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What role do harm reduction products play in tobacco industry strategy?. Geoff Ferris Wayne Harvard School of Public Health Center for Tobacco Regulation U Maryland School of Law April 20, 2007. Context–the current market. Long term declines in US but continued growth internationally

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what role do harm reduction products play in tobacco industry strategy

What role do harm reduction products play in tobacco industry strategy?

Geoff Ferris Wayne

Harvard School of Public Health

Center for Tobacco Regulation

U Maryland School of Law

April 20, 2007

context the current market
Context–the current market
  • Long term declines in US but continued growth internationally
  • Market consolidation
  • Strategic acquisitions targeting new populations and markets
    • Altria  Sampoerna (2nd largest producer of cigarettes in Indonesia, primarily kreteks)
    • RAI Conwood (2nd largest smokeless manufacturer in US, other cigarette companies following suit)
context the current market3
Context–the current market
  • Accelerating movement toward regulatory oversight, as well as greater coordination of strategies and approaches (e.g. via FCTC/ WHO)
  • Heightened public awareness of health burden of tobacco
  • Heightened public mistrust of industry
  • Greater vulnerability in litigation
    • Response by manufacturers: emphasis on perceived corporate social responsibility and public image, dialogue and cooperation
context brand development
Context–brand development
  • Brand proliferation, particularly by expansion of popular brands (Marlboro, Camel) into new line extensions
  • Flavored products
    • KOOL Smooth Fusions

Midnight Berry, Caribbean Chill,

Mocha Taboo, Mintrigue

    • Exotic Camel

Mandarin Mint, Twist,

Izmir Stinger, Crema, Dark Mint

    • Also: cigars, bidis, smokeless,

waterpipes, rolling paper

context brand development5
Context–brand development
  • New conventional

delivery technologies

    • Filter pellet
  • Introduction of new

smokeless products

    • RAI  Camel Snus
    • Altria  Taboka
    • Smokeless line extensions of BAT cigarette brands (e.g. Lucky Strike)
  • Reduced harm products/ PREPs
some open questions
Some open questions
  • What market considerations provide the primary motivation behind development of PREPs?
    • Threat of litigation or anticipated regulation
    • Need to expand or develop new markets
    • Competition among manufacturers
  • Are PREPs different from other industry product innovations?
  • Are PREPs developed in response to the same or different market considerations from other product innovations?
slide7
One approach to answering these questions is to study the industry:
  • Market/ analyst reports
  • Public statements
  • Internal documents
  • Trial testimony
analysis of industry trial testimony
Analysis of industry trial testimony
  • How PREPs are described or presented in comparison to conventional cigarettes
  • How market success or failure of PREPs is defined
  • How PREPs are described with respect to their potential “safety” or potential for harm reduction
    • Do these change over time? (1996-2003)
comparison to conventional cigarettes
Comparison to conventional cigarettes
  • Language used to describe PREPs is more excited/ radical in earlier testimony than in later testimony
  • Earlier testimony contrasts conventional products with PREPs; later testimony tends to promote similarities (continuum)
  • In later testimony, difference is not a positive attribute (i.e. “next generation”) but a negative (i.e. challenge to be overcome)
market success and failure
Market success and failure
  • Earlier testimony evaluates PREPs based on their market performance; later testimony avoids evaluations of market failure
  • Later testimony focuses on test markets as a vehicle for gathering information rather than as a means of demonstrating market acceptance
  • In later testimony, positive expectations are relied on to provide a sense of progress despite the ongoing reality of continued market failure
conclusions based on testimony
Conclusions based on testimony
  • At least some within the industry appear to have been convinced early on that they were on the verge of the “next big thing”
  • Failures in market have curbed this enthusiasm
  • The new reality means protection of the conventional market is the primary concern
  • Introduction of PREPs is problematic because it begs the question:
      • If there is a radically different, safer alternative to cigarettes, then why are cigarettes still around?
conclusions based on testimony12
Conclusions based on testimony
  • So, the industry needs to position PREPs alongside and not separately from conventional products
    • Legitimizes the sale of conventional products
    • Legitimizes (by association) conventional “harm reduction” efforts (including low tar)
    • Shifts responsibility for harm reduction from company to consumer, as an issue of market acceptance
  • PREPs remain in indefinite test market in order to support the illusion of “choice”
slide13
Another approach to answering questions about PREPs is to study the products:
  • Market approach
  • Advertising
  • Physical and chemical analysis
  • Consumer response
  • Market impact
marlboro ultrasmooth mus
Marlboro UltraSmooth (MUS)
  • Test marketed in the US, specifically:
    • Salt Lake City, UT (Apr 2005)
    • Tampa, FL (Apr 2005)
    • Atlanta, GA (Apr 2005)
    • As Marlboro Ultra Lights in North Dakota (June 2005)
  • Uses a modified charcoal filter
  • Various configurations
sem carbon slides
SEM carbon slides

MUS Carbon Bead and interior structure

Standard Charcoal Granule and interior structure

machine smoke constituent yields intense
Machine smoke constituent yields (intense)

Percent Yield of Conventional

http tobaccodocuments org product design 508026176 6283 html
http://tobaccodocuments.org/product_design/508026176-6283.htmlhttp://tobaccodocuments.org/product_design/508026176-6283.html
consumer sensory assessment
Consumer sensory assessment

Acceptability*

Irritation

Aftertaste Amount

AftertasteQuality*

Taste Amount*

Impact/ Kick*

Taste Quality*

Mouth Full

Mouth Drying

Draw Effort

* p<0.015

summary of findings for mus
Summary of findings for MUS
  • Unique technology, but questionable value for harm reduction in comparison to conventional cigarettes
  • Consumer response to MUS is not positive, low levels of satisfaction and acceptability
  • MUS was not perceived as a safer product or as a quitting alternative
what was the objective for mus
What was the objective for MUS?
  • Why introduce a product that is clearly not ready for consumer acceptance?
  • Why attach the Marlboro name to it?
  • Is this:
    • Information gathering?
    • Stepping stone to a new product technology?
    • Protection from litigation?
    • Positioning for potential regulation?
    • Serious attempt at a competitive product introduction?
putting it all together
Putting it all together
  • Given what we learned from testimony, MUS and products like it may simply be intended to blur the line between “conventional” and “reduced harm”
  • Proliferation of new products supports the industry presumption that consumers are responsible for “choosing” harm reduction
  • This also defines the regulatory framework, in which “safer” products are placed on the market within the context of a full spectrum of conventional products
putting it all together23
Putting it all together
  • Recent market acquisitions and product innovations suggest continued expansion into alternative tobacco products and technologies
  • The objective of these product innovations is to support and expand the current market
    • Smokeless products negate impact of indoor air laws
    • Flavors/ kreteks develop alternative starter products
  • At least from the industry’s perspective, there is no magic harm reduction bullet on the horizon
conclusions
Conclusions
  • What lessons can we take from this?
    • Eliminate the false continuum of “less safe” to “safer” products
    • Place the burden of harm reduction on manufacturer, not consumer “choice”
    • Limit expansion of products in market and development and use of new technologies
  • Harm reduction products must be evaluated on the basis of their viability as a serious alternative/ replacement to conventional products
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