Monday 13 November 2017

Getting the smoke out of cigarettes

While health departments have been gripped with the challenge of cannabis reform, another recreational-drug market has also become caught up in legal and market changes.

After years of turning a blind eye to illegal vape shops, the federal government has introduced legislation to legalize electronic cigarettes and other nicotine vaping devices. Bill S-5 (the proposed Tobacco and Vaping Products Act) was introduced in the Senate last November, and is now waiting for a decision by the House of Commons.

This law addresses only one of the new categories of nicotine delivery systems – those which use the nicotine which is derived from tobacco, but which do not use tobacco in its natural form. It does not respond to many of the new nicotine delivery systems which are under development, including the tobacco-heating mechanisms which have been launched by both British American Tobacco (i-glo) and Philip Morris International (IQOS) in the months since Bill S-5 was introduced.

Philip Morris International and its main competitor, British American Tobacco (BAT) recently had their new products analyzed by the same Canadian laboratory (Labstat) that developed the cigarette toxicity testing standards now written into Canada’s tobacco regulations. When tested for over 40 toxic chemicals, the heat-not-burn products still yielded dangerous amounts of carcinogens and other toxic substances, but at substantially lower levels than regular combustible cigarettes.

The head of Philip Morris International describes these products as “better choices” for smokers.  While it is a stretch to call them “better choices,” they are, for smokers, less bad choices than continuing to smoke. 

But for the moment these products lie in a kind of legal limbo – they are subject to the federal laws that apply to all tobacco products (like restrictions on advertising), but are not captured by the regulations which are more product-specific (like health warnings and bans on flavourings). They also reveal a vulnerability in Canada’s health laws. Unlike the United States, Australia, New Zealand and many other developed countries, there is no requirement for them to be approved by any government before they can be marketed in Canada.

The manufacturers of these new types of cigarettes are using private visits with policy-makers, news events and other means to encourage regulators that the health of Canadian smokers would benefit if S-5 were changed to set (less stringent) rules for marketing heated tobacco products.

We agree with the companies that Bill S-5 should be opened to respond to these new products. In return for the opportunity to sell e-cigarettes and heat-not-burn cigarettes, the Canadian government could and should oblige the tobacco industry to phase out its most harmful products.

If tobacco and nicotine companies are offering less bad choices, why should they continue to be allowed to market the worst choice – the combustible cigarettes that kill 125 Canadians a day? It’s time to stop exempting tobacco manufacturers from consumer protection laws that ensure products are no more dangerous than necessary.

We propose that no combustible or heated tobacco product should be sold unless it meets the emission standards of these new products. This could not be done overnight, but it could be done. We suggest tobacco manufacturers have five years to improve their products or remove them from the market.

This would give the marketing edge that the companies claim they need to encourage smokers to switch to a less bad option. It is a much more prudent approach than granting their request to be able to use the tools of modern advertising and marketing to promote these brands– tools we know they would use to grow the number of people who use tobacco or other forms of nicotine.

It has been argued that forcing conventional cigarettes off the market will open the floodgates to contraband smokes. Contraband tobacco is a political and economic problem that has festered in the absence of political leadership. Phasing out combustible cigarettes could also be a springboard for the meaningful negotiation and effective enforcement necessary to wind down the contraband market.

Parliament has an opportunity in S-5 to ensure that nicotine, like gasoline and paint, is regulated so that most harmful products are phased out when better options become technically feasible.

Thursday 2 November 2017

OMG! BAT's plans for Next Generation Products

Last week British American Tobacco held an "investors day"  in London, U.K, and invited investors and analysts to learn more about its "next generation products". The 10 presentations made are now available on the BAT web-site and they are worth a very close look.*

There is much to ponder in these pages, as the company sketches out its interpretation the drivers of nicotine use, its plans to keep people using nicotine in cigarette or other forms, and the ways it intends to do.

BAT's operating framework for "Next Generation Products" like tobacco-heating and vaping products challenges the mindset of groups like our own which have for decades focused on reducing cigarette use. It goes beyond the 'harm reduction' proposals made by those within the health community who see these new technologies as an new tool to reduce the harms from nicotine addiction.

BAT's approach is the one we should expect from the manufacturers of 'fast moving consumer goods'. But it is one that was not anticipated when the Tobacco Act (or even S-5, the proposed amendments to that Act) was drafted. Indeed, their plans seem to transcend the protective measures which we have promoted and achieved through the federal Tobacco Act or the Framework Convention on Tobacco Control.

It's hard to know where to start:

What is the product?

Public health authorities continue to rely on clear distinctions between (bad) tobacco and (medicinal) nicotine. Our recent struggles on how to regulate e-cigarettes in this binary model have exposed the vulnerabilities of this approach.

BAT's risk continuum model exploits those vulnerabilities: its move towards product fragmentation works to further erase the line between the nicotine products we are prepared to accept and the tobacco products we are not.

BAT 2017 Investor day

Conversion instead of quitting
We already have a pretty good idea that the the difference between a former smoker and a relapsed smoker is often a question of months or weeks, and that successful quitting eludes too many smokers.

Rather than find a way to help people quit, BAT wants to block this process. Its goal is to "convert" dissonant smokers to other forms of nicotine use. It illustrates this in the slide below - conceptualizing that on the road to conversion the company must gain trust, and move people from thinking "Should I give up or cut back?" to "It's part of my life."


A new approach to marketing 
In its quest to "convert" would-be quitters, to establish "new behaviours" and to "acquire.. new consumers" BAT has designed a marketing approach that goes beyond the 4Ps (product, place, promotion, price) that served the industry well in recruiting 1 billion or so smokers world wide.

Now it says there is "a very different marketing 'job to be done''. It presents a series of "consumer engagements" that develop from "acquisition" (experimentation) to "conversion" and "loyalty" (addiction?).

Countries which have aligned their promotional restrictions with the FCTC article 13 guidelines on tobacco promotion will find themselves with little regulatory protection against the "social selling",  "automated hypercare" tactics that are foreshadowed here.

A cynical view of unfilled needs.
I will leave to the philosophers and economists to describe how BAT is approaching the utility or considerations that might influence a consumer to use the various products that the company has on offer. "Performance" seems to be their code-word for addiction, but the other factors it names -  affordability, social consideration, potential for reduced risk, exploration, self balance and connectedness speak to a much more granular view of attraction of smoking/using nicotine than is often presented.

This is not the first time that this industry has identified the human desire for autonomy, experience and social acceptance as needs to be filled with an addictive product. It's not often it is laid out quite so unabashedly!



There is much more insight into the plans of this company and the possible road ahead that can be mined from these presentations. What is not so clear is how -- and when -- those of us who are concerned with public health and have a responsibility to protect it will respond.


* You have to affirm before accessing them that you are an institutional investor or shareholder. With our forced investments in the company through the Canada Pension Plan Investment Board, Canadians workers certainly qualify.