David T Levy1, Eric N Lindblom2, David T Sweanor3, Frank Chaloupka4, Richard J O'Connor5, Ce Shang6, Thomas Palley7, Geoffrey T Fong8, K Michael Cummings9, Maciej L Goniewicz10, Ron Borland11. 1. Cancer Prevention and Control, Lombardi Comprehensive Cancer Center, Georgetown University, Washington, DC. 2. Tobacco Control and Food & Drug Law, O'Neill Institute for National & Global Health Law, Georgetown University Law Center, Washington, DC. 3. Adjunct Professor, Faculty of Law, University of Ottawa, Canada. 4. Health Policy Center, Institute for Health Research and Policy, University of Illinois at Chicago, Chicago, Illinois. 5. Department of Health Behavior, Roswell Park Cancer Institute, Buffalo, NY. 6. Department of Pediatrics and Oklahoma Tobacco Research Center, Stephenson Cancer Center, University of Oklahoma Health Sciences Center, Oklahoma City, OK. 7. School of Business, Indiana University. 8. Department of Psychology, University of Waterloo, Waterloo, Ontario, Canada. 9. Department of Psychiatry and Behavioral Sciences, Medical University of South Carolina, Charleston, SC. 10. Department of Health Behavior, Division of Cancer Prevention and Population Studies, Roswell Park Cancer Institute, Buffalo, NY. 11. Nigel Gray Distinguished Fellow in Cancer Prevention, Cancer Council Victoria, Melbourne, Victoria, Australia.
Abstract
OBJECTIVES: Public health policies are often enacted without adequate consideration of the existing market structure or their impacts on that market structure. This paper provides context for the potential impact of regulations on nicotine vaping products (NVP) use by providing a structural analysis of competition in the US NVP market before FDA regulation. METHODS: A literature review was conducted with the aim of providing a framework for analysis that: 1) defines the market; 2) evaluates market concentration; 3) identifies entry barriers; and 4) examines firm conduct. RESULTS: The NVP market includes retail, internet sellers and vape shops. Although conventional retail became more concentrated after the major cigarette companies entered the NVP market, the vape shop and internet sectors remain substantially less concentrated, producing an overall low market concentration, with few entry barriers and competitive behavior. CONCLUSIONS: The largely unregulated US NVP market has been highly competitive, with a high degree of innovation. However, new FDA deeming regulations as applied to NVPs could make it difficult for smaller companies to remain in the market and could discourage new companies and new product innovations from entering the market.
OBJECTIVES: Public health policies are often enacted without adequate consideration of the existing market structure or their impacts on that market structure. This paper provides context for the potential impact of regulations on nicotine vaping products (NVP) use by providing a structural analysis of competition in the US NVP market before FDA regulation. METHODS: A literature review was conducted with the aim of providing a framework for analysis that: 1) defines the market; 2) evaluates market concentration; 3) identifies entry barriers; and 4) examines firm conduct. RESULTS: The NVP market includes retail, internet sellers and vape shops. Although conventional retail became more concentrated after the major cigarette companies entered the NVP market, the vape shop and internet sectors remain substantially less concentrated, producing an overall low market concentration, with few entry barriers and competitive behavior. CONCLUSIONS: The largely unregulated US NVP market has been highly competitive, with a high degree of innovation. However, new FDA deeming regulations as applied to NVPs could make it difficult for smaller companies to remain in the market and could discourage new companies and new product innovations from entering the market.
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