Philip Morris Mobilizes Lobbyists to Re-Introduce IQOS in the United States

Philip Morris International (PMI) has hired new lobbyists in at least 19 US states to prepare for the launch of its heated tobacco device IQOS, according to Reuters. PMI, which was spun off from Altria in 2008 to avoid potential legal action, is making its return to the US market.

The IQOS smoking tobacco device, designed and manufactured by Philip Morris International (PMI), was first marketed in the United States by its sister company Altria. In 2021, a litigation with RJ Reynolds, a subsidiary of British American Tobacco (BAT), had put an end to the importation of IQOS products into the US market. Altria then sold its rights to IQOS to PMI, before entering into a partnership with Japan Tobacco International (JTI) to market its Ploom heated tobacco device.

PMI now intends to regain a foothold in the United States in this key and highly competitive heated tobacco market.

PMI returns to the US market

After the split between Altria and PMI in 2008 to protect PMI's assets from potential legal sanctions, PMI had stayed away from the US market. PMI only returned to this market on its own in 2022, after the acquisition of Swedish Match, which had allowed it not only to take a comfortable position in the nicotine pouch market, but also in the cigar and snus (tobacco pouch) market. It is now on the heated tobacco market that PMI intends to re-establish its IQOS brand.

To that end, PMI has hired more than a dozen lobbyists in more than 19 U.S. states, according to lobbying disclosure records seen by Reuters.[1]. Four other states are also expected to be the subject of such declarations in the same fortnight. For this large-scale offensive, PMI has prioritized agencies and personalities with connections to places of power, such as Daniel Hodge, former chief of staff to the governor of Texas, or the firm Park Strategies LLC, founded in New York by former senator Alfonse D'Amato.

While Illinois, Florida and Pennsylvania are among the states targeted by PMI, the names of the two states set to inaugurate the new IQOS launch have not been revealed. They will, however, be closely scrutinized by PMI investors, whom the international firm is seeking to reassure about its profitability targets.

PMI exploits IQOS's "modified risk tobacco product" status

PMI relies in particular on the “modified risk tobacco product” (MRTP) status granted to IQOS by the Food and Drug Administration (FDA) in 2020. A “modified risk” does not correspond to a “reduced risk” but, following this decision by the FDA, Altria had presented its modified risk tobacco products as reduced risk products in its advertisements intended for women’s magazines or other media. The World Health Organization (WHO) had for its part recalled that there is no solid scientific evidence of a lesser toxicity of heated tobacco devices like IQOS.

PMI now intends to use this “modified risk” argument to obtain more favorable taxation of IQOS at the local level. Washington State and Colorado, for example, have already opted for reduced tax rates for these products, compared to those of other tobacco products. Beyond IQOS, the grounds for registration of PMI lobbyists also referred to trade, taxation and policies governing tobacco products.

In announcing to his investors the upcoming launch of tobacco-free sticks for IQOS, Jacek Olczak, CEO of PMI, made it clear that these new products "do not match » to the tax categories in force and that they "may not be subject to regulations on aromes of certain jurisdictions »[2]. Called "Levia", these sticks will be composed of a "tobacco-free substrate" impregnated with nicotine and flavored with tobacco, menthol-blueberry and menthol-peppermint flavors.

To learn more about IQOS and “combustion-free alternatives,” visit our decryption.

Keywords: United States, PMI, IQOS, Levia, lobbying, FDA, MRTP.

M.F.