Philip Morris’s Cigarette Alternative Could Reach U.S. In 2017

By Steve Wynne-Jones
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Philip Morris’s Cigarette Alternative Could Reach U.S. In 2017

Philip Morris International Inc.’s iQOS tobacco product, an electronic alternative to cigarettes that has taken years and billions of dollars to develop, could become available in the U.S. next year, though without claims that using it is safer.

IQOS, which heats tobacco without setting it on fire, could be released as soon as the U.S. Food and Drug Administration gives approval for it to be sold. That means Philip Morris wouldn’t be waiting for a longer vetting process that might allow it to claim the product is less harmful than traditional cigarettes.

“That’s currently the plan,” Chief Executive Officer Andre Calantzopoulos said in an interview Wednesday at the company’s offices in Lausanne, Switzerland. “It’s good to be in the market because it’s only when you are in a specific market that you learn” about consumers and product acceptance in that particular place, he said.

Gaining such insight is necessary as the company waits to see if the FDA will allow it to make any health claims, he said.

New York-based Philip Morris plans to file what’s known as a premarket tobacco application early next year. That’s required for any tobacco product sold after February 2007. The FDA has said it rules on such cases within 180 days.


Longer Wait

The company is also filing a so-called modified risk application by the end of this year to be able to designate that the product is less harmful than traditional cigarettes. The FDA’s response time for that application -- which currently is between 2 million and 3 million pages -- will probably take at least twice as long.

Altria Group Inc. will sell the product in the U.S., through a licensing agreement between the two companies, which used to be one entity. IQOS is currently available in 10 cities and is on track to enter 10 more in different countries by year-end.

IQOS is the first of four platforms of noncombustible products that make up what Philip Morris International calls reduced-risk products. The company has spent more than $3 billion dollars to date on developing the portfolio, not including research that was done before its split from Altria in 2008, Chief Financial Officer Jacek Olczak said in an interview.


The Marlboro maker expects the new portfolio to add $700 million to $1.2 billion to earnings by 2020.

The goal is to convert all smokers away from combustible cigarettes, Calantzopolous said.

“We’re very committed to a smokeless society over time,” he said.

News by Bloomberg, edited by ESM. To subscribe to ESM: The European Supermarket Magazine, click here.

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