Smoke Signals: Why a Tobacco Giant Is Backing a Tough New Anti-Tobacco Bill

Smoke Signals: Why a Tobacco Giant Is Backing a Tough New Anti-Tobacco Bill

The U.S. Senate on Thursday struck the most devastating legislative blow in
history to Big Tobacco, giving the Food and Drug Administration authority
over the industry. The new bill, which passed in the House in April,
includes tough new restrictions on advertising, like allowing only black-and-white-text ads in magazines with substantial youth readerships;
mandates that manufacturers prove or stop using claims like “light” and “low
tar”; a ban on flavored cigarettes ; and provisions for large,
graphic warning labels. So why, then, is tobacco giant Philip Morris, unlike
its industry brethren, celebrating the unprecedented oversight?

When Senator John McCain introduced FDA regulatory legislation in 1998, the company spent a reported $100 million successfully fighting it. But since then, Philip Morris has had a crucial realization. With 50% of the U.S. tobacco market already safely in the company’s pocket — including the more than 50% of 18-to-25-year-olds loyal to its top brand, Marlboro — restrictive legislation will effectively lock in its market dominance, preventing any competitors from taking a bite out of Philip Morris’s very lucrative business.

The company’s main rival, R.J. Reynolds,
manufacturer of Camel cigarettes, is still in dismay over Philip Morris’s reversal
from regulation opponent to champion, and the third largest cigarette
manufacturer, Lorillard, has labeled the legislation the Marlboro Monopoly
Act. Each argues that as the new restrictions cut off most remaining avenues available for
advertising and ban marketing stunts like free-sample cigarette giveaways, the companies’
ability to “communicate” with potential and existing smokers about their
products will be blocked. In addition, the administrative costs of complying
with FDA regulations favor large manufacturers over smaller ones.

But there’s another key reason Philip Morris lobbied hard for FDA
regulation, aligning itself with strange bedfellows like the Campaign for
Smoke-Free Kids, the American Lung Association and longtime antismoking
crusaders Senator Ted Kennedy and Representative Henry Waxman. “Philip
Morris wants the public-health community to join them in finding the Holy
Grail: the safe cigarette,” says Gregory Connolly, a tobacco expert and
professor at the Harvard School of Public Health. Simply put, figuring out
how to produce a less harmful tobacco product and getting an FDA seal of
approval could open up a whole new, potentially huge consumer market.

There is nothing in the FDA legislation that expressly favors Philip Morris
when it comes to innovation and new-product development, but the company has far deeper
pockets, putting it at a distinct advantage over its competitors. In 2007, the same year
that nearly identical FDA legislation was introduced in Congress, Philip Morris
opened a 450,000-sq.-ft. research facility in Richmond, Va. The complex
is filled with hundreds of employees, including scientists studying new
tobacco technologies that Philip Morris is hoping to get through the new FDA
approval process.

“Working on products that are potentially less harmful is
something we’ve been working on for some time,” says company spokesman
William Phelps. A June 10 market-research report from the firm Fitch Ratings
says Philip Morris spent $232 million on tobacco research and “reduced-harm
products” in 2008. And just in case the FDA agrees with Big Tobacco that
chewing instead of smoking the leaf is “safer,” Philip Morris and R.J.
Reynolds have acquired the largest and second largest chewing-tobacco
companies, respectively, in the past four years.

This support of increased government oversight, which Philip Morris first
endorsed in 2001, has given even some backers of the bill pause. “It is a
concern that the tobacco industry is involved” in the legislation, admits
David Burns, a leading tobacco researcher who has testified in court that
“light” cigarettes are no less harmful than regular ones and conducted studies for the World
Health Organization and U.S. government. Big Tobacco “has a very dark and
aggressive history of trying to change both science and public policy to its
economic favor,” he says. Still, like the vast majority of the public-health
community, Burns is in favor of FDA regulation that will hold tobacco
companies responsible for the claims they make.

Waxman, chairman of the House Energy and Commerce Committee and a champion of
the new legislation, says while “there is no such thing as a safe
cigarette,” the FDA regulatory structure will allow for research into how
to reduce the harm of tobacco. “It’s unusual to be on the same side as
Philip Morris,” he admits. “But their reasons are not our reasons. The bill
is a good bill. If they happened to support it, that’s fine with me.”

But the notion that it’s even possible to “reduce the harm” of tobacco
is making some public-health officials bristle, even as tobacco executives’
mouths are watering. “If we get someone to quit, it’s far better than giving
someone something with lower levels of toxins. You may delay it, but you’re
still going to die,” says Connolly. Critics also worry that having an implied stamp of approval on tobacco products from the FDA — which has traditionally governed the manufacture and sale of things like cosmetics, food and pharmaceuticals deemed safe — could give the misleading impression that cigarettes aren’t health hazards.

Still, after all the negative publicity and revelations about Big Tobacco over the past two decades, it’s hard to imagine there’s a whole untapped market of
Americans who will jump at the chance to enjoy supposedly “harm-reduced”
tobacco and nicotine. But when the alternative is fighting a losing
battle against regulation, it’s a gamble Philip Morris is happy to take.
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