Philip Morris Is Buying An Asthma Inhaler Company. Health Groups Are Suspicious

Enlarge this image

Philip Morris International is buying Vectura, a large asthma inhaler maker, in a move that health groups have urged Vectura shareholders to reject on both ethical and practical grounds.

hide caption

toggle caption

Igor Golovniov/SOPA Images/LightRocket via Gett

Life Kit
How To Quit Smoking, With Help From Science

Philip Morris says Vectura will operate as an autonomous unit — although PMI CEO Jacek Olczak also said the company looks forward to working with Vectura’s scientists. The company says it has the resources to help the inhaler maker develop its own products, along with extending its market reach and coping with regulatory issues.

Philip Morris has also repeatedly mentioned its «Beyond Nicotine» goal of bringing in at least $1 billion in annual net revenues from non-tobacco sources by 2025 — a plan that includes Vectura.

Health groups urged Vectura to reconsider

More than 25 health advocacy groups, including Asthma UK and the European Lung Foundation, recently co-signed a letter urging Vectura’s board to reject the Philip Morris offer, calling the company’s post-nicotine strategy «disingenuous» and saying the deal would raise ethical concerns.

«Despite articulating an ambition to move ‘beyond nicotine,’ PMI continues to manufacture cigarettes (more than two billion per day),» the groups stated, adding that the company markets cigarettes «in low- and middle-income countries where large youth populations and lax regulations have seen widespread smoking uptake in recent decades.»

In contrast, the letter states, Vectura makes most of its hundreds of millions of dollars in annual revenue from products that treat smoking-related respiratory illnesses, such as chronic obstructive pulmonary disease.

The takeover would also endanger Vectura’s history of participating in important health research and policy decisions, the signatories say.

They note that because many agencies, universities and publications have strict policies against engaging with tobacco-related companies, Vectura could now be shut out of receiving government grants, publishing in The Lancet and other journals, and conducting clinical trials alongside universities.

Vectura’s leaders will not hold a shareholder meeting

Vectura’s directors said they recognized «the superior cash price» in the Philip Morris offer. They also said the company would benefit from the tobacco company’s «significant financial resources,» its promise to boost research and development, and its plans to let Vectura be an autonomous business unit.

Advocacy groups had called for Vectura’s board and its shareholders to reject the purchase offer on both ethical and practical grounds. But shareholders will not get a chance to weigh in on the change.

Because of the terms of the deal, including the large number of shares now under Philip Morris’ control and its declaration of the move as a takeover, Vectura directors said they «do not intend to reconvene the shareholder meetings» that would have been required under Carlyle’s purchase offer.

• American Lung Association
• Philip Morris
• asthma