Iqos

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Iqos
IQOS Logo.svg
IQOS heated tobacco devices.jpg
Iqos devices, from Accord to Iluma
Product typeHeated tobacco products
OwnerPhilip Morris International
Introduced2014; 10 years ago (2014)
Related brandsElectronic cigarettes
MarketsWorldwide
Websitehttps://www.iqos.com

Iqos (/ˈaɪkoʊs/ EYE-kohs, stylized as IQOS) is a line of heated tobacco and electronic cigarette products manufactured by Philip Morris International (PMI). It was first introduced in November 2014 with the launch of the Iqos tobacco heating device in Japan and Italy, before being gradually commercialized in other countries.

Alongside Iqos-branded electronic cigarettes, a large segment of the portfolio focuses on devices that heat tobacco without burning it.[1] The long-term health benefits of heated tobacco compared to burnt tobacco are yet to be demonstrated, with the idea that the product could at any point be less harmful than cigarettes still being debated among the scientific community.

The tobacco-heating devices have undergone various technological changes over the years with the release of different versions: "Iqos 2.2" (2014), "Iqos 2.4" (2016), "Iqos 3" (2018), "Iqos 3 Duo" (2019) and "Iqos Iluma" (2021). Licensing agreements with other tobacco manufacturers are also in place, such as KT&G's lil device, now commercialized by PMI outside of Korea. Since 2016, Iqos has been the flagship smoke-free product of Philip Morris International, whose communication is now entirely geared towards a "smoke-free future". As of 2021, sales of Iqos and other smoke-free products account for a little under 30% of the tobacco giant's global revenue, up from 20% in 2019.[2][3]

In 2020, the U.S. Food and Drug Administration authorized PMI to sell Iqos in the United States as a modified-risk tobacco product (MRTP) with reduced exposure claims, the second product ever to receive the designation, after Swedish Match's General snus. Though applications for claims relating to modified risk were denied, the decision to allow for reduced exposure claims was nevertheless criticized by the World Health Organization as misleading to consumers.[4]

History

First steps

While alternatives to cigarettes have been researched for several decades, Philip Morris took its first commercial steps in the field of heated tobacco in 1990, when the group presented its first prototype of a device for heating tobacco without burning it (Project Beta).[5] The company finally put two devices on the market intended to heat a cigarette while limiting the combustion of tobacco: "Accord", a device sold in the United States from 1998 to 2006 (the device was also released in Japan under the name "Oasis"), then the "Heatbar", a device sold by the company's international subsidiary launched in 2006 in Australia and Switzerland, before being withdrawn from the market.[5][6]

The Cube, Philip Morris International's main Research and Development facility, in Neuchatel, Switzerland.

One year after its 2008 spin-off from the Altria Group, Philip Morris International inaugurated "The Cube", a $200+ million R&D facility in Neuchâtel, Switzerland, dedicated to research related to "reduced risk" products and alternatives to cigarettes.[7] Between 2011 and 2014, PMI carried out various strategic operations (purchasing patents, acquiring companies, developing partnerships) to enter the smoke-free market. In 2011, PMI acquired a smoke-free technology from inventors at Duke University including Professor Jed Rose, a leading expert in nicotine-addiction research who was instrumental in the development of the nicotine patch.[8][9] In 2013, PMI announced an agreement with Altria Group to sell Altria's e-vapor technology outside the U.S., with Altria gaining exclusive rights to sell future alternative heated tobacco products developed by Philip Morris International in the U.S.[10] Altria's "MarkTen", re-branded as "Solaris", was launched in Spain and Israel two years later.[11] In 2014, PMI acquired Nicocigs Ltd., the largest U.K. e-cigarette company at the time, whose brands included "Nicolites" and "Vivid".[12]

Launch of Iqos

In January 2014, Philip Morris International announced an investment of €500 million to build a factory near Bologna, Italy, dedicated to the production of heated tobacco products.[13] In November 2014 the first version of Iqos was released, first marketed in Nagoya, Japan, and Milan, Italy, before being gradually rolled out to other countries.[14]

Starting in 2016, Philip Morris began heavily promoting a "smoke-free future", with commercial efforts increasingly focused on products that are alternatives to cigarettes.[15] Iqos has since become the flagship product of Philip Morris, with the brand expanding to cover different devices. In 2016, PMI launched Iqos Mesh in the UK, and as a vaping product then the only Iqos product not based on heated tobacco.[16] The next generation of Iqos ("Iqos 3" and "Iqos 3 Multi") was launched in Tokyo in October 2018 and then in other markets around the world.[17]

In January 2020 PMI and South Korea's KT&G announced a partnership for the international distribution of Lil, a hybrid e-cigarette/heated tobacco product, as part of the Iqos portfolio.[18] The following Summer, PMI rebranded Mesh as Veev and launched it in New Zealand before gradually extending distribution to other countries.[19] Iluma, a new system using induction heating technology, was launched in Japan in August 2021.[20]

In 2017, the smoke-free segment generated sales of $3.6 billion for PMI (13% of its overall sales), compared to $64 million in 2015.[21] By the beginning of 2018, Iqos brand products accounted for 15% of the tobacco industry's market share in Japan.[5] By 2020, Iqos accounted for 5.5% of the global tobacco market while being available in 52 countries only, this number jumping to almost 70 a year later.[22][23] According to PMI financial releases, sales of smoke-free products represent nearly 30% of the company's revenue during the first quarter of 2021.[24] Philip Morris also reported that it was spending 99% of its R&D budget to support smoke-free products.[25]

PMI's efforts to achieve a smoke-free business transition allowed the company to begin the process of issuing sustainable bonds to finance itself in August 2021. Such moves have raised fears of greenwashing.[26]

FDA authorization in the United States

On the 6th of December 2016, PMI submitted a multi-million-page application to the U.S. Food and Drug Administration (FDA) for Iqos heated tobacco product to be authorized as a modified risk tobacco product (MRTP).[27] The following March, PMI also submitted a pre-market tobacco product application to the U.S. FDA for its Iqos 2.4 product.[28] The scientific advisory committee (TPSAC) appointed by the U.S. FDA reviewed Philip Morris International's application in January 2018 and voted 8-1 to support the claim that Iqos "significantly reduces [...] exposure to harmful or potentially harmful chemicals."[29] It nevertheless rejected any claim that the product could be marketed as safer than cigarettes.[29][30] The FDA granted PMI's premarket tobacco application to begin selling Iqos in the U.S. on the 30th of April 2019 and the brand was formally launched in October 2019.[31][32]

On the 7th of July 2020, the FDA granted Philip Morris authorization to make "reduced exposure" marketing claims, considering that the Iqos tobacco heating system met the requirements for designation as a Modified Risk Tobacco Product, the second set of products ever authorized after Swedish Match's General Snus.[33][34] The FDA explicitly stated that the product should not be considered as "safe or FDA approved."[33] It also "determined that the evidence did not support issuing risk modification orders at this time".[33]

The Heets/Heatstick system heats tobacco from a blade.
Terea sticks have a metal insert in the tobacco stick itself and work through induction heating.

Design

Technology

The basic heat-not-burn device consists of a charger and a pen-like holder.[35] A disposable stick (known as a "HeatStick" or "Heets" depending on the market[36][37]) containing processed tobacco soaked in glycerin is inserted into the holder, which then heats it to temperatures up to 350 °C.[38] The user pushes a button to turn on the heater, and then inhales from the tobacco stick.[39] Iluma, a more recent iteration, relies on induction to heat the tobacco sticks (themselves branded Terea).[40][41]

Between 2009 and 2017 more than 1,900 patents linked to Iqos have been filed by Philip Morris International.[42] According to Fortune, the company helped make "electronic smoking devices" the second fastest growing category of new technologies in 2020.[43]

Manufacturing

Iqos sticks are manufactured in several countries, mainly in Europe. A plant is located in Neuchâtel, Switzerland, near the PMI R&D center.[44] The major Iqos tobacco sticks factory is located in Crespellano, Italy. Philip Morris invested €1 billion into the creation of this plant, with a first investment of €500 million announced in 2014, and a second announced in 2017.[45] In 2017, PMI invested €300 million to convert a cigarette factory into a manufacturing plant for Iqos tobacco sticks in Aspropyrgos, Greece.[46] The same operation was carried out in Otopeni, Romania, to convert a cigarette factory into a smoke-free product unit for €490 million.[47] Another €320 million HEETS manufacturing facility was announced in Dresden, Germany, in 2017, but the investment was later put on hold.[37][48] In Asia, Philip Morris also has a plant in Yangsan, South Korea, built between 2017 and 2019 for $420 million.[49]

Philip Morris claims that Iqos reduces waste and carbon emissions compared to a cigarette, and presents the product as being part of its sustainability initiatives.[50][51] The company is also promoting itself as a player in the circular economy by arguing that Iqos devices can be recycled by being returned to manufacturing centers.[15][51]

These claims were disputed by the Public Health Law Center at Saint Paul, Minnesota, as used HeatSticks constitute waste similar to conventional cigarette butts. Furthermore, "New products such as e-cigarettes, or heated cigarette products like Iqos, will increase the overall supply of e-waste. It is most likely impossible to create any e-cigarette without a battery, poisonous liquid, metals and plastics joined in small devices, each of which cannot be recycled or disposed of responsibly."[52]

Marketing

The Iqos 2.2 was the first commercially launched device under the brand name.[53] In 2021, Iqos devices were available in approximately 70 countries.[54] Among them, the United States, Canada, Belarus, Moldova, Georgia, Israel, Sweden, South Korea and Portugal have chosen to adopt a specific approach to supervise the sale of heated tobacco/Iqos.[55] In Canada and Israel, the packaging of Iqos devices is fully covered with a warning message.[55] In the United States, the FDA granted Philip Morris authorization to make a "reduced exposure" marketing claim, considering that switching completely from cigarettes to Iqos reduces exposure to harmful chemicals, but refused Philip Morris the ability to make any claim that switching from cigarettes to Iqos reduces the user's risk of disease.[33][55]

Direct marketing

While the name has often been described by early adopters to be an acronym of "I Quit Ordinary Smoking", Philip Morris has never used this to describe or market Iqos and has repeatedly rejected this interpretation.[56]

Philip Morris is regularly accused of circumventing laws prohibiting the promotion of tobacco by considering that Iqos is a technological device and not a tobacco product. Canada updated its tobacco laws to clearly include heated tobacco devices in the list of regulated tobacco products, forcing PMI to modify its packaging for Iqos.[55] In France, it was reported that Philip Morris was promoting its devices at private parties, with salespersons sometimes offering alcoholic beverages to interested customers.[57][58]

Philip Morris has been accused of using unregulated or illegal marketing strategies: a 2018 report stated that "Iqos boutique stores are the focus of aggressive promotion including exchanging a pack of cigarettes or lighter for an Iqos device, launch parties, 'meet and greet' lunches and after-hour events".[59] According to Reuters "The marketing strategy mimics that of tobacco companies in the mid-20th century, when they started associating cigarettes with Hollywood and high society."[60]

Philip Morris has also reportedly carried out several marketing campaigns directly mentioning Iqos, presenting the product as a "smoke-free" and a "reduced-risk" alternative, encouraging consumers to quit smoking or switch to Iqos.[60][61] This marketing approach has come under criticism. A critical review of reports submitted by PMI to the FDA in support of its application claimed that "Consumers may misunderstand what is meant by 'switching completely' [and] are likely to misunderstand the unsupported claims of reduced risk". In granting the exposure order the FDA however acknowledged that adult consumers correctly understood the messages that were authorized.[33]

Youth-oriented marketing

In 2019, Reuters reported that Philip Morris was using social media influencers in several countries to make them "ambassadors" for the brand and promote Iqos to a young audience.[62] PMI responded that it would cease use of influencers.[62] According to Matthew Myers, president of the Campaign for Tobacco-Free Kids, the company "is changing its behavior only when caught red-handed."[62]

Also in 2020, a report on Philip Morris' Iqos implementation strategy in Australia pointed out that "Philip Morris has strongly lobbied the Australian government to legalize heated tobacco products, while simultaneously making plans to sell Iqos at young adult-friendly premises such as bars, clubs and pubs if its proposed legislative changes are made."[63]

Criticism and Controversies

In December 2017, Reuters published documents and testimonies from former employees alleging irregularities in the clinical trials conducted by PMI for the approval of the Iqos product by the U.S. FDA.[64] This investigative work reported that Philip Morris was lobbying to block or weaken the provisions made under the WHO Framework Convention on Tobacco Control (FCTC), going against the idea that the company would support a smoke-free future.[42]

A number of third-party toxicity studies had findings which often contradicted those of Philip Morris International.[65] UCSF-based Professor Stanton Glantz concluded that in terms of harmfulness, "Iqos is not detectably different from conventional cigarettes."[66] A 2020 systematic review of the available scientific literature found very limited available data on the effects of Iqos on a smoker's health and recommended further studies.[67]

In October 2018, the Belgian Cancer Foundation issued advice on Iqos, based on previous independent studies published on the subject. The Foundation claimed that "Iqos is not a solution" for quitting smoking."[68] It further stated that "if the tobacco giant is positioning itself in this innovative market, it is to compensate for the financial losses resulting from the reduced sales of cigarettes (...). The tobacco industry is therefore exploring solutions in order to continue to make profits and keep dependent consumers."[68]

In July 2020, the World Health Organization (WHO) published a "statement on heated tobacco products and the U.S. FDA decision regarding Iqos", which read: "WHO reiterates that reducing exposure to harmful chemicals in Heated Tobacco Products (HTPs) does not render them harmless, nor does it translate to reduced risk to human health. Indeed, some toxins are present at higher levels in HTP aerosols than in conventional cigarette smoke, and there are some additional toxins present in HTP aerosols that are not present in conventional cigarette smoke. The health implications of exposure to these are unknown. (...) Given that health may be affected by exposure to additional toxins when using HTPs, claims that HTPs reduce exposure to harmful chemicals relative to conventional cigarettes may be misleading."[4]

According to the University of Bath's TobaccoTactics website, "There is very little evidence that Iqos is effective as a [cigarette] quit tool at the individual level or population level."[69] According to the Netherlands National Institute for Public Health and the Environment, Iqos is "harmful to health, but probably less harmful than smoking tobacco cigarettes".[70]

In September 2021, the U.S. International Trade Commission ruled that Philip Morris International and its commercial partner Altria must stop the sale and import of the Iqos device in the United States because of a patent case filed by R.J. Reynolds.[71] The U.S. International Trade Commission found that the cigarette alternative infringed on two of Reynolds' patents. Philip Morris International announced its plans to appeal the trade agency's decision.[72]

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