Philip Morris International meets with FDA to make its case for Iqos in patent dispute
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Philip Morris International presents an iQOS electric cigarette. This heats and not burns tobacco sticks.
AFP | AFP | Getty Images
Philip Morris InternationalThe Food and Drug Administration received a presentation from the company on Friday about why it is the largest tobacco producer. AltriaCNBC reports that the U.S. should allow importation and sale of Iqos device in its entirety.
According to a source familiar with the meeting, Philip Morris stated that Iqos was unique in both its design and the ability it has to convert smokers. The company also claims that the U.S. International Trade Commission has outstepped its boundaries, as the FDA regulates which products can be sold.
Meeting with regulators marks the latest developments in patent disputes with R.J. Reynolds (a subsidiary of). British American Tobacco In late September, the ITC ruled that the Iqos device infringedTwo of Reynolds patents. Biden’s administration will conduct a 60 day administrative review from Nov. 29 through Dec. 29, to determine whether the import or sale of this alternative cigarette product should be stopped.
Altria introduced the Iqos product in America two years ago. However, it started developing the product over a decade before Philip Morris International was spun out of the company. Users get the same buzz of nicotine as smoking a cigarette, as long as they don’t burn their tobacco.
Philip Morris has the license for Altria to market the product in the U.S. and sells it in many international markets. Iqos aren’t a substantial part of Altria U.S. operations, but they’re part of Altria’s transition away from traditional tobacco products which have fallen in demand.
After listening to the input of a variety agencies including FDA (which regulates tobacco products), the U.S. Trade Rep will recommend President Joe Biden.
Deepak Mishra of Philip Morris International’s Americas Region stated, “The president review process could disapprove the ITC’s final determination upon a few counts. And we believe there are pretty strong cases for that.” Deepak Mishra spoke with CNBC on Thursday.
Iqos’ public health benefits are the reason the company continues to sell them. Altria claimed that it has 20,000 U.S. customers who use the Iqos device and they would be able to revert to cigarettes if Iqos is removed from stores.
Mishra stated that “we are quite convinced that the vast majority of people will return to smoking cigarettes.” “… The taste is very close to that of cigarettes, so Iqos converts a lot of people who smoke to it.”
Mishra claimed that it was an argument Mishra planned to use as the company urges Biden to reverse the ITC ruling.
According to a person who was familiar with the meeting, Trade Policy Staff Committee will meet next for the administrative review. This meeting is expected to take place this week. This group comprises a variety of federal agencies including the FDA and U.S. Department of Agriculture, as well as the Department of Commerce.
Mishra stated that if R.J. Reynolds is sided with the administration in this dispute, Iqos might be taken off the U.S. shelf for several months while the U.S. Patent and Trademark Office decides on a different claim. Mishra stated that the company was more positive about its outcome due to the success it has had in similar cases elsewhere. However, the process could take six to twelve months. British American Tobacco already brought similar lawsuits against Philip Morris on 11 other markets as well as the European Patent Office.
Altria or Philip Morris would be in the most dire of situations and have to go back on the drawing boards to move production to America, change the design, or cancel patent infringement claims.
Reynolds American spokesperson Kaelan Holton stated that infringement of intellectual property can hinder our ability to innovate and invest, and thus reduce our health impact. This statement was made after the ITC decided in our favor. We will defend IP vigorously around the world.
Philip Morris’ shares rose 12% last year. This gives it a market capitalization of $145 Billion. Altria stock has risen 9% over the past year, increasing its market capitalization to $83.1 billion.
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