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October 24th, 2016:

Philip Morris is ‘telling smokers to quit’ – as it brings out new smokeless tobacco sticks

In what might be one of the biggest U-turns in history, tobacco giant Philip Morris is looking towards a ‘smoke-free’ future, according to Bloomberg.

‘We can’t stop cold turkey,’ says CEO Andre Calantzopoulos – as he unveiled the company’s new ‘smokeless’ alternative to tobacco.

Forget vaping, though: the new product is a stick which heats tobacco, rather than burns it.

The new product – IQOS, pronounced ‘eye-koss’ – is 90% less harmful than traditional cigarettes, but has the flavour that e-cigarettes lack, Philip Morris says.

The iQOS is a tobacco stick that is heated just enough to produce an aerosol but not combust- and which looks like an e-cigarette machine.

The refills, sold as Marlboro Heatsticks cost the same as normal cigarettes, at least in Japan.

The product has already been a hit in Japan – and Philip Morris is now rolling it out to new markets.

The industry has been grappling with widespread anti-smoking campaigns which have forced companies like Philip Morris to diversify into nicotine replacements and e-cigarettes to meet consumer health concerns.

Companies such as Philip Morris are moving into ‘heat not burn’ technologies – which are expected to ‘accelerate’ rapidly, according to Owen Bennett, an equity analyst at Jefferies International.


Livestream of brain could help smokers quit

Real-time data from smokers’ brains could help them re-programme their minds and stub out cigarettes for good.

It’s one of the options being explored by researchers who are looking into the most successful ways to quit.

Neurofeedback is a brain-training technique that uses electrodes placed on a person’s head to create a live feed of their brainwaves. This information is displayed in front of the person who can then visibly reshape their thoughts.

The Issue

Smoking causes an estimated 650 000 EU citizens to die prematurely each year, but it is also the largest cause of preventable morbidity worldwide.

In 2009 the Council of the European Union called upon all Member States to protect their citizens from tobacco smoke by enhancing smoke-free laws such as encouraging efforts to quit and putting warnings on tobacco packages.

A European Commission follow-up report in 2013 found 17 EU countries have comprehensive smoke-free laws in place.

‘It allows them to control what they see,’ said Professor Panagiotis D. Bamidis from the Aristotle University of Thessaloniki in Greece, who is testing the effectiveness of the technique to help smokers give up.

‘Subjects are asked if they can do specific tasks and their reactions provide a feedback loop that lets them train their own brain.’

The ability of neurofeedback to identify negative thought processes has been used to treat mental illness and memory problems, but this is the first research looking into whether it is an effective technique for breaking an addiction.

‘With neurofeedback we can see what type of brain signals smokers are emitting when they are relaxed, then we ask them to follow specific tasks and record their reactions,’ said Prof. Bamidis.

When the subject encounters something that may trigger an urge to smoke, they will learn what the cause was and what thoughts could help them overcome the craving.

Prof. Bamidis says that smokers would need around twenty hours of treatment before feeling the effects from neurofeedback, but considering it’s a natural, drug-free treatment it could lead to high numbers of smokers willing to give it a try.

‘It’s a non-invasive, pain-free technique with no side effects so it has a lot of promise to change (smokers’) behaviour,’ he said.

Neurofeedback is just one of the quitting techniques being studied by Prof. Bamidis as part of the EU-funded SmokeFreeBrain project, to evaluate the best ways to stop smoking.

Another technique under examination is SoLoMo, which stands for social-local-mobile and focuses on using physical locations to send tailored information to a mobile device.

‘We are going to use social media techniques translated for local populations and ask them to follow healthy lifestyles with reminders and mini-games,’ said Prof. Bamidis.

SmokeFreeBrain will also assess the effectiveness of e-cigarettes, communication campaigns and more classic approaches like nicotine patches. At the end of the project in 2018, the researchers hope to have a guide outlining the best practices in smoking cessation and how these can be applied on a large scale.

‘We will figure out which approach is the most effective and economic,’ said Prof. Bamidis.

‘Our research will then help form tobacco policy at national and international levels.’

While these techniques and policies will help, any smoker knows that quitting is easier said than done. That leaves us with the bigger question – how do we motivate people to stop people smoking in the first place?

Over the last fifty years the number of smokers in Europe has been declining, but more than 20 % of the adult population still smoke.

‘Policies to ban smoking in public places and general social norms have changed and we see smoking rates have declined, but it has been quite slow,’ said Professor Anton Kunst from the University of Amsterdam, the Netherlands. ‘If it continues at this speed, smoking will persist for many decades to come.’

Ability to quit

In recent years smoking has become concentrated in lower socio-economic areas where the ability to quit is harder due to financial and employment circumstances and the subsequent emotional stress. This in turn creates a spiral where following generations are regularly exposed to those who smoke.

‘Among people in lower socio-economic circles, smoking is much more common and that could be related to factors like more emotional problems and being exposed to smoking amongst friends and parents,’ said Prof. Kunst.

Prof. Kunst is the coordinator of the EU-funded SILNE-R project which is examining how antismoking policies in seven European cities affect the smoking behaviour of 16-year-olds.

Through comparison, the project aims to use the data gathered to create better prevention programs.

‘Different countries and municipalities have different tobacco policies,’ said Prof. Kunst. ‘We want to understand why some policies are able to influence young people and why others are not.’

They have already looked at smoke-free policies in schools, which have revealed findings into youth smoking behaviour.

‘If you ban smoking from school premises it changes the way young people look at smoking and raises awareness of the health hazards,’ said Prof. Kunst.

But while these anti-smoking rules can protect some it could make matters worse for others.

‘Such policies may create peer groups that go out of school to smoke which reinforces the habit and attracts others to start smoking who just wanted to be part of the group,’ said Prof. Kunst.

Possible solutions are to ban smoking in places around schools or to discourage kids from leaving by offering more appealing activities like sports or hobby clubs.

At the end of the project in 2018, SILNE-R hopes to present policy makers with concrete suggestions on how to make anti-smoking policies more effective for young people. In the meantime, Prof. Kunst warns any young smoker not to overestimate their willpower.

‘Young people don’t see how addictive smoking can be and are very confident they will stop later in life,’ said Prof. Kunst. ‘They must be told that there is no silver bullet to quit, that they would need to try hard to stop and find help where they can.’


State Street Global Advisors (SSGA) has launched an international equities fund that screens out companies involved in tobacco and controversial weapons on the back of increasing demand.

The investment management arm of State Street Corporation said the fund was built for Australian institutional investors who were increasingly integrating environmental, social and governance (ESG) factors into their investment decisions.

SSGA head of portfolio strategies, Asia Pacific, Jonathan Shead, said: “For some years, a number of SSGA’s large Australian clients have chosen to exclude tobacco and weapons from their portfolios”.

But, investors were doing so through separate customised mandates which were expensive and only for the largest of investors, he said.

The State Street International Equities Index Trust ex-tobacco, ex-controversial weapons tracked the performance of the MSCI World ex-Australia ex-tobacco ex-controversial weapons index.

Medibank Private Limited provided $170 million of seed capital for the fund, SSGA said.

Medibank chief executive, Craig Drummond, said: “We’re proud to be investing in a tobacco-free portfolio. This decision is just good business sense”.

Medibank Private adopted a policy of not investing in tobacco companies in their $2.4 billion investment portfolio.

ESG assets under management were estimated to be over US$22 trillion, and were concentrated largely in North America, Northern Europe and Australia, SSGA said.

SSGA’s new fund had a minimum initial investment of $25,000.

MSCI also noted that investors were demanding more of these types of funds.

Revamped tobacco law a burning issue

Hong Kong needs to revamp its tobacco laws to deal with new tobacco and nicotine products, business and public health experts say.

But while business wants a “coordinated” regulatory approach, experts say the government should ban all new products.

Regulations on e-cigarettes in Hong Kong are still pending, while tobacco companies are planning to bring in “heat not burn” products, which they say carry a “reduced risk” when compared with traditional cigarettes.

Philip Morris is hoping to introduce a new product to Hong Kong, one that swept Japan within two years of its initial launch with an estimated 4.1 percent of the market share.

The product is different from traditional cigarettes in that it does not involve burning – users put the specially designed tobacco sticks into a holder which heats it up to about 300 degrees Celsius to generate a nicotine- containing aerosol.

The lit end of a cigarette can reach temperatures of up to 800 degrees, and the high temperature sparks the combustion process that breaks down tobacco into more than 7,000 types of chemicals, many of which are harmful or potentially harmful compounds, said Nveed Chaudhary, scientific communications manager of Philip Morris International.

Heated by a comparatively low temperature, the aerosol of the “heat not burn” product is 90 to 95 percent less toxic than the smoke of traditional cigarettes, Chaudhary said.

James Arnold, external affairs director for reduced risk products at Philip Morris Asia, said although the products can be sold under existing laws, the outdated product classification made it difficult for the product to fit into existing regulations, such as reporting duty and putting on the right health warning labels.

Daniel Ho Sai-yin, an associate professor in the School of Public Health at the University of Hong Kong, said: “We should say ‘no’ to the new tobacco products.”

Instead of plugging the holes every time a new tobacco product comes out, the government should ban them all, he said.

“We cannot be so naive to assume that only the smokers will switch to the ‘heat not burn’ products,” Ho said, adding that the products may appeal to youths and those who have already quit smoking. Resources should be spent to control existing products, by increasing tobacco tax and a makeover of cigarette packaging.

“There is no safe level for harmful substances,” a Hong Kong Council on Smoking and Health spokesman said, accusing the tobacco companies of trying to encourage smoking with the new products.

A Food and Health Bureau spokesman said: “We will closely monitor the development and devise our legislative proposal accordingly.”

In Marlboro Country, a Big-Money Race for the New Smoke

You want a trip to Philip Morris International Inc. to feel like a visit to Marlboro Country. But the company’s Swiss research center, aka the Cube, just won’t play along.

Perched above crystalline Lake Neuchatel, southwest of Zurich, the glass hexahedron holds secrets to a future when, Philip Morris says, the world will be blissfully smoke-free.

That’s right: Philip Morris, of all companies, is telling smokers to quit. Here, beyond the sun-dappled reflecting pool, scientists in lab coats are searching for the Big Tobacco’s magic bullet: cigarette substitutes that will sell — but won’t kill.

The push gained new urgency Friday with news that British American Tobacco Plc was offering $47 billion to buy out Reynolds American Inc., a move that would topple Philip Morris as the world’s largest publicly traded tobacco company.

The stakes could scarcely be higher. Tobacco claims more than 6 million lives every year. With smoking on the decline around the world, tobacco giants are racing to find new, supposedly safer products to feed nicotine addiction, even as they lean on old-fashioned cigarettes to sustain their profits.

Not Cold Turkey

Can Big Tobacco really kick cigarettes? More to the point, can it afford to?

“We can’t stop cold turkey,” says Andre Calantzopoulos, the chief executive officer of Philip Morris International. A crucial test could come in 2017 when his next big hope — an iPhone-esque contraption that heats tobacco inside a cigarillo-size tube — potentially hits the U.S.

Quitting old-fashioned smokes won’t be easy for tobacco companies or their stakeholders. Philip Morris turned out 850 billion cigarettes last year, generating net revenue of about $74 billion. All that tobacco pays off handsomely for global investors: Counting dividends, the company’s stock has returned roughly 70 percent over the past five years.

For Calantzopoulos, an electrical engineer by training and reformed smoker who’s spent his career at Philip Morris, the challenge will be to come up with new moneymakers as society radically redefines the way it uses tobacco. That, while BAT is grabbing the rest of Reynolds to help power its own push into so-called next generation products.

Seeking Smokers?

Critics are skeptical. They say Big Tobacco is simply doing what it’s always done: selling addictive products, with a gloss of feel-good marketing, while keeping tobacco at the heart of a $770 billion global industry.

“Philip Morris has demonstrated time and time again in the past its introduction of new products has led to more smokers,” says Matt Myers, president of the Campaign for Tobacco-Free Kids, a leading U.S. anti-smoking group. “Given their history, no one should ever trust what a tobacco company says it intends to do.”

Naysayers aside, what’s happening inside the Cube goes well beyond popular alternatives like electronic cigarettes, which exploded onto the scene in the late-2000s and made “vape” the Oxford Dictionaries 2014 word of the year.

Philip Morris doesn’t even have a word for what comes after “vape.” Its four-pronged strategy starts with something called iQOS, pronounced, EYE-kose.

Flip open the white- or blue-colored plastic iQOS case and you’ll find a heater that looks like a stubby pen. Into one end you insert what amount to munchkin-size cigarettes, called HEETS. The iQOS — which some have said is an acronym for “I quit ordinary smoking” — gently heats the tobacco without burning it, producing a warm, nicotine-laced aerosol.

New Name

It’s not smoking. Nor vaping. It’s, well — Philip Morris isn’t quite sure what. Its best idea so far for what to call it: “HEETing.”

IQOS has been a hit in Japan and parts of Europe. After an extensive application process with U.S. health authorities, the product is expected to reach America next year, though without claims that it’s any safer than regular cigarettes. IQOS will have to pass a second hurdle with the Food and Drug Administration before it can be marketed as safer.

After HEETS comes TEEPS, a heat-not-burn product that looks pretty much like an old-fashioned cigarette. Here again, Philip Morris is relying on tobacco. But instead of lighting up the old way, users ignite a carbon tip that heats the tobacco.

The taste and nicotine intake of iQOS and TEEPS are closer to that of ordinary cigarettes than e-cigarettes, the company says, a stab at fixing smokers’ No. 1 complaint about early vapor products.

Nicotine Salt

A third device, STEEM, is a twist on a medical inhaler: It combines nicotine and a weak organic acid to produce nicotine salt, which is absorbed without vapor. A fourth, called MESH, is a more conventional e-cigarette using flavored nicotine liquid.

So far, Philip Morris has spent more than $3 billion on its post-cigarette push.

Whatever the concerns about cigarette substitutes, many agree e-cigs and the like are safer than ordinary smokes. But there are fears that all these new products may ultimately drive people back to conventional cigarettes — or get nonsmokers hooked on the habit.

“These products are not zero-risk,” Calantzopoulos said.

Getting iQOS to America’s doorstep also has been a slog. The reduced-risk application to the Food and Drug Administration, expected in by the end of this year, is already more than 2 million pages. The application to get the product on shelves will likely be filed early next year.

“We are aware of the history of the tobacco industry, but our job is to take the sciences they have submitted and objectively evaluate what their data is and how far it goes to addressing the mandatory statutory standards,” said Mitch Zeller, director for the FDA’s Center for Tobacco Products.

New-Product Race

Philip Morris isn’t running this race alone. BAT, Reynolds, Altria Group Inc. and Japan Tobacco Inc. are all working on a variety of products.

“The race is not money, but time,” Calantzopoulos said.

Here in Switzerland, the Philip Morris campus isn’t smoke-free. But the company is making an effort to project a post-cigarette image. The main building has three sections: Earth, Wind and Air. Fire is missing. Indeed, e-cigarettes and iQOS have caught on among the company’s former smokers.

Jacek Olczak, the chief financial officer, said iQOS helped him quit regular cigarettes.

“I’m extremely happy,” he said. “My company solves my own problem, and I can make money off of it.”

Nearly everyone in the industry acknowledges that the road ahead for Big Tobacco will be long. Public health officials, and many ordinary people, are wary of the industry and its intentions.

So change won’t be easy. As Calantzopoulos put it: “Decades of history are not going to change in one afternoon.”

Medibank moves $170m to tobacco-free investment fund

Health advocate says decision shows tobacco a ‘pariah industry’ while CEO says move makes ‘good business sense’

The private health giant Medibank has moved $170m of investment in international equities to a new tobacco-free investment fund.

The money had previously been in an international equities index, with a portion of that index invested in tobacco companies.

The chief executive of Medibank, Craig Drummond, said the money had been reinvested into a fund with State Street Global Advisors, which excludes companies that have significant business activities involving tobacco and controversial weapons.

“We’re proud to be investing in a tobacco-free portfolio,” Drummond said on Monday. “This decision is just good business sense. Our mission for better health has to carry all the way through our business – from our employees and customers through to investments.”

According to Cancer Council Australia, two of every three deaths in current long-term smokers can be directly attributed to smoking.

A professor of public health from Curtin University and anti-tobacco campaigner, Mike Daube, said Medibank should be applauded for the move.

“It is especially important that health organisations show the way in distancing themselves from the tobacco industry,” he said.

“Two thirds of big tobacco’s Australian consumers die because they used the product exactly as intended. Medibank are sending out the signal loud and clear that this is a pariah industry.

“There is a growing global momentum towards tobacco disinvestment. Australia can lead the way here as elsewhere in tobacco control.”

A “markets and growth” report released earlier this year by Imperial Brands, which manages Imperial Tobacco, described Australia as “the darkest market in the world” for tobacco.

“It’s easy to get dispirited by that,” the report said.

Tobacco Taxes Work, But Only If They’re High

When smoking costs more, more people quit. That’s why higher cigarette taxes are almost always good policy, for smokers and the public health, too.

There’s a catch, though — and it’s one that voters in four states should keep in mind as they consider ballot initiatives next month to raise cigarette taxes: Sin taxes work only if they’re high enough.

Voters in California, Colorado and North Dakota are being asked to raise state taxes to well over US$2 a pack. Then there’s Missouri, where voters will choose from two increases so meager that they make a mockery of the very idea of sin taxes.

Properly calibrated, tobacco excise taxes can be a powerful weapon against smoking and the disease and death it brings. Raising taxes enough to boost the price per pack by 10 percent lowers adult consumption by 3 to 5 percent. Among teenagers, consumption falls 6 to 7 percent.

This effect is especially pronounced among lower-income smokers — the upside of imposing such a regressive tax. And it’s made even stronger if some of the tax money is invested in public-health efforts to help people quit, as the California initiative (which is supported by Michael R. Bloomberg) would do.

Substantial cigarette taxes also generate revenue, of course, but this is a secondary benefit. It’s never enough to cover the high costs that states incur from tobacco use, in the form of Medicaid expenditures, for example, and lost productivity. Ideally, in fact, as more smokers quit, revenue from a cigarette tax should gradually diminish.

The World Health Organization says taxes should amount to 70 percent of the price of a pack of cigarettes. No taxes in the U.S. are that high, though in some cities they come close. In Chicago, the various taxes on each pack — federal, state, county and city — amount to about 60 percent of the $12 price, and public health officials say this has helped lower the smoking rate.

If California’s ballot measure passes, the state tax per pack will rise to $2.87, from 87 cents. In Colorado it will go to $2.59, up from 84 cents, and in North Dakota, to $2.20 from 44 cents. There are a couple of drawbacks: Revenue from the North Dakota tax would not be used to fund any efforts to help people quit smoking. In Colorado, electronic cigarettes would be exempt. But in all three states the increases are big enough to be worthwhile.

Missouri’s two proposals are not. And neither — one would raise the state tax to 40 cents, from 17; the other to 77 cents — would be used to fund anti-smoking efforts. So it’s not surprising tobacco companies support both proposals, and public health organizations oppose them. They seem designed not to lower Missouri’s smoking rates, but to discourage the state from ever raising taxes high enough to make a difference.