This is not vaping…
Together with e-cigarettes, HNB cigarettes provide an alternative to combustible cigarettes for smokers who don’t want or can’t stop smoking. The tobacco industry has realized that the sustainability of combustible cigarettes was compromised t on the long-term and develop a diversified offer. In the view of the tobacco lobby, HNB cigarettes provide the advantage of a harm-reduction effort while ensuring a sort of brand portability at a time when brands marketing is muzzled by the Worldwide Health Organization (WHO) with plain packaging.
Like electronic cigarette, HNB cigarettes are promoted by their manufacturers as a much safer alternative to smoking than tobacco cigarettes. Research and development teams pretend that HNB products provide the throat hit that is sought by smokers when quitting and deliver nicotine as fast as a conventional cigarette.
Less harm but probably very addictive
HNB cigarettes are basically a tobacco stick, impregnated with a mixture whose composition remains secrete that generate something between smoke and vapor when heated by an electric element. The absence of combustion, the mechanism through which most of the harmful compounds are produced, positions HNB cigarettes in the Next Generation Products (NGP) category with a lower risk profile compared to the secular and traditional cigarette.
The “nicotine hit”, the fact that the level of nicotine in the bloodstream reaches very quickly a very high value, partially contributes to the addiction on combustible cigarettes and is likely to produce the same effects with HNB ones. A property that is not shared by e-cigarettes at legal nicotine strengths in e-juices, much slower to deliver nicotine in the blood. For the highly sophisticated combination of chemicals behind tobacco smoke addiction, including famous MAOIs, no one really knows where HNB’s smoke can stand.
The ritual of smoking is also preserved with HNB cigarettes, or at least closer to that offered by an e-cigarette. The presence of a pack in the pocket, their availability at tobacconists’ and convenience stores depending the country they’re sold to, can make the products easily accessible and recognisable for a smoker.
The most important similarity between HNB and combusted cigarettes is probably the few minutes the user spends puffing on his tobacco stick, once heated, which significantly contrasts with the punctual use of an e-cigarette. The stick-base nicotine delivery can easily be compared with cigarette-base models that have been used by Big Tobacco companies for years to develop their fruitful business.
It shouldn’t be omitted that the profit the tobacco industry is making with combusted cigarettes is centred on tobacco and the addiction it creates during combustion. In a business logic and to retain customers, HNB cigarettes have to be at least as addictive as traditional cigarettes to prevent consumers from quitting altogether, considered as the net loss for the manufacturer.
Unlike e-cigarettes that can be used with nicotine-free e-liquids, HNB cigarettes are tightly associated to nicotine, and specifically designed to ressemble to their combustible siblings. The combination of a tobacco stick and a heating element will offer the user to choose amongst the different brands, maybe the same he/she was used to, and select the tobacco stick that better fits to his/her taste.
Time to resurrect oldies
By having both of electronic cigarette and HNB technologies in their pocket, Big Tobacco brands will better be able to face up to increasing competition in an era where traditional tobacco smoking rates continue to decline. Brands that market HNB cigarettes are Reynolds American (RAI) with Eclipse, REVO and Core, Philip Morris International (PMI) with the HeatStick (also termed “HEETs” and now “TEEPs”) and iQOS (“I Quit Ordinary Smoking”), British American Tobacco (BAT) with Glo and Glo iFuse, and Japan Tobacco (JTI) with the Ploom and PAX concept. Since the late 80s, when such products have been presented to customers, they have been unsuccessful and their marketing failed all the time for various reasons.
Heat-not-burn products currently available on the market
Ploom fades, PAX persists
The last examples in date: JTI’s Ploom Model One and Model Two, that have been discontinued in the USA. The original Model One used tiny tobacco-filled pods but relied on butane and a whimsical heating element. The Pax, a larger, battery-powered, vaporizer designed to use loose-leaf tobacco, succeeded to Model One. Model Two (in fact the third of this brand) came as an oversized pen-shaped vaporizer. Six flavors were available from straight “Virginia-style tobacco” to “minty fresh or fruity smoothness”.
Only the PAX persists in three versions, one designed to accept extracts in proprietary Juul pods (truly an e-cigarette with an e-juice called extract, here, the PAX Era), a version designed to be used with loose leaf (PAX 2) and a version for both, PAX 3 at a price slightly below $300. Pax has doubled monthly production to 2 million Juul Pods and expects 5 million by January 2017, reports CSP. A marketing that helps the comparison with Nespresso products. What else?
Glo, an hybrid concept
Glo is what can be considered a classic HNB cigarette where a heating element is coupled to a disposable Kent tobacco stick. In contrast, the Glo iFuse, launched in Romania by BAT in 2015, is a sort of hybrid e-cigarette working with Kent NeoPod cartridges, a combination of a tobacco stick and a flavored nicotine liquid. The British company expands its portfolio towards HNB cigarettes, e-cigarettes and licensed medicinal products.
REVO and Eclipse were precursors
“Heat-not-burn technology was 20 years ahead” said Executive Vice President and Chief Communications Officer John Brice O’Brien to the dailymail.co.uk who added that REVO “needed the mass presence of vapor products to open up an experience-base that smokers understood”.
iQOS is driving the comeback of HNB cigarettes
This success seems to be met by the iQOS launched by PMI and Altria in 2015 in Japan for Asia, by the end of 2014 in Italy and Switzerland for Europe, and later in some cities in Romania, Portugal, Monaco, Russia, Ukraine, and Germany. A launch in the USA is envisioned for 2017.
The company expects its iQOS to be present in key cities in around 20 markets by the end of 2016 and is lobbying on many countries, especially in India, the world’s fastest growing major economy and second largest market on the globe.
In an interview Tommaso Di Giovanni, head of communication for reduced-risk products at PMI, gave to the Vaping Post during the last GFN, he is unambiguous about the ambition of his company to see all smokers switching to reduced-risk products on the long-term.
Consumer satisfaction and regulator acceptance are the keys of success
HNB cigarettes are marketed by Big Tobacco companies as safer than combustible cigarettes and all the noise around e-cigarettes serves the cause of alternative HNB products. Big Tobacco companies’ interest is to remain in the same distribution chain than combustible cigarettes, while looking at low risk profile products: HNB cigarettes still employ tobacco leaf and sticks are supplied in 20 packs that customers buy every day or so.
From the point of view of users coming straightly from combustible cigarettes smoking, HNB cigarettes appear even safer than e-cigarettes whose emissions are drastically scrutinized by researchers.
Let’s note here that the same researchers who are very busy with e-liquids and e-cigarette emissions, have not had enough time, since their release, to pay attention to the emissions of HNB products. Hence, the only claim about their safety comes from the companies, themselves, and their R&D departments.
There is also a clear willing to maintain a certain confusion between electronic and HNB cigarettes with a portfolio that sometimes combines e-liquids pods and tobacco leaf use in the same device, where the term “smoke” becomes a synonym of “vapor” and vice versa to appeal to smokers in a marketing effort.
Vulnerable to regulatory as well as to consumer’s confusion?
It comes out that, in contrast with e-liquids that contain tobacco extracts, HNB cigarettes contain real tobacco and, given their position as harm reduction products, may be treated better than cigarettes by authorities.
Reynolds American’s president and CEO, Susan Cameron, acknowledged elsewhere that “using some of the innovation that we’ve already developed in heat-not-burn outside the US will be quicker than getting it through our own FDA”. It is true that BAT and Reynolds American have partnered for the development of technology around new tobacco products.
Could NHB cigarette escape FDA’s deeming regulation because of the grandfather date? It is unlikely since it would suppose that a product was on the market on February 2007 and remained unchanged since then. Even if marketing attempts have been made since the 1990s, no device marketed before February 2007 maintained its position, unchanged, on the US market.
iQOS to reach the North American market in 2017
Commercialization and marketing plans for iQOS continue to progress in the USA. A press release by Altria announced on October 27, 2016 that “Altria continues to partner with Philip Morris International Inc. (PMI) on its FDA applications for iQOS“, and the latter “plans to submit a modified risk tobacco product application to the FDA by the end of 2016, and a pre-market tobacco product application in the first quarter of 2017“.
Those who expected iQOS to be distributed on the US market in the coming months will have to wait until the third quarter of 2017, 6 months after the pre-market tobacco product application (PMTA) is submitted. A 12-month delay after submitting the MRTP will oblige PMI to wait until the fourth quarter of 2017 to inform consumers about iQOS’ legal specificities on safety. It could have been earlier if iQOS had been in US stores on 8/8/2016, which was not the case.
A 2 to 3 million pages MRTP application for iQOS is then expected to reach the FDA by end of 2016, comments Bill Godshall.
HNB cigarettes regulated at the EU and member state levels
In Europe, most of the EU TPD has been written around the case of the e-cigarette, between 2011 and 2014 when vaping products were gaining in popularity. In the meantime no HNB cigarette was available on the market, and the HNB technology much likely slipped under the Commission’s radar. Nevertheless, HNB products fall under the scope of the TPD’s Article 2 because they contain parts of tobacco plants.
It may be clarified whether HNB cigarettes fall within the categories of “traditional” tobacco product (cigarettes, roll-your-own tobacco, pipe tobacco, water pipe, tobacco, cigars, cigarillos, chewing tobacco, nasal tobacco or tobacco for oral use) or “novel” tobacco product.
The reusable hardware, the heating element powered by a battery, is probably not concerned by the European regulation. Only the tobacco rolls, the HeatStick (HeatBar, HEETs or TEEPs) may fall under the scope of the EU TPD. But how? Not as a “cigarette”, as a first approximation, since a cigarette, in the EU’s framework, implies combustion. Rather as a “smokeless tobacco product”.
Based on our records, the first iQOS was launched in Europe by the end of 2014 and, in no case, before the May 19, 2014 deadline. From a legal basis, this would de facto discard the “traditional” in favor of the “novel tobacco product”, with the existing restrictions. Nevertheless, the range covered by the different HNB products is very large and may lead to unexpected regulatory adjustments.
Even if most of those remaining products on the market are equipped with an electronic system powered by a battery like the iQOS, some of the extict ones, like the Ploom Model One were built with a butane tank to heat tobacco, others, like the Revo, were using an actual flame to light a carbon tip and heat foil-wrapped tobacco until it evaporates into a flavored vapor.
HNB product as “novel smokeless tobacco product” according to the EU definition?
As a “novel smokeless tobacco product“, any member state shall require manufacturers and importers to submit a notification to the competent authorities and to regulate, administratively, the presence of the products on the market: the 6-month electronic submission may still be required, including information on ingredients and emissions, a complete description of the product and details on its use.
From a scientific aspect, the submission shall also include the scientific studies on ingredients and emissions (toxicity, addictiveness, attractiveness), executive summaries, market research, information on risk/benefit compared to combusted tobacco, its role in smoking cessation or on initiation of tobacco consumption, and the perception by consumers as well as any additional tests or additional information that may be required by each member state.
In brief, European regulatory provisions of the TPD establish requirements relating to measurement of emissions, the obligation to report ingredients and emissions, to ensure traceability and mandate the inclusion of security features, and to address cross-border distance sales. Most importantly in the case of HNB products, EU provisions leave open the possibility of banning a category of products and of prohibiting flavours, ingredients and additives.
Other categories in which HNB cigarettes may fit?
If the EU, regulation of HNB cigarettes as “novel smoking tobacco products” is unlikely but should not be discarded, completely. Considered as a smoking product, HNB could not be released with the flavors that are allowed for a smokeless product, for example. Provisions under this category may also include plain packaging and restrictions on emissions (CO, tar and other substances).
Hence, as a “novel smokless tobacco products” we could imagine that a 20 pack of Marlboro HeatStick (or TEEPs) would be available in different flavors including menthol, with a packaging showing the brand and a health warning pointing out possible addictiveness (according to Article 12), while a 20 pack of combusted Marlboro cigarettes comes now in the sole tobacco flavor, a plain packaging combining an ugly image and text health warnings that indicates it may kill you without any mention of the brand, even not a logo.
How will advertisement and taxation be regulated?
Advertising on printed supports, on internet, television and radio is regulated by a EU directive from 2003 and includes a ban on cross-border tobacco product advertising and sponsorship in these media. The directive extends the ban to the free distribution of gifts and the sponsorship of events that involve one or more member states and the free distribution of tobacco. ECigIntelligence experts believe that there may be some weaknesses in the EU provisions on advertising that may allow such HNB products to be visible in the media. By advertising the iQOS itself but not the tobacco HeatStick, advertising should not fall outside the legal frame.
Taxation of such tobacco products has not yet been decided at the EU level. For cigarettes, EU legislation only set harmonised minimum rates: a specific component of between 7.5% and 76.5% of the total tax burden (expressed as a fixed amount per 1000 cigarettes) and an ad valorem component (expressed as a percentage of the maximum retail selling price). The overall excise rate must be at least €90 per 1000 cigarettes or at least 60% of the weighted average retail selling price. Excise duty of €115 or more, however, do not need to comply with the 60% criterion.
Member States are free to apply excise duty rates above these minima, according to their own national needs. Currently, manufactured tobacco products fall under four categories: Cigarettes, cigars and cigarillos, fine cut smoking tobacco (intended for the rolling of cigarettes) and other smoking tobaccos. None of these categories seems to concern tobacco HeatSticks, mainly because they may not be “smoked” but just heated by the iQOS.
A Marlboro HeatStick shouldn’t be taxed as much as its combustible counterpart, on a pro rata basis of the amount of tobacco it contains and also because it is promoted as harm-reduction. Can theses taxes on HNB devices be lower than those for e-cigarettes? ECigIntelligence anticipates that anomalies in the treatment of products containing tobacco and e-cigarettes may well take the taxes on HNB devices even lower in Europe than those for vaping products.
Since they are sold and promoted as harm-reduction products, the regulatory regime is supposed to provide them with a financial advantage compared to combustible cigarettes and to be levelled on the taxes applied to nicotine e-liquids. For the latter, the experience shows that many states already thought about a way to apply excise duties with a lot of originality. In a case study, Italy can certainly be awarded for the most complex equation to tax e-liquid, but how did the AAMS ruled for HNB cigarettes?
Italy, a precursor in taxation of HNB products
An example of how could HNB cigarettes be taxed at a national level, compared to e-cigarettes and traditional combusted ones is available in Italy. Italy has classified HeatSticks “next generation smokeless tobacco products designed for inhalation”, a novel category compared to the European classification. On the table provided by the AAMS, 1000 Marlboro HeatSticks are taxed about €62.00 (∼6%) while 1000 Marlboro Gold are taxed €207.17 (76.73% incl. VAT). The taxation level of e-liquids is being discussed while Italian MPs are working hard on this task.
What future for Heat-not-burn cigarettes?
In a recent article, Theodore Caputi analyses the market of HNB cigarettes and reports their commercial success at the expense of the e-cigarette, according to tobacco market analysts. The unprecedented financial investment made by Big Tobacco companies in harm-reduction technology over the last few years tends to confirm the high expectation the companies have in these products for the coming years.
Their future development strongly depends on whether the WHO welcomes this technology. The WHO FCTC was invited, during the sixth conference of parties, (Russia, October 2014) to evaluated the e-cigarette. Not all of the 135 parties agreed to consider e-cigarettes as a tobacco product and the overall benefit of vaping in tobacco control did not either make a consensus. The mixed position about e-cigarette gave it an overall bad notice, leading to a lukewarmness, sometimes a firm reluctance with regard to the e-cigarette, that propagated to its regulation by many countries. The expert report that has been asked to the WHO for this year will be scrutinized and probably strongly debated.
Two months ago, the provisional agenda for ongoing WHO’s Conference of Parties (CoP7 held this week in New Delhi, India), gave a strong signal that HNB products would be reviewed as well: “In addition, the market may change since the tobacco industry has launched alternative nicotine delivery systems that heat but do not burn tobacco, and is developing or has bought nicotine inhaler technology that does not require a heating mechanism.” What will be the WHO’s positions about e-cigarettes and about the tobacco industry’s HNB offer?
The forthcoming favorite product seems to be PMI’s iQOS because of its presence in many places, associated to a strong marketing exercise. Soon, this product will reach the US market and will certainly be distributed in Europe market as well after its astonishing success in Japan.
Even if the company largely communicated on health benefits with scientific reports, limited external studies have been carried out about the risk of HNB products, to date. If these products expand at the high rate tobacco market analysts predict, researchers should be prepared to respond very fast and provide accurate expertise on their emission, concludes Caputi who probably refers to the scientific blunders that accompany the regulatory process of the e-cigarette.
Caputi, TL. (2016). Industry watch: heat-not-burn tobacco products are about to reach their boiling point. Tobacco Control, tobaccocontrol-2016.