PMI to Bypass Import Ban by Manufacturing IQOS in U.S.

Philip Morris International plans to manufacture IQOS in the United States to get its tobacco-heating device back on that country’s store shelves, reports Bloomberg.

The move follows an adverse ruling against the company and its U.S. partner, Altria Group, in a patent dispute with British American Tobacco.

In September 2021, the International Trade Commission (ITC) upheld an initial determination from May 2021 that IQOS infringes on two patents owned by BAT subsidiary Reynolds American Inc. (RAI).

The ITC instituted an import ban and issued a cease-and-desist order, barring Altria Group from importing PMI’s IQOS 2.4, IQOS 3, IQOS 3 Duo products into the U.S. By declining to intervene, the U.S. Trade Representative upheld the ITC finding in November, leaving PMI with the options to produce IQOS domestically or tweak the design.

A design change, however, would require authorization from the U.S. Food and Drug Administration again.

In an interview with Bloomberg, PMI CEO Jacek Olczak, said the company had planned to manufacture IQOS in the U.S. all along. “From the very beginning of us going to the FDA, we had in mind that IQOS would one day not only be sold in the U.S., but manufactured there, if you take into consideration the size of the market and the opportunity for IQOS,” he said. “It’s just happening sooner because of the ITC decision.”

In July 2020, the FDA authorized PMI and Altria to market IQOS with certain modified-exposure claims, giving the company a leg up over its rivals.

PMI has not specified where it will be manufacturing IQOS but said it plans to sell IQOS in the U.S. again in the first half of 2023.