Health Advocates Target Philip Morris’ US Launch of Heated Tobacco Products. Is the Stock in Trouble?

In most cases, new products or services launched by large companies are greeted with interest and excitement, not resistance or resentment. However, this does not apply to the tobacco industry. Anti-smoking sentiment is still strong, and many people believe that other products in this category are the least necessary for consumers.

Therefore, it was expected that there would be institutional backlash against this. Philip Morris International‘S (afternoon -0.32%) We plan to launch the IQOS heated tobacco system in the United States. Some of the opposition is very strong and determined, perhaps strong enough to threaten the company’s very survival.

Fierce investigation

IQOS, the next generation of cigarettes, actually has quite a long history. After a long development period dating back to the 1990s, Philip Morris began selling IQOS in some overseas markets in 2014.

Altria It had exclusive rights to sell IQOS in the United States since it was spun off from Philip Morris in 2008. However, as a result of a patent infringement lawsuit filed by a colleague, British American Tobacco (BAT), In 2021, the United States International Trade Commission banned the import and sale of IQOS.

The following year, Altria sold the rights to Philip Morris for $2.7 billion. The change in ownership began on May 1.

Earlier this year, another path was opened when Philip Morris and BAT settled their patent dispute. So now Philip Morris can bring IQOS to our shores, with only the US Food and Drug Administration (FDA) giving it the go-ahead, and it has filed a number of official documents in its efforts to do so. Meanwhile, many health and advocacy groups appear determined to stop the introduction.

Six organizations, including the American Heart and Lung Association, the American Academy of Pediatrics and the American Cancer Society, drafted a letter to FDA officials in June about IQOS.

In a letter to Brian King, director of the FDA’s Center for Tobacco Products, they wrote, “Recent studies of the effects of IQOS in other countries have failed to demonstrate a public health benefit from the introduction of IQOS.” This refutes the company’s claim that IQOS is a “reduced risk” tobacco product compared to traditional cigarettes.

The protesting parties also claim that Philip Morris “repeatedly made misleading and deceptive statements falsely implying that the FDA had determined that IQOS reduced the risk of disease.”

The launch of IQOS is inevitable

Generally speaking, there is little love between the public and Big Tobacco in this country. So no matter how strongly Philip Morris argues about the supposed benefits (or “reduced risk” profile) of IQOS, many consumers or regulators are unlikely to be convinced that it is the product they need.

But that doesn’t really have to be the case. Cigarettes are still widely sold nationwide, just as they used to be, and there’s no logical way to keep these products approved while the FDA refuses to approve a heated tobacco platform. And while those six organizations have some size and power, the tobacco giants have enormous capital to invest in lobbying. Philip Morris can continue to fund the regulators for years, even decades, until they give in.

So I don’t think Philip Morris’ business is at stake in this dispute (and this is basically a normal fight for all tobacco products). Whether this year, 2025, or even 2030, IQOS is very likely to hit the market sooner rather than later. The American Cancer Society and its allies won’t like it, but Philip Morris investors will be happy. After all, a wide national rollout of IQOS will only improve business in this country.