GTNF Discusses the Economics of Harm Reduction: Competition Across Product Categories to Intensify

Guests at the GTNF forum discussed "The Economics of Harm Reduction: Theory and Practice," showcasing data on the current state of harm reduction products globally. In the future, competition among various types of harm reduction products is expected to intensify.

On September 21, during the third morning of the GTNF forum in Seoul, guests discussed "The Economics of Harm Reduction: Theory and Practice," presenting data that illustrates the current state of harm reduction products worldwide. The conclusion drawn is that competition among various types of harm reduction products will become increasingly fierce.

Forum scene Image source｜Two Supremes

This forum was hosted by writer and economist Sinclair Davidson, with participants including Paul Blair, Regional Director of External Affairs at Philip Morris International, Anna Choi, Assistant Professor at Sejong University, James Lambert, Director of Asian Economic Consulting at the Oxford Institute of Economic Research, David Levy, Professor of Oncology at Georgetown University, and Tim Phillips, Managing Director of Tamarind Intelligence.

Guests presented data showing the distribution of new tobacco products worldwide. The usage rate of harm reduction products has been increasing year by year. From 2019 to 2023, in North America, the compound annual growth rate of the market size for nicotine pouches is 69%, the market size for heated tobacco products is 32%, and the market size for e-cigarettes is 11%; in Europe, the Middle East, and Africa, the compound annual growth rate for nicotine pouches is 41%, for heated tobacco products is 21%, and for e-cigarettes is 7%; in the Asia-Pacific region, the compound annual growth rate for heated tobacco products is 7%.

Data shows that in 2022, the top eight countries in the world for sales of heated tobacco and e-cigarettes are the United States, Canada, Russia, the United Kingdom, Germany, Italy, Japan, and South Korea.

Participants noted that currently, the positioning of e-cigarette companies in the U.S. is unclear, mainly due to the FDA's PMTA approval situation. The only e-cigarette company without a tobacco background that has passed the PMTA is NJOY, which was recently acquired by Altria, and currently, it seems there is no other independent e-cigarette company without a tobacco background that can pass the PMTA. In the HNB field, PMI seems ready to enter the U.S. market, with Altria and JTI collaborating to enter the U.S. market, indicating that competition in this field will exist. A similar situation is occurring in the nicotine pouch sector, where ZYN and On are competing.

Additionally, in South Korea, the smoking rate among men is as high as 35%, and currently, 85% of those using ENDS are smokers, 12% were former smokers, and 3% have never smoked. The government's attitude towards harm reduction alternative products is very negative, often promoting that harm reduction cannot help quit smoking, which also affects consumer choices, indicating that the government's attitude towards harm reduction products has a significant impact on their future.