After running its course, the original Call for Leaders – 3Q was completed successfully, achieving its intended purpose of bringing a positive, insightful, or otherwise constructive view of the Romanian business scene in the context of the current crisis. Now, Business Review followed up with some of Romania’s top professionals and entrepreneurs for #Call4Leaders part II – Back in Business, to see how they mapped out the long-awaited return to normality.
Current conversation: Branislav Bibic, Managing Director Philip Morris Romania
- How do you define the new normal that everyone should submit to?
The pandemic has altered our lives in many ways, some of which are here to stay, leading us to redefine our concept of “normal”. It has impacted and will continue to have an impact at a personal level, but also on macro-systems and economies. This is an abrupt and unprecedented shift, but it also presents an opportunity for us to pivot. Both as individuals and as organizations we need to adapt to the new conditions and make the most of them. In the case of companies, success will depend on the continuous innovation of the business model with agile, open collaboration. The ”new normal” offers us the chance to be more creative in what we are doing, to innovate, to react fast, to value the science, and, at the same time, to put human capital front and center of our actions, for both employees and consumers. COVID-19 showed us the weaknesses across all dimensions and forced us to find solutions to correct them, to change and to improve ourselves.
We don’t yet know what our ”new normal” will look like, but we do know it will undoubtedly be very different to what we had before. This unprecedented public health crisis requires the entire global community to come together and help those in need. We believe we have a responsibility to help where we can. Protecting people, families and communities is what matters.
- Has this crisis altered your optimism or hopes for your business plans in this calendar year?
Protecting the safety, health and livelihoods of our employees and their families has been at the center of our response to the COVID-19 crisis; but we have not stopped there. We have been actively working against this pandemic since its outbreak, with ongoing and planned initiatives to support society and consumer needs.
Despite a semester that has been a challenge for everyone, we are pleased with the performance of IQOS, whose market share continues to grow both locally and globally. This is a testament to the strength and agility of our business model, which is increasingly focusing on digital channels – one of the lessons that we have learned from this period.
Since the onset of COVID-19, Philip Morris International has undertaken a number of business continuity measures to mitigate potential disruption to operations and route-to-market in order to preserve the availability of our products to customers and adult consumers.
Above all, we will continue the transformation process through which we want to turn into reality Philip Morris International’s vision of a smoke-free future.
- What’s next for the industry you are currently representing?
In changing times, one can always choose to do nothing. Instead, we are continuing on the course that we have set for the company. We’ve chosen to do something really big: we’re creating a future PMI that will be remembered for replacing cigarettes with a portfolio of revolutionary products.
Our strategy remains unchanged: we are 100% determined to continue developing the portfolio of reduced risk products and to offer the millions of adult men and women who smoke cigarettes in Romania and around the world, better alternatives to smoking. We continue our investments in Romania, with HEETS and IQOS, our heat-not-burn products, representing the central point of our strategy. Thus, our vision is to build a smoke-free future and transform the tobacco industry by developing smoke-free products that are a much better choice than cigarette smoking.
This transformation process is based on the results of top scientific research, capitalizing on the latest technological discoveries in the field, while also building on an organizational culture based on agility, openness, cooperation and flexibility. All these attributes facilitate the adaptation to the new conditions dictated by the external environment. We want online marketing channels to continue to grow in importance, and our experts are constantly working to adapt internal processes to the new conditions; to protect the health of employees, consumers and business partners.
Editor’s note: Following the July 7 decision made by the FDA (United States Food and Drug Administration) which granted IQOS as the first and only MRTP (Modified Risk Tobacco Product) for an electronic nicotine product, Business Review wanted to know more about this decision which could change Tobacco Products forever, so besides the usual 3Q of the Call4Leaders series, we asked Branislav Bibic more about the FDA ruling and what it means for the tobacco industry and society at large.
What does the FDA decision mean for Philip Morris International and for Philip Morris Romania?
This is a historic decision. It marks the first time that FDA has granted modified-risk tobacco product (MRTP) marketing orders for an innovative electronic alternative to cigarettes. FDA completed its scientific review of Philip Morris International’s evidence package—and independent studies—and decided that it is appropriate to communicate to legal age smokers that switching completely from conventional cigarettes to the IQOS system significantly reduces your body’s exposure to harmful or potentially harmful chemicals. This decision confirms that IQOS is distinctly different from cigarettes because it has been demonstrated to reduce exposure to harmful or potentially harmful chemicals and that this information should be communicated to consumers to help guide their choices. We believe now is the time to rapidly shift adult smokers away from cigarettes and that scientifically substantiated better alternatives like IQOS represent a public health opportunity.
Even if the FDA decision concerns only the United States, it is a reference decision for the company internationally, in all 57 markets in which we are present with this device and we have the responsibility to offer all users as much information as possible about our products so that they can make the best choices on a personal level.
Is PMI pursuing a similar decision within the European Union?
The MRTP designation applies to the US. We encourage governments around the world and public health bodies, like the WHO, to review the evidence and take urgent steps to allow men and women who smoke to have access to, and information about, scientifically backed smoke-free products like IQOS. By doing this, society has the opportunity to dramatically accelerate the end of smoking globally.
Each country has its own set of legal standards that govern permissible consumer communications, including the standards for scientific evidence of reduced risk. Those standards are often very different from the standards that the US FDA must follow pursuant to the Family Smoking Prevention and Tobacco Control Act. We ensure that any information we provide to adult consumers is accurate and non-misleading and in line with local law.
What does it mean for the society, at large?
In taking the decision to authorize IQOS as a modified risk tobacco product, the agency found that the exposure modification order is appropriate to promote the public health. It concluded that the available scientific evidence demonstrates that IQOS is expected to benefit the health of the population as a whole.
Do you see the Romanian market prepared for a shift from classic cigarettes to heated tobacco products and how fast do you think this shift can happen?
The best choice for anyone is to never start smoking, or to quit altogether if they are already smoking.
For those who don’t quit, the best thing they can do is switch to a scientifically substantiated smoke-free product. In order to make the best decision for them, they must have access to the right information. We will continue to develop smoke-free, scientifically based products, which we will subject to extremely rigorous evaluations, in order to offer alternatives that have the potential to be less harmful than continuing smoking to almost over 1 billion adult smokers worldwide and to almost 5 million adult smokers in Romania.
Data from countries where IQOS is available for sale shows that approximately 70% of smokers who purchase IQOS abandon cigarettes completely. Independent studies have found that the introduction of IQOS in Japan, the country with the highest number of IQOS users in the world, is most likely the main driver behind accelerated decline in cigarette sales in Japan. The researchers found that the decline in cigarette sales increased five-fold following the introduction of IQOS, without increasing the overall sales of tobacco products.
Based on what did FDA decided to authorize the marketing of IQOS in the US? What data did Philip Morris International submitted to FDA?
Philip Morris International submitted a huge body of evidence to the FDA, in accordance with the law in force in the USA. The data package contained detailed information, from the description of the product and any proposed advertising and labeling, the conditions for using it, to research findings conducted, supported, or possessed by PMI relating to the effect of the product on tobacco-related diseases and health-related conditions, including information both favorable and unfavorable to the ability of the product to reduce risk or exposure and relating to human health. In addition, the FDA was able to request further information as the case was reviewed.
PMI’s application was publicly available on the FDA’s website, made open to comments from the public and subject to a hearing by FDA’s Tobacco Products Scientific Advisory Committee.
How long did the FDA evaluation process take?
The evaluation process conducted by the FDA is extremely complex and rigorous and took about three and a half years. In December 2016, our company submitted the first body of evidence, a data package containing more than one million pages. In 2019, the FDA authorized the commercialization of IQOS in the United States, but then the authorization did not allow communication to adult smokers of information about reduced risks or reduced exposure to harmful or potentially harmful chemicals. By its July 7th, 2020 decision, the FDA allows Philip Morris International to communicate to consumers in the United States the information about reduced exposure to harmful or potentially harmful chemicals if they completely switch from cigarettes to IQOS.
What will be next in terms of studies and researches for IQOS?
We are proud of this achievement, but Philip Morris International will not stop its research here, our clinical and pre-clinical research process is being planned already for the next decade. We continue to make efforts in order to reach our objective: replace cigarettes with better alternatives for the millions of adult smokers who would otherwise continue to smoke.
Will products like IQOS help in creating a completely smokeless future?
As I was saying before, the best choice is to never start smoking, or to quit altogether. For those who don’t quit, the best thing they can do is switch to a scientifically substantiated smoke-free product. We, as an industry, have a key role to play in developing products that reduce exposure to harmful or potentially harmful substances. Thanks to the imagination and perseverance of thousands of people at PMI, we have developed breakthrough products that are smoke-free and enjoyable and are key to creating a smoke-free world.