Category: Print Edition

This year’s Global Forum on Nicotine focused on how to take tobacco harm reduction mainstream.

By Stefanie Rossel

The sixth edition of the Global Forum on Nicotine (GFN), which took place in Warsaw, Poland, June 13–15, was once again the meeting point for multiple stakeholders, ranging from consumers and scientists, regulators and manufacturers to distributors, public health professionals, policy analysts and parliamentarians.

The theme of this year’s event, “It’s time to talk about nicotine,” examined how attitudes toward the use of nicotine are changing and considered some of the compound’s potentially beneficial uses. The three-day conference started with several satellite meetings that focused on topics such as the demystification of scientific modeling and the integration of tobacco harm reduction (THR) into everyday healthcare.

Being staged for the third time, the International Symposium on Nicotine Technology informed participants about the latest technological advances in the rapidly changing landscape of nicotine-delivery systems. Again, the GFN was accompanied by a film festival, which focused on the turnaround in New Zealand, where vaping has been acknowledged as a quit-smoking tool, and the role of nicotine around the world. Alongside the symposium, scientists provided poster presentations of the results of their work related to nicotine and smoking cessation.

The plenaries and partly parallel sessions of GFN 2019 investigated how reduced-risk products (RRPs) could best be taken mainstream, not only in geographical and socioeconomic terms but also with regard to vulnerable and hard-to-reach groups of society. The event made it clear that regulation will be key to the success of THR.

In order to shape realistic regulation of tobacco products and RRPs, however, GFN speakers agreed that a broader base of scientific evidence will be required. The harms and risks of nicotine are an essential consideration in assessing the public health impact of nicotine-based harm reduction. One of the science plenaries hence looked into understanding the effects of nicotine on the human body and the psyche.

Public perceptions of nicotine are at best cautious but mostly negative. Government positions on the substance and its delivery systems vary widely around the world. In the U.K., vaping is endorsed as a means of quitting in the “Switch” campaign. The United States is focusing on the prohibition of flavors in e-liquids. China, on the other hand, is the world’s largest producer of e-cigarettes, but vaping prevalence remains low there.

Smokers use nicotine because it offers positive effects. Nicotine can potentially affect every organ system of the body since it mimics the neurotransmitter acetylcholine. As numerous studies have shown, the substance provides a number of benefits, including anxiety relief, increased alertness and improved cognitive function. Without combustion, long-term nicotine use, while not harmless, is much less hazardous than cigarette smoking. The harms of long-term nicotine inhalation without tobacco combustion have not been determined yet and need to be studied. Major safety concerns for nicotine are related to addiction, cardiovascular disease and reproductive toxicity.

Despite these negative effects, experts generally have no concerns if smokers switch to e-cigarettes and stay with them for the rest of their lives. After all, nicotine-replacement therapy (NRT) products have been accepted as safe and an effective means to wean smokers off combustible cigarettes. This gives reason for hope that in a second step, vapor products will become acknowledged as the new, better products for smoking cessation. According to studies, even dual use could translate into significant harm reduction.

Correct research needed

To accelerate the cause of THR, it is essential to reverse the proliferation of junk science, according to GFN participants. Riccardo Polosa, director of the Center of Excellence for the Acceleration of Harm Reduction at the University of Catania, Italy, called for a resurrection of vigor in THR research. He singled out preclinical in vitro research and animal studies, clinical research, and epidemiology surveys as areas where corrective measures were needed.

To improve the quality of science, Polosa suggested taking advantage of big data and the internet of things. This would permit researchers to capture real-time data and create a cloud platform for behavioral research. Additionally, he recommended creating an expert working group to draft international guidelines setting recommendations for better, high-quality studies.

Brad Rodu, a professor of medicine and holder of the Endowed Chair of Tobacco Harm Reduction Research at the University of Louisville, Kentucky, USA, warned against forever preserving historical, flawed studies. He cited a 1981 U.S. study linking smokeless tobacco to oral cancer that triggered an enduring campaign against the entire product category. What is not widely known, according to Rodu, is that the researcher looked at powdered dry tobacco—a rare product used by only a handful of people. Even though subsequent studies found different results for more commonly used smokeless tobacco products, the findings of the 1981 study continue to taint the entire category.

Of good and bad examples

Almost two decades after the invention of the e-cigarette, the international perspectives of THR differ greatly. Japan, where heat-not-burn (HnB) products were introduced in 2014, continues to stand out as an example of risk reduction in action. According to Hiroya Kumamaru, vice director of the AOI Universal Hospital in Kawasaki, Japan, overall tobacco consumption kept decreasing in 2018 as cigarettes were quickly replaced by HnB products.

Cigarette consumption dropped from 197 billion units in 2012 to 133 billion sticks in 2018, whereas retail volume of HnB consumables stood at 34 billion in 2018. Studies in Japan have not shown evidence of a “gateway effect,” where users of HnB products migrate to combustible cigarettes. Nevertheless, physicians see even more potential in e-cigarettes—which are currently banned in Japan if they contain nicotine—as smoking cessation tools.

In the U.K., vapor products have been officially recognized as cessation tools, but many health professionals remain reluctant to support would-be quitters with e-cigarettes. At the other end of the scale is Australia, which takes a dim view of tobacco harm reduction. Despite its strict tobacco control policies, including plain packaging and the world’s highest cigarette prices, Australian smoking rates have not significantly declined since 2013. According to Alex Wodak, president of the Australian Drug Law Reform Foundation, 15.2 percent of Australian adults still smoke compared with 16 percent in 2015.

At the same time, Australia permits the sale and use of nicotine liquid only with a prescription—but doctors are hesitant to prescribe nicotine liquids because vapor products are regulated as tobacco products. Violators face fines of up to aud45,000 ($30,923) and two years in prison. In 2016, only 1.2 percent of adult Australians vaped, with 0.5 percent vaping daily.

An example of how increased consciousness of THR can be implemented in a low-income country comes from Malawi (also see “A Blank Slate,” Tobacco Reporter, June 2019), where social scientist and THR advocate Chimwemwe Ngoma has installed an information dissemination project on THR and science. One of its targets has been to source and disseminate evidence-based information on THR to the general public. The project has succeeded in igniting THR discussion in the African state. The project has created more than 15 partnerships with organizations and individuals.

Reaching the hard to reach

While bringing THR to lower-income countries will be a major challenge in the future, higher-income countries in which RRPs are already present are confronted with the question of how to best get safer nicotine products to vulnerable and hard-to-reach populations, which tend to have higher rates of smoking than other parts of society.

As Kevin McGirr, clinical professor at the University of California San Francisco School of Nursing, explained, it is vital to understand the meaning and the culture of smoking in these communities and to take a psychological and neurobiological approach. In contrast to the middle-class white population where the peer pressure to quit smoking is continuously growing, people from vulnerable populations, especially those with mental health issues, face less such pressure. In these communities, THR takes on another dimension, circling around questions such as how far mentally challenged people can handle vapor products as well as around questions regarding access and cost—and what happens if a program to make these populations switch to e-cigarettes ends?

Sarah Cox, trial manager at the London South Bank University’s Centre for Addictive Behaviours Research, looked at smoking and homelessness in the U.K. and found that smoking is considered a “nonissue” as there are so many other problems, meaning that the more problems a person seems to have, the less cessation help they will get. A positive outcome in THR, Cox’s studies have shown, is increased by person-to-person contact with the cessation helper as well as behavioral support. Barriers include an underestimation of the clients’ desire to change and little faith in their recovery on the helpers’ side; on the smokers’ side, contact with other smokers is the biggest obstacle.

Rebecca Ruwhiu-Collins, THR lead for New Zealand’s only indigenous Maori public health unit owned by tribes, presented her strategy to help the Maoris switch to RRPs. New Zealand is aiming to be smoke-free by 2025, which means that smoking prevalence is to be brought under 5 percent. Because stop-smoking support programs developed for white people turned out not to work for the indigenous population, Ruwhiu-Collins developed a dedicated Maori wellness-based model that empowers the people to lead. Instead of promoting NRTs that have not proven successful, the program recognizes that vaping is a legitimate tool to help established smokers quit. According to Ruwhiu-Collins, the model has helped many Maoris stop smoking. Last year, New Zealand became the first country where all RRP categories are available.

Once more, the GFN 2019 made it clear that the road to success for THR is tied closely to regulatory framework for reduced-risk products. Already, there is plenty of evidence showing that an accommodative legal framework results in higher levels of smoking cessation than a “quit-or-die” approach. As David Sweanor, chair of the advisory board of the Centre for Health Law, Policy and Ethics at the University of Ottawa in Canada, put it, “Where else do we permit a really deadly product but try to restrict access to safer ones? Unfortunately, the people who say, ‘our fight is against big tobacco companies’ are the ones who are protecting cigarettes.”

Does industry funding taint the work of think tanks?

By George Gay

Now here’s a thought: Given that there are apparently thousands of think tanks in the world, is it reasonable to assume that thinking comprises one of the least productive sectors of all? Think about it. How many meaningful, original thoughts are generated worldwide each year by the members of independent think tanks that come within the definition of such organizations in the country or countries in which they operate?

If, like me, you’re having difficulty even guessing at an answer to the question above, it’s probably because such organizations aren’t always easy to identify. As far as I can see, any think tank operating in the countries where the bulk of these organizations are based (throughout North America and Europe) can be involved in one or more of a whole string of activities, including but not limited to advocacy, consultancy, lobbying and research. And although, because of the tax status of these organizations, their activities are generally subjected to limits in some areas, such as politics, it would seem that these limits are, shall we say, tested at times. Think tanks can have wide-ranging interests, or they can be little more than single-issue pressure groups.

Generally, the benign view of think tanks is that they comprise experts in various fields who use their expertise to try to solve problems that arise in those fields. Some view them, however, as more malign—organizations that push, sometimes using dodgy data as well as business and social agendas that are a response to invented problems and that are aimed at advancing the interests of only a minority. The reality is probably that they exist on a continuum that runs from one such extreme to the other.

One contentious issue that sticks to the bottom of think tanks’ shoes has to do with funding. Are they funded by people and organizations that approve of the views they expound? Or are those views guided by the source of the funding the think tanks can muster?

The impact of donations

In November 2018, The Guardian published a story by Jessica Glenza that was introduced with the statement that more than 100 free-market think tanks (FMTs) from North America to Europe and South Asia took positions helpful to the tobacco industry or accepted donations from the tobacco industry. A strap line said, “How tobacco industry donations cloud debates over cigarette controls” while the first paragraph said, “Free-market think tanks around the world provide a powerful voice of support to cigarette manufacturers in battles against tougher regulations, a Guardian investigation shows.”

I don’t have strong views on FMTs because I simply don’t know enough about them, and, since they operate in different jurisdictions, it is not easy to make generalizations. But my interest was raised by the use of the word “or” in the writer’s opening statement, and one thing led to another …

The tobacco manufacturers quoted in the story, on the other hand, responded to the more pointed idea behind the strapline: How tobacco industry donations cloud debates over cigarette controls. The manufacturers basically said that they supported think tanks that already opposed policies that did not achieve what was intended and that were inimical to conducting their businesses efficiently in a competitive environment. And the response of the FMTs was that they did what they did regardless of who was funding them.

The amounts of money that were mentioned seemed to support the idea that the FMTs were not in the pay of tobacco manufacturers. Even assuming that the manufacturers were wrong in apparently claiming that ideas are not for sale, it seemed unlikely that the amounts reportedly on offer would turn heads or buy too many great ideas, although it has to be said that the information on funding was patchy—because of a lack of transparency according to one side of the argument and because of the need to uphold democracy or some such on the other. From my reading of the results of The Guardian’s research, not all FMTs covered were found to have accepted tobacco industry funding, but I wasn’t certain whether, in individual cases, that was due to a lack of information, the fact that they weren’t offered such funding, or that they were offered it and refused it.

Worthy of debate

Interestingly, the issue mentioned most often as the one that FMTs had become involved in had to do with standardized packaging, which the FMTs oppose. I say this is interesting because it can be used as an argument for supporting the idea that the FMTs are in league with the tobacco industry, while, just as legitimately in my view, supporting the view that these organizations are looking at a wider picture. Yes, standardized packaging has been focused on the tobacco industry, but there can be little doubt that those in other industries are feeling the cold winds of such policies.

And it also has to be said that standardized packaging is a subject worthy of debate. It would be ridiculous to assume that governments could introduce such a radical, largely unproven policy that seems to run counter to ideas of commercial freedoms and free speech without somebody at least saying, “Wait a minute. Perhaps we should take another look at this.”

The second most-mentioned issue overall was cigarette taxes—though, if my adding up is anything to go by, this was the main issue in North America, possibly because FMTs there were opposing rises at the federal and state levels. Again, this can be interpreted in two ways. One is that this was about cigarette taxes and therefore supportive of the tobacco industry. But it is also in line with the nature of the FMTs, which are generally against what they would see as burdensome taxes and regulations aimed at the redistribution of wealth downward.

As with the question of standardized packaging, there is surely no surprise that there is a debate about taxes. In fact, it would be wrong if there were not such a debate, and for there to be a debate, there have to be naysayers.

Overall, the FMTs looked at some issues in ways that would be supported, I believe, by a fair number of people who are opposed to tobacco and tobacco manufacturers. For instance, some FMTs opposed the denormalizing of smokers and some supported the liberalizing of vaping regulations. Some would probably have even lent their support to arguments, made by at least by one FMT, against higher health insurance costs for smokers, but only those tending toward more libertarian views would have gone along with arguments against smoking bans and the raising of the minimum age at which people should be allowed to buy tobacco products. Clearly, more eyebrows are going to be raised when the issues being addressed by FMTs are more narrowly focused—opposition to a ban on the use of menthol in tobacco products, for instance, and support for the commercialization of the IQOS brand in the U.S.

Of course, while it might be correct, as some believe, that it is ridiculous to imply that supporting an FMT would result in its taking action it otherwise would oppose, you have to ask the question: What would happen in the case of an FMT that was formed of people who were generally free trade oriented but neutral in respect of a certain issue, say standardized packaging as it applies to tobacco products, and that was offered money by a tobacco manufacturer? Might it be swayed? And you cannot rule out the possibility that an FMT, especially a new one or one having difficulty raising funds, might latch on to pro-tobacco issues with the hope of obtaining tobacco funding.

Effectiveness

One thing that I found most difficult to gauge was the critical question of how successful these FMTs were in changing minds or, given largely sympathetic right-wing governments, at holding the line. I would guess patchy. My observation seems to indicate that the denormalization of smokers has been laid to rest, but then it was morally repugnant and so it was an easy target. With standardized packaging and taxation, FMTs possibly still have their fingers in the dyke, but they seem largely dead in the water when it comes to minimum age requirements and smoking in indoor public places.

Need people unconvinced by free trade thinking fear the work of these FMTs? In some respects, I think not, because I believe the FMTs’ thinking is too rigid. Thinking should be robust but not rigid, otherwise the brains of the thinkers will atrophy. Thinking, to my way of thinking, is about change, and I believe the whole free market agenda has been coasting for years in the wake of ideas put into practice by Ronald Reagan and Margaret Thatcher—ideas that have lost any buoyancy they ever had. Some of these FMTs seem to have become dogma tanks.

But they cannot simply be shrugged off. Their ideas don’t have to be new and shiny to influence the already committed legislator, and they don’t have to hold up the introduction of a tobacco tax rise for too long to make them attractive to manufacturers. And that is why I would come down on the side of the argument that says that whenever FMTs are involved in lobbying, they should be required to declare who their backers are, even if not how much funding those backers are providing—after all, that can be guessed at.

Of course, now you want to know what I mean by “lobbying.” Sorry, I seem to be out of words.

 Why live events continue to matter even in an increasingly digital world.

TR Staff Report

Despite the rapid evolution and accepted benefits of virtual trade fairs (VTFs), reports of the traditional “live” events’ death have been greatly exaggerated. As preparations continue for TABEXPO 2019, which will be held in Amsterdam this November, we looked at some of the reasons why “full-bodied” business gatherings continue to survive and thrive.

VTFs have been around since the mid-1990s. For many companies, especially small and medium-sized enterprises, the benefits are clear: Virtual events are almost always cheaper, easier to plan and set up, and more convenient for visitors to attend, regardless of their locations. All you need is a computer or a mobile device with an internet connection. There are obvious savings in staff time, transport and accommodations.

In theory, every business-savvy organization should have junked its banners and booth equipment by now and become fully virtual. So why are there still over 10,000 trade fairs and events annually all over the world?

According to the 2019 Oxford Economics and Events Industry Council report, in 2018 exhibitions alone generated $136.9 billion in direct spending worldwide, with almost half of that expenditure in North America. Everything from building materials and beauty products to food and fashion appears to get its “15 minutes of fame” under the bright lights of a bustling exhibition center somewhere in the world. In an industrywide report commissioned in 2018 by Bizzabo, a New York-based global leader in event software, 84 percent of business leaders responding believed that in-person events were a critical component of their company’s success.

Product-focused businesses, including those in the tobacco and nicotine industry, are particularly likely to prefer a live exhibition. Food and drink, textiles, jewelery and many other industries need live visitors to see, taste, smell and touch these types of products in order to gauge quality and weigh “wantability.”

But there is an even deeper motivation, and Aristotle nailed it centuries ago: “Man is by nature a social animal,” he said. In marketing psychology, it’s called “propinquity.” Potential customers interacting with your brand in real time, face to face with another person, are more likely to build rapport with the brand and go on to establish a real relationship. Research has also shown that people value a product more highly if they are physically in the same space with it.

Perception is also important—miss a trade show and rumors might begin to circulate that your company is not in buoyant health. The “grapevine” also flourishes at live events, with chance meetings and informal conversations often providing gems of information that might not be elicited on a conference call via Skype or set down in an email.

In truly global businesses such as tobacco and nicotine, the personal connection and subtle cues of body language can leap across language and technology barriers. “There’s an energy you feel when you walk into a busy exhibition space,” says Barbara Hicks, director of TABEXPO 2019 and several previous TABEXPO events. “People are moving around, talking, sharing; that buzz isn’t there when communicating through devices.” Friendships forged over decades and across continents are still common in these industries, and many visitors come to keep up these connections.

TABEXPO 2015 in London filled over 5,000 meters of exhibition space, featuring 114 traditional tobacco companies and 42 e-cigarette and next-generation product purveyors.

Its accompanying two-day congress, which featured headline-making speakers, attracted high-quality visitors. TABEXPO 2019 in Amsterdam will have the same high-potential atmosphere. Shaking hands, exchanging greetings, making eye contact, talking about place, people and products, chatting over coffee or a glass of wine. This is the global marketplace in action—a true meeting of minds and motivations.

Long live the live event!

PMI’s venture into the life insurance business presents customers with new options and raises some interesting questions.

By Stefanie Rossel

In late April, Philip Morris International (PMI) announced a move that was remarkable in more than one respect: The company said that it had diversified into the life insurance business. With its newly established, wholly owned subsidiary Reviti, which is based in the United Kingdom, it targets smokers who use any combustible tobacco product, such as cigarettes or cigars, and who are willing to quit. To incentivize them, smokers who switch to any type of e-cigarette and/or a nicotine-replacement therapy (NRT) product will be given a 2.5 percent discount on premiums. People who change over to PMI’s heat-not-burn (HnB) product iQOS for three months will receive a 25 percent discount, whereas ex-smokers who quit smoking and quit nicotine altogether, including NRTs, for at least twelve months will get 50 percent off. All those who never smoked combustible tobacco and never used nicotine-containing products will be charged the lowest premiums.

Premiums for a 20-year-old nonsmoker stand at around £5 ($6.50) per month for a life insurance policy that pays £150,000. The same premium would buy a £60,000 policy for a 40-year-old nonsmoker.

Reviti believes firmly in the risk reduction potential of e-cigarettes and will determine how big a discount to offer people using alternative products based on scientific data. The potential of a product to reduce a person’s health risk will also play a role.

“Traditional insurance companies set premiums based on how ‘risky’ a customer is to insure when they buy a policy—what Reviti brings to the market is different,” says Andrew Cave, PMI’s director of communications. “They recognize that people’s lives change over time and want to help them on this journey of positive change, so if customers make better choices through improving their lifestyle, Reviti will reward them.”

The life insurance initiative underlines PMI’s ongoing commitment to creating a smoke-free future. Reviti, which acts on behalf of Scottish Friendly Assurance Society Limited, also plans to roll out a range of other insurance policies that reward better lifestyle choices, such as weight management, increased exercise or stress management. For smokers who want to quit tobacco and nicotine altogether, Reviti offers support from a leading pharmacy chain with a range of options including coaching, says Cave. “Every Reviti customer will be offered the chance to work through a program via the new Reviti life app, which provides them with 120 activities and programs designed to support lifestyle changes.”

Rewarding self-optimization

Offering health and wellness incentives to encourage their customers to adopt and maintain healthy lifestyles—which helps reduce the risk of developing chronic illnesses and dying prematurely—has become a trend among life and health insurance companies in recent years. Global management consulting and professional services firm Accenture predicts big benefits for life insurers that promote customer wellness. Termed “connected wellness,” the concept involves the use of digital technology, such as fitness trackers and apps, by insurance providers to build intimate, real-time relationships with their customers and thus encourage them to become healthier and safer to be able to enjoy greater rewards and incentives. In turn, insurers can generate additional value from these long-term relationships by increasing their offerings, capitalizing on new markets and improving efficiency. The approach, however, has also evoked debate because of privacy concerns and potential misuse of data.

What makes Reviti’s insurance model novel is its explicit targeting of smokers. Until now, smokers seeking to get life insurance have had to pay significantly more for their premiums than nonsmokers. According to a U.K. survey taken by moneysupermarket.com between January and November 2018, the average nonsmoker will pay £9.96 per month for decreasing life term insurance while a smoker would pay £21.

New in Reviti’s approach is that it also differentiates between smokers of combustible cigarettes and users of other nicotine delivery systems. Usually, insurance companies don’t distinguish between people smoking two packs of cigarettes a day and those smoking two packs a year. Neither does it make a difference to them whether customers use cigarettes, cigars, pipes or NRTs. Because e-cigarettes contain nicotine and their long-term health benefits have yet to be established, they are also categorized as tobacco products. To qualify as a nonsmoker, and hence for lower premiums, customers must refrain from using any nicotine and nicotine-replacement products for at least 12 months.

Determining whether a policyholder has truly switched to reduced-risk products (RRPs) may present a challenge to Reviti. Although there are a variety of testing methods to determine the nicotine content in the body, a reliable method to verify whether that nicotine comes from combustible cigarettes, e-cigarettes or HnB products does not yet exist.

“As with all questions, customers must answer and complete declarations honestly and truthfully,” explains Daniel Pender, CEO of Reviti. “There may be occasions, in line with the industry, where Reviti asks customers to undertake a test to validate their smoking declaration, and the offer of a discount from Reviti to lower their premium would require customers to consent to this test being a possibility. In line with industry standards, Reviti [is] clear to point out the obligation to answer questions honestly and provide warnings that a failure to do so could result in the insurance being canceled.”

Focus on iQOS

Working with Reviti, PMI fills a gap in the market for life insurance policies for people who smoke and wish to quit tobacco and nicotine altogether or who wish to switch to scientifically substantiated reduced-risk alternatives.

“It was time the insurance business caught up with its customers,” said Pender at the launch of his company. “The life insurance product we offer is a win-win for Reviti and our customers. They get competitive premiums and, with a little help from us, a better lifestyle. We get to help millions of people who have never had access to life insurance before and who will benefit from positive lifestyle changes we’re helping them to make.”

While this is a laudable goal, Reviti’s offer also contains a detail that is unusual in the insurance business: One of the highest discounts offered is tied explicitly to a PMI product. Already, U.K. anti-tobacco activists have criticized the move as a new PMI marketing tactic to promote iQOS in a market where advertising and promotion of tobacco products as well as sponsorship by tobacco companies has been completely banned.

They may have a case. The popularity of HnB products in the British market is still comparatively low. While heated-tobacco products were introduced into the U.K. in late 2016, awareness and ever-use remain rare, as noted by Public Health England (PHE) in its 2018 evidence review of e-cigarettes and heated-tobacco products.

While smoking prevalence among adults in the country decreased to 14.9 percent in 2017, vapor products became the preferred reduced-risk products category. Today, the U.K. is the world’s third-largest vapor market, although the PHE review also found that e-cigarette use had recently plateaued at 6 percent of the adult population.

PHE’s 2015 statement that vaping is 95 percent less harmful than traditional tobacco and the agency’s recommendation of e-cigarettes as smoking cessation tools has contributed to the popularity of vaping in the U.K.

In its most recent report, PHE upholds its view on e-cigarettes, declaring, “The available evidence suggests that heated-tobacco products may be considerably less harmful than tobacco cigarettes and more harmful than e-cigarettes. With a diverse and mature e-cigarette market in the U.K., it is currently not clear whether heated-tobacco products provide any advantage as an additional potential harm reduction product.”

The agency recommends that, depending on emerging evidence on their relative risk compared with combustible tobacco and e-cigarettes, regulatory levers such as taxation and accessibility restrictions should be applied to favor the least harmful options alongside continued efforts to encourage and support complete cessation of tobacco use. Its assessment is in line with the theory of the continuum of risk, which puts e-cigarettes at the lower end of the scale.

Lower risk of relapse

Reviti, however, says it has its reasons for emphasizing iQOS in its insurance concept. “There are hundreds of e-cigarette brands on the market in the U.K.,” says Pender. “Assessing all of those as the same would be the equivalent of a home contents insurer treating all post codes, house sizes and building types the same. The scientific data for each product needs to be assessed together with the potential of a product to reduce risk over the medium to long term. We have data to demonstrate that smokers who switch to iQOS are unlikely to relapse—on average, 70 to 80 percent of iQOS users have quit cigarettes—which makes iQOS a compelling smoke-free alternative for people who would otherwise continue smoking.”

According to Pender, Reviti’s next step will be to cover more smoke-free products, but each one would have to be considered on its own merits rather than taking a category approach. “It is important to keep in mind that both the qualitative and the quantitative composition of e-cigarette aerosols is greatly variable,” he says. “E-cigarette emissions can be very different from one manufacturer to another, from one device to another and even from one puff to another. This leads to a situation where, despite the presence of many high-quality e-cigarettes on the market which are safe for intended use and deliver substantially lower levels of harmful and potentially harmful compounds compared to cigarettes, there are many e-cigarettes which are not manufactured to high standards of quality and safety and therefore present undue risks to consumers. This is why the risk profile of e-cigarettes and other noncombustible products must be assessed on a product specific basis.”

Pushing iQOS sales

PMI has pumped billions of dollars into research and development as well as into the marketing of its next-generation products in recent years. While the company offers a wide range of reduced-risk products, among them many leading e-cigarette brands, its main focus remains on iQOS. During its annual shareholder meeting on May 1, 2019, the company said that its heated-tobacco unit (HTU) shipment volume increased by 14.2 percent to 41.4 billion units in 2018, whereas its in-market sales volume for HTUs nearly doubled, reaching 44.3 billion units, a development driven by all iQOS launch markets. Without distinguishing between individual product categories, the company said that in 2018, all RRPs including HnB products accounted for more than 5 percent of PMI’s total shipment volume and nearly 14 percent of its total net revenues, or over $4 billion. However, the growth was less than expected as volumes saw a decline of 22.6 percent in the fourth quarter of 2018, mainly due to negative distributor inventory movements in Japan. Although margins for the product are currently very low due to discounts and offers as the company is trying to promote the product, analysts expect iQOS to drive the company’s future growth and create value for the company as the discounts are gradually withdrawn.

PMI said it targeted shipping 90 billion to 100 billion heated-tobacco units a year by 2021. On April 30, 2019, the U.S. Food and Drug Administration (FDA) authorized iQOS for sale in the United States. The approval follows a two-year science-based review period through the premarket tobacco product application (PMTA). The FDA was quick to add that while this action permits the tobacco products to be sold in the U.S., it does not mean these products were safe or “FDA approved.” The agency still has not acted upon PMI’s modified risk application for iQOS, which the company had submitted alongside its PMTA application in March 2017.

Where next?

With the U.K., PMI has chosen Europe’s biggest life insurance market for its introduction of Reviti. The company says it has plans to become a global brand with a broad suite of products and to expand overseas in the future, but it hasn’t named any concrete markets yet. If countries such as Germany, for instance, were on Reviti’s list, a launch of its current discount concept could become difficult: In Germany, life insurances are regulated by the principle of equal treatment as stipulated by the insurance supervision law. This principle generally prohibits discounts for individual groups of policy holders if no underlying factual reason for the differentiation can be found in the premium calculation.

Discount premiums especially for users of a certain product of a brand, a spokesperson of the German Insurance Association told Tobacco Reporter, would be permissible if only there were such serious differences between the use of this product compared with the use of a competitive manufacturer’s product with regard to premium calculation that they would justify unequal treatment. The advantage of the product promoted by the insurance policy would have to be statistically proven. In the case of iQOS, this would require independent long-term studies, which for the novel product category don’t exist yet.