PMI has submitted two applications to the U.S. Food and Drug Administration: one that would allow it to simply sell IQOS in the U.S., and another that would allow it to market it as being less risky than a conventional cigarette. Altria will commercialize IQOS in the U.S. if it receives regulatory clearance.
The latter, known as a modified-risk tobacco product application, requires an abundance of scientific evidence. The FDA has never authorized one of these requests.
Knowing the bar was high, PMI decided to build its capabilities to gather and measure clinical data. The bulk of the company's investments into IQOS and other reduced-risk products have gone into this, Calantzopoulos said.
"I think from a consumer perspective, (the modified-risk regulation) is very important," he said. "And I think also for regulators, it's important as well because they need to have a process, test it and control what manufacturers say. And it's also a level playing field for all the players because we invested billions of dollars."
Under Commissioner Scott Gottlieb, the FDA has adopted the idea that tobacco products exist on a continuum of risk, where conventional cigarettes are the most dangerous and others are possibly less harmful. Regulators and industry leaders agree most people don't understand that nicotine, while addictive, isn't deadly on its own.
Regulation on how IQOS can communicate the product with consumers affects how people switch to the product, Calantzopoulos said. PMI decided to apply IQOS for modified-risk tobacco product authorization so it could tell consumers the company's research has shown the product is a safer alternative to cigarettes, he said.
An FDA advisory committee disagreed, saying evidence doesn't back Philip Morris' claims. Its conclusion is non-binding and serves only as a recommendation to the FDA, which will make the ultimate decision.
"The FDA is largely viewed as the gold standard for scientific evaluation, so if they could get the MRTP application authorized, it would put them in a position to go to other foreign governments and use that as support on differentiated advertising and favorable tax rates," Azer said.