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Tag: IQOS

Altria can’t sell IQOS device in U.S. after ITC ruling stands

Henrico County-based Altria Group Inc. and former subsidiary New York-based Philip Morris International Inc. can no longer sell the IQOS tobacco heating device in the U.S. after the Biden administration’s 60-day administrative review process concluded Monday. 

On Sept. 29, the U.S. International Trade Commission determined that the IQOS device violated two of rival R.J. Reynolds Tobacco Co.’s patents, following its investigation in response to R.J. Reynolds’ submitted complaint. The ITC decision ruled that Altria and Philip Morris International would be prohibited from importing the heating articles and components, and it issued a cease and desist. The Biden administration did not change this decision after its review.

“While this decision will cause near-term disruption, we continue to see a large opportunity for IQOS and other FDA authorized smoke-free products in the U.S. over the coming years,” Philip Morris said in a statement.

The ITC began its investigation on May 15, 2020, after R.J. Reynolds, a subsidiary of British American Tobacco PLC, filed a complaint.

Altria and Philip Morris International began selling IQOS devices in the U.S. in October 2019 out of a mall storefront in Atlanta, later expanding its offerings into the Richmond and Charlotte, North Carolina, markets. Philip Morris International, which Altria spun off in 2008, introduced IQOS overseas in 2014, where it gained about 8 million users by 2019.

“We’ve been focused on our contingency plans surrounding sales and distribution and have been in communication with PMI on their domestic manufacturing plans,” Altria spokesperson David Sutton said in a statement. “We’re communicating with IQOS consumers regarding removal of IQOS and HeatSticks from the market, why this is occurring and that we’re working on contingency plans to make these products available again at retail.”

The device heats tobacco without burning it, and the U.S. Food and Drug Administration had allowed Philip Morris to market an early version as a “modified risk” product.

R.J. Reynolds has filed two claims with the U.S. Patent and Trademark Office over the IQOS system. The agency is expected to rule on the claims in 2022.

Altria names two new board members

Henrico County-based Altria Group Inc. announced the elections of two board members Wednesday and its third quarter earnings Thursday.

Marjorie M. Connelly and R. Matt Davis joined Altria’s board of directors.

“Both Marge and Matt bring a tremendous amount of senior-level public company experience,” Altria Board Chair Kathryn McQuade said in a statement. “I believe that their significant expertise, including in operations, business strategy, consumer insights and public policy, will enhance the board’s strategic oversight.”

Connelly was the chief operating officer of Cincinnati-based customer management company Convergys Corp., now integrated into Fremont, California-based Concentrix Corp., from November 2014 until December 2017. She has also held leadership positions with credit card company Barclaycard, now-defunct Wachovia Securities and McLean-based Capital One Financial Corp. Currently, she serves as a director of Norfolk-based debt collector PRA Group Inc. and as an adviser to Philadelphia-based MissionOG, a venture capital firm. Connelly will serve on several Altria committees: audit; innovation; and nominating, corporate governance and social responsibility.

In 2018, Davis retired from his roles as Dow Inc.’s president of North America and senior vice president of global corporate affairs, a position he had held since 2016. From 1987 to 2016, Davis held varying roles with Dow Inc. Since 2019, he has served as president of leadership training company Driftwood Leadership LLC. He will serve on the following Altria committees: finance; innovation; and nominating, corporate governance and social responsibility.

John T. Casteen III, a director since 2010, will retire from service on the board when his term ends.

Altria reported almost $6.79 million in third-quarter profits Thursday, bringing the company’s year-to-date revenues to nearly $19.76 million.

Altria wholly owns Philip Morris USA Inc. and has exclusive U.S. commercialization rights to the IQOS Tobacco Heating System, which the U.S. International Trade Commission ruled in late September the companies must stop selling and importing. The decision was the result of a patent case brought by R.J. Reynolds Tobacco Co. The ban will take effect near the end of November, after the conclusion of a two-month administrative review. Philip Morris has said it plans to appeal the ruling.

FDA authorizes sale of Altria’s IQOS 3 device

The third generation of Altria Group Inc.’s IQOS tobacco heating system device has been authorized for sale in the United States by the U.S. Food and Drug Administration, the Henrico County-based company announced Monday.

After receiving an application from Philip Morris International, the FDA ruled that IQOS 3 can be sold to adults in the U.S. market. IQOS, which was launched in the United States last year through an exclusive license with Philip Morris USA and Altria, uses tobacco-filled Marlboro HeatSticks that are heated but not burned. It is available in Richmond and the Atlanta and Charlotte, North Carolina, markets. The FDA review says that IQOS 3 has a similar design to its predecessors and that its nicotine exposure, abuse liability, use patterns and user populations are virtually the same as the two previous versions.

Altria markets IQOS as a way for adult smokers to transition from combustible cigarettes to noncombustible smoking devices. HeatSticks are required by law to come in menthol and tobacco flavors only so as not to be attractive to underage users. The IQOS 3 device offers longer battery life, faster recharging and magnetic closure, according to Altria.

In July, the FDA ruled that the IQOS 2.4 system was allowed to be marketed as a “modified risk” product, a safer alternative to cigarettes. Philip Morris will have to file a second application with the FDA seeking authorization of a reduced exposure claim for IQOS 3, which it plans to do, according to the company.

A longtime Fortune 500 company listed among the S&P 500, Altria is the parent company of Richmond-based tobacco products manufacturer Philip Morris USA, best known for its Marlboro cigarettes brand.

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Altria’s tobacco heating system approved as ‘modified risk’ product

Henrico County-based Altria Group Inc.’s IQOS tobacco heating system will be allowed to be marketed as a “modified risk” product, the U.S. Food and Drug Administration ruled Tuesday.

IQOS is available in 53 countries, and more than 10 million people have purchased the system, which is marketed to adult smokers seeking to quit cigarettes. According to Philip Morris USA, the Altria affiliate that markets IQOS in the United States, the product will be able to be marketed in the U.S. as a lower risk alternative to combustible cigarettes.

“Our 10-year vision is to responsibly lead the transition of adult smokers to a non-combustible future,” Altria CEO Billy Gifford said in a statement Tuesday. “IQOS is a key part of that future as we develop our portfolio of FDA-authorized, non-combustible products and actively switch adult smokers to them.”

The IQOS line of products, which heats but does not burn tobacco like cigarettes, was launched commercially in April 2019 after two years of research and development, and an initial authorization by the FDA. The electronic device heats a Marlboro HeatStick (limited by law to tobacco and menthol flavors) filled with tobacco, and is recharged like a cell phone, with a charging device and plug. The system, which includes 10 packets of 20 HeatSticks, retails for $80.

In a release from the FDA on Tuesday, Mitch Zeller, director of the FDA’s Center for Tobacco Products, wrote, “Data submitted by the company shows that marketing these particular products with the authorized information could help addicted adult smokers transition away from combusted cigarettes and reduce their exposure to harmful chemicals, but only if they completely switch. The FDA will closely monitor how IQOS is used by consumers to determine if these products meet this potential and do not cause increased use among youth.”

The FDA ruled that available evidence shows that heating tobacco rather than burning it reduces the production of 15 harmful and potentially harmful chemicals, although the agency cautions, “these products are not safe nor ‘FDA approved,'” and the company is not allowed to make any other claims of modified risk in its marketing. Altria’s Philip Morris Products S.A. also is required to conduct post-market surveillance and studies to “determine the impact of these orders on consumer perception, behavior and health…. The company must also keep the FDA apprised of efforts to prevent youth access and exposure.” The authorization will expire after four years, and the company must renew authorization to continue marketing the product as “modified exposure.”

In the past two years, the FDA and other officials have raised alarm over the number of teenagers using e-cigarettes and suffering serious and occasionally deadly lung ailments when using black-market drugs in vaping devices, although those products are different from the IQOS system. Last year, all vape flavors except tobacco and mint were banned — including fruit and candy, which were blamed for part of the appeal to underage vapers.

R.J. Reynolds’ parent company, British American Tobacco, sued Philip Morris International Inc. in April for patent infringement in the U.S. District Court for the Eastern District of Virginia, alleging PMI had used copyrighted technology in its IQOS product and Marlboro HeatSticks, which leads the heat-not-burn market. Altria’s e-cigarette and smokeless tobacco divisions, in turn, filed suit in May against Reynolds for patent infringement on Juul Labs Inc.’s e-cigarettes, in which Altria owns a 35% stake.

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