The tobacco giant Philip Morris is trying to position itself into a pharma company—and healthcare advocates don’t like it.
On Sep. 16, Philip Morris announced a $1.52 billion acquisition of Vectura, a British company that makes asthma inhalers. It was merely the latest purchase in Philip Morris’ recent shopping spree in the healthcare sector.
Just the previous day, Philip Morris said that it would buy Fertin Pharma, which manufactures oral drug-delivery systems, for $820 million. In August, Philip Morris bought another inhaled drug firm, OtiTopic. In January, the company hired a chief life sciences officer—a former executive at Sanofi, the French pharmaceutical firm. One of Philip Morris’ older acquisitions, Medicago, even set out to develop a Covid-19 vaccine last year.
Philip Morris says it wants to move “Beyond Nicotine”
There’s a cold, bold logic in this emphasis on healthcare, a sector in which, if your products work as they should, you save lives rather than abbreviate them—the polar opposite of cigarettes. (No pharma firm ever shelled out billions in fines or lawsuit settlements for medicines that did their job.) Philip Morris calls its campaign “Beyond Nicotine,” and wants to earn at least $1 billion in annual revenue from non-nicotine products by 2025.
But that target is a pittance, relative to the company’s revenues of nearly $76 billion in 2020. And while these new acquisitions may yet turn Philip Morris into a pharma firm in the very long term, healthcare professionals are concerned that, in the short term, the company is buying companies that can feed its nicotine business.
Philip Morris’s focus on firms that specialize in inhaled-drug technology, for instance, appears to sync with its objective of moving into “smoke-free” nicotine products. (“The best choice for any adult smoker is to quit nicotine altogether,” Philip Morris says on its web site. “However, for those adult smokers who do not quit, they deserve better alternatives”—smoke-free ones, in other words.) At present, many of these smoke-free options come under Philip Morris’ IQOS brand, which heats tobacco rather than burns it. The company has claimed that IQOS is less harmful than cigarettes, only to see that claim rejected by a Food and Drug Administration panel.
Should a cigarette company treat your asthma?
Now Harold Wimmer, the president and CEO of the American Lung Association, worries “that [Philip Morris] will use the inhalation services technologies developed by Vectura to make their tobacco products more addictive.” The acquisition, he said in a statement, “creates a complex entanglement of conflicts of interest throughout the respiratory medicine supply chain that could undermine public confidence in essential medical products.”
But even beyond the strategic angle, healthcare advocates are questioning the morality of the purchase: that a company so responsible for aggravating asthma is now in a position to profit from treating it. Academics moved quickly to exclude Vectura from a pharmaceutical conference soon after they heard the news about Philip Morris’ deal, worrying that the parent company will exercise the wrong kind of influence over proceedings.
And by buying drug companies, Philip Morris perversely gains a kind of lobbying power in the healthcare sector—the sector that has spent billions trying to repair the damage done by cigarettes. Sarah Woolnough, the chief executive of Asthma UK and the British Lung Foundation, said in a statement: “There’s now a very real risk that Vectura’s deal with big tobacco will lead to the cigarette industry wielding undue influence on UK health policy.”