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When asked by CNBC whether BAT had asked for blu to be sold as a condition for helping financing the merger, Reynolds' Howard said, "I have no insight to that, at all." However, Howard did say that Reynolds and BAT now "have an agreement in principle to pursue an ongoing technology-sharing initiative for the development and commercialization of next-generation tobacco products, including electronic cigarettes." Read More Selling blu to Imperial also may have been aimed at easing antitrust concerns for the larger deal

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Given that the agency regulates modified risk tobacco products and may soon take on e-cigarettes, this apparent conflict of interest has raised new concerns that FDA regulation will continue to have anti-competitive effects