this portion will not 
contribute to the social benefit of the rule but will instead be a 
transfer of resources from health service providers to consumers, 
public and private insurers, and others. A further complication in the 
analysis of the market for health is generated because nonsmokers' 
payments take the form of a subsidy for smoking-related medical 
services and thus some portion of their expenditure in the absence of 
the rule is greater than smokers' own willingness-to-pay for those 
medical services. Both for this reason and due to the existence of 
economic rent, the avoidance of at least some portion of nonsmokers' 
smoking-related spending will transfer value from one portion of 
society to another but not contribute to an overall social benefit of 
the rule. We do not know the size of this portion relative to 
nonsmokers' overall rule-induced expenditure change, so we assume that 
50 percent of nonsmokers' smoking-related spending accrues as a net 
social benefit of the rule. This produces an overall estimate of rule-
induced reductions in medical expenditures of $659.0 million, 
calculated with a 3-percent discount rate, or $376.3 million, 
calculated with a 7-percent discount rate.
---------------------------------------------------------------------------

    \14\ The difference between what a supplier is paid for a good 
or service and the marginal cost of supplying that good or service.
---------------------------------------------------------------------------

    v. Other financial effects of smoking cessation. In section XI.F.6 
of this document, we will discuss in detail the effects of the rule on 
Social Security, income taxes, private pensions, and life insurance. 
Summaries of these effects will appear in table 23 of this document. 
For the most part, we will characterize the values appearing in table 
23 as transfers, having equal and offsetting effects on various members 
of society. There are, however, some additional consequences of these 
transfers that must be considered in light of the optimal internality 
tax estimation approach and the related need to estimate gross internal 
benefits and costs of dissuaded smoking. The mixture of positive and 
negative values in table 23 shows that societal transfers can take the 
form of both subsidies and additional costs of smoking; when summed 
together, the positive and negative effects in table 23 show a net 
smoking subsidy, which individuals relinquish when they avoid 
initiating or quit smoking.
    There is a difficulty in quantifying the effect of the types of 
transfers appearing in table 23 of this document on internal benefits. 
Smokers' experience of these transfers may already be included in the 
section XI.D.2.b.ii and XI.D.2.b.iii of this document estimates of 
gross health benefits because the willingness-to-pay measure on which 
we base our morbidity and mortality calculations includes all the 
effects a person will likely experience as a result of improving his or 
her health and extending his or her life. These effects include 
increased opportunities to collect Social Security and defined benefit 
pension payments, a decreased chance of leaving survivors enough life 
insurance to make up for the amount paid in premiums, and increases in 
pension and income tax payments (due to working longer and receiving 
higher wages in compensation for higher productivity). If the results 
in section XI.D.2.b.ii and XI.D.2.b.iii of this document already 
reflect these phenomena, what is missing from our analysis is not the 
intrapersonal effect associated with smokers' experience of table 23 
transfers but the direct benefit to the general public of no longer 
providing a net smoking subsidy; in this case, the total value of the 
subsidy, or 100 percent of the values in table 23, would need to be 
added to our net benefits estimate. Because morbidity and mortality are 
the primary but not the only ways in which smoking affects Social 
Security, income tax, pension, and life insurance payments and 
receipts, we do not know the extent to which our morbidity and 
mortality willingness-to-pay measures capture smokers' experience of 
these transfers. We will assume that 50 percent of the midpoint values 
in table 23 are included in our morbidity and mortality estimates; with 
this assumption, our estimated net benefits will change in two opposing 
directions: They will increase by 100 percent of the midpoint values in 
table 23 (representing the reduced subsidy payment from the general 
public), but will decrease by an amount equal to 50 percent of the 
table 23 midpoint values times the net-to-gross benefits ratio 
(representing the effects on dissuaded smokers that are not included in 
the morbidity and mortality estimates).
    Summing our estimates of rule-induced life-year extensions, health 
status improvements, medical cost reductions, and financial effects, we 
find that the present value of health-related and financial benefits 
accruing to dissuaded smokers totals $9.29 to $27.50 billion (with a 3-
percent discount rate) or $2.10 to $6.01 billion (with a 7-percent 
discount rate). As shown in table 7 of this document, the present value 
of financial benefits accruing to the general public totals $733.1 
million (with a 3-percent discount rate) or $330.3 million (with a 7-
percent discount rate).
[GRAPHIC] [TIFF OMITTED] TR22JN11.009

    vi. Summary of benefits accruing to dissuaded smokers. Table 8 of 
this document presents benefits estimates that reflect a variety of 
net-to-gross ratios, ranging, as discussed in Technical Appendix X5, 
from the 7

[[Page 36726]]

percent derived from the work of Gruber and K[ouml]szegi to the 90 
percent suggested in a public comment. Also presented are the net 
internal benefits results derived from Warner et al.'s work on the 
value to smokers of cessation programs. For each discount rate and 
VSLY, we also report the midpoint between the lower and upper bound 
benefits estimates, where the upper bound is yielded by the 90 percent 
net-to-gross benefits ratio and the lower bound by the 7-percent ratio 
in some cases and by the cessation value approach in others. Given the 
great variation in estimates of net benefits to dissuaded smokers, we 
follow the recommendation of OMB Circular A-4 and use the midpoints for 
our primary calculations in the remainder of this analysis. The 
resulting midpoints range from $4.37 to $12.56 billion (with a 3-
percent discount rate) or $1.02 to $2.86 billion (with a 7-percent 
discount rate). We emphasize that all the net benefits appearing in 
table 8 are intrapersonal and thus could not be positive if all tobacco 
consumers were time-consistent, fully rational, self-controlled, able 
to resist temptation, and in possession of perfect and complete 
information; instead, our results are qualitatively consistent with 
policy implications of economic models in which consumers are 
characterized by hyperbolic discounting, incorrect forecasting, 
temptation utility or self-control problems (in addition to Gruber and 
K[ouml]szegi (Ref. 104), see Bernheim and Rangel (Ref. 105) and Gul and 
Pesendorfer (Ref. 110)) and with Gruber and Mullainathan's (Ref. 182) 
examination of the effect of cigarette excise taxes on the happiness of 
individuals with a high propensity to smoke.
[GRAPHIC] [TIFF OMITTED] TR22JN11.010

3. Reduced Fire Costs
    Each year, fires started by lighted tobacco products kill and 
injure people and destroy structures and other property. In the United 
States in 2007, civilian deaths caused by smoking-related fires totaled 
720, with direct property damage of $530 million (Ref. 141). A 
reduction in the number of smokers, and the coinciding number of 
cigarettes smoked, will reduce the number of future fires.
    FDA estimates the rule-induced decrease in cigarettes smoked by 
multiplying together the percentage change in smoking whose calculation 
was described in section XI.D.1 of this document, the projected 
population in a given year (Ref. 130) and age-appropriate discounted 
lifetime cigarette consumption (in packs) per smoker. FDA calculates 
average consumption for 18- to 23-year-olds using the May 2006, August 
2006, and January 2007 Tobacco Use Supplements to the Current 
Population Survey (Ref. 142). Sloan et al. (Ref. 116) report lifetime 
discounted consumption for typical 24-year-old smokers. Comparing 
against total consumption in 2006 (the most recent year for which the 
FTC (Ref. 143) reports cigarette sales), we find that discounted 
lifetime cigarette consumption will decrease by an amount equivalent to 
3.9 percent (using a 3-percent discount rate) or 2.1 percent (using a 
7-percent discount rate) of a present-day annual total as a result of 
the final rule.
    The rule-induced percentage reduction in fires may not equal the 
percentage reduction in cigarette consumption, however, because all 50 
States have passed legislation that requires cigarettes to be self-
extinguishing or fire-safe (Ref. 144). FDA acknowledges some 
uncertainty in the effectiveness rate of fire-safe cigarettes; \15\ for 
this analysis, we

[[Page 36727]]

estimate that 10.6 percent of apparently rule-induced future fire 
reductions would have been avoided even without this final rule due to 
fire-safe cigarette design.
---------------------------------------------------------------------------

    \15\ One of the first States to enact these laws, New York, 
requires cigarettes to self-extinguish 75 percent of the time (Ref. 
145). Data from New York show a reduction in smoking-caused fires of 
about 10.6 percent from the average of the 4 years (2000 to 2003) 
prior to passage of the fire-safe cigarette law to the first 2 years 
(2006 to 2007) after implementation was complete (Ref. 146).
---------------------------------------------------------------------------

    The National Fire Protection Association (Ref. 147) reports the 
percentages of fire fatalities by age category; along with the CDC's 
estimate of average American life expectancy (Ref. 136), these data 
allow FDA to calculate that the average number of life-years lost by 
fire victims is approximately 37.3; we project that total discounted 
life-years saved as a result of the rule will be 317.4 (at a 7-percent 
discount rate) or 1,198.5 (at a 3-percent discount rate). Using--as in 
sections XI.D.2.b.ii and XI.D.2.b.iii of this document--VSLY ranging 
from $106,308 to $318,923, FDA estimates total rule-induced fire-cost 
savings of $106.0 to $262.5 million (at a 3-percent discount rate) or 
$34.1 to $76.5 million (at a 7-percent discount rate); of these totals, 
$12.9 (7-percent discount rate) or $27.7 million (3-percent discount 
rate) consists of averted property damage, with the remainder being the 
value of life-years saved. These estimated savings may significantly 
underestimate the final rule's fire-related benefits because they 
exclude noncivilian mortality and the value of reduction in fire-caused 
nonfatal injuries. There will, however, be some double counting between 
the estimated fire-related mortality benefits and the mortality 
benefits estimated in section XI.D.2.b.ii of this document to the 
extent that it is smokers themselves who are killed in cigarette-caused 
fires.
4. Summary of Benefits
    The discussion above demonstrates the considerable magnitude of the 
economic benefits available from smoking reduction efforts. As shown in 
table 9a of this document, our midpoint benefits estimates range from 
$5.21 to $13.55 billion (with a 3-percent discount rate) or $1.38 to 
$3.27 billion (with a 7-percent discount rate). Estimates are presented 
as annualized values in table 9b of this document, reported over time 
in Appendix X3, and subjected to Uncertainty Analysis in Technical 
Appendix X6. Nonquantified benefits include reductions in nonsmoker 
morbidity and mortality associated with passive smoking and mothers 
smoking during pregnancy.
[GRAPHIC] [TIFF OMITTED] TR22JN11.011


[[Page 36728]]


[GRAPHIC] [TIFF OMITTED] TR22JN11.012

E. Costs

    Implementation of this final rule, and the statutory requirements 
directly linked to it, will create new burdens for cigarette 
manufacturers. In particular, manufacturers will incur the upfront 
costs associated with a major labeling change.\16\ There will be 
additional ongoing costs associated with equal and random display of 
the warnings required in this rule, as mandated by the Tobacco Control 
Act. Cigarette manufacturers and retailers will be responsible for the 
removal of noncompliant point-of-sale advertising. Consumers are likely 
to ultimately bear a share of these costs in the form of increased 
prices. In addition, the tobacco industry and possibly other sectors 
will experience lost sales and employment, but these revenue transfers 
will be offset by gains to other sectors, as discussed in the 
``Distributional Effects'' section of this document.
---------------------------------------------------------------------------

    \16\ All of the upfront costs of this rule are assumed to occur 
in the first period of the time horizon of this rule (2012). The 
cost tables present raw undiscounted calculations of these one-time 
costs. For summary tables requiring a present value, these costs are 
discounted 1 year back to the present (2011).
---------------------------------------------------------------------------

1. Number of Affected Entities
    Labeling and advertising requirements will affect domestic 
cigarette manufacturers and importers of foreign-made cigarettes. 
Statistics of U.S. Businesses data show that there were 24 cigarette 
manufacturing firms in the United States in 2007 (Ref. 148). An 
undetermined number of importers will also be affected.
    Noncompliant point-of-sale advertising will be removed by 
manufacturers (or importers) and retailers. We use detailed data from 
the 2002 Economic Census report on product line sales for 
establishments with payroll to estimate the percentage of various types 
of retail establishments that sell tobacco products. Searching by the 
Economic Census product line 20150 (cigars, cigarettes, tobacco, & 
smokers' accessories), we find accommodation and food service 
establishments (NAICS 72) and retail trade establishments (NAICS 44-45) 
that report tobacco sales (Refs. 149 and 150). Although some 
establishments in other industries may have unreported sales of tobacco 
products, the product line sales data provide a reasonable basis to 
determine which establishments will be affected by the rule.

[[Page 36729]]

[GRAPHIC] [TIFF OMITTED] TR22JN11.013

    Because the 2007 Census data on product line sales for retail 
establishments with employees are not yet available, we update the 
number of various types of retail establishments using 2007 Statistics 
of U.S. Businesses data but assume the share of establishments selling 
tobacco products is unchanged (since 2002) within each category. 
Likewise, we lack 2007 Census data on product line sales for 
nonemployer establishments. Without additional information, we assume 
that, within a NAICS category, the share of establishments selling 
tobacco products will be the same for nonemployer establishments in 
2007 as for establishments with payroll in the 2002 Census. As shown in 
table 11 of this document, we estimate that about 249,000 retail 
establishments with payroll and 126,000 nonemployer establishments sell 
tobacco products.

[[Page 36730]]

[GRAPHIC] [TIFF OMITTED] TR22JN11.014

2. Costs of Changing Cigarette Labels
    We have updated our analysis of the cost of changing cigarette 
labels based on the availability of improved estimates generated by the 
new FDA labeling cost model. Unless stated otherwise, our estimates in 
this analysis come from the new model.
    The front and back of every cigarette package must be redesigned to 
incorporate graphic warnings that will occupy the entire top half, and 
the current warning will be eliminated. This is classified by the 
labeling model as a major change. (Any change that affects more than 
one color or changes the layout enough to require a redesign is major.) 
In addition, the requirement to incorporate nine different warnings 
will increase costs beyond what the labeling model estimates. FDA 
accounted for the additional warnings by first calculating the standard 
cost of a major change for cigarette labels and then inflating specific 
cost components expected to increase as a direct result of the 
requirement for nine warnings.
    The FDA labeling cost model incorporates three potential cost 
components of a labeling change: Label design costs (incurred on a per-
UPC basis), inventory costs (incurred on a per-unit basis), and testing 
costs (incurred on a per-formulation basis). Because the model has a 
greater focus on analytic testing (e.g., measuring fat grams in a candy 
bar) than on market testing (which is the aspect of testing applicable 
to cigarettes), we perform several modifications to the model's testing 
cost estimation. First, we calculate costs on a per-brand, rather than 
per-formulation, basis and, second, we restrict the calculation of 
market testing costs to the largest firms. The large cigarette 
manufacturers can plausibly be expected to conduct quantitative studies 
and focus group testing for each of their brands to gauge the effect of 
the new graphic warnings and to study how they might best be able to 
mitigate their effects. By contrast, small manufacturers with lower 
sales revenues are highly unlikely to conduct expensive market testing 
in response to the new requirements. Further details of our estimation 
approach will be discussed in section XI.E.4 of this document.
    The labeling model estimates that a total of 4,312 cigarette UPCs 
(3,789 branded and 523 private label) will be affected by this rule. 
However, it is estimated that label changes for 335 UPCs (8 percent of 
branded and 6 percent of private label) can be coordinated with 
previously scheduled, nonregulatory labeling changes. Coordination of a 
regulatory change with a nonregulatory change reduces the incremental 
burden of the regulatory change.
    As discussed in the responses to comments, FDA follows its previous 
labeling cost model (Ref. 152) in assuming 10-percent rush charges 
under a 15-month compliance period. Using the labeling model cost 
estimates for uncoordinated changes and incorporating 10-percent rush 
charges, we estimate that labor costs for label design, including 
administrative labor costs as well as graphic design and prepress labor 
costs, are $4,147 to $10,890. Materials costs are estimated to be 
$6,644 to $10,934; included in this total are both prepress materials 
and printing plate costs.\17\ Recordkeeping costs are estimated to be 
$55 to $99. Summing labor, materials, and recordkeeping costs yields a 
per-UPC label design cost of $10,846 to $21,923. The model estimates 
that for coordinated labeling changes, there is a per-UPC cost of $340 
to $840. This cost is nonzero because there will still be

[[Page 36731]]

some administrative labor and recordkeeping associated with 
coordinating a regulatory change with a previously scheduled, 
nonregulatory change. Total label design costs of this change are thus 
estimated to be $43 to $87 million.
---------------------------------------------------------------------------

    \17\ Rotogravure, the most expensive printing method, is used 
for cigarette package labels.
---------------------------------------------------------------------------

    Manufacturers incur costs if they discard unused label inventory at 
the end of the compliance period and thus have to print new labels 
instead of using that inventory. (There is also a small cost associated 
with disposal.) The labeling model estimates that 767,016 labels will 
be discarded at the end of the 15-month compliance period, each having 
a cost of $0.028 to $0.039. The inventory-replacement cost of this 
labeling change would then be $21,000 to $30,000. Table 12 of this 
document summarizes the total cost of a standard major labeling change 
(one warning per UPC), which is estimated to be $43 to $88 million.
[GRAPHIC] [TIFF OMITTED] TR22JN11.015

    We expect materials costs for printing plates and prepress 
activities to be approximately nine times as large as previously 
calculated for uncoordinated UPCs because of the requirement for nine 
separate warnings. Each UPC will require nine printing plates, one for 
each warning label. Additionally, the incremental materials cost of a 
coordinated label change will be eight times the uncoordinated 
materials costs, because eight extra printing plates will be needed. We 
assume that this adjustment accounts for all the one-time costs that 
arise from the requirement to use nine warnings.\18\ Table 13 of this 
document shows the total costs of the cigarette labeling change, making 
the adjustment for the nine-warning requirement. The labeling cost 
range increases to $273 million to $465 million.
---------------------------------------------------------------------------

    \18\ Some of the subcomponents of other cost categories might 
increase due to the nine-warning requirement, but there is far less 
reason to believe there will be a direct, proportional relationship 
between those cost categories and the number of warnings. For 
example, the part of the label that is under the manufacturer's 
control only has to be designed once because the same design will be 
paired with all nine labels. Likewise, the amount of unused 
inventory discarded is unaffected by the number of warnings used 
under the new requirements.

---------------------------------------------------------------------------

[[Page 36732]]

[GRAPHIC] [TIFF OMITTED] TR22JN11.016

    The cost of changing cigarette labels is largely driven by 
materials costs. The distribution for the estimate of materials costs 
is extremely skewed to the right, as evidenced by the fact that the low 
and medium estimate are much closer than the medium and high estimates. 
We report the 90th percentile range but note that the high value 
appears to be driven by a few extremely high values.
3. Ongoing Costs of Equal and Random Display
    The Tobacco Control Act calls for equal and random display of the 
graphic warning images required by this rule. Although the initial 
design and implementation of a system for equal and random display will 
be part of the upfront label change, continued operation of such a 
system in subsequent years will have incremental ongoing administrative 
and recordkeeping costs. Such a system will be more burdensome than the 
current system of quarterly rotation of four warnings. FDA assumes that 
the ongoing yearly administrative labor cost per UPC will be equal to 
10 percent of the (non-rush) administrative labor cost of an 
uncoordinated labeling change, and the yearly recordkeeping cost will 
be equal to 50 percent of the (non-rush) recordkeeping cost of an 
uncoordinated labeling change. As shown in table 14 of this document, 
FDA estimates that, under these assumptions, ongoing annual 
administrative and recordkeeping costs equal $375,000 to $876,000.
[GRAPHIC] [TIFF OMITTED] TR22JN11.017

4. Market Testing Costs Associated With Changing Cigarette Package 
Labels
    As stated previously, FDA expects that only the large manufacturers 
will conduct market tests for their brands. Using several State 
directories of certified tobacco products, FDA estimates that 75 brands 
are marketed by the 4 largest domestic manufacturers (Refs. 153 through 
158). If we assume (as in the labeling model) that 8 percent of changes 
for these brands are coordinated, then changes for the remaining 69 
brands are not coordinated. Including rush charges, the cost of focus 
group testing is estimated to range from $8,000 to $14,000 per brand, 
and the cost of a quantitative study is estimated to range from $14,000 
to $105,000 per brand. Assuming both types of testing are conducted for 
69 brands yields a total cost estimate ranging from $1.5 to $8.2 
million with a medium estimate of $2.1 million, as shown in table 15 of 
this document. We assume that the requirement to use nine

[[Page 36733]]

different color graphic-text pairs does not affect these costs.
[GRAPHIC] [TIFF OMITTED] TR22JN11.018

5. Advertising Restrictions: Removal of Noncompliant Point-of-Sale 
Advertising
    The principal effect of the restrictions on advertising in the rule 
stem from the requirement that retailers and manufacturers of 
cigarettes remove any point-of-sale advertising for cigarettes that 
fails to conform to the requirements. In this analysis, we estimate the 
social resource costs for the removal. In the analysis of FDA's 1996 
final tobacco rule, we based much of our estimate of the cost of 
removing noncompliant point-of-sale advertising on a report from the 
Barents Group that used average removal costs for seven types of retail 
establishments, calculated using in-store surveys conducted by A.T. 
Kearney, Inc. (61 FR 44396 at 44580). We retain our assumptions from 
1996 about the level of effort required to remove point-of-sale 
advertising. We acknowledge, however, that this approach may overstate 
or understate the costs for a particular action or type of business.
    Table 16 of this document regroups the information from table 11 of 
this document according to the categories studied by A.T. Kearney. 
Because our analysis considers only the removal of point-of-sale 
advertising from physical retail locations, we do not include nonstore 
establishments. Table 17 of this document shows that, in current 
dollars, one-time per-establishment costs range from about $12 for 
``other establishments'' to about $198 for convenience stores. To 
estimate the total costs to comply with the restriction on point-of-
sale advertising, we apply the updated per-establishment costs from 
table 17 to affected establishments. As shown in table 18 of this 
document, the one-time costs to remove point-of-sale materials will 
total $45.4 million.
[GRAPHIC] [TIFF OMITTED] TR22JN11.019


[[Page 36734]]


[GRAPHIC] [TIFF OMITTED] TR22JN11.020

6. Government Administration and Enforcement Costs
    FDA's estimated internal costs for administering and enforcing this 
regulation are uncertain. As a best estimate, however, FDA projects 
that 25 full-time equivalent employees (FTEs) will be needed to 
implement the rule. Fully loaded employee costs vary with the type of 
employee (e.g., field inspectors versus administrative), but an average 
of $247,049 per FTE places the dollar cost at approximately $6.2 
million per year.
    An additional cost of the final rule, borne by government but not 
necessarily FDA, arises due to the required reference to the cessation 
resource. The rule requires the final graphic warning labels to refer 
to an already-existing cessation resource. Therefore, only costs 
associated with additional traffic to that resource are attributable to 
this final rule. FDA has not quantified these costs.
7. Summary of Costs
    Table 19 of this document summarizes the cost estimates from the 
preceding sections and table 20 of this document displays the present 
value and annualized value of costs. The tables in Technical Appendix 
X4 show the undiscounted stream of costs. The range of total costs 
presented in table 20 of this document is an approximate 90 percent 
confidence interval and, as such, corresponds to the uncertainty range 
of benefits presented in table 51 of this document. The distributions 
of costs and benefits, however, are not correlated; in other words, it 
may be the case that the actual effects of the rule fall in the high 
end of the cost range and the low end of the benefits range, or vice 
versa.

[[Page 36735]]

[GRAPHIC] [TIFF OMITTED] TR22JN11.021

[GRAPHIC] [TIFF OMITTED] TR22JN11.022

F. Cost-Effectiveness Analysis

    We measure the effectiveness of the final rule as the sum of saved 
life-years and QALYs. In order to assess the cost-effectiveness of the 
rule, we must adjust the costs to account for effects that are not 
captured by life-years or QALYs. As shown in detail in the previous 
section, we calculated the first 20 years' costs attributable to the 
rule and found present values of $367.6 to $558.4 million (using a 7-
percent discount rate) or $407.3 to $607.4 million (using a 3-percent 
discount rate). We add to each total the estimated monetary value of 
lost consumer surplus (as discussed in detail in Technical Appendix X5, 
this was implicitly netted out of life-years and health improvement 
benefits estimates calculated in section XI.D.2.b of this document); 
this yields overall costs of $1.46 to $3.70 billion (using a 7-percent 
discount rate) or $5.33 to $15.55 billion (using a 3-percent discount 
rate). In order to focus on the costs associated with extensions of 
quality-adjusted life (see Ref. 103 at pp. 11-12), we then subtract 
both medical cost reductions and the value of property savings due to 
reductions in accidental fires and arrive at a net cost of $0.94 to 
$3.19 billion (using a 7-percent discount rate) or $4.38 to $14.59 
billion (using a 3-percent discount rate).
    Discounting over the same 20-year time period, we calculate that 
this rule will lead to 208,535 to 246,137 discounted smoking 
preventions or cessations. Similarly, we find that 18,534 to 86,326 
discounted QALYs will be saved (this includes both fractional life-
years associated with reduced morbidity and full life-years associated 
with reduced premature mortality--both for smokers themselves and for 
others caught in the path of cigarette-related fires). This yields a 
cost per smoking prevention of $4,530 to $59,287, and a cost per QALY 
saved of $50,746 to $172,082. Braithwaite et al. (Ref. 159) find that 
preferences in the United States are such that the threshold for cost-
effective interventions is somewhere in the range of $109,000 to 
$297,000 per QALY saved.
[GRAPHIC] [TIFF OMITTED] TR22JN11.023


[[Page 36736]]



G. Distributional Effects

    This final rule will lead to losses to some segments of U.S. 
society that will most likely be offset by equal gains to some other 
segments of society; as such, these effects do not constitute net 
social costs or benefits and have not yet been discussed in detail in 
this Analysis of Impacts. In general, sectors affiliated with tobacco 
and tobacco products will lose sales revenues as a result of this final 
rule. Simultaneously, nontobacco-related industries will gain sales, 
because dollars not spent for tobacco products will be spent on other 
commodities.
1. Tobacco Manufacturers, Distributors, and Growers
    FDA estimates that implementation of the regulation may reduce the 
annual cigarette consumption of U.S. smokers by 30.8 million packs (in 
2013) to 40.5 million packs (in 2031). Meanwhile, the FTC (Ref. 143) 
reports that, in 2006, 17.5 billion cigarette packs were manufactured 
and distributed to consumers. These numbers imply that tobacco 
manufacturer revenues will be 0.176 percent lower in the rule's first 
year, and 0.231 percent lower in 2031, than they were in 2006. The U.S. 
Census Bureau (Ref. 160) reports that tobacco manufacturers' revenues 
totaled $41.6 billion in 2006; hence, the rule-induced decrease in 
annual tobacco sales will range from approximately $73.1 to $96.2 
million. These estimates would rise somewhat higher if we were 
accounting for the decrease in price that accompanies the decrease in 
demand for a good (in this case, cigarettes). Experimental evidence 
from Mexico (Ref. 101) indicates that graphic warning labels may 
decrease smokers' willingness-to-pay for cigarettes by 17 percent; 
however, without supply elasticity data, we cannot determine how much 
this decline in willingness-to-pay will change cigarettes' market 
price.
    We estimate that the tobacco manufacturing, warehousing, and 
wholesale trade sectors employ about 74,000 full-time workers (Ref. 
148). Under the assumption of constant production-to-employment ratio, 
we project that a 0.176 to 0.231 percent reduction in sales will result 
in the displacement of 130 to 171 jobs among manufacturers, 
warehousers, and wholesalers.
    Effects of the rule will also be observed in the agricultural 
sector. According to USDA's 2007 Census of Agriculture (Ref. 161), 
there are 16,234 tobacco farms. Upon implementation of the rule, these 
farms may shift some of their acreage from growing tobacco to producing 
other agricultural products.
2. National and Regional Employment Patterns
    Several studies estimate the contribution of tobacco to the U.S. 
economy or, alternatively, the losses to the U.S. economy that will 
follow a decline in tobacco-related consumption. Economists have shown 
both theoretically and empirically that, for the nation as a whole, 
employment gains from spending on other products will offset any 
employment losses from reduced spending on tobacco products (Ref. 162). 
The major tobacco-growing states, however, will experience some adverse 
economic effects. An economic simulation of the regional impacts of 
spending on tobacco products carried out in 1994 found that after 8 
years, a 2-percent per year fall in tobacco consumption (which 
substantially exceeds the FDA forecast for the effects of this final 
rule) would cause the loss of 36,600 jobs for the Southeast Tobacco 
region of the United States (0.2 percent of regional employment), 
whereas the nontobacco regions of the United States would gain 56,300 
jobs (Ref. 122). That study, if carried out today, would find a much 
smaller net effect because total employment in tobacco-related 
industries has fallen. Overall, FDA finds that the income and 
employment effects associated with the estimated reduction in tobacco 
consumption will be small.
3. Retail Sector
    As will tobacco growers, distributors, and manufacturers, tobacco 
retailers will be affected by any decrease in cigarette sales. 
Retailers will, however, be in a position to shift shelf space and 
promotional activities to nontobacco products, in order to take 
advantage of the increase in demand for other products that will be 
expected to accompany the decrease in spending on cigarettes. It is 
possible that some retailers who rely heavily on cigarette sales may 
not be able to fully offset their reduction in cigarette sales with 
sales of other products. Other retailers would then experience some of 
the gain in sales associated with an increase in demand for other 
products. This would be a distributional effect within the retail 
sector.
4. Advertising Industry
    The overall impact of the rule on the advertising industry is 
uncertain. Advertiser revenue may decrease because advertisements with 
graphic warning labels are less desirable from a cigarette seller's 
standpoint and thus tobacco manufacturers will choose to conduct less 
advertising. On the other hand, advertising industry revenue may 
increase due to cigarette sellers' need to redesign advertisements to 
accommodate new warning labels and to devise new promotional 
strategies. In either case, few net social costs or benefits will be 
generated. Moreover, the effect on advertising revenue will likely be 
relatively small because spending on cigarette advertising has declined 
substantially in recent years and is now quite small compared with the 
1980s and 1990s (Ref. 143). By 2006, expenditures on magazine 
advertising had fallen to about $50 million and outdoor advertising to 
under $1 million. Most of the remaining affected advertising 
expenditures were point-of-sale promotions, which totaled $240 million 
(Ref. 143).
5. Excise Tax Revenues
    In 2009, Federal tobacco tax revenues totaled $16.3 billion, while 
State and local tobacco tax revenues totaled $16.5 billion (Ref. 163). 
This rule will decrease government tobacco tax revenues as fewer 
Americans consume cigarettes. Sales tax revenues generated through 
tobacco sales will also fall as a result of the rule, but those changes 
will be much smaller than the changes in excise tax collections and 
have not been quantified by FDA.
    FDA estimates this change in excise tax revenues by multiplying 
together the percentage change in smoking rate, whose calculation was 
described in section XI.D.1 of this document; the projected population 
in a given year (Ref. 130); age-appropriate discounted lifetime 
cigarette consumption (in packs) per smoker; and current Federal and 
average State tax rates (Refs. 164 and 165). FDA calculates average 
consumption for 18- to 23-year-olds using the May 2006, August 2006, 
and January 2007 Tobacco Use Supplements to the Current Population 
Survey (Ref. 142). Sloan et al. (Ref. 116) report lifetime discounted 
consumption for typical 24-year-old smokers.
    FDA estimates that average direct annual rule-induced decreases in 
excise tax collections will be approximately $33.4 million for State 
governments and $25.7 million for the Federal government. Approximately 
25 percent of this reduction may be offset by increased sales of other 
taxable goods and services (Ref. 166); thus, the annual reductions in 
tax collections will be $25.1 million for State governments and $19.3 
million for the Federal government. Assuming that excise taxes rise, on 
average, at the rate of inflation allows us to sum these values over 
the time horizon of our analysis, yielding an

[[Page 36737]]

overall revenue loss to State governments of $454.9 million (present 
value with a 7-percent discount rate) to $977.5 million (present value 
with a 3-percent discount rate) and to the Federal government of $348.1 
million (present value with a 7-percent discount rate) to $749.8 
million (present value with a 3-percent discount rate).
    Because we cannot know if nominal cigarette excise taxes actually 
will increase at the rate of inflation, we also calculate these 
discounted present values for the case in which tax rates remain at 
their current nominal levels. In this case, the real tax rate will fall 
at the rate of inflation, which we forecast using the difference 
between interest rates for standard and inflation-protected long-term 
Treasury bills. The U.S. Department of the Treasury (Ref. 167) reports 
that, as of February 11, 2011, the composite rate for long-term 
standard bills was 4.33 percent, while the composite rate for long-term 
inflation-protected bills was 2.00 percent; the difference yields an 
inflation forecast of 2.33 percent per year. At this rate of inflation, 
the overall rule-induced tax revenue loss to State governments will be 
$327.8 to $590.0 million and to the Federal government will be $250.6 
to $451.9 million. FDA emphasizes that these estimates would be 
altered, possibly a great deal, either by future changes in tax rates 
or inaccuracy in the inflation forecast.
    We note that, leaving aside potential deadweight loss, there are 
two principal effects of tax reductions: Gains to former payers and 
losses to former recipients. Because these transfers exactly offset 
each other, there is no net social cost or benefit associated with the 
reduction in excise tax collections induced by the rule.
6. Government-Funded Medical Services, Insurance Premiums, and Social 
Security
    Sloan et al. (Ref. 116) estimate that smokers use more medical 
services over their life cycles than do comparable nonsmokers; in 2000 
dollars and discounted at a 3-percent rate, specific net costs are 
$3,757 per female 24-year-old smoker and $2,617 per male 24-year-old 
smoker. Smokers bear a portion of these net costs themselves, but a 
portion equaling $1,726 per female smoker or $1,245 per male smoker is 
borne by nonsmokers through increased private insurance premiums or 
taxes used to fund government health care programs; hence, a reduction 
in the U.S. smoking population will transfer value from smokers (who 
receive medical services paid partially by the general public) to 
nonsmokers. If nonsmokers' payment portions are adjusted for inflation 
and distributed over ages 24 to 100 as described in section XI.D.2.b.iv 
of this document (``Medical Services''), given FDA's projected 20-year 
reductions in smoking prevalence, this transfer totals $401.7 million. 
With a 7-percent discount rate, the total becomes $230.1 million. Sloan 
et al. indicate that this reduction will be distributed unequally 
across Medicare, Medicaid, and other insurance types. Details appear in 
table 22 of this document.
[GRAPHIC] [TIFF OMITTED] TR22JN11.024

    Sloan et al. (Ref. 116, at p. 255) estimate the effect of smoking, 
per male and female smoker, on net Social Security, private pension, 
and life insurance outlays, as well as on income tax payments. In the 
cases of Social Security and private pension outlays, smoking-related 
premature mortality causes smokers to collect less from the programs 
than they contribute during their lifetimes. Therefore, any rule-
induced reduction in the U.S. smoking population will shift value from 
members of the general public who pay Social Security taxes and who 
contribute to private pension plans to the individuals who are 
dissuaded from smoking by the regulation. A transfer in the opposite 
direction--from individuals dissuaded from smoking by the regulation to 
the general public--will occur in the realms of life insurance programs 
and income taxes.
    Because Sloan et al. only report effects for 24-year-olds, we can 
only directly calculate these transfer effects for cohorts who are no 
older than 24 during the period from 2012 to 2031. The sum of these 
effects appears in the lower bound columns of table 23 of this 
document. For the upper bounds, we assume that effects are the same for 
smokers aged 25 and above as they are for 24-year-olds. In converting 
Sloan et al.'s present values, calculated with a 3-percent discount 
rate, to present values calculated with a 7-percent discount rate, 
further assumptions are necessary. We calculate the ratios of 7-percent 
present values to 3-percent present values for all gross benefits 
categories (life-years, health status, medical cost reductions, and 
fire loss reductions) and use the lowest and highest ratios for the 
lower and upper bounds in table 23. Finally, we note that we update 
Sloan et al.'s estimates using the most recent annual GDP deflator 
(Ref. 132).

[[Page 36738]]

[GRAPHIC] [TIFF OMITTED] TR22JN11.025

H. International Effects

    Of the $87.9 billion worth of tobacco products consumed in the 
United States in 2009 (Ref. 168), only $156 million consisted of 
imported cigarettes, with another $897 million imported as tobacco in a 
less-processed state (Refs. 169 and 170). As in the United States, 
foreign manufacturers, distributors, and growers of tobacco and tobacco 
products will lose revenue as a result of the rule, though their loss 
will be a small fraction of the overall revenue loss. As consumers who 
would have been smokers purchase other products, there could be a shift 
in patterns of international trade, depending on where the preferred 
substitute products are made.
    The rule does not apply to cigarettes manufactured for export, 
whose value totaled $417 million in 2009 (Ref. 169).

I. Regulatory Alternatives

    We compare the rule to two hypothetical alternatives: An otherwise 
identical rule with a 24-month compliance period and an otherwise 
identical rule with a 6-month compliance period. Even though we 
estimate costs and benefits for these alternatives, they do not provide 
viable regulatory options, as they are inconsistent with FDA's 
statutory mandate. We also describe alternatives associated with 
different graphical warnings.
1. 24-Month Compliance Period
    Extension of the compliance period to 24 months reduces the one-
time costs of this rule through three avenues: The number of UPCs that 
can be coordinated with a previously scheduled labeling change is 
increased, rush charges for the label design and market testing costs 
are eliminated, and discarded inventory costs are eliminated.
    Table 24 of this document shows that extending the compliance 
period to 24 months would reduce the upfront label change cost by $30 
to $53 million, to a total of $242 to $411 million. Table 25 of this 
document shows that market testing costs would be reduced by $0.3 to 
$1.8 million to a total of $1.2 to $6.4 million.\19\ Extending the 
compliance period to 24 months would also delay all costs by about 9 
months. We account for this by discounting the present value of costs 
an extra 9 months in the summary of alternatives table at the end of 
this section.
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    \19\ The increase in the proportion of UPCs that can be 
coordinated is also expected to affect the number of brands that are 
market tested.

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[[Page 36739]]

[GRAPHIC] [TIFF OMITTED] TR22JN11.026

    Extending the compliance period to 24 months would delay the 
accrual of health and fire reduction benefits by 9 months. An 
approximation of the effect of this delay may be found by discounting, 
at 3- and 7-percent discount rates, the previously calculated total 
benefits. As shown in table 26 of this document, FDA finds that a 24-
month compliance period would decrease the present value of benefits by 
between $65.4 and $294.6 million.
[GRAPHIC] [TIFF OMITTED] TR22JN11.027

2. 6-Month Compliance Period
    With a 6-month compliance period, the labeling cost model assumes 
that there is not enough time for any of the labeling changes to be 
coordinated with previously scheduled changes. Also, FDA accepts the 
labeling model's assumption of 40 percent rush charges, rather than 
assuming 10-percent rush charges as we did with a 15-month compliance 
period. The labeling model further assumes that 12 months is the 
shortest compliance period that can be met without resorting to 
covering up the old labels with stickers as a temporary solution. 
Therefore, with a 6-month compliance period, the cost of discarded 
inventory is the same as under a 12-month compliance period, but there 
is an additional cost for applying appropriate stickers to cover the 
old package label design.

[[Page 36740]]

    The model, based on current sales data, estimates the number of 
units sold annually to be about 8 billion. Therefore, 4 billion units 
would be relabeled with stickers. The per-unit cost for the sticker and 
application is between $0.045 and $0.323. Reducing the compliance 
period to 6 months would then increase label change costs by $258 to 
$1,430 million to a total of $531 to $1,895 million. It would also 
increase the market testing costs by $0.6 to $3 million to a total of 
$2 to $11 million. Finally, shortening the compliance period to 6 
months would move all costs up by about 9 months. We account for this 
by compounding the present value of costs 9 months in the summary of 
alternatives table at the end of this section.
[GRAPHIC] [TIFF OMITTED] TR22JN11.028

    Reducing the compliance period to 6 months would hasten the accrual 
of health and fire reduction benefits by 9 months. An approximation of 
the effect of this change in timing may be found by compounding, at 3- 
and 7-percent discount rates, the previously calculated total benefits. 
As shown in table 29 of this document, FDA finds that a 6-month 
compliance period would increase benefits by between $68.8 and $301.2 
million.

[[Page 36741]]

[GRAPHIC] [TIFF OMITTED] TR22JN11.029

3. Alternative Graphic Images
    A legally available alternative to this rule would be to select a 
different set of graphic images. Although we are unable to quantify the 
effects of different graphic images, we note that some images may have 
a larger impact on smoking rates than other images.
    Another alternative suggested would be to use more than nine 
graphic images to accompany the nine statutory warnings. We cannot 
assess the effect of additional images on the benefits of the rule but 
more images would increase costs. Although not all costs rise in 
proportion to the number of graphic images, the materials cost, which 
is the largest cost component, would rise in proportion to the number 
of images.
4. Summary of Regulatory Alternatives
    Table 30 of this document summarizes the regulatory alternatives 
related to the compliance period by displaying ranges for the present 
values of the total benefits and total costs. Estimated ranges for the 
cost ratios (per smoking prevention and per life-year saved) of the 
rule and its regulatory alternatives appear in table 31 of this 
document.
[GRAPHIC] [TIFF OMITTED] TR22JN11.030


[[Page 36742]]



J. Impact on Small Entities

    The Regulatory Flexibility Act requires agencies to prepare a final 
regulatory flexibility analysis if a final rule will have a significant 
effect on a substantial number of small entities. We expect this rule 
to have a significant effect on a substantial number of small entities. 
Consequently, this analysis, together with other relevant sections of 
this document, serves as the Final Regulatory Flexibility Analysis, as 
required under the Regulatory Flexibility Act.
1. Description and Number of Affected Small Entities
    The final rule will affect small entities in several industries, 
from tobacco farming to the retail industry. Most of the Nation's 
16,234 tobacco farms are small; between 90.7 and 95.8 percent (between 
14,732 and 15,555) of the farms growing tobacco in 2007 had total farm 
sales under the U.S. Small Business Administration (SBA) small business 
size standard of $750,000 (Refs. 161 and 171).
    Table 32 of this document shows the breakdown of domestic cigarette 
manufacturers by employment size. Census data indicate that most 
cigarette manufacturing firms are small businesses, with only 4 of 24 
firms employing more than 500 employees, while the small business size 
standard established by the SBA for this industry is 1,000 employees, 
so 20 small cigarette manufacturers will be affected (Refs. 148 and 
171).
[GRAPHIC] [TIFF OMITTED] TR22JN11.031

    Statistics of U.S. Businesses data show that 1,067 of 1,159 tobacco 
wholesale trade firms (92 percent) employ fewer than the 100-employee 
threshold that constitutes a small business according to the SBA (Refs. 
148 and 171). If the size distribution of cigarette importers is 
similar to that of all tobacco wholesale trade firms, then 92 percent 
of them will be affected small businesses.
    Also likely to be affected by the regulation are small retail and 
service entities that sell cigarettes. Retail establishments bear 
shared responsibility with manufacturers for the cost of removing 
noncompliant advertising. SBA size standards for the retail trade and 
the accommodations and food services industries differ from size 
categories used by the U.S. Census. Table 33 of this document shows the 
2002 Census size categories that most closely match the SBA size 
standards. In all cases, the closest Census size category is smaller 
than the SBA size standard. As a consequence, any estimate based on the 
Census size categories may underestimate the number of affected small 
entities.
[GRAPHIC] [TIFF OMITTED] TR22JN11.032


[[Page 36743]]


    The Census reports establishment numbers for business by product 
line, and establishment and firm size by type of business, but provides 
no size data by type of business and product line. To estimate the 
number of affected entities that SBA classifies as small, we begin by 
counting the number of firms that fall below the Census size standard 
shown in table 33 of this document, including only firms in NAICS 
categories with tobacco product line sales. Next, we calculate the 
percentage of small firms in each NAICS category. Depending on the 
category of business, the percentage of small firms ranges from 41 
percent for Discount Department, Warehouse Clubs and Superstores to 
almost 100 percent for Convenience Stores.
[GRAPHIC] [TIFF OMITTED] TR22JN11.033

    Finally, we apply the percentages in table 34 of this document to 
our current estimate of the number of affected establishments with 
payroll (table 16 of this document). This approach implicitly assumes 
that small establishments are similar whether or not they sell tobacco 
products. In addition, we classify all nonemployer establishments as 
small. In total, we estimate that about 355,000 small retail and 
service establishments will be affected by the rule. This number 
represents about 98 percent of the estimated 361,000 establishments 
selling tobacco products.
[GRAPHIC] [TIFF OMITTED] TR22JN11.034


[[Page 36744]]


2. Description of the Potential Impacts of the Final Rule on Small 
Entities
    a. Effect on manufacturers. In order to estimate how much of the 
label change and rotation costs will be incurred by small domestic 
cigarette manufacturers, FDA subtracts from the total costs those costs 
estimated to be incurred by large domestic manufacturers and foreign 
manufacturers. Scanner data from AC Nielsen indicate that approximately 
49 percent of UPCs can be readily identified as belonging to a brand 
marketed by one of the four largest cigarette firms by volume (Refs. 
153 through 158). Because the costs of label changes are roughly 
proportional to the number of UPCs, FDA then attributes 49 percent of 
the total label design and inventory costs to the four firms employing 
at least 500 people. FDA attributes an additional 3 percent of the 
label change costs to foreign manufacturers.\20\ These adjustments 
leave 48 percent of costs, or $131 to $223 million in upfront costs and 
$180,000 to $420,000 in ongoing costs, to be incurred by the 20 small 
manufacturers. Assuming costs are distributed equally among these firms 
implies one-time costs of $6.5 to $11.2 million and ongoing costs of 
$9,000 to $21,000 per firm. Table 36 of this document compares these 
estimated compliance costs to average annual receipts in order to gauge 
the potential impact of labeling change requirements on small cigarette 
manufacturing firms. Because the number of UPCs is probably larger for 
larger firms, costs are likely greater for larger firms than for 
smaller firms; if so, this method overstates the impact on the smallest 
firms and understates the impact on the largest firms (within the 
category of firms employing fewer than 500 people).
---------------------------------------------------------------------------

    \20\ In 2008, 9.9 billion out of 345.3 billion individual 
cigarettes sold were imported (Ref. 123). FDA assumes the same 
proportion holds for UPCs. These UPCs should not overlap with those 
produced by the four largest domestic producers.
[GRAPHIC] [TIFF OMITTED] TR22JN11.035

    b. Effect on retailers. As shown in table 37 of this document, 
retail trade businesses account for almost all sales of tobacco 
products (Refs. 149 and 150). About 90 percent of tobacco product line 
sales occur at gasoline stations, food and beverage stores, general 
merchandise stores, or tobacco stores. Convenience stores (with 
gasoline stations and stand-alone convenience stores) account for about 
half of all tobacco product line sales.

[[Page 36745]]

[GRAPHIC] [TIFF OMITTED] TR22JN11.036

    To illustrate the effects of the rule on a typical small retail 
store, we look at one-time costs for a convenience store and a 
convenience store with gasoline. We select these businesses because, as 
illustrated in table 37 of this document, sales of tobacco products in 
these stores account for about 50 percent of all tobacco sales. In 
addition, tobacco products are an important part of overall revenue for 
these stores, composing over 12 percent of total sales (as shown in 
table 38 of this document).

[[Page 36746]]

[GRAPHIC] [TIFF OMITTED] TR22JN11.037

    For both types of convenience stores, table 39 of this document 
shows that for the smallest firms with less than $250,000 in annual 
sales, the one-time costs of the rule will equal less than 2 percent of 
annual average sales of tobacco products. Furthermore, one-time costs 
total less than 0.1 percent of annual average sales of tobacco products 
for stores with $1 million or more in average annual sales. Although 
the impact on other small retail and service entities is uncertain, 
this example suggests that the rule will be unlikely to create a 
significant direct burden on small retail stores or service 
establishments.
    If individual small retailers are unable to fully offset reduced 
cigarette sales with increased sales of other items, their sales 
revenue may fall. Although this decline would not be a social cost (as 
discussed in the distributional effects section) it would be a cost to 
the retailers who experience it. FDA has not quantified this additional 
potential effect, but believes that it is minor because the overall 
reduction in cigarette consumption is predicted to be less than one 
half of a percent, the demand for other goods is expected to increase, 
and retailers can be expected to shift shelf space to the other goods 
for which demand increases.

[[Page 36747]]

[GRAPHIC] [TIFF OMITTED] TR22JN11.038

3. Alternatives To Minimize the Burden on Small Entities
    a. Increase the compliance period to 24 months for small 
manufacturers or all manufacturers. Allowing all manufacturers, or only 
small manufacturers, 24 months to comply with the label changes would 
eliminate overtime and rush charges, eliminate costs for replacing 
discarded inventory, and increase the number of UPCs for which the 
addition of graphic warning labels could be coordinated with previously 
scheduled label changes. Under a 24-month compliance period, the one-
time label change costs would fall by an average of $0.7 to $1.3 
million per small firm. Table 40 of this document compares the reduced 
estimated compliance costs to average annual receipts in order to gauge 
the potential impact of this regulatory alternative on cigarette 
manufacturing firms employing fewer than 500 people. As a comparison 
with table 36 of this document shows, this option would provide some 
relief, but the burden would remain significant. It would also delay 
the public health benefits of the rule and be inconsistent with FDA's 
statutory mandate.
[GRAPHIC] [TIFF OMITTED] TR22JN11.039

    b. Allow small manufacturers to use one warning per UPC. Allowing 
small cigarette manufacturers to use only one randomly selected warning 
and graphic image per UPC would reduce their upfront label change cost 
substantially. The costs to small businesses of implementing this 
option can be approximated by assuming that the 20

[[Page 36748]]

smallest firms bear 48 percent of the cost of a standard (one warning) 
cigarette label change. The average cost per small manufacturer would 
be reduced by $5.5 to $9 million per firm. Additionally, there would be 
some small cost at the beginning to ensure random selection of the 
warnings, but the ongoing annual rotation cost of $9,000 to $21,000 per 
firm would be eliminated. Table 41 of this document compares the 
reduced estimated compliance costs to average annual receipts in order 
to gauge the potential impact of this regulatory alternative on 
cigarette manufacturing firms employing fewer than 500 people. As a 
comparison with table 36 of this document shows, this alternative would 
provide significant relief. However, it is inconsistent with FDA's 
statutory mandate. Smokers who use only one specific product would not 
be exposed to all the warnings, which would likely hinder the 
effectiveness of this rule.
[GRAPHIC] [TIFF OMITTED] TR22JN11.040

    c. Exempt small manufacturers from the labeling change 
requirements. Exempting small manufacturers from the label change 
requirements would eliminate their label change costs and ongoing 
rotation costs (an average reduction of $6.5 to $11.2 million in 
upfront costs and $9,000 to $21,000 in ongoing costs), thus providing 
maximum relief. The combined market share of the four largest 
manufacturers was 89.7 percent in 2008 (Ref. 123). The immediate impact 
of exempting small manufacturers would therefore be to allow 10.3 
percent of cigarettes to be marketed without graphic warning labels. 
This proportion would grow over time, however, as some consumers would 
be expected to switch to brands marketed without graphic warnings. This 
approach would be inconsistent with both FDA's statutory mandate and 
the public health objectives of this rule.
    d. Exempt small cigarette retailers from the point-of-sale 
advertising requirements. Exempting small cigarette retailers from the 
point-of-sale advertising requirements would eliminate their need to 
remove noncompliant advertising, reducing their direct costs to zero. 
However, table 35 of this document shows that the overwhelming majority 
of retail establishments selling cigarettes are small. Although the few 
establishments operated by large firms might be expected to have higher 
volume, a significant proportion of consumers would continue to be 
exposed to advertising lacking the new graphic warnings. This situation 
would be inconsistent with the public health objective of the rule as 
well as FDA's statutory mandate.

XII. Paperwork Reduction Act of 1995

    The required warning disclosures are the ``public disclosure of 
information originally supplied by the Federal government to the 
recipient for th[at] purpose,'' and are, therefore, not within the 
scope of the Paperwork Reduction Act (see 5 CFR 1320.3(c)(2)).

XIII. References

    The following references have been placed on display in the 
Division of Dockets Management (see ADDRESSES) and may be seen by 
interested persons between 9 a.m. and 4 p.m. Monday through Friday. 
(FDA has verified Web site addresses, but FDA is not responsible for 
any subsequent changes to the Web sites after this document publishes 
in the Federal Register.)

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List of Subjects in 21 CFR Part 1141

    Advertising, Incorporation by reference, Labeling, Packaging and 
containers, Tobacco, and Smoking.
    Therefore, under the Federal Cigarette Labeling and Advertising 
Act, the Federal Food, Drug, and Cosmetic Act, and under authority 
delegated to the Commissioner of Food and Drugs, chapter I of title 21 
of the Code of Federal Regulations is amended by adding part 1141 to 
subchapter K to read as follows:

PART 1141--CIGARETTE PACKAGE AND ADVERTISING WARNINGS

Subpart A--General Provisions
Sec.
1141.1 Scope.
1141.3 Definitions.
Subpart B--Cigarette Package and Advertising Warnings
1141.10 Required warnings.
1141.12 Incorporation by reference of required warnings.
1141.14 Misbranding of cigarettes.
Subpart C--Additional Disclosure Requirements for Cigarette Packages 
and Advertising
1141.16 Disclosures regarding cessation.


    Authority:  15 U.S.C. 1333; 21 U.S.C. 371, 387c, 387f; Secs. 201 
and 202, Pub. L. 111-31, 123 Stat. 1776.

Subpart A--General Provisions


Sec.  1141.1  Scope.

    (a) This part sets forth the requirements for the display of health 
warnings on cigarette packages and in advertisements for cigarettes. 
FDA may require additional statements to be displayed on packages and 
in advertisements under the Federal Food, Drug, and Cosmetic Act or 
other authorities.
    (b) The requirements of this part do not apply to manufacturers or 
distributors of cigarettes that do not manufacture, package, or import 
cigarettes for sale or distribution within the United States.
    (c) A cigarette retailer shall not be considered in violation of 
this part as it applies to the display of health warnings on a 
cigarette package if the package:
    (1) Contains a health warning;
    (2) Is supplied to the retailer by a license- or permit-holding 
tobacco product manufacturer, importer, or distributor; and
    (3) Is not altered by the retailer in a way that is material to the 
requirements of section 4(a) of the Federal Cigarette Labeling and 
Advertising Act (15 U.S.C. 1333(a)) or this part, including by 
obscuring the warning, by reducing its size, by severing it in whole or 
in part, or by otherwise changing it in a material way.
    (d) A cigarette retailer shall not be considered in violation of 
this part as it applies to the display of health warnings in an 
advertisement for cigarettes if the advertisement is not created by or 
on behalf of the retailer and the retailer is not otherwise responsible 
for the inclusion of the required warnings. This paragraph shall not 
relieve a retailer of liability if the retailer displays, in a location 
open to the public, an advertisement that does not contain a health 
warning or that contains a warning that has been altered by the 
retailer in a way that is material to the requirements of section 4(b) 
of the Federal Cigarette Labeling and Advertising Act (15 U.S.C. 
1333(b)), this part, or section 4(c) of the Federal Cigarette Labeling 
and Advertising Act (15 U.S.C. 1333(c)), including by obscuring the 
warning, by reducing its size, by severing it in whole or in part, or 
by otherwise changing it in a material way.


Sec.  1141.3  Definitions.

    For the purposes of this part,
    Cigarette means:
    (1) Any roll of tobacco wrapped in paper or in any substance not 
containing tobacco; and
    (2) Any roll of tobacco wrapped in any substance containing tobacco 
which, because of its appearance, the type of tobacco used in the 
filler, or its packaging and labeling, is likely to be offered to, or 
purchased by, consumers as a cigarette described in paragraph (1) of 
this definition.
    Commerce means:
    (1) Commerce between any State, the District of Columbia, the 
Commonwealth of Puerto Rico, Guam, the U.S. Virgin Islands, American 
Samoa, Wake Island, Midway Islands, Kingman Reef, or Johnston Island 
and any place outside thereof;
    (2) Commerce between points in any State, the District of Columbia, 
the Commonwealth of Puerto Rico, Guam, the U.S. Virgin Islands, 
American Samoa, Wake Island, Midway Islands, Kingman Reef, or Johnston 
Island, but through any place outside thereof; or
    (3) Commerce wholly within the District of Columbia, Guam, the U.S. 
Virgin Islands, American Samoa, Wake Island, Midway Island, Kingman 
Reef, or Johnston Island.
    Distributor means any person who furthers the distribution of 
cigarettes at any point from the original place of manufacture to the 
person who sells or distributes the product to individuals for personal 
consumption. Common carriers are not considered distributors for the 
purposes of this part.
    Front panel and rear panel mean the two largest sides or surfaces 
of the package.
    Importer means any person who imports any cigarette that is 
intended for sale or distribution to consumers in the United States.
    Manufacturer means any person, including any repacker or relabeler, 
who manufactures, fabricates, assembles, processes, or labels a 
finished cigarette product.
    Package means a pack, box, carton, or container of any kind in 
which cigarettes are offered for sale, sold, or otherwise distributed 
to consumers.
    Person means an individual, partnership, corporation, or any other 
business or legal entity.
    Required warning means the combination of one of the textual 
warning statements and its accompanying color graphic, which are set 
forth in ``Cigarette Required Warnings,'' which is incorporated by 
reference at Sec.  1141.12.
    Retailer means any person who sells cigarettes to individuals for 
personal consumption, or who operates a facility where vending machines 
or self-service displays of cigarettes are permitted.
    United States, when used in a geographical sense, includes the 
several States, the District of Columbia, the Commonwealth of Puerto 
Rico, Guam, the U.S. Virgin Islands, American Samoa, Wake Island, 
Midway Islands, Kingman Reef, and Johnston Island. The term ``State'' 
includes any political division of any State.

Subpart B--Cigarette Package and Advertising Warnings


Sec.  1141.10  Required warnings.

    (a) Packages--(1) It shall be unlawful for any person to 
manufacture, package,

[[Page 36754]]

sell, offer to sell, distribute, or import for sale or distribution 
within the United States any cigarettes the package of which fails to 
bear, in accordance with section 4 of the Federal Cigarette Labeling 
and Advertising Act (15 U.S.C. 1333) and this part, one of the required 
warnings on the front and the rear panels.
    (2) The required warning shall be obtained from the electronic 
images contained in ``Cigarette Required Warnings,'' which is 
incorporated by reference at Sec.  1141.12, and accurately reproduced 
as specified in ``Cigarette Required Warnings.''
    (3) The required warning shall appear directly on the package and 
shall be clearly visible underneath the cellophane or other clear 
wrapping.
    (4) The required warning shall be located in the upper portion of 
the front and rear panels of the package and shall comprise at least 
the top 50 percent of these panels; Provided, however, that on 
cigarette cartons, the required warning shall be located on the left 
side of the front and rear panels of the carton and shall comprise at 
least the left 50 percent of these panels.
    (5) The required warning shall be positioned such that the text of 
the required warning and the other information on that panel of the 
package have the same orientation.
    (b) Advertisements--(1) It shall be unlawful for any manufacturer, 
importer, distributor, or retailer of cigarettes to advertise or cause 
to be advertised within the United States any cigarette unless its 
advertising bears, in accordance with section 4 of the Federal 
Cigarette Labeling and Advertising Act (15 U.S.C. 1333) and this part, 
one of the required warnings.
    (2) The text in each required warning shall be in the English 
language, except that:
    (i) In the case of an advertisement that appears in a non-English 
publication, the text in the required warning shall appear in the 
predominant language of the publication whether or not the 
advertisement is in English; and
    (ii) In the case of an advertisement that appears in an English 
language publication but that is not in English, the text in the 
required warning shall appear in the same language as that principally 
used in the advertisement.
    (3) For English-language and Spanish-language warnings, each 
required warning shall be obtained from the electronic images contained 
in ``Cigarette Required Warnings,'' which is incorporated by reference 
at Sec.  1141.12, and accurately reproduced as specified in ``Cigarette 
Required Warnings.''
    (4) For foreign-language warnings, except for Spanish-language 
warnings, each required warning shall be obtained from the electronic 
images contained in ``Cigarette Required Warnings,'' which is 
incorporated by reference at Sec.  1141.12, and accurately reproduced 
as specified in ``Cigarette Required Warnings,'' including the 
insertion of a true and accurate translation of the textual warning. 
The inserted textual warning must comply with the requirements of 
section 4(b)(2) of the Federal Cigarette Labeling and Advertising Act 
(15 U.S.C. 1333(b)(2)).
    (5) The required warning shall occupy at least 20 percent of the 
area of each advertisement, and shall be placed in accordance with the 
requirements in the Federal Cigarette Labeling and Advertising Act.
    (c) Irremovable or permanent warnings. The required warnings shall 
be indelibly printed on or permanently affixed to the package or 
advertisement. Such warnings, for example, must not be printed or 
placed on a label affixed to a clear outer wrapper that is likely to be 
removed to access the product within the package.


Sec.  1141.12  Incorporation by reference of required warnings.

    ``Cigarette Required Warnings'' Edition 1.0 (June 2011), consisting 
of electronic files, U.S. Food and Drug Administration, referred to at 
Sec.  1141.3, Sec.  1141.10(a) and (b), and Sec.  1141.16(a), is 
incorporated by reference into this section with the approval of the 
Director of the Federal Register under 5 U.S.C. 552(a) and 1 CFR part 
51. To enforce any edition other than that specified in this section, 
FDA must publish notice of change in the Federal Register and the 
material must be available to the public. All approved material is 
available for inspection at the National Archives and Records 
Administration (NARA). For information on the availability of this 
material at NARA, call 202-741-6030 or go to http://www.archives.gov/federal_register/code_of_federal_regulations/ibr_locations.html. 
Also, you may obtain a copy of the material by contacting the Center 
for Tobacco Products, Food and Drug Administration, Office of Health 
Communication and Education, ATTN: Cigarette Warning File Requests, 
9200 Corporate Blvd., Rockville, MD 20850, 1-877-CTP-1373, or 
[email protected]. You may also obtain the material at 
http://www.fda.gov/cigarettewarningfiles.


Sec.  1141.14  Misbranding of cigarettes.

    (a) A cigarette shall be deemed to be misbranded under section 
903(a)(1) of the Federal Food, Drug, and Cosmetic Act if its package 
does not bear one of the required warnings in accordance with section 4 
of the Federal Cigarette Labeling and Advertising Act (15 U.S.C. 1333) 
and this part. A cigarette shall be deemed to be misbranded under 
section 903(a)(7)(A) of the Federal Food, Drug, and Cosmetic Act if its 
advertising does not bear one of the required warnings in accordance 
with section 4 of the Federal Cigarette Labeling and Advertising Act 
(15 U.S.C. 1333) and this part.
    (b) A cigarette advertisement or package will be deemed to include 
a brief statement of relevant warnings for the purposes of section 
903(a)(8) of the Federal Food, Drug, and Cosmetic Act if it bears one 
of the required warnings in accordance with section 4 of the Federal 
Cigarette Labeling and Advertising Act (15 U.S.C. 1333) and this part. 
A cigarette distributed or offered for sale in any State shall be 
deemed to be misbranded under section 903(a)(8) of the Federal Food, 
Drug, and Cosmetic Act unless the manufacturer, packer, or distributor 
includes in all advertisements and packages issued or caused to be 
issued by the manufacturer, packer, or distributor with respect to the 
cigarette one of the required warnings in accordance with section 4 of 
the Federal Cigarette Labeling and Advertising Act (15 U.S.C. 1333) and 
this part.

Subpart C--Additional Disclosure Requirements for Cigarette 
Packages and Advertising


Sec.  1141.16  Disclosures regarding cessation.

    (a) The required warning shall include a reference to a smoking 
cessation assistance resource in accordance with, and as specified in, 
``Cigarette Required Warnings'' (incorporated by reference at Sec.  
1141.12).
    (b) In meeting the smoking cessation needs of an individual caller, 
the smoking cessation assistance resource required to be referenced by 
paragraph (a) of this section must, as appropriate:
    (1) Provide factual information about the harms to health 
associated with cigarette smoking and the health benefits of quitting 
smoking;
    (2) Provide factual information about what smokers can expect when 
trying to quit;
    (3) Provide practical advice (problem solving/skills training) 
about how to deal with common issues faced by smokers trying to quit;

[[Page 36755]]

    (4) Provide evidence-based advice about how to formulate a plan to 
quit smoking;
    (5) Provide evidence-based information about effective relapse 
prevention strategies;
    (6) Provide factual information on smoking cessation treatments, 
including FDA-approved cessation medications; and
    (7) Provide information, advice, and support that is evidence-
based, unbiased (including with respect to products, services, persons, 
and other entities), and relevant to tobacco cessation.
    (c) The smoking cessation resource must:
    (1) Other than as described in this section, not advertise or 
promote any particular product or service;
    (2) Except to meet the particularized needs of an individual caller 
as determined in the context of individual counseling, not selectively 
present information about a subset of FDA-approved cessation products 
or product categories while failing to mention other FDA-approved 
cessation products or product categories;
    (3) Not provide or otherwise encourage the use of any drug or other 
medical product that FDA has not approved for tobacco cessation;
    (4) Not encourage the use of any non-evidence-based smoking 
cessation practices;
    (5) Ensure that staff providing smoking cessation information, 
advice, and support are trained specifically to help smokers quit by 
delivering unbiased and evidence-based information, advice, and 
support; and
    (6) Maintain appropriate controls to ensure the criteria described 
in paragraphs (b) and (c) of this section are met.
    (d) If the Secretary of the Department of Health and Human Services 
(Secretary) determines that a part of the smoking cessation assistance 
resource referenced by paragraph (a) of this section does not meet the 
criteria described in paragraphs (b) and (c) of this section, the 
Secretary shall take appropriate steps to address the noncompliance.

    Dated: June 9, 2011.
Margaret A. Hamburg,
Commissioner of Food and Drugs.
    Dated: June 9, 2011.
Kathleen Sebelius,
Secretary of Health and Human Services.

    Note:  The following Appendices will not appear in the Code of 
Federal Regulations.

Appendices

I. Technical Appendix X1: Smoking Rates
II. Technical Appendix X2: Life-Years
III. Technical Appendix X3: Timing of Benefits
IV. Technical Appendix X4: Timing of Costs
V. Technical Appendix X5: Additional Diagrams on Benefits
VI. Technical Appendix X6: Uncertainty Analysis
    A. Alternative Estimation of Smoking Rate Reduction
    B. Monte Carlo Simulation

I. Technical Appendix X1: Smoking Rates

    FDA's primary and secondary methods for estimating the reduction in 
smoking rates realized in Canada due to that country's introduction, in 
December 2000, of graphic warning labels both involve several steps. In 
both methods, the first step is to estimate the smoking rate trend for 
Canada in the years from 1991 up to and including 2000. (We perform a 
similar analysis for the United States, but this will be used only in 
the primary method.)
    In response to comments on the Preliminary Regulatory Impact 
Analysis of the proposed rule, we refine our estimate of the Canadian 
smoking rate trend by accounting for tax changes at the Federal and 
provincial levels. The Ontario Flue-Cured Tobacco Growers' Marketing 
Board (Ref. 174) reports time series of cigarette taxes for Canadian 
provinces and territories. (Because these time series only extend back 
to 1991, we have had to estimate a shorter time trend than the one used 
in the analysis of the proposed rule.) We find average tax levels for 
all of Canada by weighting by provincial and territorial populations 
(using Ref. 175). We then adjust nominal cigarette taxes for general 
inflation using the broad Canadian CPI (Ref. 176). (Canada has 
estimated a GDP deflator only since 2002, so we use the Canadian CPI, 
even though consumer price indices tend to be characterized by slight 
upward biases in their estimates of inflation.) Our results, along with 
results from an analogous estimation for the United States, are 
reported in Table 42.
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[[Page 36756]]


    Using the estimated time trend, we forecast the Canadian smoking 
rate that would have been realized post-2000 had graphic warning labels 
not been introduced in that country. The difference between the smoking 
rate forecast and the actual Canadian smoking rate yields the portion 
of the smoking rate that is unexplained apart from the introduction of 
graphic warning labels. Calculating the difference in the average 
unexplained smoking rate between 1994-2000 and 2001-09 yields the 
estimate of the effect of graphic warning labels, 0.574 percentage 
points, that appears in part (a) of Technical Appendix X6.
[GRAPHIC] [TIFF OMITTED] TR22JN11.042

    In our preferred estimation method (see section XI.D.1, above), we 
use the U.S. experience as an additional control. We find the 
unexplained smoking rate in the United States using calculations 
analogous to those used for Canada and tax data from the Centers for 
Disease Control and Prevention (Ref. 177) and Jamison et al. (Ref. 
178), population data from the U.S. Census Bureau (Refs. 179 and 180), 
and inflation data from the U.S. Bureau of Economic Analysis (Ref. 
132). We then calculate the difference in unexplained smoking rates 
between the United States and Canada. Finally, we again subtract the 
average for 1994-2000 from the average for 2001-09; this produces the 
estimate that graphic warning labels decrease the national smoking rate 
by 0.088 percentage points. Details appear in Table 44.
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[[Page 36757]]



II. Technical Appendix X2: Life-Years

    In calculating expected life-years saved per dissuaded smoker, FDA 
relies heavily on the life tables developed by Sloan et al. (Ref. 116). 
The life tables are calculated from the perspective of 24-year-olds, so 
the calculation of rule-induced effects on males and females who turn 
24 sometime after the rule takes effect is relatively straightforward. 
In the following example, we will show the calculation of expected 
rule-induced effects for 24-year-old females, under the assumption of a 
3 percent discount rate; the calculations for males or for a 7 percent 
discount rate would be analogous.
    The life tables show that, of one hundred thousand females who 
smoke at their 24th birthdays, 99,939 will survive to their 25th 
birthdays and 99,876 to their 26th birthdays. Of one hundred thousand 
24-year-old female nonsmoking smokers, 99,946 will survive to their 
25th birthdays and 99,889 to their 26th birthdays. These numbers imply 
that, for every one hundred thousand females who smoke at their 24th 
birthdays, smoking will cause seven deaths between birthdays 24 and 25 
and six deaths between birthdays 25 and 26. The tables continue to show 
number of survivors in each category (and thus the smoking-related 
excess probability of dying) for every birthday up to age 100; the 
discontinuation of the tables at this point requires us to assume no 
survival in either category to the one-hundred-and-first birthday.
    Someone who dies at the age of 24 loses all the life-years up to 
and including age 100. Without discounting, this would be a total of 77 
years; with a 3 percent discount rate, however, the total is 29.9 
years. Similarly, someone who dies at age 25 loses 76 undiscounted or 
29.8 discounted life-years. By multiplying together the age-specific 
discounted life-year loss and the age-specific smoking-related excess 
probability of dying, then summing over all ages, we arrive at the 
overall expected number of life-years saved per dissuaded female 
smoker. Using a discount rate of 3 percent, this result is (7/
100,000)*29.9 + (6/100,000)*29.8 + [hellip] = 0.524.
    For individuals who are older than 24 at the time of the rule's 
implementation, we want to perform a similar calculation; however, 
direct application of the nonsmoking smoker life tables is 
inappropriate because the life expectancy effect of smoking cessation 
at a particular age is almost certainly different than the effect of 
having refrained from smoking since at least the age of 24. Thus, it is 
necessary to develop age-specific survival probabilities for former 
smokers.
    There are four possible events that a 24-year-old smoker can 
experience between any two birthdays: staying alive and remaining a 
smoker, staying alive and becoming a former smoker, dying in the state 
of being a smoker, or dying in the state of being a former smoker. The 
percentage of former smokers who do not experience the last of these 
events is the former smoker survival probability that we seek to 
calculate. We will illustrate this calculation for 25-year-old females, 
under the assumption of a 3 percent discount rate; the calculation for 
males or other discount rates or age categories would be analogous.
    We again consider one hundred thousand female smokers at their 24th 
birthdays. According to the National Health Interview Survey (Ref. 
128), 3.4 percent of them will become former smokers by their 25th 
birthdays. Following Sloan et al., we use the 1998 NHIS and define 
former smokers as individuals who quit at least 5 years in the past. 
Sloan et al.'s life tables indicate that another 61 of the original one 
hundred thousand will die before their 25th birthdays; all 61 die in 
the state of being smokers (because no time has elapsed since they were 
smokers at the definitional age of 24). This leaves 96,540 who are 
alive and still smoking and 3,399 who are living former smokers at the 
25th birthday.
    Sloan et al.'s typical smoker life table indicates that 63 of these 
25-year-old survivors will die before their 26th birthdays; we must 
calculate how many of them die in the state of being smokers and how 
many in the state of being former smokers. To find death probabilities 
for those individuals who are still smoking at age 25, we look to Sloan 
et al.'s life table for lifetime smokers. Whereas the typical smoker 
life table shows survival patterns for individuals who smoke at age 24 
and may quit sometime later in life, the lifetime smoker life table 
isolates survival patterns for individuals who smoke at age 24 and 
continue to a specific age. The lifetime smoker life table will begin 
to diverge from the typical life table at later ages, but for birthdays 
25 and 26, the results are once again 99,939 and 99,876 survivors; 
therefore, the percentage of 25-year-old female smokers who survive to 
birthday 26 is 99,876/99,939. Multiplying this percentage by the 96,540 
smokers alive at birthday 25 yields 61 deaths. Therefore, two (=63-61) 
deaths of former smokers are expected between birthdays 25 and 26, and 
the age-specific former smoker survival probability is 1-(2/3,399) = 
0.99937. (This technique for estimating former smoker survival 
probability does not distinguish between recent quitters and those who 
quit many years ago. Not making this distinction, which becomes 
increasingly important the further beyond age 25 we consider, will 
result in our estimates of cessation-related life expectancy benefits 
being too great for those who quit at an advanced age and too low for 
those who quit at an early age.)
    To find the expected number of life-years gained for a female who 
quits smoking at age 25, we subtract from 0.99937 the survival 
probability for a smoker of the same age (calculated from Sloan et 
al.'s typical smoker life table), then multiply by the discounted 
number of life-years lost if death occurs at age 25 (previously found 
to be 29.8), and finally add the expected value of life-years gained by 
quitting at age 26, discounted 1 year. Because there is no extension of 
life brought about by quitting at age 100, this addition is feasible 
for age 99, and then for age 98, and so on back to age 25. The final 
result for females who quit smoking at age 25 is 0.081 discounted life-
years saved.
    For the year 2013, we multiply our estimated age-specific expected 
discounted life-years saved by the cohort sizes (for ages 18 and above) 
projected by the U.S. Census Bureau (Ref. 130). For years 2014-31, we 
multiply our estimated age-specific expected discounted life-years 
saved by the cohorts that would not have been included in our 2013 
calculation, specifically new 24-year-olds and older individuals whose 
cohorts grow from one year to another (for example, if the projected 
number of 35-year-olds in 2014 is greater than the projected number of 
34-year-olds in 2013, the difference is included in the 2014 
calculation). Finally, we estimate effects for individuals who are 18-
23 in the year 2031 by discounting the present value of benefits 
accruing to 24-year-olds by the number of years until each cohort 
reaches that age threshold. Results are further multiplied by FDA's 
estimate of the rule-induced reduction in the U.S. smoking rate to 
yield our final estimate of the number of life-years saved by the 
regulation.

III. Technical Appendix X3: Timing of Benefits

    FDA's estimated benefits appear as undiscounted streams in Table 
45, Parts 1 through 12. Benefits are realized as late as 2113 because 
we calculate effects over lifetimes extending to age 100 for

[[Page 36758]]

cohorts aged 18 and above during the first 20 years (2012 to 2031) of 
the final rule's implementation.
    Because many of our sources report only present values of smoking-
related effects, estimating the timing of those effects requires us to 
make various assumptions. Changing those assumptions would change the 
results appearing in Table 45. Similarly, because many of our sources 
report present values calculated only with a discount rate of 3 
percent, changing our assumptions about the timing of effects would 
change the present values we have reported at the 7 percent discount 
rate (an important exception being the present value of reduced 
mortality for 24-year-olds because Sloan et al.'s life tables allow us 
to know the timing of those benefits).
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IV. Technical Appendix X4: Timing of Costs

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V. Technical Appendix X5: Additional Diagrams on Benefits

    Consumer Surplus Model. The benefits estimated in sections 
XI.D.2.b.ii, XI.D.2.b.iii, XI.D.2.b.iv and XI.D.2.b.v overstate, all 
else held equal, the net internal (i.e., intrapersonal) benefits (or 
costs, in the case of section XI.D.2.b.v) of reduced smoking because 
they include only the increased welfare from improved health and 
expected longevity (and decreased welfare due to subsidy loss) and do 
not account for any lost consumer surplus \21\ associated with the 
activity of smoking. In the Preliminary Regulatory Impact Analysis (see 
page 75 FR 69524 at 69544), FDA adjusted benefits estimates with a 50 
percent consumer surplus reduction, based on a model created by Cutler 
(Ref. 134). Several comments on the proposed rule expressed concern 
about the appropriateness of Cutler's assumptions, so FDA has revised 
the model to make it more applicable to the present analysis. Our 
revised model is illustrated in Figure E1.
---------------------------------------------------------------------------

    \21\ The difference between what a consumer would be willing to 
pay for a good or service and what that consumer actually has to 
pay.

---------------------------------------------------------------------------

[[Page 36773]]

[GRAPHIC] [TIFF OMITTED] TR22JN11.059

    We begin with a downward-sloping demand for typical lifetime 
smoking. A negative relationship between price and consumption of 
cigarettes has been demonstrated empirically many times over (Chaloupka 
and Warner (Ref. 162) review this literature).
    The height of line DCSfull marks the full cost, 
including the cost of adverse health and life expectancy effects, of 
typical lifetime smoking (thus, the ``Discounted Cost of Smoking'' or 
DCS), while the height of line DCSmoney marks only the 
after-tax price of cigarettes. The height difference between these two 
lines is the sum of the per-person effects we calculated in sections 
XI.D.2.b.ii, XI.D.2.b.iii and XI.D.2.b.iv. Also belonging in 
DCSfull are the effects calculated in section XI.D.2.b.v 
because the concept of the full cost of smoking, as used in the model, 
is defined from the private perspective of the smoker (and thus it is 
irrelevant whether or not there is someone else in society who 
experiences an effect that offsets the cost or benefit experienced by 
the smoker--which is what distinguishes the entries in Tables 22 and 23 
from the effects in sections XI.D.2.b.ii, XI.D.2.b.iii and 
XI.D.2.b.iv). While the elements in Tables 22 and 23 do contribute to 
DCSfull, we posit that they should not be thought of as 
included in DCSmoney because they are intricately related to 
the mortality and morbidity effects of smoking that, unlike the after-
tax price of cigarettes, are likely characterized by time 
inconsistency, incomplete information or other sources of market 
failure.
    Society will be at the intersection of Demand and 
DCSmoney if the health costs associated with smoking are not 
known or, if known, cannot be ``internalized'' and incorporated into 
consumption decisions. The current widespread awareness that smoking 
poses health risks and the significant decline in smoking rates over 
the past 50 years make it highly implausible that actual consumption is 
near that hypothetical level. The intersection of the Demand line and 
DCSfull represents the other extreme. At that hypothetical 
level, consumers are fully aware of all known risks and have 
internalized all health costs and incorporated them into consumption 
decisions. The economic models and empirical studies of addiction, 
self-control, and time inconsistency (which we discuss in detail in our 
response to comments on the preliminary analysis) strongly suggest that 
health costs are not fully internalized; the behaviors that lead to 
less-than-full internalization appear to be common. In surveys, many 
smokers express a desire to quit and report that they have tried to 
stop smoking. The demand for various aids to smoking cessation provides 
further evidence of less-than-full internalization. Moreover, the 
immature judgments, short time horizons and lack of self-control of 
most children and adolescents--who make up the vast majority of new 
smokers--suggest that policy interventions that prevent initiation and 
encourage cessation can increase social welfare.
    For these reasons, we find it implausible that actual consumption 
is at the intersection of Demand and DCSfull. The number of 
current smokers is therefore found at the intersection of Demand with a 
line falling somewhere between DCSfull and 
DCSmoney. We have drawn this as line DCSabsence. 
Our finding that the graphic warning label regulation will reduce 
smoking rates is represented by an upward shift of this line to 
DCSrule. (This may seem less intuitive to some readers than 
shifting the demand curve--which is the approach taken by Weimer et al. 
(Ref. 181)--but the two analytic methods will produce equivalent 
results, as we illustrate below.) The intersections of 
DCSabsence and DCSrule with the demand curve show 
the number of smokers, Qabsence and Qrule, in the 
absence and in the presence of the final rule.
    In the absence of the final rule, total cost, including health 
costs, for smokers is shown by the sum of areas B through K. We 
reiterate that, even though consumers do not internalize all costs 
upfront, they do ultimately incur them. The gross value smokers place 
on cigarette consumption (known as willingness-to-pay) is the area 
under the demand curve as far right as Qabsence, or 
A+B+E+F+H+I+J+K. The net value to smokers of cigarette consumption is 
thus (A+B+E+F+H+I+J+K)- (B+C+D+E+F+G+H+I+J+K) = A- (C+D+G).
    In the presence of the final rule, total expenditure, including 
health costs, by smokers is B+C+E+H+J. Smokers' willingness-to-pay is 
the area under the demand curve as far right as Qrule, or 
A+B+E+H+J. The net value to smokers of cigarette consumption is thus 
(A+B+E+H+J)-(B+C+E+H+J) = A-C. As a result, the effect of the rule is 
to increase net value by (A-C)-[A-(C+D+G)] = D+G.

[[Page 36774]]

    The calculations appearing in sections XI.D.2.b.ii, XI.D.2.b.iii, 
XI.D.2.b.iv and XI.D.2.b.v each consist of multiplying 
(Qabsence - Qrule) by some portion of 
(DCSfull - DCSmoney); therefore, summing the 
results of D2b.ii, D2b.iii, D2b.iv and D2b.v produces an estimate of 
(D+F+G+I). Because we have already established that the benefit of the 
rule is (D+G), reporting the unadjusted sum of results from sections 
XI.D.2.b.ii, XI.D.2.b.iii, XI.D.2.b.iv and XI.D.2.b.v would cause us to 
overestimate the benefits of the final rule by an amount equal to 
(D+F+G+I)-(D+G) = (F+I). As drawn in Figure E1, (F+I) is approximately 
50 percent of the unadjusted estimate, (D+F+G+I). FDA does not claim 
that 50 percent is the correct ratio; the correct ratio of (F+I) to 
(D+F+G+I) is determined by the shape of the demand curve as it divides 
areas F and G and, more pertinently, by the relative height differences 
between DCSfull and DCSrule and between 
DCSabsence and DCSmoney. (DCSfull-
DCSrule) may be much greater than (DCSabsence-
DCSmoney) or it may be much less, yielding a ratio that may 
be near zero or may be near 100 percent, depending on the starting 
height of DCSabsence and the size of the policy-induced 
reduction in smoking.
    We now parameterize this model using the literature on the 
economics of habits and addiction. (We note, however, that rigorous 
quantitative welfare analyses of tobacco control interventions are rare 
in published, peer-reviewed literature, so the estimates generated 
below should not be viewed as definitive.) First, the Robert Wood 
Johnson Foundation (Ref. 137) reports that, as of 2009, State and 
Federal taxes made up 40.4 percent of the total retail price of 
cigarettes. With the Federal cigarette excise tax being $1.01 per pack 
(Ref. 164) and the population-weighted average State tax being $1.33 
per pack (Ref. 165, with population weights from Ref. 130), we estimate 
the average after-tax price of a pack of cigarettes, or the height of 
DCSmoney, to be $5.78. FDA's analysis in section XI.D.2.b of 
the benefits of smoking reduction has produced an estimate of 
discounted internal health and financial effects (reduced mortality, 
morbidity, medical costs and implicit smoking subsidy) that ranges from 
$2.10 billion to $27.80 billion in total, or from $4.56 to $27.69 per 
pack; this range indicates the range of potential height differences 
between DCSfull and DCSmoney. We can derive the 
heights of the remaining DCS curves from a simulation conducted by 
Gruber and K[ouml]szegi (Ref. 104), in which they estimate the tax rate 
that would allow time-inconsistent smokers to consume the quantity that 
would be optimal under perfect rationality. Because this quantity is 
found at the intersection of the demand curve and DCSfull, 
Gruber and K[ouml]szegi's tax result provides an estimate of 
DCSfull - DCSabsence. Gruber and K[ouml]szegi 
first estimate an internal health cost of $30.45 per pack. From this, 
they calculate an internality tax that ranges from $0.98 to $2.89 
(depending on technical parameters of their model), with an average of 
$2.17. FDA's internal health and financial cost estimates differ from 
Gruber and K[ouml]szegi's in a number of respects, including discount 
rate and use of a VSLY rather than value of a statistical life 
approach. We therefore scale the $2.17 internality tax estimate 
according to the ratio between our internal health and financial cost 
estimates and the $30.45 result found by Gruber and K[ouml]szegi; this 
produces internality tax estimates ranging from $0.33 to $1.98. 
Subtracting these values from our estimates of DCSfull 
yields estimates of DCSabsence ranging from $10.01 to 
$31.49. Knowing DCSabsence and Qabsence, we can 
use a Gruber and K[ouml]szegi elasticity estimate, -0.803, to find the 
height of DCSrule. This calculation yields estimates of the 
difference between DCSrule and DCSfull that range 
from $0.27 to $1.81. If we assume a linear demand curve (in which case 
F will be 50 percent of the sum of F and G), this indicates that 
consumer surplus loss offsets roughly 93 percent of rule-induced 
internal health benefits. An analogous calculation using the $7.50 per 
pack tax suggested by Gruber (Ref. 133) indicates that consumer surplus 
loss offsets roughly 76 percent of rule-induced internal health 
benefits.
    Figures E2 and E3 illustrate the underlying model for the benefits 
analysis and the uncertainty associated with the changes in consumer 
surplus resulting from the final rule and other tobacco control 
policies. The diagrams are elaborations on Figure E1, and lines and 
areas should be interpreted as discussed in the explanation of that 
figure. (Full internalization in Figure E2 corresponds to 
DCSfull in Figure E1; no internalization in Figure E2 
corresponds to DCSmoney in Figure E1.) Both of the diagrams 
below show the effects on lifetime smoking of differing degrees of 
average internalization of the full costs of smoking. Figure E2 shows a 
rise in the full price (equal to the money price plus the internalized 
cost), while Figure E3 shows a downward shift in demand equal to the 
level where all costs are internalized; both diagrams illustrate how 
the market evolves as it moves leftward from the no-internalization 
equilibrium to the full-internalization equilibrium. We note that the 
net internal benefits to smokers of smoking reductions, shown as shaded 
triangles or trapezoids above the full-internalization demand curve, 
are the same size in each diagram. Moreover, the area representing 
benefits decreases in size as the size of the smoking population 
decreases. We assume that the market is currently at some intermediate 
point given by the intersection of one of the dashed (partial 
internalization) price lines with the solid demand curve or the 
intersection of one of the dashed (partial internalization) demand 
curves with the solid money price line, but we are not able to 
definitively estimate where that point is today or where it will be 
after this final rule takes effect.

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VI. Technical Appendix X6: Uncertainty Analysis

    Estimation of the effectiveness of the rule (on reducing the future 
U.S. smoking rate) is subject to a large uncertainty that is not fully 
reflected in the benefits estimates appearing in the preceding 
sections, which only reflect different estimates of the VSLY and 
different discount rates. In this section, we show the uncertainty 
associated with our estimate of the effectiveness of the rule.

A. Alternative Estimation of Smoking Rate Reduction

    Our primary estimate, that the U.S. smoking rate will decrease by 
0.088 percentage points, was calculated in the following steps. First, 
we found the decrease in Canadian smoking rates

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since 1994 over and above what would have been expected using the pre-
2001 trend and accounting for the effect of excise tax changes. We then 
subtracted the analogous unexplained decrease in the U.S. smoking rate 
over the same period. This second step was driven by the idea that the 
U.S. experience could proxy for recent social or policy changes (such 
as public smoking restrictions) that may have had effects on Canada's 
smoking rate and thus needed to be subtracted in order to isolate the 
effect of graphic warning labels. The last step was to calculate the 
difference between United States and Canadian unexplained decreases in 
smoking before and after graphic warning labels were introduced in 
Canada. We attributed the remaining unexplained difference to graphic 
warning labels.
    However, the U.S. social and policy climate may have been so 
different from Canada's during the years 1994-2009 that this proxy is 
inappropriate. To account for this possibility, we calculate the 
unexplained difference in Canadian smoking rates before and after 
graphic warning labels were introduced, this time omitting any U.S. 
adjustments. We assume that antismoking policies and programs other 
than the graphic warning labels are incorporated in the pre-2001 trend, 
with no additional effects of these variables occurring after the 
introduction of graphic warning labels. This approach indicates that 
graphic warning labels may have been responsible for a 0.574 percentage 
point decrease in the Canadian smoking rate. If the rule were to 
achieve this effectiveness level in the United States, benefits would 
be approximately six times larger than those reported earlier in this 
analysis. For example, our benefits estimates calculated with a VSLY of 
$318,923 and a net-to-gross benefits ratio of 90 percent rise from 
$1,681.0 million with a 3 percent discount rate and $517.5 million with 
a 7 percent discount rate (see Table 9b) to $10,916.6 and $3,360.7 
million. We use these last two numbers as global upper bounds in Table 
1.
    Although both of the estimation methods discussed thus far lead to 
the conclusion that graphic warning labels will reduce smoking rates, 
FDA has had access to very small data sets, so our effectiveness 
estimates are in general not statistically distinguishable from zero; 
we therefore cannot reject, in a statistical sense, the possibility 
that the rule will not change the U.S. smoking rate. Therefore, the 
appropriate lower bound on benefits is zero. Ranges of benefits, 
representing the zero-effect case and the Canada-only modeling 
approach, appear in Table 49. The wide ranges shown in the table 
highlight the uncertainty inherent in our approach.
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B. Monte Carlo Simulation

    In addition to the uncertainty surrounding the effectiveness of 
graphic warning labels at reducing smoking rates, the other principal 
uncertainty in our benefits analysis is the value to smokers of 
cessation or avoided initiation. As discussed in section XI.D.2, we use 
two methods and several net-to-gross benefits ratios to produce a range 
of value estimates. For every percentage point reduction in the 
national smoking rate, these estimates become $4.2 to $281.6 billion 
(with a 3 percent discount rate) or $1.3 to $61.1 billion (with a 7 
percent discount rate). Similarly, for every percentage point reduction 
in the national smoking rate, estimates of benefits accruing to the 
general public (including fire loss and financial effects) range from 
$6.1 to $14.7 billion (with a 3 percent discount rate) or $4.3 to $11.6 
billion (with a 7 percent discount rate). Details appear in Table 50.
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    We estimate the 90th percentile range for the present and 
annualized values of total benefits with a Monte Carlo simulation. We 
model the distribution of the decline in smoking rates with a non-
parametric bootstrap, in which we draw from discrete uniform 
distributions an individual year's United States-Canada adjusted 
smoking rate difference from the graphic warning label period (in 
Canada) and an individual year's difference from the pre-graphic 
warning label period. To account for uncertainty in the value to 
dissuaded smokers of cessation or avoided initiation, we use for each 
discount rate and VSLY a uniform distribution running from the lower

[[Page 36777]]

bound estimate to the upper bound estimate, as shown in Table 50. 
Benefits accruing to the general public are modeled analogously, with a 
uniform distribution bounded below and above by the values appearing in 
the table. We run 100,000 iterations for each simulation and report our 
results in Table 51. Both positive and negative results appear in the 
table because some paired-year United States-Canada differences show 
graphic warning labels decreasing the Canadian smoking rate and some 
paired-year differences show them increasing the smoking rate. (The 
second finding is almost certainly due to survey noise. More 
specifically, ordinary sampling variation will cause the percentage of 
smokers contained in a survey sample to change from one year or country 
to the next; this is separate from any underlying change in the true 
smoking rate. Depending on the sizes and directions of the relative 
changes, a comparison of country-year pairs can show the smoking rate 
increasing even when it has actually decreased, or vice versa. Because 
we expect this survey noise to overestimate the smoking rate change in 
some years and underestimate it in others, in our primary estimate, we 
take an average over all the years for which we have data in order to 
estimate as reliably as possible the true underlying change.) The wide 
differences in benefits shown in the table highlight the uncertainty 
inherent in our analysis.
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[FR Doc. 2011-15337 Filed 6-21-11; 8:45 am]
BILLING CODE 4160-01-P