Altria Lays Road Map for 2018

By 
Angel Abcede, Senior Editor/Tobacco, CSP

Altria HQ

SCOTTSDALE, Ariz. -- Detailing opportunities and obstacles facing the tobacco industry in 2018, three executives from Altria Group Distribution Co. discussed the company's strategies going forward with attendees at CSP’s Outlook Leadership Conference held Nov. 13-15.

Covering everything from legislative issues affecting the tobacco category to product introductions and opportunities, Altria Client Services executives Eric Barker, senior manager for local government affairs; John Hoel, director for federal government affairs; and Dan Smith, regional director for state government affairs, shared their perspectives on a wide range of issues during a session in Scottsdale, Ariz.

Here’s a breakdown …

Product opportunities

iQOS

The presenters shared Richmond, Va.-based Altria’s positioning around noncombustible products, saying that the company believes a large number of adult smokers are ready to embrace noncombustible products, particularly if equipped with accurate, science-based information about their risk. Altria is actively supporting New York-based Philip Morris International (PMI) on its application to designate iQOS, PMI’s “heat not burn” device, as a modified-risk tobacco product. (Altria has the rights to market iQOS in the United States.) “If the FDA sticks to its own timelines, we expect to see a decision on the PMTA (premarket tobacco application) sometime early next year and a decision on the MRTP (modified risk tobacco product application) by the end of next year,” Hoel said.

Altria is also continuing to focus on product development and U.S. Food and Drug Administration (FDA) filings to build out a strong portfolio of oral-tobacco and oral-nicotine products over time. Altria’s subsidiary, U.S. Smokeless Tobacco Co., “will take an important step toward our harm-reduction aspiration with our plans to file with the FDA an MRTP application for Copenhagen Snuff in the first quarter of 2018,” Hoel said. “We also plan to file our first Verve PMTA application in 2018.”

In addition, the company plans to file PMTAs for its MarkTen products in 2018, with MRTP applications to follow. Verve is a chewable tobacco product, and MarkTen is an electronic cigarette.

Federal legislative and regulatory update

The Capitol

The three Altria regulatory leaders explored FDA Commissioner Scott Gottlieb’s acknowledgement that any proposed nicotine standard would need to be part of a comprehensive package that also includes steps to foster potentially reduced-risk products. “We’ve already been working for years on key technologies to allow us to meet any reasonable potential standard. Any potential nicotine standard will go through a rigorous science- and evidence-based process before it becomes a final regulation,” Hoel said. In the interim, Altria is advancing the development of its noncombustible products portfolio and doing work to prepare for potential standards. “This will be a multiyear process, and we are looking forward to participating every step of the way.”

The panelists also commented on the N-Nitrosonornicotine (NNN) proposed rule. Earlier this year, the FDA issued a proposed rule that would establish a limit of NNN—a naturally occurring form of nicotine in the tobacco plant—in finished, smokeless-tobacco products. The panelists said this proposed rule is a “de facto ban” on smokeless-tobacco products, saying that any product standard must be technically achievable and take into consideration the economic impacts to domestic tobacco farmers and regulated entities. “We do not believe this is technically achievable, and we believe it will have a significant, negative economic impact,” Hoel said. “Before issuing this proposed rule, the FDA should have first issued an Advance Notice of Proposed Rulemaking (ANPRM).”

State and local legislative updates

Judge

Panelists commented on trade engagement, flavored tobacco and excise taxes. On trade engagement, they said the company continues its investments in what they called “local bill identification and stakeholder outreach,” emphasizing the importance of local business leaders and their perspectives.

They noted concerns with regulations in some Rhode Island jurisdictions and even some positive amendments on “problematic bills” in larger jurisdictions in California and New York, among other places.

“We carefully monitor state and local regulations, and engage when appropriate,” Smith said. “We advocate on public policy issues relevant to our companies by engaging responsibly with government officials, retailers, wholesalers, suppliers, adult consumers, employees and other stakeholders.”

Regarding flavors, the company opposes legislation that would prohibit selling certain kinds of tobacco products, for example, those with characterizing flavors. “Flavor bans can have many unintended consequences,” Barker said. “First, these types of bans can incent illicit contraband activity. And these bans discount the role that flavors could play in facilitating trial and possible adoption of potentially reduced-risk products. Any regulations regarding flavors, in particular menthol, should be undertaken by the FDA."

On excise taxes, the panelists drew similarities with flavor bans. They said excise taxes invite contraband and counterfeit-tobacco-product trafficking by creating a significant financial motive for criminals. “Flavor bans and excise taxes are unfair to the trade,” Barker said. “When adult tobacco consumers shift their purchases across state lines or to other sources, legitimate retailers and wholesalers lose sales and revenues.”