Evolving PMI’s business to deliver value in the long-term14 Jan 2022 · 5 min read
Philip Morris International (PMI) is committed to delivering solutions to global challenges in pursuit of a better future.
That means not only addressing the problem of smoking—but also seizing opportunities beyond our current combustible and smoke-free portfolio.
In February 2021, we announced our ambition to explore new spaces and products that have nothing to do with tobacco or nicotine—setting an aspirational target of USD 1 billion in net revenues from such innovations by 2025.
As a transforming company led by technology, science, and innovation to deliver a smoke-free future, PMI has the capabilities to develop effective solutions in health and wellness.
We have a strong foundation and significant expertise in life sciences—particularly with product formulation, aerosol chemistry and physics, device technology, clinical research, and best-in-class preclinical safety and inhalation models.
Inhaled therapeutics and selfcare wellness
PMI is harnessing these disciplines to deliver new innovations in many fields, but has identified opportunities in two key growth areas:
- Inhaled therapeutics - Developing these products utilizes our expertise in the delivery and scientific assessment of aerosols, as well as our experience in device technology for medical application.
- Selfcare wellness - Moving into selfcare wellness products—including botanicals—will enable us to address benefit areas such as energy, sleep, calm, and focus, applying our expertise in oral delivery, inhalation science, and technologies, as well as plant substrates.
Our business model in this area is not necessarily to pursue the entire value chain, from upstream development to downstream commercialization.
Instead, our aim is to stay at the center with our clinical capabilities, our formulation capabilities, and our delivery capabilities. To apply the skills we do not have, we will then partner, outsource, and orchestrate an ecosystem to bring products to market.
We have already made significant progress in this area with our recent acquisitions of U.K. pharmaceutical company Vectura Group, U.S. inhaled drug specialist OtiTopic, and Danish pharmaceutical and well-being products manufacturer Fertin Pharma.
These acquisitions clearly reflect our ambition to deliver innovative products and solutions to benefit global public health.
From harm reduction to net-positive
We have deliberately chosen to disrupt our own business—not only because we can, but because we believe it is the right thing to do.
Since 2016, we have transformed our products, business model, and value proposition—providing scientifically substantiated smoke-free alternatives to millions of adult smokers who would otherwise continue to smoke.
We are accelerating toward our vision of a smoke-free future—one in which we no longer sell cigarettes—and aim to be a majority non-combustible company by 2025.
However, we realize that going smoke-free cannot be the end-goal for PMI.
A complete and successful transformation requires us to move from a value proposition built around harm reduction toward one with a net-positive impact on society.
Aiming for a business transformation unlike any other
Researchers in the harm-reduction field have often asked us why we’re not using our knowledge in aerosolization and inhalable devices beyond the tobacco harm reduction space.
We believe this was a valid question. That’s why, building upon the research, expertise, and knowledge we’ve gained from developing and assessing smoke-free products, we are in such a strong position to move into these growth opportunities.
By looking beyond our current portfolio, we can achieve a business transformation unlike any other—and help to deliver a better, more sustainable future for all of society.