The negative health effects of smoking are top of mind when society looks at Philip Morris International (PMI). For us, this translates into a societal mandate to transform our business by developing and offering to adult smokers an innovative range of alternative tobacco and nicotine products that have the potential to reduce risks for smokers and in turn reduce population harm compared to continued smoking. We refer to these revolutionary products as “Reduced Risk Products” (RRPs).
Transformation on this scale is a long-term process and has many organizational and business implications, but our organizational dedication to achieving this mandate has already delivered the first tangible results with the commercialization of our first RRP, the iQOS tobacco heating system.
Investing to Meet Ambitious Objectives
We have been working at the development and scientific assessment of RRPs for over a decade. Since 2008, we have invested over USD $2.0 billion in product development and scientific research and in 2009, we opened a state-of-the-art R&D center in Neuchâtel, Switzerland. Within R&D we have over 430 scientists, experts and staff, with an impressive diversity of backgrounds ranging from clinical science and systems toxicology to materials science and consumer electronics.
As many public health experts have recognized, RRPs cannot succeed if they don’t meet two basic criteria. First, products need to present less risk of harm than cigarettes. Second, adult smokers need to find the products acceptable and switch to them.
We are focused on developing, assessing and commercializing products that provide an experience as similar as possible to smoking cigarettes and which, based on robust scientific evidence, are shown to be less harmful than cigarettes.
The Harm Reduction Equation as presented at the E-Cigarette Summit by Clive Bates (19 Nov 2013) Source: PMI
Addressing Different Adult Smoker Preferences
Experts agree that nicotine, while addictive, is not the primary cause of smoking-related diseases. When a cigarette is lit, the burning of tobacco and other materials produces thousands of chemicals, more than a hundred of which are widely recognized as being associated with the development of smoking-related diseases. Each of our product platforms is designed to significantly reduce or eliminate the formation of these chemicals, while approaching the taste, nicotine and ritual-oriented characteristics of cigarettes.
To address the different preferences of adult smokers, our RRP portfolio currently focuses on four product platforms: two platforms that use different innovations to heat rather than burn tobacco, and two different non-tobacco nicotine e-vapor platforms. To date we have over 1,100 patents granted worldwide relating to RRP platforms and over 2,000 pending applications.
Substantiating Risk Reduction
PMI’s RRPs are in various stages of development. We are conducting extensive and rigorous scientific studies on the risk-reduction potential of these products. We assess risk reduction compared to the health effects of quitting smoking. We are conducting extensive research, including both laboratory and clinical studies, and “perception and behavior studies” to help us shape our risk communication and gain an understanding of consumers’ behavior (and the behavior of other groups) pre-market.
Our studies on one of our heated-tobacco products, iQOS, are well advanced. We have already determined that, with the exception of nicotine, the aerosol generated by iQOS is substantially different than cigarette smoke and contains on average 90-95% less harmful and potentially harmful compounds compared to a reference cigarette based on lists identified by health authorities such as Health Canada, the US FDA and the WHO. We have also proven that the aerosol is 90 to 95% less toxic than smoke from a reference cigarette. In a three-month clinical study recently carried out in Japan, the average reduction in 15 biomarkers of exposure to 15 harmful and potentially harmful compounds measured in smokers who switched to iQOS approached the effect observed in smokers who quit smoking for the duration of the study. While conclusions on the risk reduction profile of iQOS will be based on the totality of the evidence, results of research conducted to date give us confidence that we are on course with our plans to demonstrate that iQOS is not only a reduced-exposure product but also a less harmful alternative for smokers who switch exclusively to this product from cigarettes.
iQOS, one of PMI’s heated-tobacco products. Photo courtesy of PMI.
Positive Feedback from Adult Smokers
In late 2014, we launched our heated-tobacco product iQOS in the pilot cities of Nagoya, Japan, and Milan, Italy, and communicated to adult smokers that iQOS produces no ash and generates less odor. Even without a reduced-risk claim, our initial results met or exceeded our expectations. We have subsequently launched iQOS in Switzerland and have begun national expansion of iQOS in Japan. We are making progress with our expansion plan for Italy, as well as planned city launches in other markets.
We are also present in the e-vapor category. In the UK, we market e-cigarettes under the brand names Nicolites and Vivid, and in Spain we have launched an e-vapor product branded Solaris.
This is only the beginning of an exciting journey to transform the industry. We have the ambition that RRPs represent 10-15% of our portfolio in 5-10 years from now. But we hope to achieve even more than that. Indeed, we can envision a future in which RRPs someday replace cigarettes.
André Calantzopoulos is Chief Executive Officer of Philip Morris International. He joined the company in 1985 and worked extensively across Central Europe, including as Managing Director of PM Poland and President of the Eastern European Region.