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Justice Ministry says iQOS product will be treated as ordinary tobacco

Previously, the company asked the US Food and Drug Administration to recognize iQOS as “modified-risk product.”

http://www.jpost.com/Business-and-Innovation/Health-and-Science/Justice-Ministry-says-iQOS-product-will-be-treated-as-ordinary-tobacco-485912

The world’s largest tobacco company, Philip Morris International, faced an obstacle in Israel that has apparently influenced its position toward its heated-tobacco product iQOS.

Previously, the company asked the US Food and Drug Administration to recognize iQOS as “modified-risk product.”

Last week, Israel’s Justice Ministry notified the company that it accepted the position of three voluntary organizations in Israel that the product is actually a “tobacco product,” and all the restrictions that apply to tobacco products should apply to iQOS.

In parallel, Philip Morris reversed its previous position towards the FDA and now wants iQOS to first be recognized as a “tobacco product.”

The small Society for Progressive Democracy thus “made history,” as the new position will set the definition of the product for deliberations by the FDA.

The Israel Medical Association, the Israel Cancer Association and the small Society for Progressive Democracy thus “made history,” as the new position will set the definition of the product for deliberations by the FDA.

While the Israel Cancer Association and the Israel Medical Association sent letters to the authorities to protest against Health Minister Ya’acov Litzman for preventing restrictions on the sale and marketing of iQOS in Israel, the Society for Progressive Democracy headed by lawyer Shabi Gatenio actually applied to the High Court of Justice and asked for an Injunction againt him.

“It is a story of the little David toppling Goliath, Philip Morris,” commented lawyer Amos Hausner, the chairman of the Israel Council for the Prevention of Smoking.

The limitations that now apply to all tobacco products will include iQOS, such as prohibiting its sale to minors, prohibiting smoking it in all public places where conventional cigarettes may not be smoked, excluding it from advertising in the electronic media and media for children and teens, and other restrictions for which violators are fined.

Under the rules of administrative law, the position of Justice Ministry professionals is binding upon all governmental agencies in Israel, and their position supersedes the one expressed by any political figure – in this case, the health minister.

Attorney-General Avichai Mandelblit has yet to decide on a petition by Avir Naki, a voluntary organization that aims to fight smoking, to prohibit Litzman from having any involvement in decisions on tobacco matters.

Dubek, the Israel tobacco producer and importer, has also filed an application in the High Court against Litzman, arguing that he was giving Philip Morris benefits that Dubek did not enjoy.

Hausner said that Philip Morris “officially changed its position here while its application was pending in the FDA, as a negative consequence in Israel might have negatively influenced the company’s position in its deliberations with the US over iQOS. We clearly learn from this case that politicians cannot determine policy on major public health issues like this; they must leave it to ministry professionals to set policy.

It turned out that Litzman was more protective of Philip Morris than the company itself demanded. As to Philip Morris, Hausner said that their products should meet the requirements of professionals and not only of the politicians.”

Commenting on the Justice Ministry decision, Philip Morris Ltd.’s spokesman in Israel said that it would “continue to market iQOS in Israel in a responsible way according to law so that adult smokers would have better alternatives than continuing to smoke cigarettes.”

The ministry said in a statement after the court decision was announced that “while waiting for the FDA’s position, we plan at this stage to place on the product all restrictions on tobacco products regarding marketing, advertising and smoking in public places.”

FDA delays ‘other use’ rule for tobacco-derived products

The Food and Drug Administration (FDA) pushed back by one year a rule to clarify when products derived from tobacco face regulation as drugs or combination products.

http://www.tobaccojournal.com/FDA_delays_other_use_rule_for_tobacco-derived_products.54153.0.html

Initially set to take effect in February, the FDA first delayed implementation by one month and now intends for it to take effect on 19 March 2018. An additional comment period will expire on 19 May 2017. Additional information is available at: https://goo.gl/BrQooq

PMI to convert Greek cigarette plant to make iQOS sticks

Philip Morris International (PMI) will invest EUR 300 million (USD 323 million) to convert a Greek cigarette factory to into a plant capable of turning out 20 billion tobacco sticks for its iQOS heat-not-burn device, the company said.

http://www.tobaccojournal.com/PMI_to_convert_Greek_cigarette_plant_to_make_iQOS_sticks.54155.0.html

Expansion and remodeling the Aspropyrgos plant operated by affiliate company Papastratos will create 400 new jobs in addition to the 800 current ones, PMI said. Construction will begin immediately with operations expected to start in January 2018.

“This investment is further evidence of our progress towards a smoke-free future. We are encouraged by the 1.4 million smokers who have already switched to IQOS around the world, and we expect this momentum to continue,” said Frederic de Wilde, PMI regional president for the European Union.

Aspropyrgos will be the third facility dedicated to iQOS production. Production currently is centred in a specially built facility in Crespellano, Italy and a small scale Industrial Development Centre in Neuchatel, Switzerland.

Treasury consults on tax treatment of heated tobacco products

The Treasury is consulting on the tax treatment of heated tobacco products, which are being promoted as a new innovation in the tobacco market. In these products processed tobacco is heated (but not burned like conventional tobacco) to produce, or flavour vapour. Heated tobacco is not a separate category in its own right in current legislation, so a consultation on their tax treatment aims to help maintain the integrity of the duty system going forward.

The consultation scope does not include e-cigarettes, which do not contain tobacco.

The consultation closes on 12 June 2017.

Letter from New Zealand Associate Minister of Health on e-cigarette Regulations

Download (PDF, 565KB)

Health Ministry sued over soft treatment of iQOS

Dubek, a manufacturer and importer of tobacco products, sued the Health Ministry for showing favouritism by allowing Philip Morris International to skirt advertising restrictions in marketing iQOS, the Jerusalem Post said.

http://www.tobaccojournal.com/Health_Ministry_sued_over_soft_treatment_of_iQOS.54143.0.html

Health Minister Ya’acov Litzman reportedly is waiting to see how US regulators deal with the tobacco heating device. In the meantime, iQOS is being sold and marketed without restriction in Israel. In its complaint to the High Court of Justice, Dubek said this discriminated against its tobacco products, which face restrictions, the Post said.

Tobacco company files suit against Health Ministry

Philip Morris chose Israel to be one of the first countries to market iQOS.

http://www.jpost.com/Business-and-Innovation/Health-and-Science/Tobacco-company-files-suit-against-Health-Ministry-484079

Dubek, Israel’s tobacco manufacturer and importer, filed a suit in the High Court of Justice against the Health Ministry on Monday for showing “favoritism” to the international tobacco company Philip Morris, which is marketing its no-smoke heated- tobacco cigarette iQOS.

Dubek said it is limited in marketing and advertising its own products, while Health Minister Ya’acov Litzman – against the views of public health professionals inside and outside his ministry – allows iQOS to be sold and advertised without limit.

This laxity will continue, Litzman decided recently, until the US Food and Drug Administration decides what to do about the product.

The sale and marketing of iQOS has been prohibited in the US and other countries until the FDA releases its ruling.

A few days ago, Avir Naki, a nonprofit organization that fights smoking, petitioned Attorney-General Avichai Mandelblit to revoke Litzman’s authority on all tobacco legislation and regulation because he has shown a “personal connection” to a number of issues relating to tobacco. Litzman met with Philip Morris lobbyists before announcing his decision.

Dubek said the ministry “has ignored blunt violations of the law for restricting advertising and marketing of tobacco products” by Philip Morris, thus carrying out unfair competition. It also charged that the Tax Authority does not levy sales taxes on iQOS and “causes a huge loss of revenue to the state coffers.” Sales taxes constitute 80% of the price of regular cigarettes.

IQOS, Dubek said, claims to be a “less-harmful product” than conventional cigarettes because the tobacco and additional chemicals are warmed but not burned.

But Philip Morris’s claim has not been proven, Dubek said, also complaining that iQOS is not required to carry any health warnings on the package.

Philip Morris chose Israel to be among the first countries to market iQOS, thus turning its population into “guinea pigs” in a “huge experiment for which we will all pay,” the Israel Medical Association’s Society for the Prevention of Smoking and Smoking Cessation said early this year.

When Public Health and Big Tobacco Align

Nobody trusts the tobacco industry, and it’s easy to understand why. For decades, industry executives knew that smoking caused cancer and heart disease yet publicly denied the dangers of cigarettes. It relentlessly attacked its critics. Documents that emerged in the 1990s showed that the industry targeted teenagers, knowing that the earlier someone became addicted to cigarettes, the more likely they would be lifelong smokers. And so on.

https://www.bloomberg.com/view/articles/2017-03-09/when-public-health-and-big-tobacco-align

In the 1980s and 1990s, the public health community went to war with the tobacco industry. Though the war largely ended in 1998 with Big Tobacco agreeing to a multi-billion-dollar settlement with the states, it remains a powerful memory for public health.

To this day, most tobacco-control advocates view the cigarette companies as being every bit as duplicitous and evil as they were in the bad old days. Some years ago, I asked Stanton Glantz, perhaps the leading anti-tobacco scientist in the U.S., what his ultimate goal was. He didn’t say it was to eliminate the scourge of smoking. He said: “To destroy the tobacco industry.”

What brings this to mind is an excellent cover story in the upcoming issue of Bloomberg Businessweek about the efforts of the tobacco industry to devise and market so-called reduced risk products like electronic cigarettes — products that give users their nicotine fix without most of the attendant carcinogens that come with combustible tobacco.

Although the tobacco companies have done decades of R&D on smokeless products, the business was dominated early on by startups like NJOY, which is today the largest independent e-cigarette company in America. From the start NJOY has said that a big part of its mission was “to end smoking-related death and disease.” And from the start, messages like that have been scorned by the public health community.

Ingesting nicotine in some smokeless fashion is vastly safer than smoking a combustible cigarette. (In the words of the late South African tobacco scientist Michael Russell, “People smoke for the nicotine but die from the tar.”) Last year, the Royal College of Medicine issued a report saying that e-cigarettes were some 95 percent safer than cigarettes.

Even so, the public health community in the U.S., led by the Centers for Disease Control and Prevention, has done everything it can to demonize smokeless products. Some of this has been with good reason: to try to keep kids from picking up an addictive habit. But this effort has also helped to create the impression that smokeless products are as dangerous as cigarettes. One result, sadly, is that many long time smokers have refused to try them, even though they could save their lives.

My sense in talking to tobacco-control officials over the years is that too many of them simply don’t believe in a reduced-harm approach. We give heroin addicts methadone not because methadone is good but because it is better than heroin. With cigarettes, however, the public health mindset appears to be all or nothing — that the only “right” thing for smokers to do is to go cold turkey.

But the lingering distrust of the tobacco industry has also had a lot to do with public health’s unwillingness to acknowledge the potential benefits of alternative products. Matt Myers, the president of the Campaign for Tobacco Free Kids, has often complained, for instance, about the marketing of e-cigarettes, saying that companies are using the same tactics to hook teenagers that Big Tobacco once used.

With the e-cigarette market clearly established, the four big tobacco companies — BAT, Reynolds American, Altria (formerly Philip Morris) and Philip Morris International (spun off from Altria) — have proclaimed themselves all in.

Philip Morris International is an especially interesting case: Not only does it have an array of e-cigarettes and other smokeless products, but as the Bloomberg Businessweek story points out, it has publicly proclaimed that its goal is to lead the world into “a smoke-free future.” The home page of its website asks, “How long will the world’s leading cigarette company be in the cigarette business?”

As astonishing as it is that a company with $26 billion in tobacco revenue last year would be calling for the end of cigarettes, I believe Philip Morris is sincere. It has spent around $3 billion in research. Its new flagship product, called IQOS, heats tobacco but doesn’t burn it — which the company believes will be more satisfying to smokers than vaping. IQOS already has 7 percent of the tobacco market in Japan, and is being rolled out in other countries.

Philip Morris recently asked the British government that tobacco products “be taxed according to their risk profile.” In other words, it wants the government to impose higher taxes on cigarettes to encourage smokers to move to reduced-risk products. What tobacco company has ever done that before?

In the U.S., Philip Morris has done something extraordinary: It has made a submission to the Food and Drug Administration to get the right to market IQOS as a reduced risk product. The expensive submission consumed 2.3 million pages and is backed by a great deal of research, including several clinical trials. So far, none of the U.S. e-cigarette companies have attempted to get such a designation, and it is a big problem. How do you sell a reduced risk product when you can’t tell anybody it reduces risk?

The business case for diving into this market is that it’s a product category that’s growing, while the cigarette market is shrinking. Philip Morris doesn’t want to be left behind. But there is no particular need for the company to set out such a transformative agenda, at least not yet. The small smokeless companies are not much of a threat. NJOY filed for bankruptcy last fall. And under a 2009 law, every company in the e-cigarette industry will have to file something called a premarket tobacco application with the FDA by August 2018. The submissions will cost, on average, over $450,000, and the companies will have to show that their products have some public health benefit. There is a legitimate chance that some small companies won’t be able to clear the hurdle.

No, Philip Morris is pushing as hard as it is, I believe, because it wants to get on the right side of the issue, finally — to be viewed as a good corporate citizen. When I spoke to Glantz the other day about the company’s new anti-smoking agenda, he said, “I don’t believe them.” (He added, “If they were serious, they would stop marketing cigarettes right now.”)

No doubt many others in the tobacco-control community feel the same way. They still loathe Big Tobacco, and view Philip Morris’s new strategy as just another deception. But the truth is, if there is ever going to be a serious move from cigarettes to less dangerous products, it will have to come from Big Tobacco. They have the R&D resources, they have the marketing apparatus — and, it appears, they have the will.

Public-health advocates don’t have to trust Philip Morris, or any other tobacco company. They don’t have to believe what I believe in order to arrive at the same conclusion: that the advocates should be rooting for the companies’ innovations — pushing them, double-checking their data, making sure regulations are in place to prevent their products from being marketed to kids. The advocates should also be spreading the word that there is an alternative to cigarettes. Who really cares whether it’s Big Tobacco or some other entity that reduces smoking deaths? What matters is that it happens.

The tobacco wars are long over. Continuing to fight the cigarette companies may bring a certain satisfaction to the veterans on the public-health side. But joining forces is the way to save lives.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

To contact the author of this story:
Joe Nocera at jnocera3@bloomberg.net

To contact the editor responsible for this story:
Philip Gray at philipgray@bloomberg.net

‘War of Innovation’ Rages in Tobacco Industry

A recent Bloomberg report titled “Big Tobacco Has Caught Startup Fever” sheds light on traditional tobacco and cigarette industry leaders’ accelerated race to offer innovative products in light of anti-smoking regulation and campaigns, along with changing consumer preferences. As a byproduct of this shift, market giants such as Philip Morris International Inc. (PM), Reynolds American Inc. (RAI) and Japan Tobacco Inc. have invested heavily in product development, funding tech incubators, launching venture funds and creating apps after the style of Silicon Valley in efforts to develop next-gen reduced-risk tobacco platforms. (See also: Business Groups Increasingly Turn Against Tobacco.)

http://www.investopedia.com/news/war-innovation-rages-tobacco-industry/

‘Next-Gen Nicotine Delivery’

Philip Morris, the world’s largest publicly traded tobacco company, demonstrated its commitment to offer “next-gen nicotine delivery” through a new $111 million environmentally progressive research center called the Cube.

As a testament to the Lausanne, Switzerland-based firm’s new greeting on its re-launched homepage, “Designing a smoke-free future,” the high-tech center has three wings named Earth, Wind and Air. The absence of Fire signifies the company’s push for “heat not burn” tobacco products, including its popular IQOS heat stick. Philip Morris has poured more than $3 billion into new tobacco-based inventions as an alternative to the fragmented e-cigarette market. The decision makes sense given that the largest companies already have a competitive edge in the tobacco space.

A Cigarette-Free Future

A wave of tobacco companies shadowing Philip Morris have shown their willingness to deliver tobacco through any means consumers will adopt, whether it be heat-not-burn products, gum, lozenges, dip, e-cigarettes etc.

In January 2016, America’s second-largest tobacco company, Reynolds, announced the formation of RAI Innovations Co., following the nationwide release of its e-cigarette brand Vuse. Later, British American Tobacco Inc. (BTI) announced plans to acquire Reynolds for $49.4 billion. The London-based company’s CEO, Nicandro Durante, told sources that the deal was more about the future of smokeless nicotine than of scale.

“It’s going to be an arms race,” said analyst Nik Modi of RBC Capital Markets. “Who has the best technology, the best science? Who can get their applications through the FDA the quickest? We’re not in a pricing war. We’re in an innovation war.” (See also: Tobacco Giants Push New ‘Alternative Products’.)

Jeff Sessions, Anti-Weed Crusader, Was a Shill For Big Tobacco

The new Attorney General, Jeff Sessions, is concerned about marijuana. Yesterday he said that he doesn’t want it to be “sold at every corner grocery store.” You can’t get weed at many corner stores just yet, but there is a product at those stores that kills about 400,000 Americans each year. And Sessions has vigorously defended the interests of that product. I’m talking, of course, about tobacco.

http://paleofuture.gizmodo.com/jeff-sessions-anti-weed-crusader-was-a-shill-for-big-1792831457

With more states legalizing marijuana for both medicinal and recreational use, the newly confirmed Attorney General says that he’s concerned about the drug. Sessions says it’s about health. But back in the 1990s and 2000s, he wasn’t so concerned about the real health epidemic of cigarettes.

“States can pass whatever laws they choose,” Sessions told a crowd at the National Association of Attorneys General meeting yesterday. “But I’m not sure we’re going to be a better, healthier nation if we have marijuana being sold at every corner grocery store.”

Oh gosh golly! Marijuana being sold at every corner grocery store! But what about all those corner stores that have a much deadlier product called cigarettes?

Funny you should ask. Because the tobacco industry helped get Jeff Sessions elected to the Senate in 1996. In fact, Session got a bit too much money from R. J. Reyonlds, the makers of Camel cigarettes, during his 1996 campaign. In October of 1997 his staff had to send money back to the company because they had donated more than was legally allowed.

Letter from the US Senate campaign for Jeff Sessions sending back money in October of 1997 that it had received in October of 1996 to get elected (UC-SF Tobacco Industry Documents archive)

Letter from the US Senate campaign for Jeff Sessions sending back money in October of 1997 that it had received in October of 1996 to get elected (UC-SF Tobacco Industry Documents archive)

Sessions would go on to rail against the lawsuits that the tobacco industry was facing in the late 1990s. During a private dinner, Sessions called the lawsuits “extortion” and said that it would lead to “shake downs” of other industries.

“If we let them get by with this extortion of the tobacco industry, then they’ll start shaking down other industries, one after the other,” Sessions said at a private dinner in July of 1997 with Bill Orzechowski, Chief Economist for the Tobacco Institute, a tobacco industry front group that tried to advocate against tobacco control policies.

How do we know Sessions said this? Thankfully, we have an archive of documents at the University of California-San Francisco that came out of a settlement with the Big Tobacco companies in the late 1990s, known as the Master Settlement Agreement (MSA). The Sessions quote about shakedowns comes from an email from tobacco industry insiders that was reporting back to R. J. Reynolds about how legislators would deal with the threats to their industry.

Back in the 1990s, states were pissed that they were paying for healthcare costs from smoking related diseases, and they started suing the tobacco companies one by one. Mississippi was the first to sue in 1994, and by 1997 had won, something nobody had ever done successfully against the tobacco industry before. Other states started to sue, and pretty soon enough states were emboldened that they lumped it all up into one big settlement.

The Master Settlement Agreement included handing over decades of documents showing that the tobacco industry knew tobacco was addictive (contradicting sworn testimony by every major tobacco exec in 1994), that tobacco was harmful to health (another thing that the industry denied for decades), and that the tobacco industry was explicitly targeting kids with their advertising.

Sessions also introduced a pro-tobacco industry amendment in 1997 that would cap how much money lawyers could make from suing tobacco companies. The goal was evidently to hamper legal efforts to go after the tobacco industry, which was spending millions to fight regulation of its product. The Sessions amendment was narrowly defeated.

From a September 11, 1997 Associated Press report:

A chastened Senate voted emphatically Wednesday to undo a $50 billion tobacco-industry break that had been slipped into a tax-cut bill signed into law just last month.

Voting 95-3 to repeal the provision, senators rather contritely agreed to an amendment that unraveled what sponsor Richard Durbin, D-Ill., called a “sweetheart deal” for the industry.

But the repeal was nearly derailed by an amendment from Sen. Jeff Sessions, R-Ala., who tried—and nearly succeeded—in limiting the fees that can be collected by attorneys hired by the states to press damage claims against the tobacco industry.

Sessions argued that the legal fees could amount to billions of dollars and are “too generous, too much of a windfall, and cannot be defended.”

Durbin and his allies defeated the Sessions amendment on a 50-48 vote by arguing that it would put states at a big financial disadvantage in their long and expensive legal jousting with the tobacco industry.

As late as 2004, Sessions was still opposed to FDA regulation of tobacco. And no, that’s not a typo. The tobacco industry fought regulation of its product for decades and FDA was only granted regulatory authority over it in 2009. Again, that’s not a typo.

When the Senate passed a compromise bill on regulation of tobacco by the FDA in 2004, Sessions was disgusted. He fought against regulation of tobacco as a drug using everything from free speech arguments to boilerplate pro-business language.

“One bad bill that couldn’t pass on its own attached to another bad bill that can’t be passed on its own,” Sessions said at the time, referring to the part of the proposed 2004 bill that also provided $12 billion to tobacco farmers who pledged to stop growing the product.

By 2009 he had finally come around and voted to allow the FDA to regulate tobacco as a drug—something that Philip Morris, an enormous tobacco company, was also supporting by 2009—because it was clear that the ridiculous fight against it had been lost.

The tobacco document archive (which is searchable online here) really is fascinating, and a search for “Jeff Sessions” or “Senator Sessions” gives hundreds of responsive documents about how the legislative and lobbying sausage gets made.

If we’ve learn anything about Sessions from the documents, it’s that he’s much less concerned about health than he is about maintaining the disastrous “war on drugs” of the bad old days. That is, as long as those drugs don’t include tobacco, the one that kills hundreds of thousands of Americans each year.