As pharmacies around Australia become our new vape dispensers, those smokers looking to quit the habit through vaping may be surprised to learn that a familiar manufacturer is producing the pre-filled nicotine vape pods.
Subscribe now for unlimited access.
or signup to continue reading
Yes, it's your old smoking buddy Phillip Morris, home of the Marlboro man.
As part of its corporate diversification, Phillip Morris International is pushing hard into the heated tobacco, e-vapor, and oral products and also has a healthy share of the nicotine vape market, with pharmacies across the country now dispensing the company's products like the popular Veev One cartridges, which contain as much as 39 milligrams (mg/mL) of addictive nicotine.
Focus shift
Veev is the top-selling vape product across five European markets. It is distributed by national wholesaler and distributor Vapelabs, which geared up quickly to get products efficiently out to pharmacies when legislative change was in the air, with its website promoting "express delivery", "dedicated support" and "widest range".
After decades of being a tobacco-focused company, PMI now identifies the non-traditional e-cigarette and vaping market as delivering faster growth.
For multi-nationals like Phillip Morris, it is all about staying ahead of the changing consumer curve and ahead of the excise squeeze.
From September 1 last year, excise on tobacco increased every March and September. Tax now accounts for almost 80 cents in every tobacco retail dollar.
However, vapes are not subject to any excise duties or controls because while they have a nicotine content they do not meet the required definition of a "tobacco" product.
And this treatment will not change after October 1, 2024, when the need for prescriptions disappears and chemists become the new vape shops.
A therapeutic vaping substance containing nicotine also will remain GST-free after October 1.
In the fourth quarter of last year, Phillip Morris's "heated tobacco product" IQOS - which heats tobacco without burning it to generate an aerosol - overtook its leading cigarette brand, Marlboro, in terms of net revenues for the first time.
And with vapes, Phillip Morris has sniffed another market opportunity.
in its investor statement, Phillip Morris says it is "leading a transformation [to] ultimately replace cigarettes with smoke-free products to the benefit of adults who would otherwise continue to smoke, as well as to society, the company, and its shareholders".
'Not risk-free'
It claims to be undergoing the "biggest shift" in its corporate history "replacing cigarettes with smoke-free products that - while not risk-free - are a better alternative than cigarette smoking".
No mention is made of the highly favourable taxation regime for the new products in markets like Australia.
Most vapes, or e-cigarettes, contain common components such as a battery, a heating element, an e-liquid storage tank, a sensor to detect inhalation and a mouthpiece.
It's the so-called e-liquid, which is replaced as a pod, that the tobacco giants now recognise as the next big sales opportunity as tobacco sales slowly but stubbornly decline in first-world countries like Australia.
The IQOS is a different product because it contains tobacco and therefore generates similar chemicals as found in cigarette smoke.
The Food and Drug Administration in the US described IQOS as a "modified risk" compared with cigarettes but in Australia the TGA took a much harder stance, saying it could not "establish a public health benefit from greater access to nicotine in HTPs [heated tobacco products]".
Currently, vapers can only buy "therapeutic vapes" - with nicotine or without - from a pharmacy with a prescription from a medical practitioner or nurse practitioner.
From October 1, 2024, nicotine in therapeutic vapes will be classified as a Schedule 3 substance and can be supplied without a prescription to those over 18. Vapes will have to be kept behind the counter and personally handed to the patient by the pharmacist. Nicotine concentration will not be allowed to exceed 20 mg/mL.