Thursday, February 20, 2020

IQOS Heat-Not-Burn Products Are Drawing Smokers Away from Cigarettes

Tobacco prohibitionists offer a plethora of reasons why harm reduction won’t work for smokers.  One last-gasp argument is that tobacco companies will never sacrifice cigarette sales by selling less harmful substitutes.  A recent report from Philip Morris International (PMI), however, provides substantial evidence that a transition from combustibles to smoke-free products is already happening across the globe.
The PMI chart at left shows that its iQOS heat-not-burn products accounted for 19% (about $5.6 billion) of the company’s 2019 revenues.  As recently as 2015, iQOS revenue was essentially zero.

PMI reports that IQOS is now available in 52 markets worldwide.  The company estimates that there are 13.6 million users, 71% of whom have stopped smoking completely, as seen in the following chart. 


The next chart shows that IQOS market share in key cities around the world varied considerably, from 3-4% in Zurich and Munich, to 14% in Moscow and Kiev, 21% in Tokyo, and 29% in Vilnius, Lithuania.


Although the FDA approved IQOS sales last year, the agency has still not determined whether it is a reduced risk product, two years after an FDA committee unanimously endorsed PMI’s claim that switching reduces smokers’ exposure to toxins.

PMI’s international sales suggest that IQOS will succeed in the U.S., although the product is currently available only in Atlanta and Richmond.

Note regarding use of company estimates: PMI marketing claims concerning IQOS are strictly regulated by the FDA, meaning they must be fully substantiated.  That is a considerable deterrence to inaccurate reporting, a control that does not apply to anti-tobacco activists in government or elsewhere.

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