Tobacco giant Philip Morris International, which now owns and operates under the name Swedish Match in Sweden and the United States, is booming on the stock market. This after the company received a scientifically based green light to continue selling the white snuff brand ZYN in the US. At the same time, the company announces an unexpected increase in profits and, above all, a 40% increase in sales of nicotine pouches.
Just a few weeks before the quarterly report, the US Food and Drug Administration (FDA) announced that the white snus ZYN will be officially authorised for sale in the country. The so-called PMTA process has taken a long time and PMI had the green light to sell the products while waiting for a decision. And the decision came with a bang.
"To obtain marketing authorisation, the FDA must have sufficient evidence that the new products offer greater benefits to population health than risks," says Mr Matthew Farrelly, Director of the Office of Science at the FDA's Centre for Tobacco Products in a press release. "In this case, the data show that these nicotine pouches fulfil this limit by favouring adults who already use cigarettes and/or smokeless tobacco products and switch completely to these products."
Cumbersome authorisation system
The US authorisation system for nicotine products differs from the European one in that each individual product has to be assessed on its own merits before the authorities grant an authorisation. The EU model is based on a general product standard and sets specific requirements. The EU Tobacco Products Directive (TPD) dictates the requirements and this currently applies to smoking tobacco and e-cigarettes but not yet to nicotine pouches.
In contrast, the US system means that each variant of a nicotine product, for example, each nicotine strength and flavour in a range of nicotine pouches or e-liquids, requires its own review. This is a process whereby research, tests and studies showing that the products are 'fit for the market' are presented in a so-called 'PMTA application' to the FDA. The costs of the whole process are borne entirely by the companies and usually amount to several million US dollars. Per product.
Difficult for small businesses to keep up
This has, according to critics, severely limited the ability of small and medium-sized companies to get their products authorised in the US. At present, only products from large tobacco companies are authorised to remain on the market. The system also means that the vast majority of cigarette brands have been approved for a long time, and that new variants of those brands are regularly re-authorised. At the same time, in the ten years since the law was introduced, some 30 e-cigarette models (disposable and pre-filled pod systems) have also been approved, all produced by tobacco companies and flavoured only with either artificial tobacco flavouring or menthol. However, ZYN nicotine pouches are authorised to be sold in a range of flavours (e.g. fruit and mint).
"Although the process is not perfect, the FDA's decision is important for the future of nicotine pouches"
Says Markus Lindblad, Head of Communications at Haypp Group and Swedish Snusbolaget, which sells nicotine pouches on the US market.
A scientific proof of harm reduction
According to Markus Lindblad the decision will strengthen the case for more harm minimisation elements in the nicotine market.
"The health risks of nicotine pouches have now been compared to the harm reduction potential of the product, all through a thorough scientific review. A similar review was done in Germany recently and all in all it is scientific proof of what we in the industry have known for a long time - that smokeless nicotine is significantly less harmful compared to smoking and the importance of smokers having the opportunity to choose and make informed decisions about their nicotine use." says Markus Lindblad to Vejpkollen.
"Matters for public health"
PMI also sees the decision as a victory. The company bought Swedish Match in 2022 and thus gained access to a wide range of both snus and nicotine pouches. Tom Hayes is CEO of Swedish Match North America.
"An estimated 45 million Americans regularly consume nicotine and about 30 million of them smoke, the most harmful form of nicotine consumption. The FDA's decision recognises the role that ZYN can play in protecting public health by helping people switch from cigarettes and other traditional tobacco products" says Tom Hayes in a press release.
