This article first appeared in The Edge Malaysia Weekly on October 21, 2024 - October 27, 2024

THE strategic shift Philip Morris International Inc (PMI), a “big four” tobacco company that sells Marlboro, L&M and Chesterfield cigarettes, began 10 years ago — moving away from cigarettes and towards smoke-free products — has recently marked a major milestone.

Its flagship heated tobacco product (HTP) IQOS, launched in late 2014 in Japan and Italy, outpaced its leading cigarette brand, Marlboro, in terms of global net revenue in the fourth quarter of 2023 for the first time.

For the whole of 2023, PMI’s smoke-free portfolio, including IQOS and electronic cigarettes (e-cigarettes), accounted for 37% of total net revenue, with 25 markets generating more than half of their total net revenue from smoke-free products. At end-2023, PMI’s smoke-free products had about 33 million users and were available for sale in 84 markets.

Its next step is for smoke-free products to account for more than two-thirds of its total net revenue by 2030.

While progress towards a smoke-free future shows good signs, CEO Jacek Olczak believes it’s not moving quickly enough. At an Oct 9 event, called Technovation, at the Cube — PMI’s research and development (R&D) centre in Neuchâtel, Switzerland — he expressed frustration with the continued reluctance by a number of governments and public health authorities such as the World Health Organization (WHO) to acknowledge that smoke-free products like HTPs, e-vapour products and nicotine pouches are less harmful than conventional tobacco products, despite being science-backed.

WHO has declared that vapes cannot be recommended as a way to stop smoking as too little is known about their harms and benefits. The global body also reportedly said that vapes “may” be recommended as a smoking cessation aid “in the future as evidence accumulates”. 

“Delaying acceptance of innovations and [the implementation of] regulations to govern these products, [you] are essentially extending the life of cigarettes and preventing consumers who smoke an opportunity to [have] better alternatives. As we continue to debate over whether or not these [smoke-free] products should be promoted, people continue smoking. It is highly frustrating that society continuously denies innovations rather than focus on the positives. And these things have to be regulated,” said Olczak, who became CEO in May 2021.

He cited Japan as a market where smoke-free products have outpaced cigarette sales. “On the other side, you have countries that are religiously espousing these smoke-free products while allowing sales of cigarettes to continue.”

Despite widespread evidence that cigarette smoking causes harm and leads to premature death, and there are alternative tobacco products that can reduce the harm by reducing the exposure to carcinogens and toxin levels, he argues that it doesn’t make sense to have legislation that bans these reduced-risk products while at the same time allowing cigarette smoking to continue.

“Reputable organisations like WHO are giving examples of countries which are fighting [against] smoking like Turkey and India, but at the same time these are countries that ban alternatives but allow smoking. This is where I think we have crossed the point into what one of my former mentors at PMI once told me that the real disaster is coming when the smart people are saying stupid things,” said Olczak.

While tobacco companies have often called on policymakers to include them in the public health policy conversation, governments, universities and health advocates are told to reject any engagement with the industry over concerns that they may influence and interfere in their tobacco control decisions.

At the Q&A session during Technovation, Olczak cheekily responded to a question about whether he has met with the director-general of WHO, Tedros Adhanom Ghebreyesus. “While I don’t remember the number of letters my predecessors and I have sent to them, I definitely remember the number of answers we got from them because it was absolutely zero.”

“I would say, ‘Good morning. Can we talk?’,” he says when asked what would be the first thing he would say to Ghebreyesus. “But seriously, we are not arguing per se about the anti-smoking policies, etc. We want a smoke-free world. Our goals are aligned to this. As such, I don’t think we are so much enemies. But we want to also tell people the alternatives (to smoking cigarettes) because if we don’t tell them, then they will end up smoking. There is not a single country in the world that has banned (the sale of) cigarettes even though there is conclusive evidence that cigarette smoking is harmful.

“As a result, many countries have policies that prohibit the sale of smoke-free products or communication about these products and yet continue to allow cigarette smoking. This is not about science anymore. Rather, this is about opening your mind up and thinking logically. So, do you want to be in the group of smart people who say stupid things or are you going to move out of this group? Let’s talk,” said Olczak.

He shrugged off critics who say “We don’t know enough about it to regulate this product” as an excuse for not making a decision. “If you go into the corporate world, if I don’t want to make a business decision, I can ask a ton of questions to make an organisation do more analysis, more analysis and more analysis. It is just because I don’t want to make a decision. The same is happening here. A decade ago, yes, science was low, people didn’t have the time to look into the science side of this whole thing. But 10 years later, we do.

“I came across this thing, which makes me sad, but there are 1% or 2% of people on this planet who still believe that the earth is flat. This is unbelievable. More science is needed. Yes, but can we agree, for God’s sake, that within the science that exists today to conclude about the [dangers and health risks of] nicotine? What more science do we need to know about nicotine?”

“There are consequences because every time we delay a decision, there are people smoking cigarettes. And there are new people in many countries who start to smoke cigarettes. I can delay the decision-making process if nobody will suffer. But we are not in that scenario. So my question is who is going to take responsibility for another waste of 10 years? We cannot operate in this environment. Nicotine is not carcinogenic. Nicotine does not cause cancer. But yes, nicotine is addictive,” Olczak added.

“Cigarette sales are going up in countries that ban smoke-free products. Technically speaking, we will not be able to achieve the ambition of a smoke-free future in these countries because we are not allowed to. We can continue to be a 100% cigarette company, but that is completely opposite to what we want to achieve. Actually, cigarette sales decline much faster in countries that allow any form of alternatives to smoking products. Clearly, these countries will be on the forefront of reaping the public health benefit.”

What’s next for PMI? Olczak said: “There are still more than one billion smokers in the world. None of these smoke-free products will stay exactly the same. Each of these categories require continuous attention and investment until we reach the last smoker. It is still a journey to be made.”

Fellow speaker Tommaso Di Giovanni, vice-president of international communications and engagement at PMI, concurred, noting that innovating isn’t enough, but adoption of an innovation is what really makes a difference.

He cited as an example what happened after Swedish engineer Nils Bohlin invented the three-point safety belt in 1959, while he was with Volvo.

“That innovation, which may seem simple to us, was adopted only much later. The first state in the world to make wearing seat belts compulsory was Victoria, Australia, in 1971. By doing so, it was estimated that it saved 13% to 17% of lives during the first year. If I consider more recent data from the US Department of Transportation, this invention diminishes the risks of significant accidents by between 45% and 65% every year — 14,000 lives in the US alone. But again, how long did it take us from the invention to the adoption? Twelve years for the state of Victoria, which was the pioneer. But many other places, including Switzerland, only adopted seat belts nationwide in the 1980s. And it was quite controversial. Although it seemed pretty obvious that if you wear seat belts, your risks go down, but there was a huge debate about it. This was what slowed the adoption,” said Di Giovanni.

“The question is, why don’t we apply exactly the same thinking to the tobacco industry? Why is it that we traditionally have looked at tobacco and nicotine differently than the way humankind looks at innovation? What is the barrier inherent in some of the debates that didn’t allow us to look for those solutions? Especially because there are over one billion people who smoke out there in the world. And even the best estimate considers that that number is going to continue in the next five to 10 years. So the question, can we do something else through science, technology and innovation to address this problem, besides continuing with the efforts to discourage people from starting smoking or those who smoke to quit? Because it is working partially but not as much as we would like.”

For the ongoing development of its smoke-free products, PMI has spent more than US$12.5 billion (RM53.9 billion) in the past decade and employs over 1,500 engineers, scientists, technicians and support staff.

The company estimates that the number of IQOS users totalled 28.6 million last year. “That number would be over 33 million if we include other smoke-free products such as e-cigarettes and nicotine pouches. But that doesn’t depend only on us. If others play their role, we can get there much faster,” he said.

Di Giovanni says governments, non-governmental organisations and everyone who speaks to the public, such as physicians, health authorities and academia, have a role to play in the smoke-free transition. “But governments have a particularly important role because they can shape the rules of the game like what we have seen in electric vehicles. They can drive a collaborative agenda that gets us there much, much faster.” 

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