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  • Wake-Up Call

    Wake-Up Call

    Derek Yach

    To speed up the demise of combustible cigarettes, the Framework Convention on Tobacco Control needs serious modifications, says Derek Yach.

    By Stefanie Rossel

    The World Health Organization (WHO) Framework Convention on Tobacco Control (FCTC) made headlines on its 15th anniversary in 2020. Unfortunately, the news was not that it was an overwhelming success but that progress toward getting rid of combustible tobacco was slow. Over the past two decades, overall global tobacco use has fallen, from 1.397 billion in 2000 to 1.337 billion in 2018, or by approximately 60 million people, according to the WHO. Eight million people still die every year from tobacco-related diseases. Critics warn that if the FCTC doesn’t modernize, a smoke-free world will remain a distant goal.

    “The FCTC remains essentially frozen in time,” says global health expert and anti-smoking advocate Derek Yach, founder and president of the Foundation for a Smoke-Free World (FSFW). As a cabinet director and executive director of the WHO, Yach was instrumental in the development of the FCTC. “With the FCTC, which is a fairly ambitious document, we achieved our first goal to put tobacco use on a much higher footing within global health—and it has had its impact,” he continues. “In the late 1990s, global health meant infectious disease control to most people, and now it includes noninfectious diseases as well, such as heart disease, diabetes, cancer and mental health. Smoking prevalence has started to decline slowly in some parts of the world, although there are still countries where smoking rates are extremely high and rising.”

    Eighty percent of the world’s smokers live in low-income and middle-income countries (LMICs). Applying the FCTC to these regions is the biggest challenge of the treaty, Yach says. “When looking at the single most impactful component of the framework convention—increased excise taxes—most LMICs have yet to even partially meet FCTC targets.

    “I suspect this has to do with the universal problems of treaties. It’s nice to sit in Geneva and think about what laws will work in developing countries. If you take your examples from advanced industrialized countries instead of understanding the harsh realities of adapting regulations in poor countries where enforcement potential is low and political priorities are very different, things are a lot easier. In countries such as India or Indonesia or certain parts of Africa, we have not seen success, mainly because there’s weak legal enforcement on the tax side, a lot of corruption in the system and no political will or capacity to put smoke-free public policies in place. Some of the marketing bans have worked, but the tobacco industry continues to interfere with legislation in many countries, and this undermines anti-smoking laws.” Yach predicted that, even if the full range of FCTC recommendations was implemented, annual smoking-related deaths would still increase to 10 million by 2030.

    Framework deficiencies

    One challenge is that 17 of the FCTC’s signatories own significant shares in tobacco companies. These companies account for almost 50 percent of the global tobacco industry (see “The Contortionists,” Tobacco Reporter, January 2021). They tend to have a real conflict between their revenue and tax-raising needs, and a need to reduce the health effects of tobacco. Other shortcomings include the FCTC’s neglect of adult tobacco consumers who are trying to quit, which contributes to smoking rates staying high. “If you only focus on children not taking up smoking, you will see health benefits 50 years from now, but we want that impact in 15 [years] to 20 years,” Yach says. “For that to occur, better cessation strategies and the global rollout of harm reduction products are critical.”

    FCTC recommendations that weakly impact tobacco use, such as health warnings on cigarette packs, have been widely introduced. Cessation assistance has not been promoted, and there is only slow implementation of the FCTC’s Articles 17 and 18, which stipulate the need to develop alternative livelihoods for tobacco farmers. Governments have also not been willing to hold the tobacco industry accountable for its actions, which is specified by the FCTC’s article 19.

    Finally, promoting tobacco harm reduction (THR) products, which was part of tobacco control efforts in 2003 when the FCTC was drafted, remains undeveloped and currently only includes nicotine-replacement therapy (NRT). One reason for this is that governments remain deeply suspicious of tobacco industry claims that their new products will cut death and disease. Governments are also unwilling to seriously consider industry research, which they think is self-serving.

    However, an examination of scientific output and patent filings shows that current research, regardless of the sponsor, is leading to new technologies capable of transforming the industry. “When we drafted the FCTC, we never anticipated this and as a result neglected the role of intellectual property rights,” says Yach. “At the time, we did not think something innovative and lifesaving could come out of tobacco companies, so why bother about intellectual property? How wrong we were!”

    Filling the gaps

    A nonprofit organization established in 2017, the FSFW aims to accelerate progress. The FSFW focuses on identifying and filling gaps in FCTC implementation and transforming the tobacco industry. It has developed a three-year strategic plan around three pillars—health, science and technology; agriculture and livelihoods; and industry transformation.

    The FSFW’s approach and philosophy differ substantially from other philanthropies that support the FCTC. Yach pointed out that Bloomberg and the Gates Foundation support selected elements of the FCTC but actively back campaigns against THR products. “We’ve been very clear that we support provisions that children should never vape or smoke. However, our main objective is to help adult smokers quit by making cessation aids accessible and to support adult smokers switching to approved harm reduction products. These include snus, e-cigarettes, heated-tobacco products and nicotine pouches,” says Yach. “In the long term, tackling cessation together with harm reduction is the only way to bring smoking rates down relatively soon. If today’s adult smokers quit or switch, even into their fifties or sixties, they will see improvements in their quality of life.”

    The FSFW strongly believes in investing in building research capacity in the nations in which it is doing research. No other major funders do this. “The health of a whole country improves when it has strong national scientific research capacity,” says Yach. “The scientists in a country become advocates for good policy in time, whereas keeping the money in the U.S., or doing all the work there and flying the experts in, undermines the development of tailored solutions that actually work.”

    As the FSFW’s first strategic plan comes to an end, Yach says the Foundation is pretty much on target. “We have created a network of outstanding grantees who are producing work and scientific research that did not exist before, such as the second issue of the Global State of Tobacco Harm Reduction (GSTHR), which was released in November 2020.” (See “Uphill Struggle,” Tobacco Reporter, December 2020.)

    In polls, the FSFW has tried to assess how important people’s perceptions of risk are to ending smoking. “We found out that knowledge of the risks of smoking is good in most countries but not in countries such as India or South Africa,” says Yach. “The intention to quit is often very high, but the resources available to [smokers] to do so successfully is often low. Access to NRT and reduced-risk products (RRPs) is almost zero in LMICs, yet we know that the countries doing best, such as the U.K. or Japan, are not just providing good cessation services and high-quality harm reduction alternatives, they are also helping smokers get access to these products, which is a big missing element in other countries. Our polls, however, show that more people now believe that nicotine causes cancer than they did two years ago. It does not. That view impedes smokers switching to reduced-risk tobacco products.”

    Tools to drive change

    The FSFW is supporting three institutions to drive change: the Center of Excellence for the Acceleration of Harm Reduction at the University of Catania in Italy; the Center of Research Excellence: Indigenous Sovereignty & Smoking in Auckland, New Zealand; and the Rose Research Center in North Carolina in the United States. Led by Jed Rose, co-inventor of the nicotine skin patch, the Rose Center is working on novel compounds and innovative treatments to improve the efficacy of smoking cessation therapy and harm reduction products.

    The publication of the first Tobacco Transformation Index (see “Incentivizing Transformation,” Tobacco Reporter, April 2020) was another milestone. The index will help investors get a good idea of what tobacco companies are actually doing to address the health impacts of tobacco use, which will guide their investment policies. “For the investor, the question is where do I place my money to maximize my return and also maximize my impact on the environment and health,” says Yach. “We think the Tobacco Transformation Index is helpful guidance for them.”

    The FSFW also has a hands-on approach to the FCTC goal of creating alternative livelihoods for tobacco farmers. It has set up the Center for Agricultural Transformation in Malawi, one of the most tobacco-dependent countries in the world. According to trendeconomy.com, unmanufactured tobacco accounted for $498 million, or 54 percent percent, of Malawi’s merchandise exports in 2019.

    “Malawi has had a change in government, and the new administration is deeply committed to reducing dependence on tobacco,” Yach says. “We have signed a memorandum of understanding with the government and the National Planning Committee on accelerating alternatives and have created and supported the first National Policy Center that brings together government, industry, NGOs and academics. We support entrepreneurial agriculturalists, smallholder farmers and women. As a result, there have been new vegetable and dairy production projects as part of a broader portfolio. We see an upward movement, not only in agriculture, but in the economy.” The foundation is currently building a campus at Malawi’s major national agricultural university.

    Challenging the COP9

    The Foundation has many new research projects in the pipeline and will focus even more intensely on how change can be fast-tracked, how to counter misinformation on THR products and how to connect with doctors and health professionals in 2021, Yach says. Certainly the most important event this year is the Ninth Session of the Conference of the Parties to the FCTC (COP9), which had to be postponed until November of 2021 because of the Covid-19 pandemic. Article 28 of the FCTC addresses amendments to the convention. In a 2020 article published in Drugs and Alcohol Today, Yach provided a detailed agenda on how COP9 could modernize the FCTC, principally by a change in philosophy.

    “I hope that the FCTC will align its policy to where the science is going, which would mean creating policies and actions that support harm reduction,” says Yach. “In addition, we seek progress on smoking cessation. It is long overdue that the COP discuss the pricing and availability of THR products in LMICs. I suspect many governments are likely to reverse their initial reactions to THR products based on emerging science and in response to the U.S. Food and Drug Administration’s decisions related to snus and IQOS. Historically, U.S. FDA decisions have been regarded as the gold standard of norm setting. That should be as true for THR products as it is for pharmaceuticals, vaccines and food.”

    Yach is confident that even FCTC article 5.3, which excludes the tobacco industry and those it funds from the dialogue, might be overcome. The FSFW was immediately boycotted by the WHO because, even though the organization is independent, it receives funding from Philip Morris International Global Services. 

    “The voices [against dialogue with the tobacco industry] are loudest from a very small group of people who grew up in tobacco control decades ago and got stuck in their careers with a very strong view,” says Yach. “However, there’s a new generation coming out of new areas of science and IT. They look at science in a different way than we did. They believe in private partnerships. They seek real change and not endless rhetoric. They are less interested in what the tobacco industry did decades ago than in what it can do today to save their mother or father.”

    Because there is no internationally accepted research agenda on smoking reduction, there are significant research gaps in many countries and scientific fields, and most of them center around THR products. Yach thinks these products must be incorporated into the FCTC, and he indicated that the foundation is leading efforts to define research that could improve tobacco harm reduction in any way and guide and accelerate the end of smoking. Addressing these gaps will involve people in academia, regulatory bodies and industry. The list should be completed later this year.

    “My view is that there will be an inevitable rise in the use of THR products and a decline in the use of combustible cigarettes. My hope is that we can speed that process up. If we do that, 3 million to 4 million tobacco-related deaths could be avoided every year over the next four decades. It’s worth pushing hard to achieve that goal.”

    Stefanie Rossel is Tobacco Reporter’s editorial contributor. An experienced trade journalist, she combines sharp reporting skills with in-depth knowledge of the tobacco and vapor industries. Prior to joining Tobacco Reporter, Stefanie was editor-in-chief at Tobacco Journal International, where she worked for a decade. Fluent in English, German and French, Stefanie covers tobacco news around the world. She is based in Germany.
  • Proper Context

    Proper Context

    Photo: Dan Johnston from Pixabay

    Will the EU consider the relative risk of e-cigarettes when it revises its Tobacco Products Directive?

    By Stefanie Rossel

    Two days at the beginning of next month are likely to have a significant impact on the future of tobacco harm reduction (THR) in the European Union (EU). In its plenary meeting on March 3–4, 2021, the EU Scientific Committee on Health, Environmental and Emerging Risks (SCHEER) will adopt its final opinion on e-cigarettes. Whether it substantially differs from the committee’s preliminary opinion, published in September 2020, remains to be seen.

    Under article 28 of the EU Tobacco Products Directive 2014/40/EU (TPD), the European Commission (EC) has been tasked with reporting to the European Parliament, the European Council and other committees on the application of the directive by May 20, 2021. The article stipulates that the commission shall review the directive in light of scientific and technical developments in order to consider legislative amendments and that it shall pay special attention to e-cigarettes. In this, it is to be assisted by experts such as those from SCHEER so that it has all the necessary, most recent and up-to-date information at its disposal.

    In article 20 of its 2014 version, the TPD standardizes safety and quality requirements for nicotine-containing e-cigarettes, such as provisions on the ingredients that can be used in e-liquids and maximum nicotine content. The SCHEER report, meant to be a scientific review of the health effects of e-cigarettes, was one of several studies the EC mandated on the application of the TPD on the use and opinions of consumers of tobacco and related products and on product perception. It is important as it may be part of the basis for a further revision of the TPD, which is under consideration. And it could have contributed to making the EU a forerunner in sensible regulation of tobacco and nicotine products, proportionate to their risk.

    However, vapor advocates were dissapointed when the SCHEER committee released its preliminary opinion on Sept. 23, 2020. The Independent European Vape Alliance (IEVA) called the report “fundamentally flawed.” Christopher Snowden, head of lifestyle economics at the Institute of Economic Affairs, described the document as a “step backward.” Clive Bates, director of Counterfactual Consulting, called the report “misjudged, poorly executed and unhelpful.”

    Areas of concern included the committee’s conclusion that there is insufficient evidence that e-cigarettes are a useful tool for smokers seeking alternatives, despite quoting two randomized control trials stating the opposite. The committee was also accused of ignoring scientific literature published after April 2019, most of which supports the argument that vaping facilitates THR. In its risk assessment, critics said, the SCHEER committee had not chosen a comparative risk-based approach but a simpler hazard-based approach, stating the potential risks of using e-cigarettes without even attempting to compare these with the risks from cigarette smoking, which are exponentially higher.

    According to the report’s findings, there is strong evidence that e-cigarettes are a gateway to smoking. The data on which this conclusion is founded, however, is almost exclusively from the U.S., which has an entirely different regulatory regime. The committee also failed to acknowledge that in the EU, smoking among young people has declined significantly.

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    Ignoring relative risks

    Abrie du Plessis

    “My view, from a regulatory perspective, is that the preliminary SCHEER opinion does not really address the most pertinent question on harm reduction, which has become even more pressing since the 2014 TPD,” says Abrie du Plessis, an associate at the South African Trade Law Center in Cape Town, who spent more than a decade following the developments of the World Health Organization’s (WHO) Framework Convention on Tobacco Control (FCTC) and the the 2014 TPD. “This question is about positioning e-cigarette effects and impacts relative to those of combustible cigarettes. There is, in my view, an urgent need to do this in a comprehensive and evidence-based manner. The preliminary opinion unfortunately fails to do this.”

    A possible explanation is that the SCHEER committee simply considered such a comparison to be outside of its remit. In the minutes of its most recent working group meeting on Dec. 2, 2020, it states, “The mandating Commission service clarified that there was no specific mentioning of harm reduction in the terms of reference.”

    “This is very significant,” du Plessis explains. “What it means is that there is a strong possibility that any further submissions on this topic could be disregarded and that the final opinion, to be adopted on [March 3 to March 4, 2021], will still not address the wider issue of harm reduction. The final opinion will then probably not make any real contribution in respect of the wider policy debate on tobacco harm reduction, and this narrow focus may therefore limit its value for EU policymakers. If the opinion indeed stays the same, then the Commission will have to look elsewhere for answers to the policy questions on harm reduction that it may want to address in the next TPD.”

    The public health community, du Plessis adds, is divided on which tobacco harm reduction policies to support. The WHO holds an ideological bias against e-cigarettes, favoring cessation of all nicotine consumption. As party to the WHO’s FCTC, the EU is likely to take its cues from the global health body.

    “This bias could have played a role at the SCHEER level, but I think that there is another possibility, which is that the committee simply opted for quite a narrow interpretation of its mandate, and in the end did not really address the wider issue of tobacco harm reduction or its rapidly evolving evidence base,” says du Plessis. “The SCHEER report is, however, only one of the inputs into the upcoming Commission report to the European Parliament, and the debate could soon shift to the actual mooted proposals, to a wider range of inputs to be considered and to inclusive participation in the further legislative process.”

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    Under pressure

    In line with its formal stakeholder dialogue procedures, the SCHEER is obliged to seek feedback from the scientific community and other stakeholders before publishing its final opinion. During the commenting period following the release of the preliminary opinion, which ended on Oct. 26, 2020, the SHEER received 691 contributions. Any proposed changes to the opinion had to be tabled by Jan. 12, 2021.

    However, the SCHEER may not feel obliged to take all comments into consideration; the EU has received much criticism about the level of tobacco influence in the shaping of the 2014 TPD. Besides, provisions in the TPD require it to respect international treaties such as the FCTC and its article 5.3, which discourages tobacco industry involvement in policymaking.

    “My view is that the committee will certainly consider the comments it receives, but it will act in line with its stakeholder dialogue procedures,” explains du Plessis. “The point to keep in mind is that the committee will carefully vet all comments received for relevance to the preliminary opinion and to its interpretation of its mandate.

    “On top of this, all submissions will have to comply with its further detailed rules of procedure. This means that there is a clear risk that a significant number of submissions may be disregarded. There is also significant time pressure as the final opinion is now almost two months overdue and must feed into the article 28 report planned for [May 20, 2021].

    “I agree that article 5.3 of the FCTC can create pressure on the committee to exclude studies or evidence originating from [the] industry. I, however, think that openly disqualifying peer-reviewed scientific studies simply on this basis would be detrimental to the standing of the committee.”

    The EU Commission finds itself in the less-than-ideal situation that its TPD review will commence before the next FCTC Conference of the Parties (COP9), which had to be postponed to November 2021 due to the coronavirus pandemic. “The 2014 Tobacco Products Directive confirms that developments, such as internationally agreed rules and standards on tobacco and related products, are relevant to the EU legislative process,” says du Plessis. “Before the Covid-19 pandemic, the EU was in a position that it could benefit from possible discussions at COP9, which was originally scheduled for November 2020, before it had to publish its own article 28 report—with proposed amendments to the TPD—by [May 20, 2021]. The postponement of COP9 by one year means that the EU Commission will no longer enjoy this benefit. With its own scientific opinion not addressing key questions on harm reduction in sufficient detail, a valid question would be whether it is at this stage in a position to propose any further evidence-based measures on tobacco harm reduction.”

    Stefanie Rossel is Tobacco Reporter’s editorial contributor. An experienced trade journalist, she combines sharp reporting skills with in-depth knowledge of the tobacco and vapor industries. Prior to joining Tobacco Reporter, Stefanie was editor-in-chief at Tobacco Journal International, where she worked for a decade. Fluent in English, German and French, Stefanie covers tobacco news around the world. She is based in Germany.
  • A Mixed Record

    A Mixed Record

    FDA Center for Tobacco Products Director Mitch Zeller explains the agency’s compresive plan on tobacco and nicotine regulation during the 2017 Global Tobacco and Nicotine Forum in New York City.
    (Photo: David Parker)

    FDA’s comprehensive plan on tobacco and nicotine regulation, three years later

    By Beth Oliva and Philip Langer

    In July 2017, FDA unveiled its “Comprehensive Plan on Tobacco and Nicotine Regulation”—a plan that, in FDA’s words, “places nicotine, and the issue of addiction, at the center of the agency’s tobacco regulations.”1 While the comprehensive plan outlined several areas of focus (such as regulation of flavored products and the use and impacts of premium cigars), in announcing the comprehensive plan, FDA placed significant emphasis on two specific issues. First was the prospect of reducing nicotine levels in combustible cigarettes to nonaddictive levels through “achievable products standards;” second was “fostering innovation where innovation could truly make a public health difference.”2 When introducing the plan, former FDA Commissioner Scott Gottlieb said this:

    Looking at ways to reduce nicotine levels in cigarettes so that they are minimally or nonaddictive, while not altering the nicotine content of noncombustible products such as e-cigarettes, is a cornerstone of our new and more comprehensive approach to effective tobacco regulation.

    [W]e must recognize the potential for innovation to lead to less harmful products, which, under FDA’s oversight, could be part of a solution. While there’s still much research to be done on these products and the risks that they may pose, they may also present benefits that we must consider.3

    Nearly 3.5 years after FDA’s rollout of the comprehensive plan, it is worthwhile to explore what FDA has done—and not done—in pursuing its quest to reduce nicotine in combustible cigarettes and foster innovation for noncombustible products. Has FDA made meaningful progress toward achieving the ambitious goals it set in 2017? Or has FDA simply paid lip service to the comprehensive plan without any serious action? A review of FDA activity over the last few years suggests a mixed record of accomplishment in the development of a national reduced nicotine standard and progress toward turning the vision of reduced-risk tobacco products into a reality. FDA in its public-facing comments remains steadfastly committed to the initiative, and while progress on complex issues such as these must be measured over years rather than months, it has been slow. Recent developments and the current posture of tobacco regulation, however, suggest the coming years will be critical to the success or failure of the comprehensive plan.

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    2018—Progress in the exploration of a reduced nicotine standard

    There is no question that FDA has taken steps to explore the reduction of nicotine in combustible cigarettes since announcing the comprehensive plan in July 2017. The first significant step was in March 2018 when FDA issued an Advance Notice of Proposed Rulemaking (ANPRM), seeking public comment on the development of a reduced nicotine product standard.4 Specifically, FDA sought comments, research and data on myriad topics, including a potential appropriate maximum nicotine level; whether a nicotine product standard should cover other combustible tobacco products; and what unintended consequences could result from a nicotine product standard (such as illicit trade or increase in smoking). The comment period remained open for about four months and by its close, the public docket had garnered nearly 8,000 comments.5 

    Around the same time, FDA funded research and an article by agency researcher Benjamin Apelberg and others in The New England Journal of Medicine titled “Potential Public Health Effects of Reducing Nicotine Levels in Cigarettes in the United States.”6 The article acknowledged “a continuum of risk for products that deliver nicotine” and used a simulation model to conclude that “enacting a regulation to lower the nicotine content of cigarettes to minimally addictive levels in the United States would lead to a substantial reduction in tobacco-related mortality, despite uncertainty about the precise magnitude of the effects on smoking behaviors.”7

    In a continued show of dedication to the prospect of developing a reduced nicotine standard, in May 2018, Center for Tobacco Products Director Mitch Zeller submitted an article to the Society for Research on Nicotine and Tobacco titled “The Future of Nicotine Regulation: Key Questions and Challenges.”8 In the article (eventually published in 2019), Zeller stated that FDA’s “renewed focus on nicotine” was premised on the “continuum of risk” and invited FDA’s stakeholders to contribute perspective as FDA continued to “shape its tobacco regulatory strategy.” In the article, Zeller stated that a policy centered on nicotine was the priority in FDA’s tobacco regulatory strategy and that “FDA’s strategic regulatory approach is designed to support innovation in developing products with net public health benefits.”9

    Overall, throughout 2018, FDA appeared to “hit the ground running” in exploring reduced nicotine levels in cigarettes through a national product standard. The ANPRM, along with funding research and submitting content to scientific journals, indicated a strong start. Yet at the same time, little was being done publicly on the second prong of the comprehensive plan—encouraging innovation in new products with potential public health benefits.

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    2019—FDA hits a stall

    While 2018 showed commitment to the first prong of the plan, 2019 did not build on the prior year’s advances. The agency did, however, move forward in certain ways in encouraging innovation for potentially reduced-risk products.10 In 2019, FDA issued the draft guidance on enforcement priorities for e-cigarettes (March 2019); the proposed substantial equivalence (SE) rule (April 2019); the proposed premarket tobacco product applications (PMTA) rule (September 2019); and the final guidance document for PMTAs for e-cigarettes. These documents showed an expanded FDA focus from the reduced nicotine prong of the comprehensive plan to also encouraging at least some limited innovation in potentially reduced-risk products. The agency also, helpfully, began to look at providing more transparency and predictability to tobacco regulation. While FDA has issued draft rules, however, nothing has been finalized; in addition, the final PMTA guidance document for e-cigarette products is just that—only useful for those products and not any other potentially reduced-risk product.11 Further demonstrating that FDA’s focus shifted is that while FDA’s spring 2019 unified agenda included a potential regulation to reduce or “cap” nicotine in cigarettes (as did the 2018 agenda), such a regulation was entirely absent from FDA’s fall 2019 unified agenda.

    What FDA most notably accomplished in 2019 was the approval of two PMTAs and the granting of the first modified-risk tobacco product (MRTP) order. First, in April 2019, FDA issued PMTA marketing orders for the IQOS tobacco-heating system and charger along with the Marlboro Heatsticks in regular, smooth menthol and fresh menthol flavors, finding that “the marketing of the products is appropriate for the protection of the public health.”12 In December 2019, FDA authorized the marketing of 22nd Century’s two reduced nicotine cigarettes—Moonlight and Moonlight Menthol, similarly finding that “the marketing of the products is appropriate for the protection of the public health.” Second, in October 2019, FDA issued the first MRTP orders, authorizing Swedish Match North America to use specific modified-risk messaging on its General snus products—the culmination of a five-year process for the company and FDA.

    Regarding the reduced nicotine standard, however, there was no public indication by FDA of progress toward promulgation of a standard. In response to inquiries from the public on why the initiative did not appear on the fall 2019 unified agenda, FDA stated that the omission of a reduced nicotine standard regulation did not mean FDA was not continuing to work on the initiative. Still, this shift change was understandably interpreted by the public as a possible wavering in FDA’s dedication to the initiative.

    2020—A continued stall and concern from the public

    In response to a reduced nicotine regulation being absent from FDA’s fall 2019 unified agenda, Congressman Frank Pallone submitted a letter to FDA Commissioner Stephen Hahn in February 2020 to “voice [his] concern” that FDA “appears to be reconsidering regulations that would set a maximum nicotine level in cigarettes in order to make them less addictive.”13 In a similar vein, John Pritchard—vice president of regulatory science at 22nd Century—penned an op-ed in November 2020 noting, “late last year, without warning or significant explanation, the FDA abruptly removed the proposed rule-making to reduce nicotine levels in cigarettes from its regulatory agenda. Even before the Covid-19 pandemic struck, policymakers decided there were more immediate priorities than cigarette addiction and the roughly half [a] million Americans who die from it each year.”14 Pritchard pleaded with FDA to revisit its plan and accelerate its own actions.

    Last year brought the unexpected tragedy of the pandemic, which obviously and understandably impacted all FDA efforts. Perhaps partly as a result, it also brought little public progress with respect to FDA’s development of a reduced nicotine standard. There were no requests for proposal, research or articles released in conjunction with the nicotine reduction initiative, and the initiative continued to remain absent from FDA’s unified list and long-term actions list throughout the year.

    On the innovation front, in July 2020, FDA did issue an MRTP order authorizing IQOS to be marketed with a reduced exposure claim, but not a reduced-risk claim. The MRTP application by Philip Morris International included requests for MRTPs for both claims. While this second MRTP order is undoubtedly an important step, to date, FDA has still not decided upon the separate MRTP applications for the 22nd Century reduced nicotine cigarettes. Such an approval would be a significant endorsement of the reduced nicotine approach and its impact on harm reduction.

    Closing out 2020—a renewed interest?

    After this period of inactivity on the reduced nicotine standard, the end of 2020 brought an unexpected move from FDA: In December 2020, 22nd Century announced that FDA (along with the National Institute on Drug Abuse) submitted an order for 3.6 million very low nicotine research cigarettes. FDA stated that the cigarettes are to be used for numerous research initiatives, including the potential implementation of a national reduced nicotine standard. Further, at the Food and Drug Law Institute’s Tobacco and Nicotine Products Conference in September 2020, Zeller confirmed that FDA remained committed to everything contained in the comprehensive plan, including focus on reduction of nicotine in combustible cigarettes. Starting research on this issue would indicate a step toward that commitment.

    On the issue of potentially reduced risk products, however, FDA has not yet indicated how it will look at the hundreds of thousands (if not millions) of PMTAs it received in September 2020 for products across the continuum of risk. These include applications for e-cigarettes as well as tobacco-free nicotine pouches, nicotine toothpicks, nicotine dissolvable products and other innovative products to deliver nicotine without the combustion elements of cigarettes. No further guidance documents have been issued from the agency nor has the agency provided further clarity on how it will determine if these products are “appropriate for the protection of the public health.”

    Therefore, FDA closed out 2020 with continued public-facing dedication to the initiative as well as a potentially significant step toward achieving it. The reduced nicotine regulation continues, however, to be absent from FDA’s unified agenda and long-term actions list, including that released in December 2020. That unified agenda does, however, indicate FDA’s intention to continue to work on other important rules, such as the final rule for PMTAs, the final rule for SEs and a proposed rule for MRTPs.

    Looking forward

    In summary, FDA’s progress toward developing and implementing a reduced nicotine product standard and encouraging innovation for potentially reduced-risk products and products authorized to use modified risk or exposure claims has arguably been unsteady. Of course, the public does not have insight into FDA’s internal workings, and there is the distinct possibility (or perhaps probability) that progress is occurring (such as continued review of comments to the ANPRM, development of a proposed rule and other research initiatives as well as developing guidance documents for other noncombustible products) out of public sight.  

    FDA’s recent order of 3.6 million research cigarettes is a promising step as was the granting of the first MRTP orders. The new year, which will include agency evaluation of PMTAs, will hopefully demonstrate continued advancement toward the goals of the 2017 comprehensive plan. While some may have expected that the agency would already be much further along, measuring progress is a subjective exercise. There should be agreement by all, however, that in 2021, FDA must show—by action, not just word—its continuing commitment to the public health goals outlined in 2017.

    Beth Oliva is a partner at Fox Rothschild LLP
    Philip Langer is an associate at Fox Rothschild LLP

    References

    1 FDA news release, July 27, 2017

    2 Speech of former FDA Commissioner Scott Gottlieb, July 27, 2017.

    3 Id.

    4 FDA special announcement, March 15, 2018

    5 Federal Register Docket No. FDA-2017-N-6189, “Tobacco Product Standard for Nicotine Level of Combusted Cigarettes”

    6 Apelberg, Benjamin J., Feirman, Shari P., Salazar, Esther, et al., “Potential Public Health Effects of Reducing Nicotine Levels in Cigarettes in the United States,” May 3, 2018

    7 Id.

    8 Zeller, Mitch, “The Future of Nicotine Regulation: Key Questions and Challenges,” Nicotine & Tobacco Research, 2019, 331-332, Oxford

    9 Id. at 332.

    10 In order to receive a marketing order, any innovative new tobacco product must be found to be “appropriate for the protection of the public health” and thereby at least demonstrate the potential to be a reduced-risk product.

    11 On Dec. 31, 2020, FDA sent both the “Final Rule on Content and Format of Substantial Equivalence Reports” and the “Final Rule on Premarket Tobacco Product Applications and Record Keeping Requirements” to the Office of Management and Budget for its review.

    12 In December 2020, FDA issued a further PMTA order for the IQOS 3 device (the initial order was on the IQOS 2.4 device), finding “the similarities in the product designs of IQOS 2.4 and IQOS 3, as well as the fact that the same Heatsticks are used in both devices, make it unlikely there are new concerns related to health effects, product quality, human factors or product misuse for IQOS 3 as compared to IQOS 2.4. As the two devices have similar operating procedures, use the same tobacco sources and produce comparable aerosols, FDA has no reason to believe the IQOS 3 device will result in different nicotine exposure, use patterns, user populations or abuse liability.”

    13 Letter from Congressman Frank Pallone to Stephen Hahn, Feb. 25, 2020

    14 Pritchard, John, “It’s Time for the Government to Refocus on Respiratory Health,” Nov. 19, 2020

  • Perception and Intention Studies

    Perception and Intention Studies

    Photo: Darya Petrenko | Dreamstime.com

    The most confusing part of an FDA application explained

    By Cheryl K. Olson

    In October 2020, the U.S. Food and Drug Administration’s (FDA) Center for Tobacco Products issued draft guidance sharing “current thinking” about “principles for designing and conducting tobacco product perception and intention studies.” As a researcher, I raise a glass in celebration. Unlike toxicology, behavioral science is fuzzy and subject to interpretation. We need signposts to follow.

    The guidance applies to premarket tobacco product applications (PMTA), modified-risk tobacco product (MRTP) applications and substantial equivalence reports. If you understand why and how to do tobacco product perception and intention (TPPI) research, your application is more likely to be approved. Let’s stroll through the guidance, highlighting key points and noting ways to put the FDA’s suggestions into action.

    Why TPPI?

    Behavioral research is one type of evidence the FDA uses to decide if a new tobacco product is “appropriate for the protection of public health.” As the guidance notes, perceptions refers to “beliefs, attitudes, judgments and expectancies” about a tobacco product. In other words, how do you—a tobacco user or nonuser—understand what the label says, what the risks are or who this product is meant for?

    Why do we ask about intentions? As the guidance says, “intentions to use tobacco products may help predict future tobacco use behavior,” especially near-future actions. The FDA wants to know whether smokers will switch to your smokeless, electronic nicotine-delivery system (ENDS) or heat-not-burn product (a good thing) and whether nonsmokers or former smokers will take it up (a bad thing). But it’s seldom practical or affordable to follow people around to watch what they do or to survey them repeatedly.

    So, we fall back on measuring behavioral intentions as the next best thing. We compare smokers intending to quit—now or within the next six months—to smokers with no plans to quit. We measure whether smokers’ quit intentions change after reading about your product and seeing pictures of your packaging or advertising. 

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    TPPI study aims: your essential roadmap

    “[The] FDA recommends that you develop TPPI study aims (the overall goals of the study) prior to conducting the study.” This step is not a nice-to-have; it’s essential. Defining the aims of your study and turning them into answerable research questions creates a roadmap for everything you do. Just as important, study aims tell you what not to pay attention to. If you skip this step, you’ll end up wading through confusing piles of data, perhaps shoveling it all into your application and hoping the FDA can make sense of it.  

    As you write your survey questions, figure out your sample quotas and review your data tables, you will periodically get lost in the details and need a touchpoint. Referring to your study aims will reorient you and keep you moving in the right direction.

    Here’s another way to look at study aims. What product story do you want to tell the FDA? There are some research questions all PMTAs need to address, such as perceptions of risk (more on that later). Others will be specific to your product and your story.

    Perhaps your smokeless product appeals more to a particular group, such as female or lower income smokers, than competing products do; your story includes addressing the needs of that underserved group of smokers. Or your high-nicotine vape product is “appropriate for the protection of public health” in part because it attracts heavily nicotine-dependent smokers who, to use FDA-speak, perceive it as an acceptable substitute for cigarettes. If your less-toxic tobacco product appeals to smokers not intending to quit—who are discouraged or unmotivated—that’s a further public health win. If your product and its various flavors do not appeal disproportionately to youth or you have a solid method of restricting youth access, say so.

    From market research or conversations with customers, you might have a good idea of your story. But to tell that story to the FDA, you must design research questions and collect data to support it.

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    Study types (qualitative or quantitative) and methods

    Are you telling your story with words or numbers? When you don’t know a lot about perceptions and intentions (say, a new product or target population), start with focus groups or individual interviews. But qualitative doesn’t equal free-form; a structured set of questions, an unbiased interviewer and an analysis plan are a must if the FDA is going to take you seriously.

    Some research questions might be answered with experimental studies. For example, you could test effects of new labeling by seeing how subjects randomly assigned to view that labeling answer questions about product perceptions differently than a control group. Another option is an observational study: for example, watching a subject follow directions to operate or charge a new vaping device without prompting from researchers.

    Often, your behavioral research aims can be met entirely through cross-sectional quantitative studies: one-time surveys of people who’ve used your product and people who haven’t.

    You can get some of the benefits of a qualitative study by adding open-ended questions to your multiple-choice survey. Let’s say you’re surveying users of Vape A. You ask, “Why did you choose to try Vape A? (Select all that apply).” You then invite those who clicked on “To help me quit smoking cigarettes” to “Please tell us more about your experience using Vape A to cut down or quit.” This offers two benefits: It helps you better understand how people use Vape A. And, when paired with solid numbers, user quotes help make your case to FDA reviewers that Vape A deserves a spot on that continuum of risk.

    Study measures

    Your best bet is to adapt questions from research published in academic journals, especially studies by authors who work for the FDA or other government health agencies. Next best are validated measures from the industry—for example, Philip Morris International has tested questions on addiction and health risk perceptions. Note that your questions need to “be written or adapted in a manner that specifically refers to the product (by name) that is the subject of the study.”

    Perception questions should include risks to health and risk of addiction asked in several ways: the absolute risk of using your product; the relative risk as compared to other products in the category as well as cigarettes, nicotine-replacement therapies and no tobacco use; and the effects of dual use (health risks of sticking with smoking, partly substituting your product or switching completely). A good question will be direct, specific and unambiguous: Ask about perceived personal risk of specific types of serious illnesses or earlier death from using Vape A not generically about harm to health.

    Behavior intention questions include intent to buy, try, use or stop use of your product. Detailed questions, such as intent to partially or completely replace cigarettes with Vape A, are best left to surveys of Vape A users; it’s too much guesswork for people new to the product. (The guidance doesn’t cover “actual use” studies, but don’t forget to ask your customers about monthly and daily use, reasons for use and use situations.)

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    Participant sampling and recruitment

    Now that you know what to ask … who do you ask, and where do you find them?

    For the who part, you need a sampling plan and eligibility criteria. You want to show that Vape A appeals to intended users (smokers or users of other tobacco products) and not to unintended users (nontobacco users and former users, especially youth). Your sampling plan might call for equal numbers of smokers intending to quit, smokers not intending to quit, never-smokers and former smokers—making sure to include a disproportionate number of young adults and a minimum number of people with vaping experience.

    Eligibility criteria can be tricky; check the published research. For example, a “never-smoker” is often defined as someone who has smoked fewer than 100 cigarettes in their lifetime!

    As to the where … the FDA is open to a variety of modes of data collection (e.g., online, phone, in person) and subject recruitment methods (such as online panels and random-digit dialing). All methods will introduce some bias; online panels may have fewer low-literacy participants, for example. Have a scientific justification for the approach you choose. And phrase your screening questions carefully, so online panel members who just want the dollars can’t guess the “right” answers to join.

    Common TPPI mistakes

     

    • Not documenting your research methods (e.g., survey response rates, how you recruited)
    • Biased recruiting; for example, if you offer product coupons as an incentive to fill out your survey, people who don’t like your product won’t respond, and your study sample won’t be representative of the larger population. Use neutral incentives (like a choice of retailer gift cards).
    • Not enough people in your study—this might be a too-small total sample size or not enough members of important subgroups to detect between-group differences (e.g., women versus men).
    • Unclear questions or incomplete response options: Prevent confusion by pre-testing your survey with individuals from your target groups (including less-educated folks).
    • Generic questions—the FDA doesn’t want general perceptions of vapes or snus. They need to draw conclusions about your product, including any flavor or strength options.
    • Not protecting privacy of research subjects—document your “adequate procedures for human subjects protection;” that is, their “rights, safety and welfare.”
    • Treating TPPI studies like market research—the FDA asks that companies “select appropriate study personnel for TPPI studies … who have sufficient formal education, training and experience in conducting social or behavioral science research to ensure the study is designed or conducted appropriately.” Translation: We want to hear from academics like us who speak our lingo.
    Cheryl K. Olson is a California-based public health researcher and consultant who specializes in behavioral health issues. She spent 15 years on the faculty of Harvard Medical School.
  • Being You

    Being You

    In a world where individuality is embraced, employees should feel comfortable bringing their whole selves to work.

    How each of us plays a crucial role on the journey to achieving sustainable and inclusive workforce change

    By Rene Staebe

    Have you ever felt the need to put on a “persona” for work?  

    In a corporate world where individuality is embraced, it is extraordinary that some of us still feel we can’t bring our whole selves to work. 

    It makes sense that feeling at ease to be yourself brings out the best in you, and there is plenty of research backing up the theory that happy, motivated employees perform better. So why is it that some of us still feel we can’t be authentic in a professional environment? And how can we shed the stigma that makes us feel the need to put on an act? 

    For many of us—including women, LGBT+ community members and people of color—the answers to these questions can be traced to our industry’s long history of having a predominantly heterosexual, cisgender, white, male-dominated workforce. Thankfully, businesses now widely acknowledge that there is not only an ethical need to break this mold but also that there are many significant benefits to a diverse workforce wherein different personalities and perspectives bring new ideas to the table. Talent stays longer because they enjoy collaborating with diverse and open-minded colleagues, and the employee population more honestly resembles its consumer base.  

    There is no doubt that a diverse workforce and an inclusive business culture drive business performance. The greatest challenge is achieving it. 

    I was recently invited to participate in the 2020 Global Tobacco and Nicotine Forum’s diversity and inclusion panel. Ironically and perhaps amusingly, I was the token “white male” on the panel, albeit representing the LGBT+ PRIDE community. The discussion raised many concerns, the biggest being the slow progress in achieving genuine diversity in the workplace, and several insightful solutions were presented. The resounding conclusion was that we still have a way to go and that employees are key to achieving sustainable change. This echoes my long-held belief that driving positive, sustainable change in any industry requires striking a balance between the corporate-led diversity and inclusion push and employees feeling empowered to be the agents of change. 

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    Building a place of belonging 

    Change takes time and is usually uncomfortable. However, if you believe in it and feel you are a part of it, then the journey feels less onerous.  

    Japan Tobacco International (JTI) is still in the early stages of its change journey, but in the three years that I’ve been with the company, I have witnessed great progress. Our leadership is engaged, and the support I feel across the company has given me a strong sense of purpose and hope. 

    We have an ambitious diversity and inclusion vice president, Christiane Bisanzio, who with the help of a dynamic team is driving a bold strategy that focuses on five strategic pillars—gender equality, N-WOW (new ways of working, i.e., creating a more modern and flexible working environment), LGBT+ inclusion, well-being and my generation (with a particular focus on millennials). Our corporate mantra “everyone counts,” although not developed specifically to promote diversity and inclusion, resonates widely across the organization and feels highly appropriate.  

    It is worth pointing out that I personally have always had the privilege of feeling comfortable being my true self at work. Prior to joining JTI, I worked at Procter & Gamble where inclusion is a part of the company DNA. So, when I adopted a new corporate culture, I carried this well-established and ingrained self-confidence with me. However, I have always been aware that not everyone has had such a positive experience and many still face barriers today. 

    I recognize now how the presence of role models is a powerful element of inclusion. Having peers around you that you can relate to makes it so much easier to be authentic. Consequently, this has become one of my “personal raison d’etre.” As one of the loud and proud queer voices at JTI, if I can help just one person feel more confident to be their true self in the workplace, then my efforts will have been worthwhile.  

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    Employee-led change  

    None of us can make change happen singlehandedly. Achieving successful and sustainable changes requires advocacy and an environment in which people feel safe and empowered to speak up and know they’ll be heard.  

    At JTI, we are still collectively figuring out the best approach to diversity and inclusion and shifting our corporate culture, and in some cases, we still have to explain the value and benefits of an effective agenda. Every initiative that resonates with employees and helps shift the status quo is exciting progress, which makes my role as a vocal champion even more relevant and important. JTI genuinely is an energizing place to be right now. 

    We’ve had particular success at encouraging dialogue through employee resource groups (ERGs), most of which are being driven from our headquarters in Geneva. These voluntary, employee-led forums bring underrepresented communities together to support one another, raise concerns and share ideas for driving awareness and inclusiveness. JTI leadership has actively embraced them, recognizing their value to meet and hear the voices of underrepresented employee groups and as a useful sounding board when developing policies and corporate strategy. Our CEO Eddy Pirard has joined us at a PRIDE virtual happy hour, and our Corporate Affairs and Communications Senior Vice President Suzanne Wise has been reluctant to take off her JTI PRIDE t-shirt. 

    Thanks to this empathetic leadership and a loyal and growing team of allies, colleagues are more comfortable speaking up and sharing their stories than they were previously. The mounting enthusiasm for ERGs such as PRIDE is contagious. I am hopeful we’ll see conversations about LGBT+ and other diversity and inclusion topics, such as gender, race and generation diversity, germinate as employees feel empowered to speak up about diversity topics that resonate with them in their market.   

    With the bottom-up push from employees gaining strength, we are ripe to embrace a corporate-led pull from the top of the company. Leadership-endorsed policy changes are already giving us the momentum and motivation to make genuine and sustainable progress in our five key diversity and inclusion pillars.

    I’ve always said, great minds don’t always think alike. At JTI, we are taking the first steps to disrupting a long-worn uniformity, and we are doing so by ensuring employees play a key part in the conversation.  

    There is no doubt that greater representation of previously unseen groups, and a more open and inclusive culture where everyone feels comfortable being themselves, will better prepare us for the future—a future where our employee base truly reflects the world in which we are operating.  

    Rene Staebe is a corporate communications manager at JTI.

  • High Expectations

    High Expectations

    Photo: Rolf Hansen | Pixabay

    Faced with declining demand for tobacco, industry suppliers are turning their attention to cannabis.

    TR Staff Report

    The legalization of cannabis and related products in many jurisdictions is creating new opportunities for tobacco companies and suppliers facing stagnating sales of their traditional products.

    While the Covid-19 crisis appears to have slowed the long-term decline in demand for some tobacco products—premium cigars in particular appear to have fared well during the crisis—the days of unrestrained growth are clearly over. Global Data predicted in September that tobacco companies would sell $651 billion worth of filter cigarettes in 2020, an 8 percent drop on sales of $707 billion in 2019. For plain cigarettes, the fall is higher at 11 percent, and in niche categories like chewing tobacco, forecast sales were expected to drop by 13 percent in 2020. 

    The data and analytics firm says the pandemic has prompted significant numbers of consumers to quit tobacco products, citing lower disposable incomes from reduced employment, fewer social settings in which to light up and increased awareness about the importance of respiratory health. This is on top of existing factors depressing demand for tobacco products, including growing health consciousness and anti-tobacco measures, such as smoking bans and taxation. Global Data expects it will take at least until 2023 for global tobacco sales values to fully recover.

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    Meanwhile, global demand for cannabis and related products continues to rise steadily. Euromonitor International believes global legal sales of cannabis could increase from $12 billion in 2018 to $166 billion by 2025—a potential increase of more than 1,000 percent. Much of that growth will come from legalizing sales that are currently taking place illicitly. In 2018, only about 8 percent of the global demand for cannabis was filled legally, hinting at the tremendous opportunity for growth.

    Cannabis legalization has been gathering momentum. Alongside the U.S. presidential election in November, voters in several states approved ballot measures legalizing marijuana. In 2018, U.S. Congress had already legalized hemp with less than 0.3 percent THC, the psychoactive component in cannabis, in all 50 states.

    In December 2020, the U.S. House of Representatives passed the Marijuana Opportunity Reinvestment and Expungement Act—a bill decriminalizing marijuana at the federal level. Then Senate Majority Leader Mitch McConnell refused to bring it to a Senate vote, but the outcome of recent elections has changed the outlook. With the Democratic party controlling the presidency and both chambers of Congress, the chance for federal legalization of cannabis appears to have increased significantly.

    On the global stage, too, cannabis continues to gain acceptance. Late last year, the United Nations (U.N.) removed cannabis from Schedule IV of the 1961 Single Convention on Narcotic Drugs, where it resided alongside drugs like heroin. The change will open the door to more medical cannabis research. National governments will still decide how to regulate cannabis, but many states look to the U.N. for guidance.

    Suppliers of the tobacco industry have been watching the developments with considerable interest. Around the world, tobacco farmers have either shifted to growing cannabis or added it to their repertoire as an additional income source. Zimbabwe, a leading producer of leaf tobacco, legalized cultivation of cannabis for medicinal use in 2019. Local officials have high hopes for the new crop, with some predicting Zimbabwe’s earnings from cannabis exports could outstrip those of tobacco by a factor of three. Treasury spokesman Clive Mphambela expects the country’s cannabis sales to reach $1.25 billion in 2021. By comparison, Zimbabwe earned $444 million from the 2020 marketing season that closed in August, according to the Tobacco Industry and Marketing Board.

    Malawi, too, is gearing up to start commercial production and processing of cannabis for medicinal and industrial use. In February 2020, Malawi’s parliament passed a bill that makes it legal to cultivate and process cannabis for medicines and hemp fiber used in industry but stops short of decriminalizing recreational use. The country recently created a dedicated regulatory authority for cannabis. Despite steep licensing fees, many tobacco farmers have already applied for permission to grow cannabis. Their enthusiasm is understandable given that Malawi’s earnings from tobacco have fallen dramatically in recent years.

    Elsewhere in the supply chain, companies that have traditionally catered to the tobacco industry are also eyeing cannabis. For example, Hoffmann Neopack, known in the tobacco industry as a supplier of tins and tubes, organized a webinar last year exploring best packaging practices for cannabis products.

    Even machinery makers have gotten into the game. Evans MacTavish Agricraft, a longtime supplier of leaf tobacco processing equipment, now offers a broad portfolio of machinery for all steps of marijuana processing—from treating the raw material to overwrapping of the filled cannabis preroll packs. Hauni Maschinenbau, best known for setting speed records with its cigarette production machinery, has also entered the cannabis market. At a recent open house in Richmond, Virginia, USA, the company launched three machines for cylindrical preroll making as well as a range of accompanying equipment.

    Traditional tobacco companies, too, have ventured into cannabis. In late 2018, U.S. market leader Altria Group acquired a 45 percent equity stake in Cronos Group, a leading global cannabinoid company, headquartered in Toronto, Canada. British American Tobacco recently launched its first CBD vapor product, Vuse CBD Zone, in Manchester, U.K.

    Of course, investing a newly legalized sector presents risks, and some investments have soured. In January, Pyxus International announced that it would divest its cannabis business in order to focus on its more profitable tobacco and e-liquid operations. Regulatory confusion and failures in corporate executions have brought back some of the more outlandish forecasts to what are perhaps more realistic expectations.

    Despite such teething problems, however, the long-term narrative remains one of growth: Cannabis will likely continue to gain momentum, and tobacco industry players would do well to keep an eye out for opportunities in the segment.

  • Innovative Solutions

    Innovative Solutions

    Photo: Tobacco Reporter archive

    One traditional tobacco industry supplier that has recently diversified into servicing the legal cannabis business is LLFlex. With headquarters and manufacturing facilities in Louisville, Kentucky, USA, the company is a global leader in metals-based laminates for packaging and industrial solutions in the wire, cable, construction and other consumer markets. For nearly a century, LLFlex has supplied packaging materials to the tobacco industry. Its innerliner is available both laminated and coated and in a vast array of colors. The company’s innerframe offering includes plain and printed materials.

    LLFlex has also been working on new packaging designs that will incorporate its laminated carton board into flip-top boxes and cartons. According to LLFlex Business Segment Director Kelley Stearman, the company sets itself apart through its long history and commitment to the tobacco industry and its willingness to make investments to service this industry. “Our reputation of high-quality materials and excellent service is second to none,” she says.

    With sales offices in the U.K. and China and an extensive network of agents, LLFlex services the entire globe. Recently, the company opened a new factory in High Point, North Carolina, USA, allowing it to efficiently service the high concentration of tobacco customers in that region.

    As numerous U.S. states legalized cannabis in recent years, LLFlex started exploring opportunities in that segment as well. While the market remains small compared to that for tobacco, the potential for growth is considerable. “Data shows a huge exponential increase in demand for cannabis packaging over the next five years, and we want to be part of that growth,” says Stearman.

    Cannabis packaging is similar to tobacco packaging in that it requires innocuous materials that won’t impart any taste or odor on the cannabis or tobacco products. From there, however, the similarities diminish. “As we know, most cigarettes are packaged on high-speed packing lines due to the high production volume of these products,” says Stearman. “Cannabis products for the most part are still being made and packed on a much smaller scale. And the cannabis product that a consumer buys typically is in a much different format than a cigarette. Whether it’s a cannabis flower or an edible, the packaging is very different from a cigarette pack.”

    Complicating things from a packaging supplier’s perspective, every U.S. state that has legalized cannabis has its own unique regulations for cannabis packaging. Some states require cannabis packaging to be reclosable, for example. One requirement, however, is common to all jurisdictions: Cannabis products must be sold in child-resistant packaging.

    With its LoCRite product, LLFlex can help cannabis producers comply. LoCRite is a laminated tear-resistant board that can be used to make folding cartons with certain child resistant opening features. The tear-resistance of the board combined with the specialized opening features of the carton make the finished carton child-resistant.

    The LoCRite product has been used in several cartons that have been certified as child-resistant. In developing LoCRite, LLFlex evaluated different types and gauges of films. “The film had to be printable, and we had to achieve superior bond strength in the laminate,” says Stearman. “The finished product had to be printable on both sides, foldable and scorable.” Unlike competing solutions on the market, LoCRite is available in a variety of substrates. It can be made with various paper and board calipers and with Forest Stewardship Council-certified materials. The film component of LoCRite can be clear or metalized, including decorative options such as custom holographics. LLFlex has been supplying LoCRite for cannabis applications for more than three years and partnered with one of its key customers to develop a CR-certified carton for medical or recreational marijuana products. The folding carton is composed of LLFlex’s LoCRite board and is certified child-resistant in compliance with the U.S. Consumer Product Safety Commission (CPSC) 16 CFR 1700.20 testing protocol.

    For the time being, cannabis packaging accounts for a relatively small portion of LLFlex’s business portfolio. The market is likely to grow, however—and when it does, LLFlex will be ready. “We have several projects underway with customers utilizing our LoCRite material, and the child-resistant certifications are in various stages of progress,” says Stearman.

    “We are also working on a completely new packaging format called PotPodz, which was introduced to the market last year as a concept.” The company has received lots of positive feedback and interest in this concept and is working toward commercialization. “Between our LoCRite product and development of the PotPodz concept, we expect our cannabis packaging to become a larger portion of our total business in the next few years,” says Stearman.

    What’s more, as some tobacco companies invest in the cannabis space, LLFlex is able to bring its cannabis packaging solutions to its tobacco consumers. “It’s a great win-win scenario: Our tobacco customer can work with a known and trusted packaging partner, and we can help our existing customers as they expand into new markets,” says Stearman.

    Looking forward, Stearman says she hopes to see more consistency in packaging regulations as cannabis legalization proliferates in the U.S. “Right now, each state has their own unique packaging requirements, which presents challenges for the supplier,” she says. “It will be easier to achieve economies of scale once there is more of a national standard for packaging.”

    While LLFlex does not anticipate having to alter its materials to allow for the fast production speeds common in cigarette manufacturing, the company does expect order sizes to increase. This, says Stearman, will be beneficial for the entire supply chain and ultimately allow LLFlex to offer consistent pricing and short lead times.  

  • Continued Momentum

    Continued Momentum

    SPI has recently experienced an increase in demand for upgrades of glue applicators from gravity systems to pump systems.

    Innovative products and environmental drivers are creating new opportunities for adhesives even in a testing time.

    By George Gay

    SPI manager Danielle Roxborough appeared chuffed when I asked her in January what were the main factors driving the market for equipment used to apply tobacco industry glues. And she was chuffed; and the reason why she was chuffed turned out to be that while, in the past, the usual market drivers for such equipment have been cost reductions and efficiency improvements, currently, one of the main drivers was concern for the environment—and this she found pleasing. Of course, drives to improve efficiencies, especially, for instance, where they target waste reduction, can be seen as environmentally advantageous, but what Roxborough was talking about involved a direct link.

    For various reasons, the major cigarette manufacturers are apparently showing renewed interest in finding an efficacious filter material that biodegrades more easily than does the most commonly used traditional filter material, which is made of cellulose acetate hardened with the application of triacetin. Of course, the search for more environment-friendly filter materials has been going on for a long time, which indicates that there are no obvious substitutes, but Roxborough said the industry was now investigating the use of crimped paper, and this was raising the possibility of some interesting developments in which ITM, a company that manufactures filter-making machinery and that is related to SPI through the Tembo group, was heavily involved. And, in turn, ITM had been approaching SPI because the efficient application of glue would be crucial in constructing such a filter and because SPI is the group’s acknowledged expert in respect of glues and glue application.

    In part because of new regulations, such as the EU’s ban on single-use plastics, everybody was having to think about their products, the waste they produced and what effect they were having on the environment, said Roxborough, and so it was exciting to be involved in a new project such as this, especially since the group’s ethos was built around developing more environment-friendly products. It was exciting to see an environmental issue pushing developments, she added.

    There are a number of reasons why paper has not been used more widely as a cigarette filter material, one of which concerns taste, and, again, this is an issue of interest to SPI, which is involved also in the development and supply of flavor application systems. The idea of using crimped paper as a filter material had thrown up problems, but, wherever there was a problem, there had to be a solution, said Roxborough; so one of the projects SPI had been looking at involved incorporating a filter-material flavor system onto production machinery. However, she added one important caveat. The idea was to try to make a paper filter that offered the same taste as did a traditional filter, when attached to similar tobacco rods. It wasn’t a case of trying to introduce additional flavors. It was about trying to give consumers products that tasted as close to those that they had become accustomed to but that had better environmental credentials. Inevitably, it would be something of a balancing act, but then, there was some resistance when plastic straws were replaced by paper ones, and people got used to them.

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    Transition to new products

    Another factor driving the market for glue-application systems has arisen because of the transition being made from the production of traditional combustible cigarettes to that of more modern products, such as heat-not-burn (HnB) cigarettes. Clearly, while new, less risky products are seen as the future, their development is being funded in part by the income from the sale of traditional cigarettes; so the question arises as to how to keep existing traditional-cigarette production machinery running efficiently while avoiding the need to make major investments in new machinery that could be spent more wisely on developing new products. This situation, said Roxborough, had created an opportunity for SPI, which, by upgrading the glue-application systems on existing machinery, especially filter-making machinery, could greatly improve the efficiency of such machines at a fraction of the cost of a new machine. And as a consequence of this, SPI had seen an increase in demand for upgrades of glue applicators from gravity systems to pump systems. That had been a surprising knock-on effect of people wanting to reduce their investments in new machinery for combustible-cigarette production, she said.

    Interestingly, while such a shift in investments is not directly aimed at protecting the environment, it may be seen as having such an effect. Switching a machine from a gravity-fed to a pump-system glue applicator is said to reduce waste, as, of course, does upgrading a machine rather than sending it to the machine graveyard.

    The above market drivers come on top of one that has been around for a few years now and that was set in motion by the arrival of HnB devices. While many different next-generation products have been developed in recent years, for a while it looked like the market would be dominated by vaping devices, which offered few opportunities for SPI. However, with the arrival of HnB, things changed because, while these devices represented a clear break with the past, they were manufactured in ways that were reasonably similar to the production methods used for traditional combustible cigarettes. The arrival of HnB products opened the door again to opportunities for traditional tobacco industry companies because they used slightly different materials in slightly different ways, and what this meant in practice was that there was a need to rethink such things as glue application, Roxborough said. This might involve something simple, such as repositioning an applicator or reassessing how much glue to apply, but sometimes it involved a complete redesign.

    The above, I think, gives an indication that whereas the tobacco industry has traditionally been seen as conservative, in recent years it has undergone huge changes. And this idea was underlined by Roxborough when I asked about what pieces of SPI’s equipment were the most in-demand. She replied that the answer to that question would depend on what week I was talking about, before going on to explain that, within the tobacco industry, little was predictable. Every year, SPI managers met to set targets for the year ahead and, while the overall targets were met, it was usually the case that the sales that helped the company meet those targets were of equipment different from the ones that had underpinned the predictions. This lack of market predictability was not necessarily a disadvantage, however, because SPI was flexible and its equipment was modular, so it could change direction quickly; it never became stuck in a position where it needed to sell a particular product.

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    Riding the roller coaster

    Danielle Roxborough

    Of course, it goes without saying that 2020 was particularly unpredictable and, in answer to a question about how the Covid-19 pandemic had affected SPI’s business, Roxborough admitted that it had been a testing time—a roller-coaster year. The major issue that the company ran into was in March and April when it proved difficult to ship equipment. “We thought that the problem would be the supply chains,” said Roxborough, “but they were fine. But we were left with boxes that we couldn’t ship for three [weeks] to four weeks because some of our customers’ factories weren’t open.”

    Still, SPI seems to have weathered the pandemic well. It has kept its factory open and fully functioning. It has not furloughed or made redundant any of its people, and neither has it recorded any confirmed cases of Covid-19. According to Roxborough, this success in the face of adversity has been down to the company’s being pragmatic. The first consideration was ensuring that people stayed well; so those who could work from home were sent home immediately while those on the factory floor were given an extra day off each week so that at any one time the factory could be kept running but with one fewer person in the building. And, of course, the more obvious steps were taken in respect of such items as masks and screens.

    Infrastructure-wise, SPI was obliged to rethink its whole building, which was not necessarily a bad thing, said Roxborough. The company’s offices had become overcrowded and the pandemic forced it to have a clear out to create more space for people to spread out, something that had been under consideration since well before the pandemic struck but had never been implemented. Staff and the company have benefited too from another change that was implemented because of the pandemic—one that provided office staff with more flexible working hours and that meant the office is now open for an hour longer each day, a particular advantage since SPI works closely with Netherlands-based ITM.

    Which subject brings us to Brexit. The U.K. concluded a deal with the EU shortly before it left on Jan. 1 after a year’s transition period, and I was interested to find out whether SPI yet knew how the new trading arrangements with the EU would affect its business. “In short, no,” said Roxborough. “We’re pleased there’s a deal; that helps, but we suspect there will be more administration. We’re shipping a unit this week to Europe and it has to go through more procedures in terms of paperwork and checking. But this is nothing new to us. We have been used to shipping outside Europe and we use a broker for imports and exports. We are going to monitor the situation cautiously for now and see what happens.”

    When it comes to Brexit, SPI has the advantage of being linked to ITM, though Roxborough pointed out that the link-up wasn’t made because of Brexit. More than anything, the link-up had provided stability, which, in turn, was providing confidence about the future, she said. SPI still operated independently, but it had access to the facilities and know-how of a big group, and, at the same time, that group had access to SPI’s expertise.

    The association with ITM has come in handy during the coronavirus pandemic because, while SPI’s engineers have been unable to travel, in some regions it has been able to call on local ITM engineers to help with equipment installation. However, what the pandemic had proved also, added Roxborough, was that SPI’s equipment was relatively easy to install. By using modern technologies and software, and by having dedicated teams on standby in the U.K., the company had been able to guide some of its customers through installation processes, both in respect of glue and flavors equipment. It was with some hesitation, she admitted, that the company started down the road of having its customers instal equipment, but it had worked out very well.

     

    George Gay is Tobacco Reporter’s European editor, but his territory spans the globe. Based in London, George has covered the tobacco industry since 1982, initially for a U.K.-based publication and since 2004 for Tobacco Reporter. George’s understanding of industry issues, combined with his keen sense of observation and dry wit, have earned him a loyal following among Tobacco Reporter’s readers.
  • Vaping’s Achilles’ Heel

    Vaping’s Achilles’ Heel

    Blowing smoke: Newspapers often report lurid stories about vaping that turn out to have been misleading.
    (Photo: Oleksandr Suhak | Dreamstime.com)

    Calls continue for banning popular e-liquid flavors despite evidence that such measures are negative for public health.

    By George Gay

    As I start to write this piece, I’m under a lockdown imposed because of the spread of Covid-19 infections, which means I am not allowed to leave my house and garden except in limited circumstances. I’m not alone in this. Since Nov. 5, everybody in England has been subjected to restrictions on their movements, though the precise restrictions governing individuals vary. The lockdown is due to end on Dec. 2, a month or so before this story is due to be published, though it could be extended.

    England is not alone in having to resort to national lockdowns, and, as in other countries, here there are groups of people, many of them comprising self-styled libertarians, who believe that it is unjustified and, in some cases, counterproductive, to restrict the rights of people to move about as they were free to do before lockdown legislation was introduced, or to require them to wear face coverings. But in England we have a particular issue that perhaps does not arise in many other countries. Our prime minister, who has ordered what is England’s second lockdown, is a self-styled libertarian. This means, I assume, that he is both not in favor of, and in favor of, the lockdown: that is, he is a libertarian and not a libertarian. No wonder he, his cabinet and advisers seem to have a problem acting coherently.

    I think, however, that it is not difficult to see through these apparent contradictions. It is necessary only to understand that there is no such thing as a libertarian; only people who have libertarian views about certain—often pet—issues. For instance, a person might take a libertarian stance on smoking and drinking but oppose taking a libertarian line when it comes to allowing people to wander the land spreading contagion among their fellow citizens. Others, on the other hand, might believe that smoking and drinking should be banned while not agreeing with the idea of pandemic lockdowns.

    One argument has it that citizens should be relied on to do the “right thing” when faced with circumstances such as a pandemic rather than being subjected to restrictions brought in on the back of new laws; but, in the real world, this wouldn’t work, at least not in the short term, as a pandemic is raging. But there is no doubt that people can and do do the “right thing,” though this usually occurs where they are making choices that largely affect only their own health rather than where they make choices that have wider implications. For instance, many smokers are making rational choices—doing the “right thing”—by switching to vaping—though only when they are not fed a diet of misinformation about the health effects of vaping and only when they can obtain vaping products that satisfy their needs, including in respect of flavors.

    In any reasonable society, the threat posed to a nation’s health by smoking would mean that both of these conditions would be met, but I’m afraid often they are not. There are many people who, for a variety of reasons, would like to see the most popular and effective vaping flavors banned, something that would be likely to have significant negative consequences for the health of individuals and society at large. According to a recently published report, Use of e-cigarettes (vapes) among adults [those over 18] in Great Britain, which was based on data taken from an annual survey, Smokefree GB, carried out for Action on Smoking and Health by YouGov, in 2019 researchers asked current e-cigarette users what they would do if flavors were no longer available. In part, the findings were that about one in four would still try to get flavors and just under one in 10 would make their own e-liquid, neither of which options should be encouraged by responsible governments. The most worrying finding, however, must be that just under one in five said they would either smoke more or revert to smoking.

    These findings are broadly in line with those of other surveys investigating the same issue. In releasing the results of a recent survey it carried out, the European Independent Vape Alliance (IEVA) highlighted two findings:

    1) More than 80 percent of smokers who switched to e-cigarettes had completely stopped smoking.

    2) About 65 percent of vapers in Europe used fruit or sweet liquids.

    In further commenting on the results of the survey, in which more than 3,300 European e-cigarette users took part, the IEVA said the variety of flavors available seemed to be one of the most important factors in decisions about e-cigarette use. Forty percent of vapers used fruit-flavored e-liquids and 25 percent preferred other sweet flavors. Thirty-five percent chose to use tobacco-flavored e-liquids.

    When the IEVA asked the participants how they would react if all e-liquid flavors except tobacco flavors were banned, 20 percent said they would switch to tobacco flavors. But 31 percent said they would buy e-liquid flavors on the black market while nine percent said they would start smoking again.

    “Our survey confirms previous research that e-cigarette flavors are crucial for adult smokers,” said Dustin Dahlmann, president of the IEVA. “A flavor ban must be avoided at all costs because it would lead many vapers to buy unregulated products on the black market or to start smoking again. And this would endanger the great opportunity that many more smokers will stop smoking with the help of the e-cigarette.”

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    Safe for hypocrisy

    The evidence seems overwhelming that bans on popular e-liquid flavors would be negative in respect of public health. But there are a lot of people calling for such bans. The major problem here is that flavors are seen as vaping’s Achilles’ heel by those opposed to smokers switching from smoking to vaping. Flavors can be attacked on the grounds that they appeal to young people, and, because of the emotions elicited by the very mention of young people, these attacks hit home, no matter how feeble the evidential artillery is. People who are happy to sit alongside pavements with the engines of their motionless vehicles running and pumping out toxic fumes from exhaust pipes set at child-buggy height would be horrified at the thought that a young person might try vaping. As somebody almost once said, we have a tendency to make the world safe only for hypocrisy.

    Another problem is one that stems from the fact that, as H.G. Wells was once said to have observed, a newspaper is a device incapable of distinguishing between a bicycle accident and the end of civilization. Newspapers often report lurid stories about vaping and, especially, e-liquids, that are based on “scientific” findings—stories that often turn out to have been misleading or plain wrong. Sometimes the science itself is flawed and sometimes the flaws are inserted in a newspaper’s attempt to try to simplify the science and its findings for a general audience. Often, this attempt at simplification does more harm than good, especially given that it will be based too on a need to make the bicycle accident look like the end of civilization.

    An apparent example of how unhelpful science can be was pointed out recently in a story by Diane Caruana in the Vaping Post. Apparently, after reports appeared in the Italian press of vaping flavor presentations made by scientists from the U.S.’ Duke and Yale universities at a meeting of the European Respiratory Society, the National Association for United Vapers issued a statement that included a quote from Fabio Beatrice, director of the ENT department of the San Giovanni Bosco Hospital in Turin and the Nosocomio Anti-Smoking Center, who said that the study seemed to have been designed in such a way as to expose “predisposed subjects” to extreme situations to support a thesis. Studies such as these had the serious side effect of causing consumers to relapse into traditional cigarette addiction, he added.

    At the same time, Caruana highlighted two “expert reactions” to the presentations. One from Jacob George, professor of cardiovascular medicine and therapeutics at the University of Dundee, included the following comment: “Data presented here is of in vitro cell work and not human clinical trials. Therefore any extrapolation to whole system human physiology is tenuous at best.” The other, by Nicholas Hopkinson, reader in respiratory medicine at Imperial College London, included the comment: “As there’s no information presented in these studies about relative concentrations compared to those seen in cigarette smoke, it is not clear what, if any, significance the findings have.”

    What’s essential?

    Of course, the Duke and Yale scientists will have their own take on their findings, and it is natural that people disagree on such subjects and how to approach them, which brings me back to the lockdown mentioned at the start of this piece. There was something typically waggish about the prime minister’s ordering that the lockdown should start on Nov. 5, the day that we in England commemorate the foiling of a 1605 plot to blow up the House of Lords and, with it, the then king. Here again was one of those disagreements in which a certain section of society felt that their rights were being trampled on: a dispute that became somewhat overblown—or not, as it turned out.

    During this second lockdown, however, there is one thing that is common to everybody who is not infected with Covid-19: we can all leave the house for essential supplies—which, of course, raises the question, what is essential? I have some sympathy for those having to answer this question because, even just taking supermarkets, where do you draw the line? Since they sell food, do you allow them to open all their food aisles, or do you allow the vegetable aisle to open but not the aisle selling chocolate biscuits? After all, while a vegetable might be essential to sustaining you in a healthy physical state, a chocolate biscuit is not essential. Although, on the other hand, might a chocolate biscuit provide for your mental well-being as you start to climb the walls during your third week of lockdown?

    Opening all the aisles, even those selling nonfood products, raises questions of fairness since some of the nonfood products will normally be available in specialist outlets that have been forced to close. But it is another anomaly that is relevant here. As things stand, it would be possible for me to head to the supermarket right now and buy a bottle of gin—and only a bottle of gin, which for most people could hardly be considered essential. Indeed, according to an advert I saw recently, I could go to the supermarket and buy a bottle of chocolate orange gin “packed with flavors of cocoa, silky vanilla, sweet orange and juniper.”

    When did this start making sense? We, as a society, accept as a given that chocolate orange gin is an essential product at the same time that we are arguing the toss over whether people should be allowed to vape fruit-flavored e-liquids in order to allow them to quit smoking.

    It’s at this point I become a semi-detached libertarian. I’m willing to stay at home if people in the know have determined that my doing so will help prevent the spread of Covid-19, but I want people to be able to buy chocolate orange gin and fruit flavored e-liquids if that is what they feel they need to get them through the day, whether we’re in the midst of a pandemic or not.

    George Gay is Tobacco Reporter’s European editor, but his territory spans the globe. Based in London, George has covered the tobacco industry since 1982, initially for a U.K.-based publication and since 2004 for Tobacco Reporter. George’s understanding of industry issues, combined with his keen sense of observation and dry wit, have earned him a loyal following among Tobacco Reporter’s readers.
  • The Contortionists

    The Contortionists

    Photo: Kolozov | Dreamstime.com

    Committing to the FCTC objectives while manufacturing cigarettes requires extraordinary moral acrobatics.

    By Stefanie Rossel

    Since entering into force in 2005, the World Health Organization (WHO) Framework Convention on Tobacco Control (FCTC) has suffered from an inherent, difficult-to-reconcile conflict: While the treaty requires signatories “to protect present and future generations from the devastating health, social, environmental and economic consequences of tobacco consumption and exposure,” 17 of its 182 member states own at least 10 percent of a tobacco company.

    Eight countries—China, Iran, Iraq, Lebanon, Syria, Vietnam, Thailand and Tunisia—own 100 percent of at least one tobacco company. Together, these states control almost 50 percent of the global tobacco industry by volume. In Algeria, Bangladesh, Egypt, India, Japan, Laos, Malawi, Moldova and Yemen, governments own between 13 percent and 91 percent of tobacco companies (Cuba’s tobacco industry is around 75 percent state-owned, but the country has declined to sign the FCTC).

    Daniel Malan

    “It is not unlawful to sign a convention that requires you to oppose something that you also support, but it is unethical,” says Daniel Malan, assistant professor in business ethics at Trinity Business School, Trinity College Dublin. “Imagine an international convention against drug trafficking that allows some organs of state to be involved in the activities that it tries to prevent.”

    During the 2020 Global Tobacco & Nicotine Forum, Malan presented a study, “Contradictions and Conflicts,” highlighting the issue. The conflict, he states, is one reason that at 0.25 percentage point per year, the decline of global cigarette consumption since 2000 has been disappointing.

    FCTC Article 5.3, Malan argues, follows a flawed logic: It requires parties to protect their policies against the commercial and vested interests of the tobacco industry. If a party has a vested interest in the form of a state-owned tobacco company (SOTC), it is obliged to follow Article 7.2 and ensure that any investment in the tobacco industry does not prevent it from fully implementing the FCTC. To achieve this, however, such a party must protect its policies against the commercial and vested interests of the tobacco industry—which is where the circular argument comes to its close: The government cannot have an investment in tobacco.

    Since its inception, Article 5.3 has become a public health dogma, considered so important that it has been enriched with implementation guidelines, handbooks and “toolkits” as well as a knowledge hub in Thailand. But even in their most recent version, published in September 2018, the recommendations for governments with SOTCs remain vague. The WHO also fails to address the issue in its reports on the “global tobacco pandemic.” The 2019 edition, Malan notes, makes more than 20 references to companies such as Philip Morris International and British American Tobacco, each of which holds 14 percent of the world’s cigarette market but never mentions the China National Tobacco Corp. (CNTC), which with a global market share of 44 percent is by far the world’s largest tobacco company.

    With a global market share of 44 percent, the China National Tobacco Corp. is the world’s largest tobacco company by a wide margin. (Photo: Taco Tuinstra)

    Ethically undesirable, economically viable

    Why the FCTC was shaped that way is anybody’s guess, but an international treaty excluding countries representing only half of the globe’s smoking population would have looked feeble. “Perhaps that conflict wasn’t a priority in the bigger picture,” speculates Malan. “Or they wouldn’t want to alienate governments and exclude China as the biggest one. It’s a Catch-22 situation.”

    There is evidence that the WHO is aware of that contradiction; in 2015, the director of the WHO’s regional offices in the Philippines in Tobacco Control commented on a study of the subject published by Scott L. Hogg and others from the College of Medicine and Veterinary Medicine of the University of Edinburgh. However, the WHO declined an interview request by Tobacco Reporter.

    Arguing that from an ethical viewpoint it is undesirable for governments to be invested in tobacco, Malan looks at the business case, i.e., whether it makes commercial sense for governments to own tobacco companies. Most of the 17 tobacco-invested FCTC members can be classified as middle income. Japan, of course, is high income and Malawi is low income.

    Due to the sheer size of its tobacco industry, China is an outlier in the group. According to 2019 WHO data, the country generates $200.4 billion from tobacco tax. Malan believes that actual figure is around 30 percent higher because the WHO estimate excludes excise duties, value-added taxes and import duties, among other taxes. China is followed by Japan ($17.78 billion), India ($2.87 billion), Bangladesh ($2.65 billion), Egypt ($2.36 billion), Algeria ($2.11 billion) and Thailand ($2.1 billion).

    In Bangladesh (0.97 percent), Egypt (0.94 percent), Algeria (1.22 percent), Tunisia (1.08 percent) and Moldova (0.93 percent), tobacco tax accounts for at least 1 percent of the gross domestic product (GDP), according to WHO data from 2019. With 1.47 percent of its GDP, China again leads the group.

    Malan also investigates how the 17 countries with tobacco monopolies have implemented FCTC rules. FCTC signatories are required to report biannually to the WHO on their progress. In the most recent round of country submissions, Algeria, China, Japan and Moldova failed to provide updates on the headway they made implementing Article 5.3.

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    Different paths

    So how could the conflict in the FCTC be resolved? A rewording of Article 5.3 is unlikely because changes to the FCTC require agreement from all parties, including those with state-owned tobacco companies. Whether the subject will be brought up during the next FCTC Conference of the Parties (COP9) in November 2021 remains to be seen.

    For his 2015 research, Hogg investigated whether tobacco industry ownership represents a conflict of interest or an opportunity for tobacco control. Hogg offers three perspectives on the conflict of interests. In an “intrinsic or fundamental conflict,” governments relying on the income from tobacco companies will be less inclined to implement tobacco control policy. While in such cases privatization of SOTCs may appear as the most appropriate policy response, past SOTC privatizations, Hogg argues, have resulted in these companies being more successful businesses, thus doing a disservice to tobacco control efforts.

    The “institutionally mediated conflict” relates to the tension created by the dual responsibility of managing a state-owned company and implementing tobacco control policies at the same time. China, where the State Tobacco Monopoly Administration (STMA) is responsible for industry-related aspects as well as coordinating the implementation of the FCTC, is an example of such a conflict. The dispute could be potentially mediated by institutional arrangements, such as a firewall between different government institutions, an approach for which Thailand is often praised as a best-practice example (the country is nevertheless expected to fail the WHO’s voluntary target of a 30 percent relative reduction in smoking by 2025). 

    A third, less prominent perspective, which Hogg calls “interest alignment,” suggests that governments owning tobacco companies radically alter their approach, allowing public health interest to override the commercial interest to advance tobacco control.

    In his report, Malan highlights another potential pathway for change, a pragmatic option that he calls “shift gear.” It entails an acknowledgement of the existing conflicts of interest and a commitment to manage them. This would allow governments to make decisions without considering short-term financial performance as publicly traded companies must do. They could potentially transform the tobacco industry by being more innovative, Malan says, for example by focusing on tobacco harm reduction (THR). At the time the FCTC was created, THR was an underdeveloped area extending only to nicotine-replacement therapy and snus, but 15 years on, there are a large variety of electronic nicotine-delivery systems (ENDS) and other reduced-risk products, such as new oral nicotine, available.

    Eleven of the 17 FCTC signatories with SOTCs permit sales of e-cigarettes containing nicotine. Japan allows only sales of nicotine-free e-cigarettes. Five of these countries ban e-cigarettes; China prohibits online sales. Given the WHO’s anti-THR attitude, it’s surprising that there aren’t more bans. “For the WHO, it is difficult to acknowledge that something less harmful that could have a positive impact could come out of the tobacco industry,” says Malan. Massive funding from “philanthrocapitalists,” such as Michael Bloomberg and Bill Gates, sustain the WHO’s anti-THR stance (see “Uphill Struggle,” Tobacco Reporter, December 2020).

    Tobacco continues to play a prominent role in Chinese social interactions. (Photo: Tobacco Reporter acrhive)

    The case of China

    Due to its sheer size, China represents the greatest opportunity to resolving the conflict of interest—and the greatest challenge. According to the most recent available WHO data—from 2014—the negative effects of tobacco consumption cost the country $57 billion. They are dwarfed, however, by the value of China’s tobacco industry, which is estimated at at least $14 trillion.

    “In my view, it’s unlikely to see the Chinese government to change its stance towards tobacco control to a significant degree in the near future, although they have implemented some tobacco control policies,” says Amei Zhang, China analyst at TMA. “The major reason is that the Chinese tobacco sector has maintained its monopoly system for making huge fiscal contributions that the central government has highly depended on over the past decades.”

    Besides, tobacco continues to play a prominent role in Chinese social interactions. Zhang cites a 2006 study comparing smoking behavior across 22 countries. Uniquely among the surveyed cultures, 40 percent of Chinese smokers reported carrying two packs of cigarettes with them—one for themselves and the other for social uses. “As you can imagine, cigarettes for socialized purpose are more expensive,” says Zhang.

    Zhang doesn’t see any signs that Thailand, where two separate authorities oversee tobacco control and tobacco manufacture, could become a role model for China. “The STMA and the CNTC are two agencies with one set of people. The tobacco authority may be the only authority in China that has not been separated from the enterprise yet,” she explains.

    In 2007, China established the Inter-Ministerial Coordination Leading Group for the Implementation of the Framework Convention on Tobacco Control. The group originally comprised eight government institutions: the Development and Reform Commission; the Ministry of Health; the Ministry of Foreign Affairs; the Ministry of Finance; the General Administration of Customs; the State Administration for Industry and Commerce; the General Administration of Quality Supervision, Inspection and Quarantine; and the State Tobacco Monopoly Administration.

    “This arrangement has received fierce criticism from tobacco control people,” says Zhang. “Tobacco control experts suggest that the tobacco industry’s interference with tobacco control must be eliminated and that the tobacco industry should separate the administration from the enterprise; they suggested that the composition of the inter-ministerial coordination leading group for the implementation of the FCTC should be adjusted, and when CNTC and STMA still combine, the STMA should withdraw from the coordination mechanism for the eight ministries and commissions on tobacco control compliance.”

    Yet, more than a decade later, the STMA is still on the tobacco control leading group. “This means that those who produce and sell cigarettes will still participate in tobacco control,” says Zhang. She is more optimistic about THR. The Chinese government encourages its affiliated tobacco companies to produce less harmful cigarettes, Chinese herb cigarettes and heat-not-burn products, but at the same time it bans the online sale of vapor products.

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    Wanted: an FCTC update

    To cut the FCTC’s Gordian knot, Malan acknowledges that there is no one-size-fits-all option. “China is very different from any other country in its state control, centralized planning and looking ahead 30 [years] to 50 years,” he says. “What might be more pragmatic could be a plan that doesn’t fit exactly into the FCTC but fits their plans.”

    The shift from combustible cigarettes to reduced-harm products, he argues, will ultimately be determined by consumer preferences. “First and foremost, consumers need accurate and reliable information to be able to make informed decisions,” says Malan. “This seems more likely in advanced democracies like Japan. However, the impact of long-term centralized planning could also be positive in terms of tobacco control, provided that responsible decisions are made. Behavior change will always depend on both carrots and sticks, and it is difficult to make general recommendations when the contexts are radically different.” 

    To move forward, he suggests that a neutral body establish a platform acceptable to public health advocates to invite potentially objective organizations willing to discuss. The aim should be to create a group of interested stakeholders who could then put together a paper ahead of COP9 to put forward amendments to the FCTC. “If it’s a solid proposal from independent agents, it will be hard to ignore. I believe that there should be an effort to amend the FCTC to reflect a new context. If there is sufficient commitment from all stakeholders, this is not unthinkable. But it will require pragmatism from all, and the creation of a negotiating platform acceptable to all, which will not be easy.”

    Stefanie Rossel is Tobacco Reporter’s editorial contributor. An experienced trade journalist, she combines sharp reporting skills with in-depth knowledge of the tobacco and vapor industries. Prior to joining Tobacco Reporter, Stefanie was editor-in-chief at Tobacco Journal International, where she worked for a decade. Fluent in English, German and French, Stefanie covers tobacco news around the world. She is based in Germany.