GTNF 2023: Growing Competition in Harm Reduction Products

On the morning of September 21, during the third day of the GTNF Forum, participants engaged in discussions surrounding "Reducing Harm to the Economy: Theory and Practice." By presenting data, they demonstrated the current global status of harm reduction products. The conclusion drawn was that in the future, competition among various types of harm reduction products will intensify.

The forum was hosted by Sinclair Davidson, a renowned writer and economist. The distinguished panel of speakers included Paul Blair, the Regional Director of External Affairs at PMI International; Anna Choi, an Assistant Professor in the Department of Public Administration at Sejong University; James Lambert, the Director of Asian Economic Consultancy at the Oxford Economics Research Institute; David Levy, a professor of oncology at Georgetown University; and Tim Phillips, the Managing Director of Tamarind Intelligence.

The guests showcased the distribution of new tobacco products worldwide through data. The usage rate of reduced-risk products has been steadily increasing, with a compound annual growth rate of 69% for nicotine pouches and 32% for heat-not-burn products in the North American market from 2019 to 2023. The market size for e-cigarettes in the region has grown at a compound annual growth rate of 11%. In Europe, the Middle East, and Africa, the compound annual growth rate for nicotine pouches is 41%, while it is 21% for heat-not-burn products and 7% for e-cigarettes. In the Asia-Pacific region, the compound annual growth rate for heat-not-burn products market size is 7%.

According to data, the top eight countries in terms of sales for heated tobacco and e-cigarettes in 2022 are the United States, Canada, Russia, the United Kingdom, Germany, Italy, Japan, and South Korea.

The attending guests expressed that the current positioning of e-cigarette companies in the United States is unclear due to the FDA's PMTA approval process. The only e-cigarette company without a tobacco background that has obtained PMTA approval is NJOY, which recently was acquired by Altria. Currently, it seems that no other independent e-cigarette company without a tobacco background has been able to pass PMTA. In the HNB field, PMI appears to be prepared to enter the US market, while Altria and JTI are collaborating to enter the US market, indicating the presence of competition in this sector. A similar situation has arisen in the nicotine pouch market, as ZYN and On are competing against each other.

Furthermore, in South Korea, the smoking rate among men is as high as 35%. Currently, 85% of those using ENDS are smokers, 12% used to be smokers, and 3% have never smoked before. However, the government's attitude towards harm reduction alternatives is extremely negative. They frequently promote the idea that harm reduction cannot help with smoking cessation, which also influences consumers' choices. This highlights the significant impact the government's attitude towards harm reduction products has on the future of these products.