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A National Legal-Action Antismoking Organization Entirely Supported by Tax-Deductible Contributions
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"Merchant of Death" Admits - Cigarettes are Deadly and
Addictive [06/20/06-3]
''Cigarettes
are addictive and cause the disease and death of hundreds of thousands
of people every year.''
Steve Parrish of Altria (Philip Morris), who has also been called the
"Merchant of Death."
Excerpts from: If It's Good for Philip Morris, Can It Also Be Good for Public Health?
[NOTE:
This is a lengthy article about an executive at Philip Morris, and the
suspicious support by a tobacco company for FDA regulation of tobacco
products. Certain portions appear in boldface for emphasis.
By Joe Nocera. The
New York Times [06/18/06]
Let's stipulate a few other things. First, despite everything -- the
universal knowledge about the dangers of tobacco, the warnings on
cigarette packaging, the antismoking public-service ads -- lots of
people still smoke, and one of every
two long-term smokers will die from the habit. In all, more than
400,000 smokers in the U.S. will succumb this year to heart disease,
lung cancer, emphysema or other diseases because they smoked.
Although the trend has gone steadily downward over the past two
decades, some 20 percent of the adult population smokes -- that's about
48 million people. John Seffrin, C.E.O. of the American Cancer Society,
calls tobacco-related diseases ''the single-most-preventable cause of
death in the world.'' Who can disagree?
You'll no doubt recall that in the mid-1990's, there was a huge
public outcry about the behavior of the tobacco industry, and efforts
were made to bring the cigarette companies to heel. State attorneys
general sued the big tobacco companies, and private class-action suits
were mounted; Congress held hearings excoriating Big Tobacco, while Dr.
David Kessler, the commissioner of the Food and Drug Administration at
the time, tried to claim regulatory authority over the industry;
whistle-blowers leaked damning documents to the press. It was a moment
when the cigarette companies were exceedingly vulnerable, and serious
reform could have been imposed by the federal government. But that
didn't happen. A reform effort failed in Congress, and 46 states and
the industry wound up settling their litigation with something called
the M.S.A. -- the Master Settlement Agreement -- which imposed
marketing and advertising restrictions on cigarettes, financed an
antismoking ad campaign and transferred a staggering sum of money ($206
billion over 25 years) from the big tobacco companies to the state
governments. (Four states settled separately for an additional $40
billion.)
And then the body politic moved on. So, a final stipulation: Cigarettes
aren't going away. Nobody is about to ban tobacco, nor is anybody about
to put the cigarette companies out of business, much as they might like
to. These days, although Philip Morris USA loses the occasional
lawsuit, the litigation threat that once seemed so onerous has become
quite manageable. And though the
M.S.A. has done some very good things -- it's the reason you no longer
see cigarette billboards -- it has both limits and unintended
consequences. For one, it has resulted in the rise of about 100 small
cigarette companies -- with names like Liberty Brands and Virginia
Brands -- that now undercut the big boys on price. And it has given the
states a rooting interest in the continued prosperity of the tobacco
companies, because they now depend on M.S.A. money to balance their
budgets. All the while, cigarettes remain exactly what they've always
been: the most dangerous unregulated legal product in the country.
When you talk to Steve Parrish about all of this, though, he doesn't
use the language tobacco executives once used. He doesn't talk about
''individual choice,'' nor does he pretend that cigarettes aren't
addictive. On the contrary: ''Cigarettes
are addictive and cause the disease and death of hundreds of thousands
of people every year,'' he said in one of our conversations. ''When you set tobacco on fire and inhale
it into your lungs, bad things happen.'' In another
conversation, he said, ''If fewer people died from smoking, that would
be good for Altria's shareholders.'' He says that it is important to
keep kids from starting to smoke and freely concedes that tobacco can
never be viewed as just another product because it is so deadly. It can
be quite startling the first time you hear him say these things.
Most amazing of all, Parrish says that tobacco needs to be regulated by
the Food and Drug Administration. The industry has long fought such
efforts; it waged legal war, for instance, against Kessler's claim of
jurisdiction, finally winning in the Supreme Court, which ruled that
only Congress could give the F.D.A. the authority Kessler had sought.
Yet since 2000, thanks in large measure to Parrish, Philip Morris USA
has been calling for the regulation of cigarettes. Two years ago, Altria made a serious, sustained effort to
have such a law enacted, which was strongly backed by the country's
leading anti-tobacco lobby, the Campaign for Tobacco-Free Kids, as well
as all the other big public-health groups, and fiercely opposed by the
rest of the industry, including archrival Reynolds American. Although
the measure twice passed the Senate, it died in a conference committee.
Parrish explained to Rosenblatt that when he was approached about
working for Philip Morris, he didn't have any big moral qualms; having
represented the company in the highly publicized trial, he knew the
issues, and he also knew he liked the people who worked there. He conceded that it was painful to be
described as ''a merchant of death,'' and he sometimes worried that he
rationalized what he did for a living because of his ''nice salary.''
(''I don't think I do,'' he concluded.) None of these thoughts were
terribly different from the ones I heard recently when I plowed the
same ground in my own interviews. Parrish is a thoughtful and
articulate man, but there are clearly places he doesn't want to go.
(Last year, for instance,
Parrish's compensation package, including salary, bonus and restricted
stock, was valued by the company at more than $14 million.)
Over the intervening years, Altria has taken a number of similar
steps. It stopped fighting local smoking-ban ordinances in 2004. It has
chosen not to make candy-flavored cigarettes, even though Reynolds
makes such a product. Unlike Reynolds, it runs no magazine advertising.
The company says it has pushed the farmers from whom it buys tobacco to
cure it somewhat differently so that the nitrosamine levels are lower.
Recently, the tobacco companies got into a dispute with the states over
whether their payments could be reduced under the terms of the M.S.A.;
Philip Morris USA was the only company to make the full payment anyway,
even though an arbitrator issued an initial ruling that sided with the
industry. Inside Altria, there is a palpable feeling of pride -- a
feeling that the company is trying hard to get it right, even as it
continues to make, market and sell cigarettes. Parrish is the person
who is given most of the credit for this cultural shift. ''Steve has
taken a number of courageous positions,'' says Louis Camilleri, the
company's current C.E.O.
Yet, of course, it does continue to make, market and sell cigarettes,
and for many people that remains the core issue, and always will. It is
why virtually no one in the public-health community is willing to
concede that the company has changed in any fundamental way, no matter
what Steve Parrish says or does. ''I feel they are belatedly admitting
to what is factually accurate, and they decided that it was in their
own best interests to own up,'' says John Seffrin of the Cancer
Society, who wholeheartedly supports F.D.A. regulation. ''But I don't believe there is any
responsible tobacco company today.'' Like many public-health
advocates, Seffrin specifically mentioned another of Altria's operating
companies, Philip Morris International, which accounted for 45 percent
of the company's income in 2005. (Philip Morris USA accounted for 26
percent of its income.) The international business is buying foreign
tobacco companies and working to build its market share -- it currently
has 14 percent of the world tobacco market -- with no apparent qualms,
in some of the world's poorest countries.
And, as Myers, points out, the company is tirelessly building market
share in this country too: ''Altria is the most successful marketing
juggernaut in history.'' Indeed, what the company has done since the
signing of the M.S.A. has been to market Marlboro primarily by offering
price discounts -- two packs for the price of one, for example -- even
though it is widely known that there is a direct correlation between
cigarette prices and youth smoking: the higher the price, the less
likely a kid will buy it. Myers continued: ''If you know that your
brand Marlboro is the No. 1 brand for boys and girls, and you
understand discounting, have you really discouraged tobacco use? Have
you really changed?'' In the years since the signing of the M.S.A.,
Marlboro's market share has increased 5 percentage points.
Partly, the refusal on the part of the public-health establishment to
acknowledge any difference between Altria and, say, Reynolds, which, to
judge by its actions, seems to enjoy being an in-your-face tobacco
company, is rooted in a moral judgment about making cigarettes -- and
it doesn't matter which company makes them. ''If they had a shred of ethics, they
wouldn't be in business,'' says Stanton Glantz, a professor at
the Medical School of the University of California, San Francisco, and
perhaps the most uncompromising anti-tobacco activist in the country.
Partly, it is strategic. Since the
country lacks a national tobacco policy, the efforts to bring down
smoking rates is largely conducted as a kind of guerrilla warfare --
local smoking-ban fights, battles to enact excise taxes, efforts to put
pressure on the tobacco companies at every turn. Blasting the
tobacco companies and refusing to differentiate among them is part of
that ongoing warfare. During the tobacco wars, the companies became
demonized, and there is a sense in the public-health community that
they need to stay that way to keep the product demonized in the mind of
the public. If they eased up on Altria, wouldn't that mean they were
also easing up on cigarettes?
Finally, though, this position stems from Big Tobacco's sordid history.
After 40 years of denying reality,
deceiving the public and working to undercut every effort to reduce
smoking rates in the United States, tobacco companies simply have no
credibility. Indeed, there is a school of thought within the
public-health community that holds that if a tobacco company comes out
in favor of something, that fact alone is enough to signal that there
must be something wrong with it. It has to be some kind of trick. Which
is why those among tobacco's enemies who've come to know Steve Parrish
still worry about his motives. Including David Kessler.
But he also happily conceded that he believed regulation would be good for his company.
In any other industry, a market leader in a declining business would
begin to branch out while there was still time. It would buy other
companies, redefine its basic purpose and take other steps to maneuver
into faster-growing businesses. But that is very difficult for Philip
Morris USA to do. Although Altria's stock price has performed well in
recent years, it should be much higher based purely on its financial
performance. But it's not, in part because it owns a tobacco company
with a tarnished reputation, under constant attack. As a result, it is
much more difficult for Altria to use its stock to buy other companies.
There is no question, then, that Parrish and Philip Morris USA are hoping that
regulation could help lead the company to reclaim some legitimacy. From
a business perspective, that could result in a higher stock price,
which would give the company, as Parrish puts it, the ability ''to
increase the flexibility that the board and the senior management has
in deploying the shareholders' money.'' He also wants to see the
company accepted as having a legitimate seat at the table when tobacco
policy is being debated.
As he thinks about how to get his company growing in a declining
cigarette market, Szymanczyk has etched out what he calls an
''adjacency strategy,'' pursuing new products that are ''adjacent'' to
cigarettes. It's a common strategy for consumer-products companies --
Coca-Cola once sold just Coke; now it sells all manner of carbonated
and noncarbonated beverages. During the time I was in Richmond, the
company was extremely hush-hush about its plans. But it was very clear that, as a first
step, the company wanted to see if it could come up with ''reduced
harm'' tobacco products -- smokeless tobacco, perhaps, or less lethal
cigarettes, or perhaps products that deliver nicotine, which is
relatively benign, without doing so through a lighted cigarette, which
is anything but benign. I saw a new $350 million research
facility under construction; it will eventually house 500 scientists,
engineers and support staff. Much of their work will involve trying to
develop reduced-harm products.
In the public-health community, there
are huge divisions as to whether reduced-harm tobacco products are
possible, or whether it would even be a good thing if they were
developed. Stanton Glantz says there is ''no scientific
evidence'' that anyone is ever going to be able to make a reduced-harm
cigarette. There are many others who think it is dangerous to begin
making any health comparison among different kinds of tobacco products,
because it will only encourage people to take up the habit. But another
longtime anti-tobacco activist, Scott Ballin, the former chairman of
the Coalition on Smoking or Health, says that such products are on the
way, and that the public-health community needs to start thinking hard
about how to deal with them.
And what about all the unintended
consequences of introducing such a product? Clearly, if nicotine
addicts switch from cigarettes to smokeless tobacco, they've done
something good for themselves. But these new products are not
risk-free, and it is surely better not to ingest tobacco at all.
Smokeless products might get kids hooked on nicotine and then allow
them to ''graduate'' to cigarettes. Or smokeless products might serve
''to tide smokers over when they are in places they are not permitted
to smoke,'' says Kenneth Warner, the dean of the School of Public
Health at the University of Michigan and an author of the 2004 study.
''We have excellent research that shows that work sites that prohibit
smoking reduce smoking rates.'' A product that subverted that goal
would hardly be a gain for public health.
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