New Evidence on Tobacco Harm Reduction from Japan Market

Frost & Sullivan, the largest global consulting firm for corporate growth, has partnered with tobacco company Philip Morris International (PMI) to publish a 2021 paper titled "Reducing the Harms of Tobacco and New Nicotine and Tobacco Products: Evidence from the Japanese Market." The paper reveals that the introduction of HTPs has resulted in a 34% decline in cigarette sales.

The commercial viability of Japan's HTP technology is strongly linked to the sharp decline in traditional cigarette sales, exceeding previous declines. Additionally, despite the introduction of heated tobacco products, sales for all tobacco products (heated tobacco and traditional cigarettes) continue to decline. Although there is conflicting evidence, data from the 2019 National Health Survey suggests that 76% of consumers use only heated tobacco products, while only 24% of HTP users continue to smoke traditional cigarettes, according to Mark Dougan, Director of Healthcare Consulting at Sullivan.

In 2021, data shows that sales of cigarettes in Japan have decreased by 8.2% domestically.

Similarly, Japan Tobacco International's third-quarter results for 2021 have shown a decline in domestic cigarette sales in Japan for the second consecutive quarter, with a drop of 8.2% following an 8.9% decrease in the previous quarter.

As early as 2018, a pattern was observed where Philip Morris International's (PMI) IQOS heated tobacco product was cannibalizing sales of traditional cigarettes in Japan, according to a report by the Financial Times. The report showed that after a decline of 11.5% in the first quarter of 2017, "traditional cigarette shipments" fell by over 7% in 2018, while shipments of the "heated device" increased from 1.2 billion to 6.4 billion. In this period, nearly 9% of PMI's global revenue came from low-risk products, which is also the case this quarter.

HTP has played an important role in reducing cigarette sales.

Compared to 2016, the report shows a 42% decrease in the amount of traditional cigarettes now being consumed. A 2020 study by the American Cancer Society concluded that heated tobacco products "may reduce cigarette sales in Japan." Another 2020 study published in the International Journal of Environmental Research and Public Health reached a similar conclusion, stating that "the accelerated decline in cigarette sales since 2016 corresponds with the introduction and increased sales of heated tobacco products.

Similar patterns have been observed in both the UK and Sweden. In the UK, the promotion of e-cigarette use as a means of reducing tobacco harm and aiding smoking cessation has resulted in historically low smoking rates. Similarly, Sweden has achieved a smoke-free goal by legalizing snus and accepting it as a safer alternative to cigarettes.

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