TobaccoReporter logo

Category: Uncategorized

  • Reality Check

    Reality Check

    Photo: Grispb

    To what extent do flavor bans achieve their stated objectives?

    By Cheryl K. Olson

    As a California resident, I set aside an evening before every state election to educate myself about that year’s crop of “propositions”—proposed policies that have gathered enough signatures from registered voters to place on the ballot. This year’s motley assortment addressed kidney dialysis centers, arts and music education, online gambling … and flavored tobacco products. The brief text on my ballot stated that a “yes” vote would approve a stalled 2020 law prohibiting retail sale of certain flavored tobacco products. And this would decrease state tobacco tax revenues as much as $100 million per year.

    The California ban includes all flavored tobacco products (aside from premium cigars, loose leaf tobacco and certain hookah tobacco) as well as flavor enhancers designed to be added to tobacco products. Bans of flavored vaping products are now in effect in states such as Massachusetts, New Jersey and Rhode Island. New York bans both flavors and online sales (five states ban online sales but not flavors). Various cities and counties, including Chicago and Boulder, Colorado, also forbid flavors.

    This led me to wonder about the purpose of laws prohibiting flavors in various types of nicotine products. Are flavor bans a useful way to achieve tobacco policy goals? And what unintended consequences might result?

    Why the Focus on Flavors?

    Despite questionable evidence, it’s now dogma that flavored tobacco products addict youth and are a slippery slope to smoking. “The ban on flavored nicotine vapor products will protect our children, who, thanks to the tobacco industry’s marketing efforts, have been using vaping products at alarming rates,” said New York state’s commissioner of health in May 2020. “We will no longer permit Big Tobacco to target young New Yorkers for a lifetime of nicotine addiction.”

    “Flavors are complicated. They are initiation products for new users, no question,” says Dave Dobbins, former chief operating officer of the Truth Initiative. “We see this play out in alcohol as well. Kids start with flavored seltzers. We tolerate this because adults like flavored alcohol also.”

    “That said, nicotine can be dependence inducing, and youth initiation is a serious issue,” he adds. “But, if we expect adults to switch, measures that reduce combustible appeal (no flavored cigars or cigarettes) and increase the appeal of safer products (flavored nicotine pouches) will be important.”

    A nicotine researcher who has worked in academia and industry (and asked for anonymity) notes, “Just because most youth use flavors doesn’t mean they need flavors to experiment. They didn’t need flavors to experiment with cigarettes 20 years ago.”

    Unintended Consequences of Flavor Bans

    What do we know so far about the effects of flavored product sales restrictions? There are hints in a recent scoping review by Todd Rogers and colleagues at RTI International and the Truth Initiative Schroeder Institute. They looked at studies of local U.S. policies, most passed in 2015–2019. Research designs and measures were generally weak, and there were many gaps. None of the studies gave evidence on whether flavor bans reduced youth access to or susceptibility to use tobacco products, for example.

    The authors did find post-policy short-term reductions in flavored product sales but little assurance that these would be sustained. Most of the studies looked at unintended effects. There was evidence of cross-border sales and substituting other products rather than quitting. There were also creative workarounds as when large numbers of New York City retailers began selling “noncigarette products with concept flavor descriptors” such as “purple” instead of “grape.”

    Three included studies that measured policy success via scanner sales data found “significant, sustained levels of sales of restricted products in policy-affected areas.” The review’s authors piled on the pessimism by noting that retail scanner data leave out online sales, sales from specialty vape and tobacco stores, out-of-town purchases and “illicit sources.”

    The upshot? Rather than express skepticism of flavor bans, the review authors doubled down. They encouraged larger scale (state or national) bans because “these governments typically have more resources … to defend and enforce policies and measure outcomes.”

    A new survey and interview-based study looked at how young adult e-cigarette users in six major cities responded to the combined effects of 2020 federal restrictions on flavored cartridge-based vapes and state/local flavor bans. Very few (one in 12) reduced e-cigarette use. They went to alternative providers (including online) or used menthol/tobacco flavors. Faced with further restrictions, some intended to switch to cigarettes.

    Recent studies of flavor bans have found preliminary evidence linking bans to increased cigarette use among young adults and high school students. Any reversal in the longstanding downward trend away from smoking is cause for concern.

    In short, there’s little evidence thus far that bans achieve their stated goals. And unintended effects are potentially serious. One cynical but supportable conclusion: Tax Foundation researcher Ulrik Boesen called the Massachusetts ban on flavored e-liquids and menthol cigarettes “a public health measure that merely sends tax revenue to its neighboring states without improving public health.”

    Alternatives to Flavor Bans

    Atakan Erik Befrits, chief operating officer of the International Network of Nicotine Consumer Organizations, notes growing international interest in flavor bans as a means to protect children. He fears that the European Union and World Health Organization may have “painted themselves into a corner” with their current negative stances and find it difficult to change course. This would leave nicotine users, including those in low-income and middle-income countries, “with only the most dangerous delivery devices and the worst possible (if any) harm reduction alternatives to cigarettes for the 15–25 extra years that it will take for the natural experiment to run its course and become self-evident.”

    Are there policies that meaningfully target youth tobacco use without torpedoing reduced-harm options for adults who smoke? Dobbins favors policies, such as the recent raise in the age of sale, and using technology and volume purchase limits to reduce youth access. He also supports prohibitions on “lifestyle” marketing, such as desktop DJ parties.

    “After all, nobody will ever try an unflavored nicotine pouch, and few will switch if tobacco is the only option,” he says. “In the end, a balanced approach is the most sensible. I hope we get there.”

    Adapting to Tobacco Flavor Bans

    What do people who quit smoking with reduced-risk products do when flavors are banned? Members of the Consumer Advocates for Smoke-Free Alternatives Association (CASAA) were asked, “If you live in a state where flavors are banned, how has that affected your ability to stay smoke-free?” Examples below are representative of dozens of emailed responses.

    When flavor bans shuttered trusted local vape shops, many former smokers felt adrift. “There was a store with a very knowledgeable owner who answered all of my questions. Unfortunately, because of the ban in New York, he was forced to close,” said Melanie. “The options were scary at best because you never knew if what you were getting was safe. I am still vaping and have found reputable places to get my products.”

    To those former smokers used to buying products online, local flavor bans can be irrelevant. “I learned most of my information about vaping on various YouTube channels,” said Dave. “I think flavors are banned in my state/county, but I mix my own liquids, so the bans do not affect me.”

    Many who responded get their products across borders, in person or via family. “The New Yorkers that refused to go back to smoking either started to DIY [do it yourself], went out of state, found an online store that still ships to N.Y., or go to a Native American reservation for their flavored e-liquid,” said Dale.

    “I’m close enough to Connecticut to be able to get flavors there,” noted Rolf. “Without that, I think I would’ve returned to smoking.”

    “My fiance has a daughter who lives in North Carolina, so I usually make a big juice order and have it delivered to her” for drop-off when she visits New York, reported Roger. “I do not know what I would do if I did not have the ability to get the juice. My favs are black licorice, almond and bubble gum.”

    The extra effort required raises the costs of vaping, reducing its appeal versus smoking. “I can no longer afford to buy my favorite juice anymore. What was once a relatively cheap hobby has become too high priced,” said Zack from California. “I’m not going to lie; I’ve slipped up a few times since the flavor laws and nicotine taxes went into effect and found myself having a cigarette when socializing with friends.”

    Calling flavor bans “nonsensical,” Rob in California blamed “our government [that] can’t enforce the age barrier to buy these products” and block “teenagers looking for kicks.” He has written repeatedly to his representatives in Congress and the California state legislature to educate them about vaping and “let them know that if vaping is ever banned or flavors we need are banned, I will have to seriously consider going back to cigarettes.”

    “The flavor ban has been devastating. It feels like some states want the people to go back to cigarettes to recover some of that lost [Master Settlement Agreement] money,” said a former smoker who requested anonymity. “With that said, I’m still able to get flavored liquid. It just has to be done in a different way that I’m not going to outline here for obvious reasons.”

    “The flavor ban has not affected me much; I want my vape to taste like an authentic tobacco vape,” said Marc. However, “the ban has hindered what was an alleged battle against the dangers of cigarettes. All the vape ban did was pull Big Tobacco up off the canvas after a KO a few years ago.”

    Cheryl K. Olson is a California-based public health researcher who specializes in behavioral health issues and consults on tobacco product behaviors via McKinney Regulatory Science Advisors. She spent 15 years on the faculty of Harvard Medical School.
  • In the Bag

    In the Bag

    Photo: Swedish Match

    Swedish Match continues to dominate the U.S. nicotine pouch market with its popular Zyn brand.

    By Stefanie Rossel

    It’s still a fledgling industry but growing rapidly: According to the Foundation for a Smoke-free World (FSFW), nicotine pouches, also known as modern oral products, accounted for an estimated $2.38 billion, or 0.3 percent, of the global retail market in 2021. Toward the end of 2022, the segment had already achieved a value of at least $5.86 billion, estimates Market Reports World. The nicotine pouch market is forecast to expand at a whopping compound annual growth rate of 31 percent until 2028.

    Pouches appeal to adult nicotine consumers because they are discreet and spit-free. They can be used in places where cigarettes or vaping products are banned and can be disposed of in household trash after use. Of the global category volume, the five leading modern oral manufacturers jointly hold an 82.1 percent share, according to the FSFW. Swedish Match is the largest player with a share of 48.7 percent, followed by BAT (20.3 percent), Swisher International (6.4 percent), Altria Group (5.4 percent) and Japan Tobacco International (1.4 percent).

    Sweden and the United States are the largest markets for nicotine pouches. Both countries have long traditions of smokeless tobacco products. In the U.S., where the modern oral category currently accounts for 2 percent of the nicotine market, one brand sticks out: Swedish Match’s Zyn. Launched in 2016, Zyn pioneered the modern oral nicotine segment and has since experienced impressive and continued growth.

    Based on MSA data that records shipments by distributors to retail stores, Zyn could extend its U.S. nicotine pouch market share to 66.5 percent in the third quarter of 2022. According to IRI data, which measures consumer purchases based on a sample of retail stores, the brand’s market share even exceeded 76 percent during the quarter. Zyn’s penetration is particularly high in the west of the U.S., where it was first introduced.

    Boosting Production

    Zyn’s continuing success in the U.S. was one of the factors that prompted Philip Morris International to make its offer for Swedish Match. In May, PMI bid approximately $16 billion to acquire Swedish Match. To overcome opposition from activist investors, the multinational in October increased the offer price. Nevertheless, Framtiden Partnerships, which owns almost 1 percent of shares in the Swedish company, refused to accept the increased offer, saying it undervalued Swedish Match’s leading position in the fast-growing modern oral nicotine market. At the time of writing, PMI had secured 82.59 percent of Swedish Match.

    Owning a substantial stake in Swedish Match will give PMI a comfortable lead in the U.S. nicotine pouch market, where it currently has no presence. In recent years, Swedish Match has ramped up production of its nicotine pouches in the U.S. When Zyn debuted six years ago, it was available in approximately 40,000 stores in the west of the country. By the end of 2021, the product could be purchased in more than 120,000 retail outlets nationwide. Swedish Match increased Zyn U.S. shipments from 114.1 million cans in 2020 to 173.9 million cans in 2021. In February 2020, the company announced that it would raise production capacity again, enabling its factory to produce more than 200 million cans of pouches per year from 2022.

    Zyn is made from tobacco-derived nicotine and comes in a variety of flavors, among them coffee, cinnamon or citrus. In 2021, Swedish Match said it had rolled out Zyn Menthol and Zyn Chili nationwide. Nicotine pouches are regulated by the U.S. Food and Drug Administration and are subject to age restrictions, a nicotine health warning and premarket assessment.

    Swedish Match submitted premarket tobacco product applications for all Zyn products currently on the U.S. market in March 2020. The applications are currently under review by the FDA. According to Swedish Match, the applications show that almost all harmful and potentially harmful components associated with tobacco products are below detection levels in Zyn. Furthermore, consumer studies indicate that there is little interest in Zyn among users who are not current tobacco consumers and that there is a large potential to attract existing tobacco users to the products.

    Lawsuit Pending

    Despite Zyn’s dominance, the U.S. market for modern oral nicotine is highly competitive. According to Swedish Match, several companies expanded their nicotine pouch footprint in 2021. And some are even challenging the market leader in court. On Aug. 2, 2021, Dryft Sciences filed a lawsuit in the U.S. District Court for the Central District of California, claiming Swedish Match had driven it off the market with a series of sham legal actions.

    Kretek International, the largest importer, marketer and distributor of specialty tobacco products in the U.S., announced the creation of a new company, Dryft Sciences, that would focus exclusively on Dryft nicotine pouches.

    In a September 2019 statement, Kretek announced the new company intended to substantially expand its manufacturing capacity and roll out its nicotine pouch globally. It anticipated manufacturing 30 million cans of Dryft in 2020 and 60 million cans in 2021.

    Shortly after the announcement, Swedish Match initiated several legal actions: It asked the International Trade Commission to investigate Dryft for alleged patent infringements and sued the company for the same reason in the U.S. District Court for the Central District of California. Next, it filed trade secret misappropriation claims under Kentucky and federal law.

    “Because of [Swedish Match’s] actions, Dryft was never able to manufacture or sell the amount of product it reasonably anticipated it would when it issued the September 2019 press release,” Dryft Science explained in statement.

    As a consequence, the plaintiffs said, Dryft’s market value dropped significantly. On Oct. 20, 2020, Dryft Sciences sold its formulations, brands, know-how and other relevant assets—originally valued at $485 million—to BAT for $150 million. BAT has since sold the products under its modern oral nicotine brand Velo.

    Dryft Sciences requests $1.2 billion in damages. Swedish Match has not publicly commented on the lawsuit, and its financial report for the third quarter of 2022 made no reference to the case.

    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.
  • Contemplating the Future

    Contemplating the Future

    Tobacco growers gather in Portugal to debate the many challenges facing their sector.

    By Ivan Genov

    The year 2022 marked a return to in-person meetings for the International Tobacco Growers’ Association (ITGA). After successfully conducting regional conferences in the Dominican Republic for the Americas region and in Zambia for the Africa region in August, the ITGA held its annual general meeting (AGM) in Castelo Branco, Portugal—the organization’s secretariat headquarters.

    The event was attended by tobacco growers’ associations from five continents—Africa, Asia, Europe, South America and North America—together with key industry stakeholders and local hosts. Participants included delegations from Argentina, Brazil, Bulgaria, India, Italy, Malawi, the Philippines, Poland, Portugal, Spain, Switzerland, the United Kingdom, the United States, Zambia and Zimbabwe. The three-day event featured an open session, during which a variety of topics were discussed—the latest leaf production dynamics, a global market overview, regulatory updates and three blocks dedicated to sustainable tobacco growing in Africa, the Americas and Europe. ITGA members shared the latest market information regarding their respective regions and highlighted the most pressing concerns going into the 2023 season. Among the frequently mentioned ones were the growing costs of production, unsatisfactory pricing and the importance of being included in major tobacco forums.

    The Consumption Side

    Euromonitor International provided an in-depth briefing dedicated to the global nicotine market. The market intelligence provider’s head of nicotine and cannabis research, Shane MacGuill, identified broadening of the nicotine universe, regulatory innovation (including sustainability) and the opportunities and threats created by Covid-19 as the key future consumption drivers. In 2021, the pandemic effects sent cigarettes to their best performance in years while the category accounted for 83 percent of the total tobacco value sales. With most regions likely to see both volume and value declines in their cigarette sales, the Middle East, Africa and China are where growth is most likely to come from in the future.

    In the illicit sphere, sales are expected to rebound significantly in the short term as costs of living are growing rapidly in many markets. Currently, the countries with the biggest illicit penetration are Ecuador, Peru and Uganda. In emerging products, heated tobacco is seen as the leading reduced-risk format while nicotine pouches show significant potential, mainly driven by sales in the U.S., but starting from a lower base. The importance of sustainability is another key driver in the tobacco and nicotine universe. The growing focus on cultivation and its environmental impact; supply chain emissions, widely accepted as environmentally damaging; and product waste, which is now in part tackled by the EU Directive on Single-Use Plastics, are among the key issues that will shape the regulatory framework. Finally, Euromonitor flagged the potential of legal cannabis, which is forecasted to reach nearly $100 billion in sales by 2026, according to company estimates, with focus on the U.S. and Germany as key examples of how the newly emerging industry could take shape.

    The Production Side

    After a sharp drop in 2020, 2021 marked a slight rebound in production for the biggest tobacco variety, flue-cured Virginia (FCV). This was largely driven by production increases in the U.S., Brazil and Zimbabwe, coupled with good weather conditions and revival of trade after the initial waves of Covid-19. In 2022, further production growth was registered, but this was primarily triggered by a 110 million kg increase in China. The biggest producer of FCV, excluding China, is Brazil, where the season concluded with 60 million kg of FCV less than the year before, with production costs up nearly 30 percent. Projections for 2023 suggest that China will keep the 2022 production levels while Brazil will also increase its FCV outputs, which could lead to additional growth on a global level. Pricing is showing an upward trend in some of the biggest markets for FCV, but the rapid growth in production costs is the biggest concern flagged by most ITGA member associations. As inflation and unstable supply chains are likely to continue shaping trade in 2023, this issue is likely to persist in the medium-term to long-term.

    The trajectory for burley tobacco is downward. Production levels have been consistently declining in the past three years to four years. In contrast, for 2023, leading merchants expect notable production growth for burley in Africa, bringing the global quantities closer to the 500 million kg mark. Whether this forecast will materialize remains an open question. A market of particular importance for burley, Malawi experienced a difficult season. Sales were just under 70 million kg, down from 104 million kg the year before, representing a more than 30 percent drop on a yearly basis. The average price of $2.03 meant that total proceeds for the sector were only 7.7 percent down in comparison. The Tobacco Association of Malawi has indicated that 2021 and then 2022 have recorded a high increase in input prices because of Covid-19-related logistical developments and the impact of the Ukraine crisis, with fertilizer prices almost doubling. Fertilizers will be a big factor going into 2023 as well. In the U.S., another important producer of burley, growers indicated that interest in the variety is rapidly decreasing. Although some have diversified into other tobacco varieties, such as dark air-cured for the growing popularity of smokeless products, next season’s production is likely to register a double-digit year-on-year decline.

    Focus on Other Markets

    The AGM also shed light on some of the smaller markets that do not often enter the spotlight. For example, in the Philippines, production currently stands at 46 million kg, with an expected rise of 3 million kg going into the 2023 season. During the current crop, at least 4 million kg were lost due to rains. In Italy, the season was particularly difficult, with the rising cost of gas, fertilizer and power impacting production. A significant number of farmers took a sabbatical year while climate was hot and dry with several thunderstorms impacting production. The situation in the wider European region is also difficult. In the span of a decade, production went down drastically, with little help for growers on a regional level. Recently, the war in Ukraine has seriously been affecting pricing and availability of fertilizers. Shisha has arisen as a new opportunity for EU growers, especially in Poland.

    Special attention was also paid to Ukraine, where the war has a significant impact on the larger agricultural environment. According to U.N. data, a significant number of markets depend heavily on agricultural commodities from Russia and Ukraine while the wheat dependence of many African and other least developed markets is also noteworthy. In addition to the fertilizer shortage and availability issues, big tobacco manufacturers have large exposures of their cigarettes and heated-tobacco portfolios to Russia and Ukraine, making supply chain complications even more pressing.

    Election of New ITGA President and Future Objectives

    Jose Javier Aranda (Photo: ITGA)

    Among the important outcomes of the ITGA’s 2022 AGM was the election of Jose Javier Aranda as the new association president. Aranda belongs to a family of farmers with roots and traditions in Argentina’s Lerma Valley. His ancestors were among the first Virginia tobacco producers in Salta Province. Currently, he serves as the first member of the Camara del Tabaco de Salta, a founding organization of the ITGA and secretary of the Cooperativa de Productores Tabacaleros de Salta. His leadership experiences are built on 16 years of action in the representative entities of the Salta producers.

    Going into next year, ITGA members highlighted the importance of maintaining and strengthening communications with already scheduled regional meetings in Africa, America, Asia and Europe. The ability to sit in all meetings where the future of the sector is being decided, including meetings hosted by the World Health Organization, is among the goals of the new president. The multiple challenges facing the most vulnerable part of the supply chain necessitates the close cooperation between associations and major industry stakeholders to continue, so the sustainable future of millions of people taking part in tobacco growing can be ensured. Finally, growers agreed that tobacco should be grown in a sustainable way, respecting the environment and making sure all processes involved in production are fully compliant.

    Ivan Genov is ITGA’s manager of tobacco industry analysis.
  • Hong Kong May Resume ENDS Shipments

    Hong Kong May Resume ENDS Shipments

    Photo: Tatiana Morozova

    The Hong Kong government wants to resume shipment of alternative smoking products through the city to boost the air cargo industry, reports the South China Morning Post. Domestic sales would remain illegal under the proposal.

    The city currently prohibits imports and transshipment of electronic nicotine-delivery devices, many of which are manufactured in neighboring Shenzhen.

    “The government hopes to ensure the policy on the importation ban on alternative smoking products will be preserved while maintaining Hong Kong’s position as a leading international aviation and logistics hub,” said Pamela Lam Nga-man, deputy secretary for transport and logistics.

    Hong Kong International Airport handled 5 million tons of cargo in 2021, which is about 42 percent of the city’s overseas trade worth about HKD4.34 trillion ($556 billion). Air cargo volumes fell 18 percent on average from May to October of 2022 compared with the same period last year. Some of this decline was attributed to loss of transshipment of alternative smoking products from mainland China; most of the materials were transported through Hong Kong.

    Under the government’s proposal, products that arrive by sea for air shipment would use a mainland logistics park set up under a pilot transshipment scheme between the city’s airport and the mainland city of Dongguan. A scheme for secure road transport from the mainland would be set up, documents would have to accompany shipments to prevent them leaking into the black market, and products would have to be directly transferred by designated routing in Hong Kong. Goods would be delivered to restricted areas of the airport and held until flown out. Provision of advance cargo information, application of designated seal or e-lock on containers and GPS tracking of cargo would also be used.

  • Indonesia: President Approves Tobacco Tax Hikes

    Indonesia: President Approves Tobacco Tax Hikes

    Photo: Taco Tuinstra

    Indonesian President Joko “Jokowi” Widodo approved a plan to increase tobacco taxes by 10 percent in 2023 and 10 percent in 2024, reports Tempo. The objective is to reduce the number of underage smokers.

    “In today’s decision, the president has agreed to increase cigarette excise tax by 10 percent for [the] 2023–2024 period,” said Finance Minister Sri Mulyani after meeting at the Bogor Presidential Palace, West Java, on Nov. 3, 2022. 

    The increase in excise will apply to machine-made “white” cigarettes, machine-made kretek cigarettes and sigaret kretek pangan products. 

    Indonesia has struggled with high rates of underage smoking. The government aims to reduce smoking prevalence for 10-year-olds to 18-year-olds to 8.7 percent.  

    Cigarettes also represent the second-largest household expense—just below rice—in Indonesia.

  • Accessing Innovation

    Accessing Innovation

    Photos: Chris Frenzi Photography

    The GTNF 2022 once again delivered on its promise to promote respectful debate among stakeholders in the nicotine business. From Sept. 27 to Sept. 29, participants gathered at the Four Seasons hotel in Washington, D.C., to discuss the challenges and opportunities facing their business, with an emphasis on innovation—and the importance of making the fruits of that innovation accessible to consumers worldwide.

    This year’s GTNF was noteworthy for the diverse lineup of participants. More than half of the forum’s participants were not employed by the tobacco industry, and at least 41 percent of speakers addressed the conference for the first time.

    Below is a sampling from the conference.

    Adam Afriyie: The U.K. Example

    Adam Afriyie, Member of Parliament for Windsor and vice chair of the All-Parliamentary Group on Vaping, examined the successful U.K. approach to tobacco harm reduction and the lessons it might hold for other countries.

    This was an appropriate time to do so, he insisted, with life returning to a semblance of order following the Covid-19 pandemic and regulators around the world poised to make decisions—“life-and-death decisions”—about alternatives to smoking.

    Despite progress, smoking still kills 75,000 people in England yearly. Britain’s National Health Service spends about £2.5 billion ($2.82 billion) annually treating smoking-related illnesses. Every year, tobacco use results in economic losses of £17 billion through ill health, absence and low productivity.

    Afriyie distinguished four elements in the U.K. approach, which started with Britain setting a target to make smoking obsolete by 2030.

    Second, the government and the health establishment accepted the evidence that vaping and other smoking cessation products, such as patches, pouches and snus, are all part of the legitimate arsenal of weapons against smoking—a conclusion that was reinforced by the Department of Health’s conclusion that vaping is at least 95 percent less risky than smoking. “What matters is the relative harm,” said Afriyie. Rather than relying on conjecture, emotion or the fear of Big Tobacco, the government relied on data, he noted.

    Third, the government regulated vaping as a consumer product, setting minimum standards for quality and safety, such as a requirement to sell e-liquids in child-resistant packs. This framework, said Afriyie, allows adults to make informed decisions while protecting children from marketing and harm. All new products must be registered with the Medicines and Healthcare products Regulatory Agency. While vapes are not considered medical products in Britain, this prerequisite installs a discipline among manufacturers to be cognizant of the evidence base behind their offerings, said Afriyie.

    Finally, the government commissioned an independent review of the progress toward its smoke-free objective. Published in June, the Javid Kahn report concluded that Britain would miss its target if it continued on the current trajectory. To get the project back on track, Kahn suggested that vaping must be front and center of the drive to eradicate smoking. In light of widespread misperceptions about vaping—50 percent of general practitioners are unaware that vaping is less harmful than smoking—the report also recommended opening a conduit for the industry to communicate directly to smokers the benefits of switching from cigarettes to vapes.

    While Afriyie was inspired by the level of technical innovations in nicotine-delivery products, he was less encouraged by the equally important innovation or evolution of regulatory frameworks internationally. For example, while heat-not-burn products have been thriving in Japan, vapes are nearly impossible to access in that country because they are treated as medical products rather than consumer products.

    The World Health Organization, too, should adopt the U.K. approach, according to Afriyie. Unfortunately, the global health body’s direction of travel, he said, appears to be made in “smoke-filled” rooms lacking transparency. Rather than basing its policies on science, said Afriyie, the WHO’s stance on tobacco harm reduction products appears to be subject to influences that are not directly to do with public health.

    Concluding his presentation, Afriyie addressed each of the stakeholders in the tobacco harm reduction debate. “My message to smokers is please stop. And if you can’t stop, choose a vaping device or a heat-not-burn product—but move on. My message to investors: Britain is open for business.” His comment drew good-natured laughter, but Afriyie was only half joking, reminding his audience that when it comes to smoking cessation products, Britain is a gateway to the world. “The U.K. regulatory imprimatur on your documentation is a sign of quality and an aid to marketing and acceptance around the globe,” he said.

    “My message to industry: Be good. Conduct open, honest research,” said Afriyie. “If the answers aren’t exactly what you want, don’t hide the results. Every bit of extra information and knowledge that we gain through research is useful.” To regulators, Afriyie stressed the importance of following the science. “Follow the U.K.,” he said. “Do not let the perfect be the enemy of the good.”

    Philip Evans: An Outside Perspective on Innovation

    Philip Evans, senior advisor at the Boston Consulting Group, provided an outside perspective on the challenges and opportunities of transformation through innovation.

    Evans started by reflecting on the successes and failures of other sectors that, like the tobacco industry today, had faced existential crises. He cited Netflix CEO Reed Hastings’ decision to walk away from the business of distributing DVDs in favor of streaming video, thereby transforming the company and creating staggering amounts of economic value—and contrasted that with BP’s fruitless attempt to rebrand as “Beyond Petroleum.”

    What can such experiences teach the tobacco industry about transformation through innovation? Evans identified five lessons.

    First, transformation requires a crisis—the more acute, the better. Transformation takes place regularly in the military—always after defeat, when generals are forced to fundamentally rethink their strategies. And one reason the fast-moving tech industry is so innovative is that when a crisis hits, it tends to hit quickly, which means it cannot be evaded.

    Second, while companies can try to overcome their problems through mergers and acquisitions, this will not necessarily achieve the type of transformation that the tobacco industry is interested in. Evans cited the example of the American Can Co., a low-margin commodity business that transformed itself into a life insurance company by buying other businesses. “Over time, the only thing that transformed was the business card of the chief executive,” said Evans, adding that “a bunch of investment bankers probably got very rich in the process.”

    The third lesson in transformation, according to Evans, is that it almost invariably takes new leaders to set a new direction—and those leaders need a single-minded, long-term vision along with the security and legitimacy to withstand short-term reversals, which is the fourth lesson. Evans notes that successful transformers were often led by a sole proprietor. Bill Gates was able to overcome the threat posed by the internet to Microsoft’s software-based business model in part because he was a uniquely powerful controller and owner of the company.

    As the fifth lesson, Evans stressed the importance of a clearly articulated strategy and purpose. “Companies that lose their way cannot recruit good people,” he said. Talented candidates are attracted by the promise of growth and vitality, especially through innovation.

    Evans then set out to dispel the myth that big companies are unable to innovate. “It’s untrue,” he said. To illustrate his point, he showed a chart plotting the number of patent filings against the population levels in America’s biggest cities. The cities with the most people clearly filed the most patents. “Innovativeness is a function of the breadth and comprehensiveness of the other ideas to which an individual is exposed,” explained Evans. “That exposure is much greater in a large network than it is in a small one. If appropriately structured, there can be positive economies of scale to innovation; big is indeed beautiful.”

    The other secret of cities’ success in innovation is their lack of hierarchies. According to Evans, it’s the hierarchy rather than the scale that squelches the ability of many large organizations to innovate. If a large organization wants to be successful in innovation, it should replicate the hierarchy-free social structure of cities.

    To illustrate his point, Evans showed charts revealing patterns of collaboration within Google, Apple and Amazon—companies that are large and innovative. While each of these companies operates in a different part of the innovation cycle, the charts revealed patterns of considerable collaboration.

    Openness is key, according to Evans. Google, for example, is deeply networked in academia and does not assert intellectual property in the traditional sense.

    This lesson was learned the hard way by the pharmaceutical industry toward the end of the 20th century. In the late 1980s, there was little collaboration among pharmaceutical companies, with each player jealously guarding its intellectual property. When large molecule biotechnology emerged in the early 1990s, many traditional pharmaceutical companies stuck to old models of who owns what—and therefore got marginalized.

    In the ensuing decades, they were forced to buy their way back into the business by acquiring some of these biotech companies. According to Evans, the pharmaceutical companies have since learned their lesson. But the point, he noted, is profound: Innovation requires openness and sharing. “It is incompatible with a lot of the traditional ideas about exclusivity, secrecy and ownership,” he noted.

    Brian King: Leading an Agency Under Scrutiny

    There are plenty of reservations about the way in which the U.S. Food and Drug Administration’s Center for Tobacco Products (CTP) has handled its responsibilities. During a brief speech at the GTNF 2022 in Washington, D.C., the new director of the CTP, Brian King, did little to quell those concerns. He did, however, acknowledge the continuum of risk. “We do have certain products that are lower risk than combustible cigarettes, and that’s an important component of the dialogue,” said King.

    King told attendees that there is an opportunity for the CTP to assess the risk of youth vaping initiation and counterbalance that with the opportunity for adults who use e-cigarettes to quit combustible cigarettes.

    “I think that [the] public health standard is pretty critical to the work we do, and it’s definitely a guiding light in terms of my determinations and decision-making,” he said. “Ultimately, it comes down to the science … it’s very critical, to me, to ensure that we use that as our guiding light. And, of course, the onus is on the applicants to ensure that they are providing the most robust signs possible to inform decision-making.”

    The FDA has long been criticized for its handling of the premarket tobacco product application (PMTA) process and is currently defending multiple lawsuits from vapor companies challenging its marketing denial orders (MDOs), including two from Juul Labs, which recently filed a lawsuit over the regulatory agency’s refusal to disclose documents supporting its MDO.

    Juul claims the agency overlooked more than 6,000 pages of the data it submitted on the aerosols that users inhale, according to Joe Murillo, chief regulatory officer at Juul Labs, who also spoke at the conference.

    King said that a sizeable portion of youth are still vaping flavored and disposable products. However, he also said that the potential benefits for adult smokers are “mutually exclusive” from youth uptake concerns. “I don’t think that they necessarily have to be separate; they can certainly be explored concurrently,” he said. “But again, we need to ensure that we’re considering the science from both ends when making our decisions.”

    King said the agency is “continuing to make progress” on the estimated 1 million PMTAs for nontobacco nicotine products as well. He said over 90 percent of the applications have been completed. “We have 350 acceptances so far, and there’s about 800,000 that have received an RTA [a refuse-to-accept letter], and I’m hopeful that within the next few weeks we should be able to get through all 100 percent of those 1 million.”

    Being accepted for review is only the first step in the PMTA process. There are six stages, or rounds, to the PMTA process. After acceptance is filing, then a substantive review before an action is taken. King called the first step an important one. “[It’s] an important step, and I’m committed to ensuring that we keep things moving as expeditiously as possible,” King said.

    King recently told the AP that he believes “there’s a lot of really important science and innovations” that have occurred in the vaping industry in recent years, adding that the most notable is nicotine salts in e-liquids. “We know that when you smoke a tobacco product, it’s a very efficient way to deliver nicotine across the blood-brain barrier. So it’s been very difficult to rival that efficiency in another product,” said King in the interview. “But in the case of nicotine salts, you have the potential to more efficiently deliver nicotine, which could hold some public health promise in terms of giving smokers enough nicotine that they would transition [off cigarettes] completely.”

    King also discussed the FDA’s ability to force companies to comply with its MDOs. So far, very few companies that have been told to remove their products from the market have complied. King said the agency has multiple enforcement options to bring both manufacturers and retailers to heel.

    “We have several tools available to us, including advisory actions,” he said. “We also have regulatory enforcement actions, including voluntary recalls as well as various other requested recalls. We can also take administrative action, civil money penalties (in terms of manufacturers, that penalty cannot exceed $15,000 for any single violation or $1 million for any number of violations related to a single action),” explained King. “When it comes to judicial action, we can do seizure, injunction and also criminal prosecution. I will say that when it comes to enforcement and compliance, nothing is off the table.”

    King also updated attendees on the FDA’s external review of the CTP’s procedures, which is being conducted by the Reagan-Udall Foundation. Lauren Silvis, a former FDA chief of staff, was named as chair of the panel that has been asked to “evaluate regulatory processes and agency operations related to tobacco to help the center address new challenges as it works to reduce death and disease from tobacco and achieve its public health mission.”

    “Within only a few weeks of assuming this role, we were told that there would be an external evaluation,” said King. “I actually wholly welcome it. I think it’s a good opportunity, particularly with new leadership, to identify areas where we’re doing things very well but also identify areas where we can enhance our efficiency and effectiveness. I have had meetings with [Silvis] and her team, and I’m confident that we’re going to get very useful information.

    “It’s an ambitious timeline, 60 business days, so it’s going to work out to about 90 days total. It should finish probably by the end of the year, mid-December, and I’m looking forward to the opportunity to hear the recommendations. And I do have a very open mind on this. I’m always for improvement.”

    King expects there will also be opportunities for external engagement, including listening sessions. He could not provide specifics during the speech but said he welcomes feedback from others in terms of informing the CTP’s processes.

    “It’s not a one-size-fits-all, but I do think that we have some great opportunities here,” he said. “I’m fully committed to listening to the evaluator’s input and ensuring that we use it in a very useful way … then we’ll take it from there … I’m sure many of you have heard publicly, my calendar is rapidly filling up, and we are meeting with many—I know I’ve met with several of you in the room already, and I value those opportunities to meet with folks from across the spectrum, whether it be industry or public health … to hear people’s insights, what your priorities are.

    “And those have been very productive and helpful to me. I do listen. I think it’s a very useful opportunity to me in terms of hearing specifically what the recommendations are from industry and what are areas where you feel it would be useful for FDA to engage in to make your life easier in terms of submissions and applications and [what] processes are overly complicated and could be improved,” said King. “I’m fully committed to ensuring that happens.”

    Panel Discussion: The Investment Climate

    The 2009 Family Smoking Prevention and Tobacco Control Act charged the U.S. Food and Drug Administration with regulating tobacco products for the protection of public health, so, from one point of view, it was dismaying to hear a panelist on the investor panel of the recent GTNF describe how, under the tutelage of the FDA, the U.S. tobacco and nicotine market had become a resilient one for combustible cigarettes.

    Of course, this being an investors panel, the panelist’s comment was less about the FDA and more about Altria, whose short-term fortunes are tied to a large extent to the resilience of the combustible segment and whose reduced-risk strategy was said by another panelist to be unclear. Altria’s appeal as an investment opportunity was contrasted with that of another U.S.-listed company, Philip Morris International, which has had success in moving its sales from higher risk to lower risk products.

    The panelists discussed the proposed acquisition of Swedish Match by PMI, which, if it goes ahead, would allow PMI to use SM as a vehicle for marketing in the U.S. the heated-tobacco device IQOS, which has marketing approval and is the subject of an FDA modified-risk order but which is currently banned from being imported following a patents dispute, a ban that is being challenged in the courts. According to one panelist, Altria has an agreement with PMI to market IQOS in the U.S. until April 2024, but there is apparently a question mark over whether the agreement provides for Altria to extend the agreement for another five years.

    This raises the question of how an Altria shorn of its right to market IQOS would fare. Well, apparently, Altria is said to be due to unveil a heated-tobacco product toward the end of this year, but with FDA approval necessary, it would take some time for the company to start commercializing a new product. One interesting comment made the point that while PMI was years ahead of Altria in the heated-tobacco product field, the two companies used to be one.

    There seemed to be an assumption at times that PMI would easily be able to muscle in on the U.S. market, but not everybody was having that. One panelist made the point that Altria and other U.S. companies were likely to prove highly competitive, and another added that IQOS might not be welcomed with open arms by U.S. consumers who had access to a range of reduced-risk products, including e-cigarettes, which had out-competed IQOS on some other markets. But on the other side of this coin, PMI was said to be starting to widen the focus of its reduced-risk strategy in respect of product categories.

    It would seem that a week is a long time in the investment arena. During the panel discussion, Altria was seen as being in a difficult position when it comes to vaping. Its investment in Juul Labs involved a no-competition clause, and Juul has suffered a setback in the form of an FDA marketing denial order (MDO). The panelists indicated that the MDO was being contested, however, and that it would be open to Altria to make an outright bid for Juul. Less than a week after the panel met, however, Altria announced that it had exercised its option to permanently terminate its noncompetition obligations to Juul.

    Surprisingly, perhaps, threats raised by the potential cigarette menthol ban and the imposition of a very low-nicotine cigarette standard in the U.S. were not yet seen as particular drags on tobacco businesses’ appeal to investors since, partly because of likely legal challenges, they were seen as being some way off.

    On a wider front, while PMI was seen as a growth company, it was said to be facing headwinds created by the strength of the dollar and its exit from Russia. Or not. One panelist said that only Imperial Brands had exited Russia completely and that he would be surprised if the other major companies, which had invested heavily in the country, had exited Russia without providing for a way back.

    On a more general level, the investment case for tobacco was seen as strong, partly because most companies—the exception seems to be PMI—are undervalued but also because they offer strong and secure cash flows and high yields. This situation was said not to have changed but to be more appreciated now than it was two or three years ago, particularly in the face of a recession. And while the appeal of tobacco stocks would be negatively impacted by the current increases in interest rates, on the positive side, most tobacco company debt was at fixed rates. Still, environmental, social and governance issues comprised an overhang in respect of getting investors interested in tobacco stock.

    The discussions were heavily skewed toward the U.S. market and U.S. companies to the extent that the chairman apologized for ignoring the world outside the U.S. and Europe. The upcoming EU directives on excise taxes and tobacco products were mentioned, the former in a fairly good light given that it seemed that harmonized taxes would not be set at the same level across product categories but at a lower level on less risky products. Such a rational policy seems at odds with the Tobacco Products Directive, which seems set to retain the irrational ban on snus.

    BAT and Imperial Brands were said to be undervalued by investors. BAT’s multi-category reduced-risk portfolio was held up as the way ahead, and its success with Vuse was highlighted a couple of times. Mention was made of a new management at Imperial that was said to be getting to grips with the business, focusing on the areas where it could perform well, resetting its new-generation products business and creating an opportunity for some geographical divestments.

    Panel Discussion: Global Regulatory Issues

    It’s been almost 60 years since a U.S. Surgeon General first stated the dangers of cigarette smoking and 50 years since scientists found out that the inhalation of smoke rather than nicotine is the major cause of smokers’ health problems. With goals in tobacco harm reduction (THR) long set, regulators should be able to solve the problem and shape rational regulation, argued moderator David Sweanor, adjunct professor of law at the University of Ottawa. “In all cases, it’s only small steps forward. What would happen if we saw this as a matter of urgency and, for instance, allow more products at a time?”

    Gizelle Baker, vice president of global scientific engagement at Philip Morris International, stressed the role of science as a basis for policymaking. “Science isn’t perfect, but it has evolved,” she said. “We need to look at the data we need in the future to correct our idea and come to conclusions that can drive policy. Because the only way to shape policy is to use science, data and facts.” Knowledge about long-term effects or which part of the population in certain countries will use a reduced-risk product (RRP) can only be gained if the products are put on the market, she stated.

    Konstantinos Farsalinos, research fellow at Onassis Cardiac Surgery Center, noted that there are no missing data, only missing common sense. “We will never be fully informed about anything,” he said. “At one point, we have to make a decision.” The bar of proof for THR has been set extremely high, Farsalinos noted. In some markets, this forces smaller companies to leave the market to big companies that can afford the approval process. “We live in a high-risk society—let’s consider THR like any other harm reduction strategies,” he said.

    Marewa Glover, director of the Center of Research Excellence on Indigenous Sovereignty and Smoking, spoke about New Zealand’s Smoke-Free Aotearoa 2025 Action Plan, which is currently under review and includes a smoking ban for all those born after 2008, a drastic reduction of legal retail outlets for RRPs and the reduction of nicotine content in combustible cigarettes to nonaddictive levels. Glover said the draft bill lacks not only common sense but also compassion. “The regulatory intent is to not allow vaping to become normalized but denicotinization,” she said. “As a smoker, you should switch to vaping temporarily and then quit completely. Anyone who quits vaping should never go back.” She predicted a domino effect on other countries and urged regulators not to follow the example of New Zealand.

    The objective of THR, said Sharon Goodall, group head of regulatory science at BAT, is very clear: to reduce the number of smoking-related deaths. The sentiment of positivity that comes with this prospect should be maintained in the industry’s talks with regulators who are willing to change their approach toward THR. “We must not get distracted. We must react to individual events but remain focused on the long-term outcome. There are insufficiencies in the system, markets without open dialogue, therefore we must continue to work with regulators.”

    Focusing on the role of market structure and competition in the U.S., David Levy, professor of oncology at Georgetown University, pointed out that before 2005, the cigarette industry was static and homogeneous and, for tobacco control, the epitomized enemy. After 2005, the market fragmented, with consumers using multiple products. After 2012, e-cigarettes quickly gained market share.

    Tobacco companies responded by producing their own e-cigarettes. They played a role but didn’t control the market. Vaping became a highly competitive market. Recently, it has been joined by heated-tobacco products, which, Levy said, could play an important role as they solved problems e-cigarettes couldn’t solve. “Companies have to be serious in THR because it’s decisive for their businesses,” he said. “New Zealand and the U.K. have done well in THR. In low[-income] and middle-income countries [LMICs], such as India or Pakistan, oral nicotine could replace the highly harmful chewing tobaccos. However, restrictive policies, such as a ban of RRPs, will drive smokers back to cigarettes.” Levy saw clues for a closer cooperation between the industry and public health.

    Fadi Maayta, president and co-founder of Alternative Nicotine Delivery Solutions, provided a snapshot of the situation in LMICs by portraying the Middle East and North Africa (MENA) region, which he called a forgotten region in the picture of THR.

    Of the 547 million who live in the region, there are 140 million adult smokers. In some countries like Jordan, there is a smoking incidence of more than 60 percent, and cigarette sales are growing across the region. Governments are employing the typical measures to curb consumption, such as tax hikes and increases in customs. Saudi Arabia was the region’s only country to introduce plain packaging, which resulted in a burgeoning illicit cigarette market.

    Eight out of the 22 MENA markets have regulated vape products whereas the remaining 14 have banned them altogether. In these markets, however, vape products are still around—and unregulated. But even in regulated markets, 80 percent to 90 percent of the markets are illicit products because the government followed an aggressive path when regulating the products, introducing a fiscal and regulatory framework that is stricter than that for cigarettes.

    “Throughout the region, misinformation is polluting the whole idea of THR,” said Maayta. “Regulators rely on articles about the harm of e-cigarettes, instead [of] on robust science, and still believe that nicotine causes cancer.” An opportunity, he said, could be to cooperate with global THR associations.

    Plenary Panel: Innovating for Tomorrow

    When creating a smoke-free world, innovation must take place not only in terms of products but also in terms of regulation, communication and sustainability. That was one of the messages of the “Innovating for Tomorrow” panel discussion during the recent GTNF in Washington, D.C.

    Ming Deng, head of the Next-Generation Products (NGPs) Industry Study at Yunnan University, spoke about his desire to make NGPs smart and mobile. At present, he said, the electronic functions that differentiate an NGP from a combustible cigarette just serve as a marketing tool. However, the Artificial Intelligence of Things (AIoT)—the combination of artificial intelligence and the Internet of Things—offers considerable opportunity to improve human-machine interactions and enhance data management and analytics, among other benefits. “With AIoT, producers could trace consumers’ needs and innovate products accordingly,” said Deng.

    For Meisen Liu, R&D director at Shenzhen Zinwi Bio-Tech, lower temperature atomization is one of the most important objectives in current research as it is safer for human health. A higher atomization temperature causes atomizing agents to decompose into harmful aldehydes whereas atomizing agents with a low boiling point decrease the atomizing temperature and reduce the emission of harmful substances. Liu also described how nicotine salts derived from different acids had different properties regarding sensory stimulation or taste. His company, he said, had created a new type of nicotine salt that allows for enhanced stimulation in markets where the amount of nicotine in e-liquids is restricted.

    Kevin Peng, advanced technology scientist at ALD Group, spoke about technologies to reduce the carbon footprint of vape product manufacturing and consumption. Earlier this year, his company launched a “green cigarette,” a disposable vape product featuring 6 percent lower carbon emissions than combustible cigarettes. The company also developed a super-slim pod for reusable vaping devices made from a material that has only one-third of the carbon emission of ALD’s older materials. This way, he said, his company had achieved a 50 percent emission reduction compared to other pod products.

    ALD also conducted an emission assessment for its organization and products. “ESG [environmental, social and governance] is a much more difficult thing than we thought,” Peng stated. “We found that most suppliers are not very responsive in terms of such requirements.” He called for a unified industry ESG standard for suppliers, which would make it easier to reduce emissions.

    To help accelerate its transformation, BAT established Btomorrow Ventures two-and-a-half years ago. Lisa Smith, the subsidiary’s managing director, related how Btomorrow had set up a number of innovative ecosystems. “It’s a highly competitive market,” she said. “It’s difficult to find the best innovators out there.” Her company’s role is to be the “handshake” to the outside world to show that BAT is an appropriate partner for innovators. Among the many tasks in BAT’s transformation are to quickly promote the ESG agenda and move beyond nicotine. In order to achieve the latter, she said, the company had to build science and credibility.

    ICCPP, a provider of solutions for e-cigarettes and heated-tobacco products, believes that the key to innovation in vaporization might be the ceramic coil. The company, which focuses on research and manufacture of electronic atomizing technologies and is the parent company of the Voopoo vaping brand, introduced the world’s first nano-microcrystalline ceramic core in 2021. According to William Yu, vice president of global ODM business at ICCPP, the core is based on environmentally friendly mineral materials that result in an increased nicotine delivery and stable flavors. In combination with a powder-free technology and a porous structure, the core enables a significant increase in atomization, according to Yu. The company also develops environmentally friendly products, such as a disposable cigarette made from special recyclable paper.

    Continuing to innovate is essential as the industry is at a crossroads, said George Cassels-Smith, CEO of Tobacco Technology Inc. (TTI). After the Food and Drug Administration, through its onerous market authorization processes, had “frozen” the U.S. market for next-generation products, TTI opened a new manufacturing site in Italy, which according to Cassels-Smith is more open to innovation. “It’s vital to involve science, which is one of the pillars of what is a quick-moving new technology,” he said. “It needs expertise to focus on this direction because, ultimately, we must find superior products to combustible cigarettes.”

    Additional GTNF 2022 session summaries >>

  • Product Stewardship

    Product Stewardship

    Photo: Chris Ferenzi Photography

    Product stewardship, which in general means the responsibility of a manufacturer for his product, is something everyone has a stake in. Regulators make sure that consumers get a product that is in a form that is supposed to be in accordance with its specifications. Because of their reputation and consumer experience, companies pursue the same goal.

    More definitions of what product stewardship stands for in their respective companies were provided by panelists in the GTNF Product Stewardship panel discussion. Stefanie Miller, vice president of global scientific engagement at Juul Labs, said that when people outside the nicotine industry thought about product stewardship, labor conditions and the environment tended to be at the forefront of conversations. “At Juul, however, we’re presently in a major fight for our company because many people don’t understand the potential health benefits realized by having our product on the market.” Unlike Wall Street, where Miller worked as a tobacco industry analyst before joining Juul, Juul bases its decisions on science, she emphasized. “As product stewards, we must study every facet of our products so that we can have an open and honest discussion about how they impact adult smokers looking for less harmful alternatives. And we must hold to account those who propagate misinformation.”

    As a toxicologist, Donna Smith, associate fellow of preclinical within regulatory sciences for Altria Client Services, said she worried about the individual health risk of a product. Given the right regulatory framework, she argued, the reduced-risk product (RRP) category could make a greater impact in this next decade than has been seen in the last 50 years. In her view, product stewardship consisted of three phases: First, the “identify” stage where the chemical ingredients of the product and their quality are assessed. Second, the calculation phase, during which the substances you have added to the product and the things the product is producing are determined so that the results can be compared to published values that are used in the same sense of evaluation, as is common for drugs, cosmetics or foods. Third, the “investigate/validate” phase, where your product is put through whatever biological testing the manufacturer feels necessary to demonstrate that this particular product doesn’t increase harm to the consumer. “Knowing what goes into their product and managing suppliers properly is the most important thing any manufacturer can do.”

    As senior manager of global scientific engagement at Philip Morris International, Carrie Wade, who has a background in opioid addiction research, said she was sitting between the regulatory and product teams making sure everything runs smoothly. Her role in product stewardship is building trust with the stakeholders so that consumers are aware of what PMI is doing. “One thing I’d like to see improved is to reach harder-to-reach people who benefit the most from tobacco harm reduction (THR),” she related. “People with a lower socioeconomic status smoke more and die earlier. We can help them with a diversification of products and more affordable and appealing products that are less out of reach for these people.”

    For Elaine Round, vice president of scientific and regulatory affairs at RAI Services Company, product stewardship starts with ingredients and safety assessments of devices and their components and requires a comprehensive quality management system as well as a postmarket surveillance system to monitor and address adverse events that may happen. “All these components go into FDA [U.S. Food and Drug Administration] applications and are being scrutinized by the agency,” she said. Product stewardship, she added, was ensuring that the reduced-risk products her company brought to market had maximized their harm reduction potential and offered the biggest possible benefit to the adult smoker.

    Panelists agreed that there is still room for improvement. When Miller still worked at Wall Street, she observed how nicotine companies were unable to communicate the problem of e-cigarette or vaping product use-associated lung injury to regulators. For Round, getting a product to market is a major challenge, especially in the U.S. “RRPs are almost held to higher standards than other industries’ products because of the tobacco industry’s past,” she said.

    By working in the field of product stewardship, panelists pointed out, they had been able to make a difference. Smith mentioned her team’s ability to have a lot of the infrastructure and expertise in place to move to where they see the consumer is going. Round related her pride after she and her team had put their first premarket tobacco product application together. Miller saw it as positive that Juul gets a lot of its science published. “It’s good to see it’s treated like any other legitimate science. This is the result of amazing product stewardship surrounding the product.”

    To maximize efficiency of product regulation, panelists suggested to introduce consensus-type standards as are already in place for drugs and medical devices and to make sure that product standards were clearly communicated. No. 1 on their wish list, however, is the implementation of a standard for a product’s appropriateness for the protection of public health.

  • Clearing the Air: Policy That Better Serves Society

    Clearing the Air: Policy That Better Serves Society

    Photo: Chris Ferenzi Photography

    The opening panel of this year’s GTNF looked at the challenges in shaping a sensible regulatory framework for reduced-risk products. The way researchers silo disciplinary expertise certainly is a contributing factor to the regulatory space for tobacco harm reduction (THR) being so polarized, argued Sam Hampsher-Monk, managing director at BOTEC Analysis. “Often, empirical research is presented in a decontextualized way,” he said. “Publishers of scientific media seem to look for articles on e-cigarettes true to the motto ‘the more extreme, the better,’ thus sacrificing the middle ground.”

    Scientists, too, tend to surround themselves with people who think like them, he added, which leads to the creation of echo chambers. “With e-cigarettes specifically, part of the problem is that we’re using unexamined moral judgements to interpret the available evidence, but when we do this, we need to provide reasons for whatever judgement we make. As this rarely happens, an analytical conversation will quickly move to a subjective one.”

    Hampsher-Monk said that no scientific contribution should be taken for face value but needed to be scrutinized regardless of authorship.

    Empirical economist James Prieger, a professor of economics and public policy at the School of Public Policy at Pepperdine University, said that in other industries, such as telecommunications, it was common and unproblematic that economists were paid by companies to do research, whereas in tobacco research, any sort of funding from the industry or even indirectly from the industry was being ignored. However, the more people produce data, the better, he pointed out. “The industry has access to data that I as an academic could never replicate. On the other hand, I as an academic have access to arguably some more brain power. Put the data out there, and let it go through some refereeing process.”

    For a recent study looking at the barriers to THR, Pritika Kumar, senior fellow for integrated harm reduction policy at the R Street Institute, spoke to social workers, psychologists, nurses and several harm reduction (HR) coalitions across the U.S. as well as physicians working in HR coalitions. The obstacles highlighted by participants included physicians lacking the training and experience of leading these conversations with patients other than advising them to quit or call a quit-line number. HR coalitions, which are funded by departments of health, should be tobacco-free, which has often led to bizarre rules; one doctor in a HR coalition told Kumar that people could bring their syringes but not their vapes. “The problem is that messaging around safer nicotine products is so inconsistent,” Kumar said. “While at the FDA’s website there are some hints at THR, the CDC’s [Centers for Disease Control and Prevention] site is all about how harmful these products are. Physicians don’t get clear information, which would be extremely important.”

    Prieger stated that physicians and others needed sources of information that they could hand on to patients. He described the difference between the U.K. and the U.S. in the treatment of pregnant smokers: In the U.K., pregnant smokers having trouble quitting smoking during the first trimester receive a printed sheet with information about e-cigarettes and why pregnant smokers should switch. By contrast, in the U.S., the Pediatrician Association explicitly states that e-cigarettes are not safer.

    Misconceptions about THR prevail in many parts of the world and have a big impact on decision makers in a situation where, as surveys have shown, 70 percent of doctors believe that nicotine causes cancer. To meet this challenge, the stakeholder groups that THR advocates are talking to need to be broadened, Kumar said. “The narrative is currently shaped by public health or well-funded public pressure groups. I see that politicians gravitate toward data that makes sense to them based on their constituents, not so much policy that is really informed by science. Policymakers have no idea how things unfold in enforcement.”

    Ironically, THR products face most resistance among legislators in low-income and middle-income countries, where large parts of the population consume harmful forms of tobacco. In Russia, Indonesia, China, India and Bangladesh combined, there are about 700 million people who smoke combustible cigarettes. Most of these countries have banned e-cigarettes or enacted policies not favorable to THR. As moderator Sudhanshu Patwardhan, director of the Center for Health Research and Education, suggested, there seem to be only two policy options—either a free, Wild West-style market or a prohibitive market.

    Hampsher-Monk rejected the thought of such a false dichotomy, though, saying that politicians often simply copy neighboring countries’ regulatory decisions. However, regulators need to make sure that the unintended consequences of their decisions don’t outweigh the benefits and avoid a replication of failures elsewhere. He explained that with smoking and nicotine use being complicated issues, it is rather unlikely that two populations will respond in the same way to the same regulations.

    Panelists agreed that, in their endeavor to protect youths, health authorities greatly neglect the requirements of adult smokers seeking to switch to less hazardous alternatives. To the latter, flavors are an important criterion, so flavor bans hinder harm reduction efforts. On the other hand, studies have shown that the combustible cigarette and e-cigarette markets for youths are linked; a higher excise tax on vaping has shown to increase youth smoking. “The idea of protecting the children is diametrically opposed to helping adult smokers quit,” Hampsher-Monk concluded, “because if you forego a chance to help adult smokers quit, they will continue to model smoking to their children.”

  • Kingsley Wheaton

    Kingsley Wheaton

    Photo: Chris Ferenzi

    Kingsley Wheaton, chief growth officer at BAT, posed an interesting question at the recent GTNF. “So, we must be even more courageous, speak to the outside world further still and come together even more,” he said near the end of his presentation. “Greater collaboration is key. Is it time, for example, for the GTNF to move from the networked forum that it is to operating more like a fully fledged NGO [nongovernmental organization]?”

    Such a suggestion certainly provides something to ponder. For instance, while I take it that, since the suggestion was put forward by BAT, such an NGO would be legally viable, how would it be viewed by those cynical of the tobacco/nicotine industry’s motives and skeptical about the direction of travel of tobacco harm reduction (THR) as mapped out by those who participate in GTNFs?

    I imagine that the suggestion was prompted by a concern that, whereas the concept and application of THR principles have weaved and are weaving a certain magic, the spell might be broken without further impetus, without further change. Indeed, the word change was used 12 times in the presentation.

    But why is change necessary? After all, Wheaton told his audience that “[i]n the U.K., the U.S., Canada, France, New Zealand, Japan and Sweden, the needle is moving toward tobacco harm reduction.” In the U.K., Japan and Sweden, he said, more than half of BAT’s revenues now come from new-category products while across Europe that figure was more than 20 percent.

    Well, change is necessary, I guess, because, on the flip side, globally, the needle stubbornly refuses to move fast enough. Overall, five-sixths of the company’s revenues still come from combustible products.

    Of course, there are any number of general and country-specific issues determining why the countries named have moved the THR needle further than many of those not mentioned have, and many of those issues cannot be addressed by the tobacco/nicotine industry. Indeed, it was evident, listening to the presentation, that the industry cannot, on its own, end tobacco smoking. Far from it. “Can we look forward to a day when BAT sells its last cigarette?” Wheaton asked, before answering, “Yes, I think that is indeed within long-range view. But it will require more than just the efforts of industry or governments.”

    Even the development and marketing of less risky tobacco and nicotine products is not just down to the industry, I guess. There is no point in developing products whose viability will fall foul of unhelpful regulation in a significant number of countries. I caught the end of the GTNF panel discussion on innovation at which the moderator ended the session by bewailing the fact that the innovations that had been discussed were unlikely to be introduced in the U.S. because of regulatory hurdles in that country. And the U.S., remember, is one of the countries that is counted among those that are moving the THR needle.

    Most of the suggestions that Wheaton put forward as being necessary to reinvigorate THR have been made before but have proved devilishly difficult to implement. For instance, Wheaton made the point that in order to allow consumers to make informed decisions about what types of tobacco/nicotine products to use, public health needed to communicate risk accurately, and the industry needed the marketing freedoms to be allowed to communicate responsibly the benefits of switching from higher risk products to lower risk products. This is true, but while there is some movement in some countries toward such positions, in many countries, official information about the risks associated with tobacco and nicotine products is generally confusing and, in some cases, misleading.

    While it was a little disappointing, I thought, that Wheaton did not spend time discussing the relative environmental merits of the various tobacco and nicotine products on offer, which the engaged consumer would also seek, he did make the point that the industry needed to demonstrate that it can change sustainably. This is correct in my view. There is little point in prolonging the lives of individuals if we are going to help bring forward the death of humanity at large.

    BAT has a good record when it comes to research into lower risk products, and Wheaton made the point that science was the key to unlocking the potential of industry transformation from selling higher risk tobacco products to selling lower risk nicotine products. But he will know as well as anybody that not all the “science” points in the same direction because not all research is conducted in a scientific manner. At least one other GTNF session was taken up with a presentation demonstrating that the findings of some research funded by the U.S. Food and Drug Administration were not supported by the evidence but were nevertheless likely to influence regulations.

    Wheaton admits that he doesn’t have all the answers. But he has laid down the challenge. “It is no longer the time for talk but time to act because tobacco harm reduction is too important for us not to,” he said.

    “Ladies and gentlemen, we are standing at a crossroads. It’s either more of the same, more ‘quit or die,’ more path of least resistance, or we can chart a new course with tobacco harm reduction as our goal.”–George Gay

    The full text of Wheaton’s presentation is available here.

     

     

  • Perceptions of Nicotine

    Perceptions of Nicotine

    Photo: Chris Ferenzi Photography

    Participants in “The Perceptions of Nicotine” panel during the GTNF 2022, held in Washington, D.C., in September, began the conversation by drawing comparisons to similar consumer products, most notably caffeine. Nicotine is found in tobacco leaves, but it’s also found, at lower levels, in plants, such as tomatoes, potatoes, eggplants and sweet peppers. However, by far its predominant source is in tobacco leaves.

    Caffeine can also be found in multiple food sources, including coffee beans, tea, cocoa beans, Kola nuts and guarana berries. The amount of caffeine in guarana berry seeds is about the same as the amount of nicotine in tobacco leaves, up to about 4 percent, according to a panelist. Unlike caffeine, however, nicotine is tied to tobacco. Nicotine is a public pariah while caffeine is socially acceptable. The panelist agreed that this is due to the differences in how the public has been educated on these products. Medical professionals, for example, get much of their information from medical societies, one panelist noted.

    One challenge is that the public and even many medical specialists don’t distinguish between nicotine and smoking. “I think that’s part of the problem,” a speaker said. “How do we untangle that? Nicotine does not produce disease. It’s not carcinogenic. It does increase heart rate and blood pressure. And perhaps there are some positives … it’s a stimulant, it induces pleasure and it improves concentration, reaction time [and] performance on some tasks, but it can also reduce stress and anxiety.”

    For consumers, when asked why they smoke, the most common answer is for enjoyment and pleasure; however, nicotine ranks low on the list of motivations. But when you ask a smoker, “Why do you find smoking difficult to quit?” the answer is “because I’m addicted—addicted to nicotine.” One panelist said when consumers want medical information, more than 70 percent say the first place they go is the internet. The misinformation is rampant, even from seemingly trustworthy sources.

    “The first place that they turn for health-related information is the internet. More than 70 percent of people say that’s the first place they go when they’re looking for information … because it’s easy to use, and they find information that way,” a panelist said. “Just doing the quick search yesterday, you put in electronic cigarettes into the Google search engine, and the first thing you see is the Center[s for] Disease Control [and] Prevention website, which is great; it’s a government resource. The Office on Smoking and Health is the place within the federal government for information on health and smoking.

    “But when you click on that link, the first thing you see is information on the EVALI [e-cigarette or vaping product use-associated lung injury] outbreak. The headline is [about an] outbreak of lung injuries from e-cigarettes and vaping products. That’s not the right way to help people understand the comparative risks between cigarettes and electronic cigarettes and nicotine-replacement therapy and other lower risk [nicotine] products.”

    Many years ago, smoking and addiction were joined together, and that has now created the assumption in the public that nicotine use equals smoking, which equals addiction. It’s not helping people who smoke understand how they might be able to use the products that are available, including lower risk tobacco and nicotine-containing products as well as nicotine-replacement therapy, to quit smoking. Panelists agreed the misconception was doing more harm than good for public health.

    The way vaping and tobacco products are regulated is also partly to blame, according to the panel. Tobacco companies are very limited in the amount of information they can provide on their products. Swedish Match, for example, was the first company to receive an authorization for a modified-risk tobacco product. The U.S. Food and Drug Administration, however, severely restricted the ways in which Swedish Match could communicate the lower risk of its product to consumers.

    “We got super excited internally. I mean, here we have a product, it had no carcinogens, no tar, no nitrosamines, significant risk reductions, and when we started looking at how and what we can communicate, it was incredibly limited … as we were going through our process, we had [tried] to figure out how to tell consumers this was different without telling them it was different,” explained a panelist representing Swedish Match. “It was very challenging. We were trying to figure out how to use different colors and different cues. It was a brand-new category, so we’re trying to educate people on a brand-new category with a can, and you didn’t even know what was in it …. It was incredibly difficult to try to do that.”

    Swedish Match also gathered customer testimonials, but regulations kept the company from doing anything with them. Another panelist explained that consumers do not separate nicotine from tobacco. Nearly 80 percent of the population agree that those are virtually the same. When asked to compare the risks of products, people list tobacco as the most harmful, followed closely by nicotine and then alcohol.

    Caffeine, however, is on the other end of the scale. “Caffeine is on a totally different end of the spectrum. Interestingly, when we think about where the market is moving and things are moving relative to legality, you look at CBD, look at THC, [and caffeine] is more closely associated from a harm perspective to CBD and THC,” a speaker said. “In terms of addictiveness, 96 percent of U.S. consumers would say that nicotine is addictive. Only 76 percent say that caffeine is addictive. But then, you look at harmfulness to health. You can see this wide gap that exists in terms of … the core chemical, 89 percent versus 46 percent in terms of harmfulness to health [nicotine versus caffeine].”

    The panelists argued that people who smoke combustible cigarettes are less likely to try less harmful products if they perceive those products to be no different than what they’re currently using in terms of harm. There’s very little motivation for them to try them. There is also very little the industry can do to reverse the misinformation surrounding nicotine.

    “The industry’s hands are tied with regard to the voice that the industry can have. But I think the role that the industry can play in it is to continue to develop high-quality, lower risk products that are acceptable alternatives for cigarettes for people who smoked cigarettes, and then get those through the regulatory process,” a panelist said. “It’s up to the FDA to communicate to consumers that there are less risky products to consume nicotine.”