The best thing is to never start smoking. For those who do smoke, their best course of action is to quit tobacco and nicotine use altogether. However, many do not. Those adult smokers who would otherwise continue to smoke should have access to nicotine-containing alternatives that are scientifically substantiated to be less harmful than continuing to smoke.

Scientific and technological innovation have made such solutions available today. The vast majority of harmful compounds found in cigarette smoke and associated with smoking-related diseases are generated by combustion. Nicotine-containing products that do not involve combustion (smoke-free products), such as e-vapor, oral nicotine, and heated tobacco products, while not risk-free, could present a much better alternative than continued smoking.

For adults who would otherwise continue to smoke, scientifically substantiated smoke-free products indeed represent a significant opportunity, as switching to these products has the potential to reduce the risk of developing smoking-related diseases versus continued cigarette smoking.

Seizing this opportunity to achieve a public health benefit depends not only on the scientifically substantiated risk-reduction profile of these products, but also on adult smokers successfully switching to smoke-free products and stopping smoking cigarettes. It is therefore critical that smoke-free products are made available to all adult smokers, that adult smokers be informed of their existence and understand their benefits, that they find them acceptable, and that they can afford to buy them.

Through our early and sustained investment in R&D and consequent leadership in technology and innovation, we have built a powerful position and competitive advantage in scientifically substantiated smoke-free products, which can help accelerate the decline in cigarette smoking.

By allocating the majority of our resources to the development and commercialization of smoke-free products we are accelerating our progress toward becoming a smoke-free company, and in doing so are building legitimacy and stakeholder trust. Moreover, it allows us to expand our market share in the nicotine space, increasing our current and future revenue base as we seek to encourage all adults who would otherwise continue to smoke to switch to smoke-free products—this includes the estimated 130 million adult smokers of our cigarette brands, as well as the hundreds of millions of adult smokers who buy competitor brands. Further, our smoke-free product consumables drive higher net revenues per unit than cigarettes, with accretive product contribution per unit already helping to generate attractive returns on our significant upfront and ongoing investments in developing the smoke-free category.

It is critical to us to avoid that the marketing and sales of our products discourage complete nicotine use and smoking cessation, encourage the initiation of nicotine use, or be of particular appeal to unintended audiences (including youth). Disregarding this would undermine our credibility, harm our reputation, and potentially trigger adverse regulation, hampering our ability to achieve a smoke-free future as fast as possible.