Tag: Philip Morris International

FDA Authorizes IQOS Holder and Charger

The U.S. Food and Drug Administration (FDA) has issued a marketing order to Philip Morris Products authorizing the sale of the IQOS 3 system holder and charger, the agency announced on Twitter.
The newly authorized version has minor design differences from the previous version authorized in April, including how the holder inserts into the charger, changes to the charging connectors and LED indicator lights, a new touch feedback feature, and an option to reduce the perceived heat from the tobacco aerosol inhaled by users.
Data on product use suggest no differences among user populations from the previous version, including no new concerns regarding product initiation or use among youth and young adults.
“The issuance of this marketing granted order confirms that you have met the requirements of section 910(c) of the FD&C Act and authorizes marketing of your new tobacco product,” the FDA wrote in a letter to Philip Morris Products.
“Under the provisions of section 910, you may introduce or deliver for introduction into interstate commerce the tobacco product, in accordance with the marketing order requirements outlined in this order, including all appendices.”
The agency stressed that the marketing order does not mean any version of the IQOS system holder and charger can be marketed as “safe” or “FDA approved.”
“There are no safe tobacco products,” the FDA wrote.
The previous version of the IQOS system holder and charger was initially allowed for sale in the U.S. following the FDA’s issuance of a marketing order in April 2019. The company later submitted another premarket tobacco application requesting to market an updated version of the device holder and charger.
On July 7, 2020 the FDA authorized the marketing of the IQOS 2.4 tobacco heating system as a modified risk tobacco product with a reduced exposure claim. IQOS 2.4 is the first next-generation inhalable tobacco product to be authorized as a modified risk tobacco product.
“Altria’s 10-year vision is to responsibly lead the transition of adult smokers to a non-combustible future. IQOS is a key part of that future and we’re excited to build on our first-mover advantage with the enhanced IQOS 3 device which has performed successfully in international markets,” said Jon Moore, president and chief executive officer of PM USA, which has an exclusive agreement to commercialize the IQOS system in the U.S., in a statement.
IQOS is currently available in the Atlanta, Georgia, Richmond, Virginia and Charlotte, North Carolina markets.
December 7, 2020
Japan Cigarette Sales Plunged After HTP Entry

Photo: Colleen Williams
Between 2015 and 2019, total cigarette sales in Japan dropped by 34 percent, which can be associated with the commercial launch of heated tobacco products (HTPs), according to a white paper prepared by Frost & Sullivan and Philip Morris International (PMI).
Titled Tobacco Harm Reduction and Novel Nicotine and Tobacco Products: Evidence from the Japanese Market, the report covers the impact of the commercial launch of novel nicotine and tobacco products (NNTPS) on tobacco use in japan and discusses the regulatory approach that the Japanese government is taking with regard to these products. It focuses on the Japanese market because HTPs have been commercially available in the country since 2013, and Japan is the largest market for HTPs, despite the absence of a formal THR policy to encourage this.
“The commercial availability of HTPs in Japan is associated with a significant drop in conventional cigarette sales, well ahead of the previous rate of decline,” explains Mark Dougan, consulting director, healthcare, Frost & Sullivan.
“Moreover, even after HTPs became available, sales of all tobacco products (HTPs and conventional cigarettes) continued to fall. Although there is mixed evidence, data from the 2019 National Health Survey indicates that 76 percent of consumers who use HTPs do so exclusively. Only 24 percent of HTP users maintain dual-use.”
According to Dougan, the Japanese government is differentiating HTPs from conventional cigarettes in regulations such as taxation, health warnings and indoor use restrictions, with HTPs generally receiving less-stringent regulatory settings than conventional cigarettes.
Frost & Sullivan also noted that the availability of HTPs has had a low impact on the initiation of tobacco use by never-smokers and re-initiation by former smokers. In addition, HTPs are also less likely to cause household fires than conventional cigarettes, which are the leading cause of household fires in Japan.
The remarkable recent decline of smoking Japan was also covered during the recent GTNF by Hiroya Kumamaru, a cardiovascular surgeon and vice director of AOI International Hospital in Kawasaki.
December 3, 2020
New Infringement Suit Against IQOS

Photo: Tobacco Reporter archive
Healthier Choices Management Corp. (HCMC) has filed a patent infringement lawsuit against Philip Morris USA and Philip Morris Products over the IQOS tobacco heating product.
Among other products, HCMC markets vapor products, including the Q-Cup, a small quartz cup that heats cannabis or CBD concentrate.
“We look forward to proving our allegations of infringement in this matter and intend to continue to move forward against any and all companies that infringe upon our intellectual property in both the tobacco and cannabis categories,” said Jeff Holman, CEO of HCMC, in a statement.
IQOS is already the subject of two other patent infringement proceedings filed by R.J. Reynolds Tobacco Co (RJ). One is proceeding before the International Trade Commission and seeks to stop the importation of IQOS into the United States; the other is a patent infringement action currently pending in the Eastern District of Virginia. R.J. Reynolds’ patents are unrelated to and unaffiliated with the patents asserted in the HCMC case.
Philip Morris USA parent Altria Group rejects RJR’s claims and has countersued the company, alleging that RJR’s own electronic nicotine delivery systems products infringe multiple patents owned by Philip Morris International (PMI) and Altria Group.
In April, British American Tobacco (BAT) sued PMI in the United States and Germany for patent infringement. BAT’s claim focuses on IQOS’ heating blade technology, which the company says is an earlier version of the technology used in BAT’s Glo tobacco heating devices.
December 2, 2020
PMI Announces New Parental Leave Policy

Photo: PMI
Philip Morris International (PMI) will launch a new parental leave scheme that focuses on “people raising families” rather than the gendered stereotype of “women having children.” It will go into effect Jan. 1, 2021.
The new global minimum parental leave principles will be implemented in phases across all markets as part of PMI’s commitment to creating an inclusive and diverse workforce.
PMI’s new minimum leave principles will provide primary caregivers with a minimum of 18 weeks fully paid parental leave and secondary caregivers with a minimum of eight weeks fully paid parental leave. Countries may exceed these principles if, for example, local laws require it or local management teams choose to implement a different package.
“Our new minimum parental leave principles are inclusive as they apply to all employees regardless of gender or sexual orientation and regardless of whether they become parents through birth, adoption or surrogacy,” said Silke Muenster, PMI’s chief diversity officer, in a statement. “I see it as another demonstration of how PMI is creating a more inclusive, diverse work environment to meet the challenges and expectations of our people for the 21st century workplace.”
November 30, 2020
PMI Included in Sustainability Index

Photo: PMI
Philip Morris International has been included for the first time in the Dow Jones Sustainability Index (DJSI) North America. Moreover, for the third year in a row, PMI leads the industry in DJSI’s innovation management category, which assesses companies’ research and development spending, product innovations and portfolio of tobacco alternatives and reduced-risk products. The DJSI North America Index includes the Dow Jones Indices’ top 20 percent of ESG performers across 61 industries—those that exhibit best-in-class performance against DJSI’s environmental, social and governance (ESG) metrics.

“Integrating ESG into our business is at the core of our smoke-free strategy,” said PMI Chief Sustainability Officer Jennifer Motles in a statement. “Indeed, for us to be a truly sustainable company we must continue to relentlessly address the health impacts of our products by focusing our efforts and resources on phasing out cigarettes as quickly as possible. As the only cigarette manufacturer committed to removing cigarettes from our business, we are proud to be part of the Dow Jones Sustainability North America Index, confirming the significant progress we’re making to transform our business.”

Earlier this week, the DJSI also recognized British American Tobacco and Japan Tobacco in its sustainability indices.
November 19, 2020
‘PMI Distorting Data to Hide Smuggling’

Photo: Taco Tuinstra
Philip Morris International (PMI) has manipulated widely-used data on flows of contraband cigarettes to conceal its involvement in cigarette smuggling, reports the Organized Crime and Corruption Reporting Project, citing a complaint by MSIntelligence (MSI), a former business partner specializing in brand protection.
MSI uses a variety of methods to quantify illegal cigarette consumption in more than 100 countries. That survey data has formed the backbone of widely-cited reports on worldwide cigarette contraband, some used by regulators.
According to MSI, PMI smuggled its cigarettes into Libya despite U.S. sanctions and omitted survey results from a recent KPMG report suggesting that massive quantities of the Swiss company’s cigarettes were being smuggled into France in 2019.
A Philip Morris spokesperson called the allegations unfounded, suggesting they are related to an ongoing commercial dispute between its Swiss affiliate and MSI.
In the early 2000s, the European Commission filed a massive lawsuit against PMI over facilitating the widespread smuggling of its cigarettes into the EU, following a similar lawsuit in the U.S.
PMI settled the European lawsuit for $1.25 billion.
November 19, 2020
Medicago to Supply Covid-19 Vaccine

Photo: Arek Socha from Pixabay
Medicago, a biopharmaceutical company headquartered in Quebec City, Canada, has reached an agreement with Public Services and Procurement Canada to supply up to 76 million doses of its vaccine candidate for Covid-19, subject to Health Canada approval.
Innovation, Science & Economic Development, another department of the Canadian federal government, will contribute CAD173 million ($131 million) to Medicago to support its ongoing vaccine development and clinical trials, and for the construction of its Quebec City manufacturing facility.
Since 2008, Philip Morris Investments B.V. (PMIBV), a subsidiary of Philip Morris International (PMI), has been a shareholder of Medicago (in which it currently holds an approximately one-third equity stake) and has supported Medicago’s innovative plant-derived research and development focused on vaccines.
The investment is consistent with PMI’s own efforts to leverage science and innovation. Japan-based Mitsubishi Tanabe Pharma Corporation (MTPC) is the majority shareholder and PMIBV’s partner in Medicago. Among other things, PMIBV and MTPC will contribute additional funding to support Medicago’s efforts to develop a Covid-19 vaccine candidate.
“We welcome the collaboration announced between two departments of the Canadian government and Medicago to accelerate its efforts against Covid-19,” said PMI CEO André Calantzopoulos in a statement.
“Better outcomes can be achieved when governments and companies join efforts to promote shared objectives for the greater good. We are pleased to be able to support Medicago’s work to develop, substantiate, manufacture, and make available a Covid-19 vaccine candidate. We all hope they will be successful.”
Medicago began Phase 1 testing on volunteers on July 14 and is anticipating that Phase 2 trials will begin in early November 2020. If Phase 2 trials are successful, Phase 3 trials are expected to begin in December 2020.
October 24, 2020
PMI Reports Third-Quarter Results

Photo: PMI
Philip Morris International (PMI) reported net revenues of $7.45 billion in the third quarter of 2020, down 2.6 percent from the comparable 2019 quarter. Operating income was $3.24 billion, compared to $2.79 billion in last year’s quarter. On an adjusted basis, operating income was up 1.9 percent, while the company’s adjusted operating income margin improved to 43.6 percent from 41.7 percent between the two quarters.
PMI’s cigarette and heated tobacco unit shipments were down by 7.6 percent, reflecting a decline in cigarette shipments of 9.8 percent to 165.46 billion units and an increase of heated tobacco unit shipments of 18.7 percent to 19 billion units.
The company estimates the total number of IQOS users at quarter-end at approximately 16.4 million, of which approximately 11.7 million have stopped smoking and switched to IQOS.
“We delivered stronger-than-anticipated results in the third quarter, despite the ongoing challenges of the pandemic, with adjusted diluted EPS [earnings per share] growth of 5.6 percent on an organic basis,” said PMI CEO Andre Calantzopoulos in a statement.
“The sustained momentum of IQOS was excellent, with an estimated 16.4 million total users at the end of September and smoke-free products accounting for nearly one-fourth of our total net revenues in the quarter.
“Furthermore, our combustible tobacco business recorded an improved sequential performance, supported by better underlying total industry volumes across both developed and emerging markets.
“Despite continued headwinds for our duty-free business and in Indonesia, we are raising our full-year 2020 guidance and now anticipate adjusted diluted EPS growth of around 5 percent to 6 percent on an organic basis, compared to a range of approximately 3.5 percent to 5.0 percent previously,” Calantzopoulos said.
PMI further noted that, despite the ongoing Covid-19 pandemic, it has sufficient access to inputs for its products and is not facing any significant business continuity issues with respect to key suppliers.
Most of its manufacturing facilities, including all heated tobacco unit factories, are operational. The company also has adequate inventories of finished goods based on existing sales trends.
October 21, 2020
PMI Appoints New Sustainability Officer

Photo: Gerd Altmann from Pixabay
Philip Morris International (PMI) has appointed Jennifer Motles as chief sustainability officer effective Nov. 1, 2020. Motles will succeed the current chief sustainability officer, Huub Savelkouls, who will retire after almost three decades.
Motles will report to the company’s chief financial officer, Emmanuel Babeau, as it is increasingly recognized—by both companies and investors—that fully integrating environmental, social and governance (ESG) drivers into business strategy can significantly enhance both the sustainability agendas and financial performance.
“Integrating sustainability and financial strategies is further recognition of our commitment to unsmoking our planet and transforming our company,” said PMI’s CEO Andre Calantzopoulos in a statement. “It is a logical next step for us, following our statement of purpose adopted by our board and the introduction of integrated reporting earlier this year.”
Motles joined PMI in 2015 when she helped craft PMI’s sustainability strategy, ensuring it was intrinsically linked to the adoption of the company’s vision of delivering a smoke-free future. Since then, she has helped advance PMI’s transformation, honing the company’s sustainability and ESG performance with a strong focus on shareholder and stakeholder engagement.
“This move outlines that ESG is core to PMI’s performance and success and further demonstrates PMI’s leadership in sustainability and corporate purpose,” said Babeau. “Jennifer, with her broad range of international experience and her proven track record in the domain, is the ideal candidate to lead our company’s ambitious sustainability agenda.”
“It is our firm belief that sustainability and business performance do not follow separate paths and narratives. They are fully interrelated and mutually reinforcing and should be organized and presented to all stakeholders in an integrated way,” continued Babeau.
Motles began her career working for the Chilean Office of Drugs and Crime Prevention and Prosecution. She gained international experience working for organizations such as UNCITRAL, UNODC’s Terrorism Prevention Branch and the UNCTAD/WTO’s International Trade Center. Prior to joining PMI, Motles worked for the government of Israel, representing the country as its human rights and humanitarian affairs officer at the United Nations and other international organizations.
She holds a doctor of law degree from Universidad de Chile—Escuela de Derecho and an LLM degree from the University of California, Berkeley School of Law as well as specialized diplomas in women’s human rights, behavioral economics, sustainability, sustainable finance and political affairs from IHEID, Harvard Business School, the Harvard School of Public Health and Stanford University.
October 13, 2020
IQOS Rollout Slowed by Covid-19 Pandemic

Bonnie Herzog
Tobacco and vapor product analyst Bonnie Herzog of Goldman Sachs cites the Covid-19 pandemic as the main reason Philip Morris International (PMI) and Altria have slowed down the national launch of IQOS.
In March, Philip Morris USA closed its Atlanta, Georgia, and Richmond, Virginia, IQOS stores temporarily, paused its IQOS inperson marketing efforts and delayed the launch of IQOS in Charlotte, North Carolina, due to Covid-19 concerns. While the U.S. Food and Drug Administration (FDA) granted modified-risk tobacco product (MRTP) status to IQOS in July, sales of IQOS have not been strong during the pandemic.
“It has been more of a slow rollout and that has a lot to do with the fact that the technology that has been approved in the U.S. is older technology of IQOS,” said Herzog. “Philip Morris has applied to get approval of 3.0, but that’s still pending. We’re optimistic, assuming they can get approval from the FDA for that.” Herzog projects that by 2025, IQOS could account for as much as 12.2 percent of Altria’s volumes.”
October 2, 2020