Philip Morris International CEO Andre Calantzopoulos said the vaping health crisis sweeping across the
U.S. right now is highly emotional and will result in a tightly regulated market within the next two to three years.
"It is a very emotional issue as we know because it involves use by teenagers and vaping and this should be the priority by everybody to address because this is a serious issue," he told CNBC's David Faber in an interview Thursday. By the end of 2021 or 2022 "we will see a highly regulated market in terms of product, marketing and other restrictions."
He avoided saying whether the surge in regulatory scrutiny and investigations into market leader Juul played a factor in the company's decision to abandon merger talks with Altria, which owns a 35% stake in the vaping company. Health officials across the globe are banning fruit-flavored nicotine pods from the market amid a surge in teen use and public health crisis.
Investigators from the Centers for Disease Control and Prevention are scrambling to figure out what's causing hundreds of people to fall ill from vaping. At least 11 people have died in recent weeks from a lung disease that resembles a rare form of pneumonia.
"In any merger, you have to take into consideration the environment, shareholder sentiment, and I would say the effort required versus the priorities we have just now on the market," he said. "So we concluded that the best course of action is to end the discussions on the merger and focus instead on the forthcoming partnership of IQOS going forward."
Calantzopoulos also said that he believes all nicotine products must be regulated.
"I think Juul and any other e-vapor product has to go through the FDA," he said. "That's something we always advocated not only the U.S. but worldwide." Regulatory oversight "creates certainty for the consumer, eliminates confusion, and levels the playing field."
Calantzopoulos said he believes the outbreak in lung illnesses aren't being caused by traditional e-cigarettes that just contain nicotine.
"It contains other substances. We should be careful not to create confusion among the millions of people that use e-vapor products," he said, adding that traditional e-cigarettes have been on the market for years without any issues. "We have to let authorities conduct an investigation, but the recommendations they issue make sense — don't buy products that are not from legitimate manufacturers, don't buy products from the black market."
CDC officials have recommended that U.S. consumers avoid all vaping products until they figure out what's making people sick.