Tag: Philip Morris Interantional

  • PMI Biggest Beneficiary of HTP Tax Cuts: Critics

    PMI Biggest Beneficiary of HTP Tax Cuts: Critics

    Image: Comugnero Silvana

    Philip Morris International would be the biggest beneficiary of New Zealand’s tax cuts for heated-tobacco products (HTPs), critics told Associate Health Minister Casey Costello, according to RNZ.

    In July, Costello announced a 50 percent cut to HTP excise taxes, arguing that doing so would encourage cigarette smokers to migrate to less unhealthy nicotine products.

    The government of New Zealand will set aside NZD216 million ($127.39 million) to pay for the tax reductions.  

    According to critics, the only commercial beneficiary of the tobacco tax cuts is PMI, which is the sole supplier of HTPs in New Zealand.

    In briefings to Costello, treasury officials questioned whether PMI would pass on the excise cut to consumers given its dominance in the market, according to documents obtained by RNZ under the Official Information Act.

    “It may be that the reduction in excise taxes is not passed through to consumers in price reductions but rather is retained by the sole importer,” the officials warned.

    In response to questions about her motivations, Costello stated that she had no connections to the tobacco business. “It’s completely wrong to suggest that the tobacco industry has anything to do with these policies, which are aimed at helping people quit smoking,” she was quoted as saying.

    Costello has repeatedly said the excise tax cut for HTPs is designed to lower smoking rates by offering alternatives for people struggling to quit. She has claimed that “HTPs have a similar risk profile to vapes.”

    Treasury officials reportedly cited evidence that HTPs are more harmful than vaping.

  • PMI Sells Vectura, Exits Asthma Inhaler Business

    PMI Sells Vectura, Exits Asthma Inhaler Business

    Photo: PMI

    Philip Morris International is selling Vectura to Molex Asia Holdings for £150 million ($198 million) cash upfront and potential deferred payments of up to £148 million—about a third of the price it paid for the company three years ago. Vectura will be operated by Molex’ Phillips Medisize unit.

    In 2021, PMI paid about $1.2 billion for the U.K. maker of asthma inhalers as part of its efforts to diversify into the pharmaceutical business.

    The deal attracted heavy criticism from anti-smoking campaigners who said the cigarette manufacturer should not benefit from a company that offers treatments of ailments caused or worsened by tobacco products.

    The fierce opposition played a roll in PMI’s decision to sell the unit at a loss. “Despite the investment and commitment to developing products and therapies vital to patients, unwarranted opposition to PMI’s transformation has impacted Vectura’s scientific engagement and commercial CDMO [contract developing and manufacturing organization] relationships.” PMI wrote in statement.

    “With its experience in pharmaceutical drug delivery devices and its global manufacturing footprint, Phillips Medisize is best placed to lead Vectura into the future—while releasing it from the unreasonable burden of external constraints and criticism related to our ownership,” said PMI CEO Jacek Olczak.

    Vectura is part of a “health and wellness” unit that also includes Fertin Pharma, the producer of a smoking-cessation aid, that PMI bought for about $820 million in 2021. Last year, PMI took a $680 million impairment charge on the unit after unsuccessful clinical trials and slower-than-expected development of other products.

    Selling Vectura will allow PMI to “rid itself of a financially struggling unit,” said Kenneth Shea, a Bloomberg Intelligence analyst. “But it also represents a strategic backpedal to the company’s once-bold ambition to serve the inhaled therapeutics medical market,” he added.