Tobacco industry investment in electronic nicotine delivery devices: an evolving strategy

Benjamin Hawkins, London School of Hygiene & Tropical Medicine
Ross MacKenzie, Macquarie University, Sydney, Australia

British American Tobacco’s (BAT) decision to divest its interests in its Voke inhaler and reports that e-Voke (from here referred to collectively as Voke), the first electronic nicotine delivery (END) system to receive a medical licence, is unlikely to ‘see the light of day‘ offer potentially important insights into the evolving strategies of the tobacco industry in this emerging product range. The development of Voke had led to concerns within the public health community about the involvement of the tobacco industry in the production of medical devices, which could be prescribed, and paid for, by publicly funded health systems, and could have opened up new channels of engagement with policy makers.

The company’s decision to prioritise “the Vapour and Tobacco Heating consumer segments within [their] Next Generation Product portfolio with [their] Vype and glo brands,” reinforces previous suggestions that Voke was commercially unviable. With the single exception of the 2017 media release cited here, all references to Voke have been expunged from BAT’s website. This suggests not just a reorientation of market strategy, but a more fundamental rejection of the medicalisation approaches by BAT and an attempt to airbrush these from the policy arena.

BAT’s initial investment in, and subsequent rejection of, medicalisation reflect wider developments in both tobacco industry strategy and ENDs regulation. Initial investment in ENDs by trans-national tobacco corporations (TTCs) focused on electronic cigarettes (e-cigarettes), and related regulatory discussions centered on whether they should be treated as medical devices, tobacco products or as consumer goods. BAT’s investment in Voke appeared to have put them ahead of the regulatory curve in this emerging product category in key markets. In 2011 the UK Medicines and Healthcare Products Regulation Authority announcement that it would license some devices as medical products and in 2014 the EU Tobacco Products Directive took a dual approach to ENDs, allowing both medical licensing and regulation as tobacco products subject to certain criteria. However, Voke was never brought to market.

BAT’s strategic investment in medical ENDs devices appears to have been undermined by subsequent developments in the sector and, particularly, the emergence new product categories. Most notably, TTCs have invested in heat-not-burn (HNB) devices, which deliver nicotine by heating disposable tobacco cylinders that closely resemble cigarettes. Development of HNB products has been led by Philip Morris’ iQOS system, launched in 2014 in Japan and Italy and now available in 37 countries including the UK, Germany, France and Canada. BATs iFuse brand was launched in Romania in 2015 with a second product, glo, launched in Japan the following year. BAT’s decision to follow PMI into the HNB sector at precisely the moment it dropped its interest in medicalised devices signals a fundamental shift in their ENDs strategy.

The high price point and careful branding of HNB devices as aspirational consumer products is particularly apparent in the similarity of the iQOS and iFuse names and design to perhaps the most iconic of all technology brands: the iPhone. This suggests that TTCs aim to target these devices at specific socio-economic groups and demographics. Their phased introduction globally suggests they may also be aimed at particular national markets.

The precise role which this product category, and the different brands within it, will play within TTCs’ overall market strategy, both in relation to other ENDs products such as e-cigarettes and their traditional cigarette brands, requires close monitoring and analysis. The need for such scrutiny is underlined by the recent launch, and the aims and focus, of Philip Morris International’s Foundation for a Smoke-free World which underlines the emphasis TTCs are placing on new nicotine technologies and the promotion of research in this area.

Note: this article was amended on 11 May 2018 to provide greater clarity about the current status of Voke and e-Voke.

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