Potential Implications for Tobacco Industry Transformation of the Acquisition of Swedish Match by Philip Morris International.

Philip Morris International's recent purchase of Swedish Match may prove to be a vital tobacco industry development. We focus on PMIs potential progress in moving from primarily selling cigarettes toward primarily selling noncombustible nicotine delivery products (NCNDPs). We also consider the potential contribution of the acquisition to industry transformation whereby other cigarette firms may potentially move toward primarily selling NCNDPs. We examine the potential impact on noncombustible nicotine delivery product use, including nicotine pouches (a major Swedish Match product), e-cigarettes, heated tobacco products, and, most importantly, on sales of the industry's staple, combustible cigarettes. We focus on the United States as a special case, where PMI is limited from entering the cigarette market. Implications: Philip Morris International's purchase of Swedish Match and policies regarding nicotine pouches (NPs) have been overlooked in the tobacco control literature. The acquisition indicates the importance of the NP market to the largest nonstate-owned tobacco company. The acquisition has the potential through pricing and marketing tactics to either encourage or discourage the use of NPs, e-cigarettes, heated tobacco products, and most importantly cigarettes. Due to its inability to sell cigarettes in the United States, PMI will have incentives to use its alternative nicotine delivery products, including its newly acquired NPs, to reduce the sale of cigarettes by other companies. However, the potential effects in other countries, where PMI does sell cigarettes, are less clear. Monitoring and analyzing tobacco company acquisitions is essential to studying future transitions in using different kinds of tobacco products, especially from cigarettes to lower-risk alternative nicotine delivery products.

A Decision-Theoretic Public Health Framework for Heated Tobacco and Nicotine Vaping Products.

Markets for nicotine vaping products (NVPs) and heated tobacco products (HTPs) have grown as these products became positioned as harm-reduction alternatives to combusted tobacco products. Herein, we present a public health decision-theoretic framework incorporating different patterns of HTP, NVP, and cigarette use to examine their impacts on population health. Our framework demonstrates that, for individuals who would have otherwise smoked, HTP use may provide public health benefits by enabling cessation or by discouraging smoking initiation and relapse. However, the benefits are reduced if more harmful HTP use replaces less harmful NVP use. HTP use may also negatively impact public health by encouraging smoking by otherwise non-smokers or by encouraging initiation or relapse into smoking. These patterns are directly influenced by industry behavior as well as public policy towards HTPs, NVPs, and cigarettes. While substantial research has been devoted to NVPs, much less is known about HTPs. Better information is needed to more precisely define the health risks of HTPs compared to cigarettes and NVPs, the relative appeal of HTPs to consumers, and the likelihood of later transitioning to smoking or quitting all products. While our analysis provides a framework for gaining that information, it also illustrates the complexities in distinguishing key factors.

Differences in cigarette smoking quit attempts and cessation between adults who did and did not take up nicotine vaping: Findings from the ITC four country smoking and vaping surveys.

INTRODUCTION: There is mixed evidence as to whether nicotine vaping products (NVPs) can help adults who smoke transition away from cigarettes. This study investigated if self-reported attempts to quit smoking and smoking cessation, over a period of either 18 or 24 months, differed between respondents who initiated nicotine vaping versus those who did not. Outcome comparisons were made between those who: (1) initiated vaping vs. those who did not; (2) initiated daily or non-daily vaping vs. those who did not; and (3) initiated daily or non-daily vaping between surveys and continued to vape at follow-up (daily or non-daily) vs. those who did not initiate vaping. METHODS: This cohort study included 3516 respondents from the ITC Four Country Smoking and Vaping Surveys (Australia, Canada, England, United Sates), recruited at Wave 1 (2016) or 2 (2018) and followed up at Wave 2 (18 months) and/or 3 (2020, 24 months). Adults who smoked daily at baseline and did not have a history of regular vaping were included. Initiation of vaping was defined as beginning to vape at least monthly between surveys. Respondents indicated whether they made an attempt to quit smoking between surveys. Smoking cessation was defined as those who self-reported no longer smoking cigarettes at follow-up. RESULTS: Relative to those who did not initiate vaping, initiation of any daily vaping between surveys was associated with a greater likelihood of smokers making a cigarette quit attempt (p < 0.001) and quitting smoking (p < 0.001). Among smokers who attempted to quit smoking, initiation of daily vaping was associated with a greater likelihood of being abstinent from smoking at follow-up (p = 0.001). Respondents who initiated vaping between surveys and were vaping daily at follow up were significantly more likely to have attempted to quit smoking (p < 0.001) and to have quit smoking (p < 0.001) than those who did not initiate vaping. Respondents who initiated non-daily vaping did not differ significantly from those who did not initiate vaping on any of the outcome measures. CONCLUSIONS: Daily NVP use was associated with increased attempts to quit smoking and abstinence from smoking cigarettes. These findings are consistent with the concept that complete cigarette substitution may be more likely to be achieved when smokers vape nicotine daily.

Responses to potential nicotine vaping product flavor restrictions among regular vapers using non-tobacco flavors: Findings from the 2020 ITC Smoking and Vaping Survey in Canada, England and the United States.

INTRODUCTION: Some jurisdictions have implemented nicotine vaping product (NVP) flavor restrictions because of concerns about rising adolescent use. However, little is known how these restrictions may impact adult vapers. This study describes the level of support and predictive behavioral responses to a hypothetical NVP ban on non-tobacco flavors among regular adult vapers who only use flavors that would be banned. METHODS: Data came from 851 regular vapers (all current or ex-smokers) participating in the 2020 ITC Four Country Smoking and Vaping Survey in Canada, England, and the United States (US). A random sample of respondents in each country received and completed the questions about flavor bans: (1) do you support or oppose a ban on all non-tobacco flavors; and (2) what would you do if all flavors were banned, with the exception of tobacco in the US, and tobacco and menthol in Canada and England. Those who used tobacco-flavored or unflavored NVPs were excluded from all analyses, and additionally, vapers of menthol flavor in Canada and England were excluded from Aim 2. RESULTS: Overall, 53.6% of vapers were strongly opposed to flavor bans, 28.2% were opposed, 9.3% were in support, 3.6% were in strong support, and 5.2% did not know. Predicted behavioral responses were: 28.8% would continue vaping an available flavor, 28.3% would find a way to get their banned flavor(s), 17.1% would stop vaping and smoke instead, 12.9% said that they would stop vaping and not smoke, and 12.9% do not know what they would do. Responses to a potential flavor ban largely varied by smoking and vaping status, and by the level of support of a flavor restriction policy. CONCLUSIONS: At this time, it is not clear what net population-level consequences would occur if non-tobacco flavored NVPs were prohibited. While a majority of vapers in this study opposed this policy, and many vapers would not be willing to switch to available flavors, there was considerable variability in predicted behavioral responses.

An Analysis of the Altria-Juul Labs Deal: Antitrust and Population Health Implications.

On December 19, 2018, Altria announced an offer of $12.8 billion for Juul Labs, combining the largest U.S. cigarette manufacturer with the largest U.S. e-cigarette company. This deal is currently being challenged by the Federal Trade Commission (FTC). We consider the antitrust implications. We also consider population health implications, which we argue are essential to a comprehensive analysis of the impact on consumers. Although the FTC antitrust investigation has focused on closed vaping systems, we argue that the relevant market is the broader nicotine delivery product market, which includes all vaping products along with tobacco products. With Altria having a large market share in the key nicotine delivery product submarkets and with important entry barriers, the merger potentially places Altria in a dominant position in the relevant market. In particular, competition in the vaping submarket is reduced, thereby likely to reduce the availability of less harmful alternatives to cigarettes.

An Analysis of the FTC's Attempt to Stop the Altria-Juul Labs Deal.

On 20 December 2018, Altria, the largest US cigarette company, announced an offer for a 35% share of the large and rapidly growing vaping product company, Juul Labs. On 2 April, 2020, the Federal Trade Commission issued a complaint that the deal was anticompetitive and should be voided. This paper analyzes the deal. We find that the deal gives Altria market power in the e-cigarette market through its support of Juul in retail stores and through the agreement not to otherwise compete in the e-cigarette market. The deal also has implications for its marketing of heated tobacco product IQOS and generally may provide Altria greater control of the broader nicotine delivery product market.

What Is Accounting for the Rapid Decline in Cigarette Sales in Japan?

This study describes how trends in the sale of cigarettes in Japan between 2011 and 2019 correspond to the sales of heated tobacco products (HTPs) that were introduced into the Japanese market in late 2015. Data used for this study come from the Tobacco Institute of Japan and Philip Morris International. The findings show that the accelerated decline in cigarette only sales in Japan since 2016 corresponds to the introduction and growth in the sales of HTPs.

The US Cigarette Industry: An Economic and Marketing Perspective.

OBJECTIVES: Tobacco company conduct has been a central concern in tobacco control. Nevertheless, the public health community has not taken full advantage of the large economics and marketing literature on market competition in the cigarette industry. METHODS: We conducted an unstructured narrative review of the economics and marketing literature using an antitrust framework that considers: 1) market; definition, 2) market concentration; 3) entry barriers; and 4) firm conduct. RESULTS: Since the 1960s, U.S. cigarette market concentration has increased primarily due to mergers and growth in the Marlboro brand. Entry barriers have included brand proliferation, slotting allowance contracts with retailers and government regulation. While cigarette sales have declined, established firms have used coordinated price increases, predatory pricing and price discrimination to sustain their market power and profits. CONCLUSIONS: Although the major cigarette firms have exercised market power to increase prices and profits, the market could be radically changing, with consumers more likely to use several different types of tobacco products rather than just smoking a single cigarette brand. Better understanding of the interaction between market structure and government regulation can help develop effective policies in this changing tobacco product market.

An Economic Analysis of the Pre-Deeming US Market for Nicotine Vaping Products.

OBJECTIVES: Public health policies are often enacted without adequate consideration of the existing market structure or their impacts on that market structure. This paper provides context for the potential impact of regulations on nicotine vaping products (NVP) use by providing a structural analysis of competition in the US NVP market before FDA regulation. METHODS: A literature review was conducted with the aim of providing a framework for analysis that: 1) defines the market; 2) evaluates market concentration; 3) identifies entry barriers; and 4) examines firm conduct. RESULTS: The NVP market includes retail, internet sellers and vape shops. Although conventional retail became more concentrated after the major cigarette companies entered the NVP market, the vape shop and internet sectors remain substantially less concentrated, producing an overall low market concentration, with few entry barriers and competitive behavior. CONCLUSIONS: The largely unregulated US NVP market has been highly competitive, with a high degree of innovation. However, new FDA deeming regulations as applied to NVPs could make it difficult for smaller companies to remain in the market and could discourage new companies and new product innovations from entering the market.

Young or adult users of multiple tobacco/nicotine products urgently need to be informed of meaningful differences in product risks.

Previously, it has been argued that health information efforts need to inform the public about meaningful differential risks from tobacco/nicotine products. The fact of multiple product use by the same individual further supports this need. When the majority of youth, for example, who use smokeless tobacco are also current tobacco smokers, it makes little sense to mount a smokeless prevention campaign that fails to include clear messages about the much greater risks from smoking. In April 2016, The Food & Drug Administration (FDA) announced a $36 million campaign for youth that "smokeless doesn't mean harmless." Research shows the public (a) already knows that smokeless tobacco is not harmless, but are (b) also largely unaware that cigarettes are much more harmful than smokeless. Though not harmless, smokeless tobacco has been estimated to be over 90% less harmful than cigarettes. 'Gateway' fears are made moot by current use of multiple tobacco/nicotine products. When multi-tobacco product use is commonplace among users, usable information on significant differences in risk is crucial for both adult and younger users. The FDA and like campaigns and health information websites should follow established ethical principles and accepted communication methods to inform the public of less-harmful tobacco/nicotine products as well as the greater harms of smoking, in keeping with the Surgeon-General's advice that reductions in smoking in particular will bring about the greatest public health advances.