Industry_Day_Meeting_Summary_4.18.2017.pdf

Industry Day Meeting Summary, April 18, 2017 1179639 Hookah Purchase Journey

Office of Acquisition and Grant Services 5630 Fishers Lane, Rockville, Maryland

10am to 12pm

Attendee List

Industry representatives FDA/Center for Tobacco (CTP)/Office of

Science FDA Office of Grant Services and Acquisitions (OAGS)

Euromonitor International Bill Carroll, Account Manager Matt Tripodi, Account Director

Ii-Lun Chen, MD Director Division of Individual Health Science

Robert Maydwell Contract Specialist

SmartAnalyst Jim Martin, Team Leader Consumer Healthcare Group

Priscilla Callahan-Lyon, MD Deputy Director Division of Individual Health Science

Nicola Carmichael Contracting Officer

Prescient, LLC Steven Shpiner, Principal

George Rochester, PhD Mathematical Statistician Chief, Statistics Branch Division of Population Health Science

Translational Technologies Int’l Robert Bauserman, Ph.D.

Senior Scientist

Chad Reissig, PhD Chief, Addiction Branch

Sandra Retzky, DO, JD, RPh, MPH Medical Officer

Ron Edwards, MSc.

Biologist Division of Nonclinical Science

Ashley Ross, MPH Public Health Analyst Division of Population Health Science- Evaluation Branch

Hyungsik “Chris” Shin, PhD Mathematical Statistician Division of Population Health Science

Carolina Ramoa, PhD Pharmacologist Addiction Branch

Sahlee Sabala, MPH Regulatory Health Project Manager, Branch III Division of Regulatory Project Management

Meeting Summary

1. Introduction and Project Context. On April 18, 2017, representatives from CTP and OAGS met with four outside companies to discuss contract requirements for the Hookah Purchase Journey (11796390). The following sections summarize the information exchange.

Under the Deeming Rule effective on August 8, 2016, FDA’s Center for Tobacco Products now regulates all tobacco products that meet the definition of a tobacco product, including waterpipes and waterpipe tobacco. In order to inform regulatory activities related to waterpipes and waterpipe tobacco, CTP is seeking information on waterpipe commerce in the project called The Hookah Purchase Journey (11796390).

Questions submitted by companies prior to Industry Day are incorporated below with Government responses.

2. Task. Each task was briefly discussed.

Task 1 Supply chain for U.S. waterpipe tobacco

Describe the countries of origin, species, and type of tobacco used in waterpipe tobacco products.

Describe the supply chain for waterpipe tobacco and the process for making it. This is a qualitative task that could contain some quantitative information if available, e.g., percentages for waterpipe tobacco components. The specific question on honey (SOW Task 1/Section 3(iv)) stems from our knowledge that sometimes a product is called “honey” when it does not fit FDA’s definition of such.

Question 1: Per SOW Task 1/Section 2(a), companies with greater than 50% aggregate share should be listed. Clarify if the same is share by value or volume?

Answer 1: The description should include both dollar value and volume.

Question 2: In the absence of sales data for SOW Task 1/Section 2(a), is it acceptable to identify leading companies , i.e. those companies comprising in aggregate 50% share as defined by sales or volume, through annual reports, product range, or geographic reach?

Answer 2: No. Annual reports are not likely to be useful since very few companies are publicly traded in the waterpipe space. Product range or geographic reach are not acceptable in lieu of sales or volume data.

Question 3: For SOW Task 1/Section 2(b), regarding channel share to consumers through different channels, please clarify if the requirement is B2B (Tobacco suppliers to WPEs (Waterpipe Establishments)) or B2C (Tobacco suppliers to Consumers)? [Per the SOW Task1/Section 2(b), “channel share” means the percentage of waterpipe tobacco product flowing to consumers via various distribution methods such as, but not limited to, the Internet, convenience stores, and waterpipe establishments.]

Answer 3: The requirement includes both B2B and B2C. For B2B, segmentation can be used with an approximation by percentage of product flow.

Question 4: Can the client, i.e., the Government, provide import data by waterpipe tobacco species? Or should contractor identify source?

Answer 4: The Government can provide import data from 2012 to the present, but not tobacco species information.

https://www.fda.gov/food/guidanceregulation/guidancedocumentsregulatoryinformation/labelingnutrition/ucm389501.htm

Task 2 Supply chain for U.S. waterpipe charcoal

Describe subtypes of waterpipe charcoal and accelerants used in the quick-light variety.

Charcoal types are highly sub-segmented. It may be the case that it is not possible to describe all the sub-segments. Sub-segmentation categories can be refined during the project as more information is obtained, provided that the Government agrees with the method.

Describe companies that process or manufacture waterpipe charcoal, components, and their sources for waterpipe charcoal and countries of origin.

Contractors are encouraged to provide one or more methods that would give the client an understanding of the charcoal landscape given the variety that exists.

Question 5: As per briefing document, i.e., SOW Task 2/Section 3, companies/brands with greater than 50%/80% aggregate share should be listed. Can you clarify if it is share by value or volume?

Answer 5: The description should include both dollar value and volume.

Question 6: In the absence of sales data for SOW Task 2/Section 3, is it acceptable to identify leading companies, i.e. those companies comprising in aggregate 50% share as defined by sales or volume, through annual reports, product range, or geographic reach?

Answer 6: No. Annual reports are not likely to be useful since very few companies are publicly traded in the waterpipe space. Product range or geographic reach are not acceptable in lieu of sales or volume data.

Task 3 Estimate the size of U.S. waterpipe tobacco, steam stones, and charcoal markets

The Government desires sales estimates of the U.S. waterpipe tobacco, steam stones, and charcoal markets for the periods of time defined in the SOW (Task3/Sections 1-3). CTP will provide the Contractor with definitions of shisha and steam stones for the purposes of performing this contract. It is understood that these definitions are not official FDA definitions.

Forecasting future sales is not within project scope.

Question 7: Referring to SOW Task 3/Section 2, due to paucity of data, is it acceptable to triangulate to estimate the market size of certain sub-categories, such as steam stones.

Answer 7: Yes. This is acceptable provided responses are properly supported with the rationale, assumptions, and references.

Question 8: Referring to SOW Task 3/Sections 1-3, market size may not be available for all years. Is it acceptable to estimate the missing numbers by applying growth rates or other methodology?

Answer 8: Yes. This is acceptable provided responses are properly supported with the rationale, assumptions, and references.

Task 4 Waterpipe establishments (WPEs): estimate price ranges for consumer smoking sessions

It is acceptable to segment WPEs into 2-3 types to approximate costs. Other methods may be acceptable as long as they are properly supported. To be clear, determining behaviors and attitudes of users is not part of this project.

Where tasks require data for 2016, information can be provided in a different year if: (1) a later full year of data is available; or (2) if only an earlier year is available. Regardless, if the data collection year is different than 2016, choice of year should be discussed and agreed upon with the Government.

Question 9: Referring to SOW Task 4/Section 1 and 3, cost would vary by establishments (chain or standalone). Similarly the mark-up would also vary. Would it be acceptable to segment WPEs into 2-3 types to approximate such costs?

Answer 9: Yes, this is acceptable provided answers are properly supported including the rationale.

Task 5 Estimate domestic hookah unit sales

A small part of this market includes highly customized, one-off units. It is not expected that these units will be included in the project scope.

3. Available Project Resources. Information was provided on project resources that may assist potential awardees with proposal creation or contract performance. However, it is not a requirement to use any or all of the resources listed below. Moreover, the list is not exhaustive; other valuable resources may exist that are not shown below.

a. Waterpipe (WP) workshop. FDA hosted a public WP workshop in March 2016. Experts were invited to speak on various WP-related topics. Lecture videos and transcripts are accessible via a URL on the SOW’s first page and lecture slides are posted to Fed Biz Opps website for 1179639.

b. Medical literature. Some references that could be useful in support of project requirements were provided at the end of the RFI and SOW. These are posted at the Fed Biz Opps site for 1179639. The posted references are not an exhaustive list.

c. News sources. An example discussed was press releases for company transactions. These are sometimes helpful in understanding market dynamics. To illustrate, in 2012, Japan Tobacco Inc. acquired Nakhla Tobacco—one of the world’s leading manufacturers of waterpipe tobacco. Related press releases, blog posts, and analyst reports may provide insight into the target’s revenue and market share.

Trade journals may also be another source of information for the Hookah Purchase Journey. On the other hand, annual reports are likely of limited value since very few companies in the hookah space are publicly traded, and thus have no public disclosure requirements.

d. Court documents. Court documents may offer insightful information. Cases of interest include: contract disputes, bankruptcy filings, copyright/trademark infringement complaints, and tax court cases. An example was referenced in the RFI.

e. Internet sources. Images from YouTube and copyright licensing sites for images may be used to understand certain aspects of the hookah marketplace.

f. Hookah retailers. Examining products and packaging can provide useful data.

g. Population Assessment of Tobacco and Health (PATH) Study data. This is an NIH/FDA national longitudinal study of tobacco use and how it affects the health of people in the U. S. About 46,000 people ages 12 and older are participating in the PATH Study which began in 2012. Each year from 2012 to 2017, results from questionnaires are collected. Beginning in 2018, data will be collected every other year. Hookah use, including brand information, is included. Wave 1 data are available now; Wave 2 data are expected later this year.

These PATH website links were provided to participants:

NIH PATH site for general study information.

https://pathstudyinfo.nih.gov/UI/HomeMobile.aspx

NAHDAP (National Addiction and HIV Data Archive Program). This site provides in-depth information including data files. There are two types of data files: (1) “PUF” or public use data files; and (2) “RUF” or research use data files. The latter requires an application to access data; researchers need to apply online and login credentials are needed for the application process.

http://www.icpsr.umich.edu/icpsrweb/NAHDAP/studies/36498

h. CTP experts. CTP has hookah experts from many different disciplines. In addition, the organization is aware of outside experts that may have information related to achieving project tasks. Post-award, the contractor may, from time to time, place inquires with CTP to obtain hookah-related project information, if available.

There is no charge to the contractor for using CTP expertise. All communications and requests will go through the project’s Contracting Officer Representative. Project team members will respond either via email or telecommunications as needed, in addition to scheduled monthly meetings per the SOW.

CTP also has knowledge of scientific experts who work on hookah outside of the Agency. To the extent that the contractor may need scientific experts, the project team may offer suggestions to assist with project tasks.

4. Proposals and Contractor Innovation. Contractors are encouraged to be innovative in creating proposals that provide options or staged decisions to de-risk spend due to uncertainty in achieving certain tasks and variability in results. Moreover, contractors may offer alternative methods of achieving tasks that may not be contemplated in the SOW, provided these methods are well supported.

5. Timelines. The anticipated timeline for project completion is two years from award date. This allows adequate time for performance given potential delays due to Government processes. It is assumed that, in the course of task completion, primary market research may be needed. The Government requires Institutional Review Board approval for research with human subjects. Additionally, research with more than nine subjects requires Office of Management and Budget approval to be in compliance with the Paperwork Reduction Act.

Note: The Sources Sought Notice and combined Hookah Purchase Journey information: Industry Day, Statement of Work, evaluation criteria and PATH Website links were amended and posted on Fed Biz Ops on April 20; postings for Sources Sought and Hookah Purchase Journey information, closed April 25.

I hereby certify that this accurate to the best of my knowledge.

https://pathstudyinfo.nih.gov/UI/HomeMobile.aspx http://www.icpsr.umich.edu/icpsrweb/NAHDAP/studies/36498