By Chris Kirkham
(Reuters) - The U.S. Food and Drug Administration on Tuesday said it would allow Philip Morris to sell a heated tobacco product called IQOS in the United States, a major victory for the international tobacco giant as it looks to sell more alternatives to traditional cigarettes.
Following a review of about two years, the FDA determined that authorizing the device for sale in the U.S. market was "appropriate for the protection of public health" because the products produce "fewer or lower levels of some toxins than combustible cigarettes."
Unlike combustible cigarettes, the IQOS devices heat tobacco-filled sticks wrapped in paper, which generates an aerosol that contains nicotine. They are different from e-cigarettes such as the popular Juul device, which vaporizes a nicotine-filled liquid.
The FDA's move is certain to add fuel to a growing debate among public health advocates on whether such smoking alternatives shift lifelong smokers to less harmful products or risk addicting a new generation to nicotine. E-cigarette use among middle- and high-school students surged last year, according to federal data, sparking a crackdown on the device makers by the FDA.
Altria Group Inc, which sells Marlboro cigarettes in the United States, will market IQOS devices as part of a licensing agreement with Philip Morris International.
Altria Chairman and Chief Executive Howard Willard said the IQOS will first be introduced in the Atlanta area, through an IQOS-branded store and other convenience store outlets such as Cirle K. The products will be sold in Marlboro and Marlboro menthol flavored varieties.
The move gives Altria yet another stake in a product designed as an alternative to traditional cigarettes, following its $12.8 billion deal in December to take a 35 percent stake in Juul Labs Inc.
Unlike the Juul, where users insert a pre-filled, flavored nicotine cartridge into a device resembling a USB, IQOS users insert what looks like a miniature cigarette into the end of a device, which heats the tobacco for inhalation.
André Calantzopoulos, CEO of Philip Morris International, called the FDA announcement a milestone. "All of us at PMI are determined to replace cigarettes with smoke-free alternatives that combine sophisticated technology and intensive scientific validation," he said.
While Tuesday's FDA decision allows Philip Morris to sell IQOS products, they must carry similar warning labels as traditional cigarettes and are subject to the same restrictions on television, radio and print advertising.
The FDA also placed restrictions on how the products can be marketed on the internet and through social media.
The FDA is still reviewing the company's request to make claims that the products pose less of a health risk than cigarettes.
IQOS is currently available in Japan, South Korea, and throughout much of Europe. Tuesday's announcement by the FDA opens a huge market for the devices and the decision is likely to be cited by health regulators in other countries as Philip Morris expands distribution.
Japan was one of the first markets where Philip Morris introduced IQOS, and it remains one of the most popular markets for the devices. E-cigarettes using liquid nicotine are not allowed in Japan, meaning heat-not-burn devices such as IQOS have less competition from vaping devices.
Philip Morris International has made the IQOS a centerpiece of what it is calling its “smoke-free future” initiative, which the company has promoted heavily in full-page newspaper advertisements in the United States and across the world.
Company executives have promoted the idea that non-combustible products such as IQOS will replace cigarettes and that the company is well positioned to help smokers switch to less harmful products.
Anti-smoking and public health advocates have criticized the campaign, asking why the company does not stop selling cigarettes altogether.
Last year Philip Morris International derived about 14 percent of its annual revenue from "reduced-risk products" such as IQOS.
In its review of the IQOS product, the FDA found that Philip Morris' studies "do not demonstrate reduction in long-term disease risks," but found that smokers who switch completely to the IQOS "will have reduced toxic exposures and this is likely to lead to less risk of tobacco-related diseases."
The FDA's review found that current cigarette smokers were the "most likely" group to use IQOS. The agency noted there was limited research on youth use of IQOS, but that data in Italy and Japan found "low uptake by youth and current non-smokers."
(Reporting by Chris Kirkham in Los Angeles and Tamara Mathias in Bengaluru; Editing by Shinjini Ganguli, Bill Trott and Tom Brown)