BRENT: Hi everybody, I’m Brent Stafford, and welcome to another edition of RegWatch on GFN.TV. There are few companies more reviled than those in the business of selling combustible cigarettes. Smoking kills, and it took decades for tobacco companies to acknowledge this fact. But now the question is: what role should big tobacco play, if any, in helping smokers to quit? Joining us today to help untangle this question is Dr Moira Gilchrist, VP of strategic and scientific communications at Philip Morris International. Philip Morris is the largest multinational tobacco and cigarette manufacturing company in the world. It operates in over 180 countries and thanks to its best-selling Marlboro brand, PMI brings in over 30-billion dollars a year in sales. In 2016 the company announced its goal to deliver a smoke-free future Dr Gilchrist thanks for coming on the show
MOIRA: Thank you, Brent, for having me. Much appreciated.
BRENT: Well, let's start with PMI's promise of a smoke free future. What does that look like and how does PMI get there?
MOIRA: So this really all started probably almost two decades ago when our researchers understood that it could be possible to create alternatives to cigarettes that had the potential to be less harmful, but also the potential to be satisfactory alternatives for adults who currently smoke. So after we did the initial R&D and we started to have prototypes and we started to have early scientific information, we really decided that we had to go really all in, if you like, and make this the future of our company and really basically replace the cigarette. And that's where we're at right now. And I think we' tremendous progress and certainly in the last decade and is a really exciting thing to be part of.
BRENT: So before we dive deeper into this issue, please tell our viewers a bit about yourself and what brought you to PMI.
MOIRA: So I trained as a pharmacist in the UK, in Scotland. I did a PhD in pharmaceutical technology, essentially working on anti-cancer drugs. After that, I went to work for the UK's largest cancer charity, Cancer Research UK, working on sort of orphan drug development for things like breast cancer. And then went into the industry, pharma industry proper, working on inhalation drug delivery and then ended up in consulting. And when I did that, I was asked to go on a project with Philip Morris International, and this was back in sort of 2004, 2005, because the company wanted to transform their R&D facility to be much more like a pharma company. So we came in and gave advice on the strategy, the skills and capabilities that would be required, the quality processes and so on. And that's when I got to learn about this ambition to go smoke-free, although it was very nascent at the time. And we did this very long project and at the end I was asked if I would like to join. And of course it was a very difficult decision because nobody in the public knew what the company was doing. But I had a chance to see it and I thought, okay, if the company can get this right, then it could be a solution for more than a billion people on the planet who smoke. But it could also be a solution for me because I was a smoker at the time, and although I had given up many times, I had always gone back to smoking because I enjoyed it. So there was a very personal connection to the problem, and I decided to join and that's how I ended up with the company.
BRENT: That's an amazing story working so closely on the science around cancer, for one thing, and then also being a smoker, joining a big tobacco company in your process of quitting, I mean, that's amazing. Let me ask you this, Dr Gilchrist. What do you say to those who blame big tobacco for creating and perpetuating the smoking problem in the first place?
MOIRA: So I hear this a lot and I wonder what blame actually brings. So are we trying to solve the problem of smoking or are we trying to point fingers? And I think people can have whatever opinion they like about the industry I work and the company I work in, the work we do, as long as it's based on facts. And I think quite often people who are looking to blame have lost track of the facts. And I just ask people to go and look at what we're doing, look at what we're doing today, and make a judgment based on that. And I want to work together with people to solve this problem. There's no point there's no there's no benefit in seeking out blame, in my view.
BRENT: Tell us about the investment a little more deeply in terms of what was spent, in terms of product development in the science, and most importantly, how strong is the science on reduced risk products?
MOIRA: So I'll start with the second part of your question first. I think the science now is really strong. We have really good evidence that smoke-free products have the potential to bring a real benefit for public health if we can ensure that they get into the right hands, which is adults who would otherwise continue to smoke and we can keep them out of the wrong hands, which is people who don't currently smoke with a particular emphasis on youth. And I think we at Philip Morris International have done a really good job of ensuring that. So with the science that we see with getting into the right hands of the right audience, there really is a potential benefit for public health based on what I see and scientifically, and we invested in this and right from the get go with quite a great amount of vigour, if you like. We're now more than $9 billion that we have spent on the development research and early manufacturing of smoke free alternatives. I think that's an unprecedented, unprecedented investment in the industry. And we're continuing to develop new prototypes, new products, and we're also continuing to develop the science because we believe that it's really important to get long term evidence. For example, many people are nervous about these products because they don't know what will happen in the long term, and that's a very valid concern. So we're investing in ensuring that we get the scientific data over the long term.
BRENT: Now the reduced his product for your company Is the heat, not burn technology? And is it IQOS branded everywhere in the world or just in North America? I know it is IQOS.
MOIRA: It is IQOS. Yes, we're branded IQOS in all countries where it's available, which is now, I think, 70 markets worldwide.
BRENT: And what has been the success story, if there has been one?
MOIRA: Well, frankly, it blew me away. Having been involved in the project from the moment, it was sort of drawn on a flip chart, the idea to where we are now, it's an incredible, incredible story. And it's happened incredibly quickly. So we first started to get the scientific data early clinical data, I would say around about 2012 ecause that was so promising e decided to go into pilot markets in Japan and Italy and that started in 2014. And of course, sitting in the R&D facility, we were all very nervous about what was going to happen. Would consumers actually like this product? Would smokers actually want to switch to it? And very, very quickly, we saw that the answer was a very firm yes. We started to see queues developing outside the stores in Japan, which was really exciting. And now we're in the position where I think around 9 million people are using IQOS worldwide and just over 30 million we announced in June this year had switched completely. So that means switched completely away from cigarettes to IQOS and they've abandoned smoking. So that's just in a few short years, really since 2014-15 fast forward to 2022. I think that's really incredible progress and something I'm personally very proud of.
BRENT: Now, does PMI have any traditional vaping products? You know, the -iquid types.
MOIRA: Yeah, we do. We took the approach from the very beginning that it would be important to offer a range of products to adult smokers, recognizing that there's not going to be one product that suits the needs and expectations of each and every one of the one but more than a billion people on the planet who smoke. So we have an e-vapor products. We also have pouch products and we have a range of heated tobacco products as well. And the idea is to provide different types of experiences for adults who may be looking for an alternative to cigarette smoking.
BRENT: Now, just recently, I've seen a few odd bits and pieces of research saying that the heat not burn technology has been showing that it's not got the same promise that, say, PMI. And actually a lot of supporters in the tobacco harm reduction community have and the research community have for it. So what's the nature of this research? I'm talking recently and how does that contrast with the fact that the FDA in 2020 did provide, you know, reduced risk marketing approval for IQOS?
MOIRA: So we applied for what's called modified risk tobacco product status for IQOS back in 2016. FDA spent four years pretty much poring through the science, three and a half, four years poring through more than a million pages of science that we submitted back in 2016 and came to the conclusion that the product is appropriate to promote the public health and the authorize. It authorized us to make what's called reduced exposure claims. So telling consumers, adult consumers that switch and completely to IQOS reduces their exposure to harmful and potentially harmful chemicals. So this wasn't a quick decision by FDA. This wasn't a decision that they just thought about. It was a proper scientific evaluation of million pages or more of data. So I would just ask people who are criticizing the product to go and look at that data and also to replicate it. If they don't trust our science for whatever reason, there's no reason why they can't replicate those studies and see if they can't come to the same conclusion as we did. And some scientists have done that. And more or less they come to the same data, the same findings that we do. And we've been very, very transparent in making sure that people could see what science, what scientific data we have, not just the conclusions we're making, but the raw data even because we understood that people would be sceptical. So I would just say to people, if you're sceptical, go look at the data.
BRENT: I think one of the things that they're sceptical about is actually a big tobacco company getting involved in a business that kind of destroys the traditional sales that built their company and going to, you know, something farfetched in the future. What do you say to that?
MOIRA: I understand. It seems very odd if you're looking from the outside. To us, it seems very natural. We have a better product. We know very clearly from the scientific evidence that it's much better than continuing to smoke. We have the will to do this because it's from a profitability perspective, it makes business sense for us. So it would be the wrong business decision to decide not to do this. So we really decided to go all in because it makes perfect sense for public health and it makes perfect sense for us as a business for the longer term.
BRENT: So how big then are reduced risk products in relation to total sales?
MOIRA: The latest data that we announced, I think it was in June this year, June 2022, was that we're now at 29% of our net revenues are coming from smoke free alternatives, and that's up from 0% basically in 2015. So an incredible trajectory. And we have the ambition that by 2025 will be a majority smoke-free company. And that means that more than 50% of our total net revenues will come from smoke free alternatives.
BRENT: he numbers kind of say it, don't they?
MOIRA: Well, I hope so. And that's why we've been we've been deliberately very, very vocal and transparent about these KPIs, if you like, key performance indicators. So people can check people can check whether what we said last year has come through this year, whether what happens in 2025 is what we committed to make happen. And I think that's really important because we are operating in this environment of a deficit of trust and scepticism. We've nothing to hide. So we made these KPIs public and people can check on a quarterly basis how we're doing in terms of transforming our business.
BRENT: This is an excellent interview for us in our side because, you know, we've been trying to talk to the big bad wolf, and I don't see that as being big tobacco. I'd like to get campaign for tobacco free kids to sit down or truth initiative to sit down, you know, or somebody from Bloomberg Philanthropies to sit down there. The big bad wolves, as far as we can tell. What do you think?
MOIRA: Look, I think it's very unfortunate that these organizations won't sit down at the table with everybody who has a stake in this issue or rarely will sit down. I think I need to be fair. Sometimes they do come to conferences and we do have an opportunity to debate and discuss because it's only through discussiont's only through hearing the point of view of each and every stakeholder that we're going to be able to progress forward, I think. And that means hearing the voice of the consumers who are affected and their families hearing the voice of the non-governmental organizations who are concerned about this. And they have very legitimate concerns. And hearing the voice of the industry and the players within the industry who can make a difference. And I think by sitting down and discussing, we have more chance of progressing more quickly towards a world where we reduce the public health impact of people using nicotine containing products.
BRENT: Is it frustrating, though? I mean, our coverage endlessly is about how these groups and, you know, tobacco control in general tend to kind of disregard completely, entirely consumers of tobacco products and consumers of safer alternatives. They're completely, totally erased from this equation, at least from their side. However, though, your company caters to that customer.
MOIRA: Well, look, I've been saying for years that I think the solution is to keep two things at the centre of the conversation. The first is people who are currently smoking. If we're ignoring them, if we're just pretending that they're going to do something, that would be the perfect solution, which is to quit. Some of them will. And that's great. That's great. That's the best thing anyone can do, but the vast majority of them won't. So I think we have to face reality and figure out what can we all do to help those people to manage their decisions in a better way, to manage their risk in a better way if they choose to do so. And I think ignoring them and pretending that they're all going to fall in line with the right decision, if you like, which is to quit, I think is just the wrong thing to do. We're all people. We all do things which are I mean, I was a smoker and I knew exactly the risk I was taking, but I chose to continue doing it. And there are many people like me. So we have to factor those people into the decision making. The second thing we have to do is factor the science into the decision making. It's very easy to say, I'm not going to look at big tobacco science because I don't like the fact that they've funded it, and I don't like the fact that I don't trust them. That's very easy to say. What's much more difficult is to dive into the data and figure out what does it mean? What's much more difficult is to try and replicate the studies and people are not doing that and that in a large amount. I find that intensely frustrating because it's the smokers who are going to be disenfranchised because of that.
BRENT: I'm a committed vapor. You know, I shouldn't even say vapor. I'm a committed daily recreational nicotine user and I don't see anything wrong with that. I've been doing that since I was 15 and for the entire time with legal product. So I'm not certain that I'm ready to just give up that habit because somebody in tobacco control has decided that my use of nicotine is going to hurt some 15 year old.
MOIRA: Well, if I may, I think some organizations and individuals have somehow seemed to have lost sight of what the battle is. In my mind, the battle is against the disease and premature death that smoking causes. That's the battle. The battle in some people's minds seems to have morphed towards nicotine. And I don't understand that. So nicotine, we know, is not risk free. It's addictive. And there are certain groups of people who absolutely should not use it pregnant women, youth, people with serious cardiovascular disease, etc.. But for the average person, for the average person who's smoking today is not nicotine. That is the primary cause of the disease and premature death for them. It's all of the chemicals that are delivered in cigarette smoke and there are thousands of them, some of them carcinogenic, some of them causing heart problems and lung problems. So that's what we should be fighting. That's the immediate battle that we have today, because there are more than a billion people on the planet today who are drawing smoke into their lungs 20 times a day and will continue doing so because they don't want to quit. So what solutions can we find for those people? That's the battle that we need to be fighting today, in my mind.
BRENT: Excellent point. And let me just play devil's advocate here. The comment would be we'll just stop selling cigarettes then.
MOIRA: We get that comment all the time. Look. Philip Morris International stopping selling cigarettes does nothing to address the problem of smoking, because if we stop selling cigarettes, our competitors will just fill the gap. People will switch brands and they will continue smoking. What we want to do is to change people's demand for cigarettes. We want to be bringing better alternatives so that people don't want to buy cigarettes in the end in the future. So selling our business to somebody else doesn't solve the problem of smoking. Stopping selling cigarettes doesn't solve the problem of smoking. Changing and reducing the demand for cigarettes that can solve the problem of smoking.
BRENT: Let me ask you this, Dr Gilchrist. Tobacco harm reduction is a strategy that is being deployed in many places, though there are many other places that are resistant to it. What can you say about tobacco harm reduction? Is it a good strategy to use in this battle that you just described?
MOIRA: So it's a strategy that's used in pretty much every other sector. And I see no logical reason why it should not be used in the field of smoking and health. There is no logical scientific reason why it could not be successful, and I think it is being successful in many countries. If you take the UK, you take Japan. It may not necessarily be labelled as tobacco harm reduction. It's providing better alternatives for people who otherwise would continue to smoke. So it is happening and I think we're going to start to see and we are starting to see what I would term emerging epidemiological data. So data on large populations who have switched to better alternatives for a sufficient period of time, we start to see interesting data that shows that this can potentially have an impact on public health. In Japan, we see changes in the rate of hospital admissions, for example, for things like chronic obstructive pulmonary disease exacerbations. Now we can't s today that that's caused by the introduction of IQOS, but we can see a correlation to the introduction of IQOS. And we're investigating now to see whether it's actually causal so we can start to see this data. And we're looking in other countries as well. And if that starts to show a positive impact on public health, then we have the proof point tobacco harm reduction and providing these alternatives for adults who would otherwise continue to smoke is a positive strategy.
BRENT: How important is being freed up in terms of the messaging? No vape shop can legally promote the product as you come here and use this vaping product and you can have a shot at quitting smoking, or you could quit smoking by using these vapes that we sell at X, Y, Z vape store. I mean, there's thousands of those stores, at least there used to be pretty much you can't say anything in order to help share the truth about the product.
MOIRA: Mm hmm. Well, our experience in working with adult smokers on switching to alternatives over the last five, five or more years has shown that it's really hard. So you have to help people with information. You have to help them with support. You have to re inform them. You have to re encourage them. Because smokers, oftentimes, they enjoy their cigarettes. And so you have to give them a reason to abandon something that they really enjoy doing. So information provides a vital part of that and persuasion. So I think in countries like the UK, they have a much different approach where the government is actually really encouraging people and providing information at the trusted government source, never mind the companies. If you go to somewhere like the US, there's a law in place which means that FDA have to authorize messaging. And I understand that. I encourage companies to go and take advantage of that route if they can. But then also I would encourage people who are contributing to what I would call the information environment around smokers to play their part. If you Google, for example, is vaping safer than smoking or is heated tobacco safer, safer than smokinghe confusion that that comes up in the results is just incredible. You have some article saying, yes, you have other articles say no. You have other articles saying they're more dangerous. And if you're if you're in this field, you can sort through those and understand where they're coming from and understand which is right and which is wrong. But if you're just an adult who is a cigarette smoker, who's never thought about this or looked into this, you're left completely confused. So I think we all have a responsibility to ensure that the information environment for adults who smoke is clean and clear so that they can make the right choices.
BRENT: So how is it then that people and the public, more people now believe that vaping, safer alternatives, vaping is as harmful or more harmful than smoking? And that's only a recent development in the last 3 to 4 years.
MOIRA: I can see a multitude of reasons for this having happened. The concerted efforts of many of these campaign groups to discourage, with good intentions, I believe discourage youth from using these products have completely blend into the information environment for adults, so adults are left completely confused. There's been no separation, if you like, in the messaging. So you get every single week you get a scare story in the media about vaping or other alternatives. And that leads to a societal impression that these products are much more dangerous than the science would, which would lead us to conclude. And that's the unfortunate thing. And I believe there have been concerted campaigns to muddy the waters, if you like, to, to create confusion. I don't understand the full motivation other than the youth part which we can all agree on. Youth should not be using these products, but I think these organizations and individuals need to leave room for adults to have proper accurate information.
BRENT: Yeah, you mentioned Googling. I mean, if you Google in Canada or the U.S., you're going to get bombarded with paid advertising in search results from government authorities or, say, state tobacco control organizations. California being one of the biggest one. And, of course, I mean, so and none of that is going to help an adult sort through the misinformation.
MOIRA: Correct. Correct. And I think that's the unfortunate thing. And I think there has been tremendous success in in keeping products in general out of the hands of youth. There were unfortunate data coming out of the US where we saw a spike in youth use. We see that starting now to decline. That's great news. And I think it's really important that that happened. But now I think it's time to focus on the adults because they have been left out of this conversation. The adults who smoke have just been left to try and figure out things on themselves. And I think now is the time to be looking at both. We can't ignore the potential of youth using these products. That's not what I'm saying. But we also can't ignore the adults who are just continuing to smoke cigarettes.
BRENT: Yeah. I can't just be all about trying to save the kids.
MOIRA: Correct. Correct.
BRENT: Share with us a little bit of information about this exposed tobacco group they have, and they're going straight head on at big tobacco. Who are they?
MOIRA: Well, it's a set of organizations that are funded by Bloomberg Philanthropies with the mission, as they call it themselves, to stop tobacco organizations and products. So basically, I would turn them as a prohibitionist organization with an ax to grind against the industry. And they have published countless articles. They have funded investigative journalists, they do webinars, they do all sorts of things with the sole purpose, I believe, of discrediting Philip Morris International primarily, but other tobacco companies as well, and also smoke free alternatives. And that's what worries me most. I really we're able to defend ourselvesut when people start muddying the waters about what the products are and what the science shows, that's when I get really concerned.
BRENT: Could there be a little bit of ragon slayer syndrome going on here? You know, tobacco control believed they licked big tobacco in the nineties and 2000. And now through vaping, your business and others have found new life and an innovative way to hook a new generation on nicotine.
MOIRA: Well, again. Which dragon are they trying to slay? You know, this this fight and I believe in the nineties and so on. It was absolutely right that these organizations had to address the problem of smoking, but that's morphed into just fighting against tobacco companies. And I think the problem of smoking is somehow being forgotten and if you like. And that's because it's become a fight against tobacco companies and particularly my company. They haven't looked at the company we are today. They haven't such a thought through, I think. What does this fight mean today, given that Philip Morris International now has gone all in for better alternatives to cigarette smoking? And I think there just needs to be a little pause. Let just take a pause and say, okay, what would be the best step now for these organizations and individuals? What would be the best thing for public health that they could fight against or fight for? And I'm not sure that it's fighting against smoke free alternativesnd Philip Morris International.
BRENT: With all that in mind, Dr Gilchrist, is PMI looking for a redemption?
MOIRA: This is not a religion. What we're doing is making a business out of better alternatives and going beyond that also into new streams of revenue in in wellness and health care, which is really exciting for the longer term future of our company. I'm not looking for anything from anybody other than to do what we've set out as our mission, which is to end the sale of cigarettes for our company and transform the company into something completely different.
BRENT: We just had Clive Bates on the show and he said that almost in a way, tobacco control is operating like the new merchants of doubt. They've embodied what the key thing that they blame tobacco companies for, for decades, and that was creating, you know, misconceptions, muddling, muddying the waters and so forth. What do you think of that?
MOIRA: I think there's definitely an element of truth there. I see them accusing our company of doing things that they are exactly doing themselves. Again, I think a moment of reflection is required. What exactly is the battle that needs to be fought today? And muddying the waters on the science, muddying the water, on the data that shows that we are transforming, for example, what exactly is that achieving other than utter confusion among the people that these people claim to be helping, which is adults who are smoking?
BRENT: So, Dr Gilchrist, as a journalist for 30 years, I could say two thirds of that time, you know, you give your eye teeth to have a story to take down big tobacco. But now I actually believe big tobacco on these issues more than public health. And there's only one way that happened.
MOIRA: Well, look, I think people sometimes forget that, for example, my company is a US stock exchange listed company that comes with a tremendous set of responsibilities that includes telling the truth. So saying what to investors, what we're going to do and following up on that, we can say whatever we like. We can't just make things up and leave them hanging there. We have responsibilities for telling the truth. And so that drives the behaviour that you see. There are laws and governance systems in place. That means that we have to tell the truth. We have to accurately report our science. We have to accurately, accurately, accurately report the transformation metrics, because if we don't, we'll be in a lot of trouble with the Securities and Exchange Commission, for example, What are the checks and balances for the anti-tobacco organizations? What laws do they act under? What governance structures mean that they have to tell the truth, that they are responsible for the actions that they take? I don't know what their responsibilities are, and that worries me. I know exactly that. Every single word I see in public has meaning, and I have to be very careful about it. But I'm not sure about some of these campaign groups.
BRENT: Philip Morris released this fall 2022, a white paper called Rethinking Disruption. Now, there's one section in there that was titled Beyond Sectarian Arguments. I wouldn't say it was political, but it was almost putting its PMI's putting a finger on the zeitgeist of all the disruption that's going on out there. How explain that
MOIRA: Look, I think as we as we're moving through this transformation, we've recognized that the world is really polarized on this issue. Really, really polarized. And if you look through history, history at any polarized issue, the only way the issue solved was through discourse, discussion and sitting around the table and almost negotiating, if you like. When we're going through, when we're going through this radical disruption, we can expect everybody will be on side. I think that's that that wouldn't be normal. But we do expect is that people would discuss it, people would share opinions, people would give us criticism, legitimate criticism where it's necessary, but also help us if people believe that this is the right thing to do. And I think most people and most of the public believe that it's the right thing to do for tobacco companies to transform. Doesn't that deserve a rational discussion based on facts and based on a common understanding of what the problem is based on a common path forward? And I think if we can do that, we can really accelerate the end of smoking. It just requires a reasoned discussion and a commitment from everybody involved.
BRENT: Could regulation help in this effort? And if so, how?
MOIRA: Of course, regulation can help and it's something that we're working really hard to try and get in place. Regulation can encourage good behaviours and bad behaviours either way, depending on how you do it and I mean behaviours from consumers and also behaviours from industry, tobacco companies. So you can incentivize smokers to switch. If they don't quit, you can incentivize them to switch to smoke free alternatives or not through regulation, through taxation, through providing information, etc. You can do the same with tobacco companies. You can create regulation that incentivizes tobacco companies to go faster towards products with the potential to reduce the risk of smoking related diseases. Or not, it's a choice for governments. We would rather they chose to incentivize us to go more rapidly. And we've done a lot of thinking about the tools that could be put in place from a regulatory and policy perspective to do that. And we're happy to discuss these with anybody, with any of the campaign groups, with any government, with any scientist, and get their feedback on what policies can really accelerate the end of smoking.
BRENT: Will PMI win the fight to create a smoke free future?
MOIRA: It's not a case of PMI winning. It's a case of adults who otherwise would continue to smoke winning. That's what I want to see happen. I want to see everybody who wants to continue using a tobacco or nicotine product, having the choice to choose one that's better than a combustible cigarette.