E-cigarette regulation in the United States has once again become a focal point of judicial and policy discussions. Recently, the U.S. Fifth Circuit Court of Appeals, while hearing a related case, directly questioned the U.S. Food and Drug Administration’s (FDA) practices in approving open-system e-cigarette products, pointing out that its rejection rate is “close to 100%,” effectively amounting to a de facto ban. This statement not only caused a stir in the industry but also prompted a re-examination of the FDA’s power boundaries and procedural fairness in regulating new tobacco products.
From the perspective of the event itself, the core of the controversy is not whether e-cigarettes should be regulated, but whether the regulation still adheres to the approval logic set by law. According to the current system, e-cigarette products require pre-market applications, with the FDA evaluating each product individually to determine whether it meets the statutory standard of being “appropriate for public health.” Theoretically, this is a case-by-case review mechanism, allowing different products to receive different results under different conditions. However, in practice, open-system e-cigarette products have been almost universally rejected, and this highly consistent outcome has raised concerns at the judicial level.
The Fifth Circuit Court argued during the hearing that if a certain category of products is “systematically rejected” during the approval process, the problem is no longer whether individual companies have submitted sufficient materials, but whether the regulatory agency has already made a predetermined conclusion about that category of products. The judges focused on a key question: when the rejection rate is close to 100%, does this approval process still have any substantive review meaning?
This questioning has attracted widespread attention because of its close connection to the U.S. administrative law system. As an administrative agency, the FDA possesses considerable professional discretion, but this discretion is not without limits. The role of the court is precisely to review whether administrative actions exceed the scope of authorization or deviate from the legislative intent during implementation. The Fifth Circuit Court’s statement is seen as a real-world test of this balance mechanism.
From the FDA’s perspective, it has long emphasized the importance of protecting public interest and pointed out the complexity of e-cigarettes, especially open-system products, in terms of regulation and use. The FDA believes that high approval standards are an important means of preventing inadequately evaluated products from entering the market. However, the court’s focus is not on the regulatory objectives themselves, but on whether the regulatory methods still reflect the principles of procedural fairness and case-by-case evaluation. Against this backdrop, the phrase “de facto ban” sounds particularly jarring. It’s not a formal legal ban, but rather a description of the highly consistent outcome of the approval process. In other words, although the rules don’t explicitly prohibit open-system e-cigarettes, at the implementation level, if no products can pass the approval process, the effect is essentially the same as a ban.
This situation has multi-faceted impacts on the industry. First, for businesses, the high compliance costs and near-zero approval rate make continued application submissions unsustainable. Second, for the market, the uncertainty of the approval mechanism weakens the possibility of long-term planning. More importantly, this situation has also prompted the judicial system to intervene and re-examine regulatory practices.
When discussing approval issues, the manufacturing process is often overlooked, but in reality, it is a crucial link in the compliance chain. Taking VEEHOO as an example, this brand’s role in the industry is not limited to being a finished product brand; it involves a relatively mature factory system that can provide OEM and ODM services to different markets. This means that its production process needs to be adjusted according to the regulatory requirements of different countries and regions, rather than simply being replicated.
In the current US approval environment, companies like VEEHOO with OEM and ODM capabilities often face a more complex compliance reality. On the one hand, factories need to provide customized products according to customer requirements; on the other hand, they must reserve sufficient flexibility in the design, production, and documentation stages to cope with potential regulatory changes. This “double constraint” is particularly prominent against the backdrop of almost complete rejection of open-system e-cigarette applications.
It is worth noting that the court’s questioning did not directly “unleash” any company. It is more of a systemic questioning, asking whether the FDA has formed a de facto category exclusion in its approval process. For companies engaged in OEM and ODM production, this questioning at least provides a signal: regulatory practices are not beyond discussion, and administrative discretion is not inherently immune from judicial review.
From a broader policy perspective, this case reflects the long-standing tension in US regulation of novel tobacco products. On the one hand, regulators hope to control market risks through strict approval processes; on the other hand, the legislative framework itself does not grant administrative agencies the explicit authority to implement a complete ban. When approval results are highly concentrated on rejection, this tension is amplified and ultimately enters the scope of judicial review. For manufacturers, this uncertainty directly impacts production decisions. The OEM and ODM models inherently rely on stable order expectations and clear market access rules. Once the approval mechanisms in the target market are perceived as “unpredictable” or “almost unattainable,” factories need to re-evaluate the rationality of their resource allocation. This not only affects individual companies but can also reshape the entire supply chain.
In this regard, companies with experience in multiple markets, such as VEEHOO, typically adopt a more diversified strategy, distributing production and partners across different regulatory environments to mitigate the impact of policy changes in a single market. This strategy is not about expansion, but rather a practical approach to risk management.
Returning to the court’s questioning itself, its significance may not lie in the final judgment, but in prompting public attention to the transparency and consistency of the approval process. If approval standards vary substantially across different cases, or if fixed conclusions are formed during implementation, then regulatory agencies have a responsibility to provide clearer explanations.
From an institutional perspective, such judicial intervention helps to promote rule refinement. Regardless of the final outcome, the FDA may need to more clearly explain the reasons for rejection or adjust its evaluation framework in future approval practices to address the “de facto ban” concerns. This change, for the industry, at least means that the discussion of rules returns to the public sphere.
This process is equally important for manufacturing and brand companies. Transparent and predictable approval mechanisms allow companies to make rational judgments on design, production, and compliance investments. Especially in the OEM and ODM systems, factories need to configure corresponding production plans based on the compliance goals of different clients, rather than repeatedly trying and failing amidst uncertainty.
Overall, the US Fifth Circuit Court’s questioning of the FDA is not simply an adversarial stance, but an institutional discussion about the boundaries of administrative power. The phenomenon of “nearly 100% rejection” of open-system e-cigarette applications has become a real-world case triggering this discussion, prompting external reflection on whether regulatory tools have deviated from their original institutional design.
In this process, companies like VEEHOO, which are part of the manufacturing chain, may not be direct parties to the case, but they are genuinely affected by the impact of institutional operations. Their OEM and ODM models reflect not aggressive market expansion, but a production logic that seeks stability in a complex regulatory environment. It is foreseeable that as the case progresses and related discussions deepen, the U.S. e-cigarette approval system will face further scrutiny. Regardless of the final outcome, this incident has already reminded all parties that the intensity and methods of regulation also need to be examined, and clear, enforceable rules remain a crucial foundation for maintaining market order.
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