According to the American Cancer Society and World Lung Foundation's 2012 Tobacco Atlas, tobacco use is the single most preventable cause of death, with smokers accounting for nearly 20% of the global population. Though this presents an ample market for NRT (Nicotine Replacement Therapy) aids, the products have faced some notable obstacles in recent months. Euromonitor International examines these challenges in the context of NRT's broader potential.
Factors supporting NRT
Over the period 2003-2008, the Tobacco Atlas estimates that the percentage of total health care expenditure used to treat tobacco-related illnesses ranged from nearly 5% in China, the US, and the UK to over 11% in Egypt. This is a key reason why smoking cessation is such an integral part of preventive health care programs. In fact, in August 2011 the US Department of Health and Human Services awarded US$5 million to states to bolster tobacco quit-lines, which provide information on cessation treatment and services.
Many other countries are encouraging cessation through legislative bans. China, where over a quarter of the population smokes and smoking-related diseases kill a million people each year, instituted a smoking ban in May 2011 in enclosed public venues. Given that China's State Tobacco Monopoly Administration, which sets tobacco control policy, is the same agency that runs the China National Tobacco Corporation, the world's largest cigarette maker, there are doubts about how effectively the ban will be enforced. Still, some areas in the country are taking the ban seriously. The Shanghai municipal government, which passed a local tobacco law in March 2010, considered in January 2012 a proposal to increase fines for violating smoking bans and raise taxes on tobacco products, among other measures. Bulgaria, which has one of the highest smoking prevalence rates in the world at 38%, proposed in December 2011 to expand the ban passed in 2005 to cover bars, cafes, and restaurants starting June 1. In 2011 and 2012, Singapore, Wales, and the US all also either considered or implemented smoking ban policies, including such measures as prohibiting smoking in cars while children are present and smoking in federally subsidized housing projects.
Other developments relate specifically to NRT treatments. In March 2011, the US Food and Drug Administration (FDA) began considering removing existing warning labels on NRT products to cease usage after 12 weeks. Such guidelines are already less stringent in Canada, Germany, Japan, and the UK, where recommended usage limits range from six months to a year. Moreover, a 2007 report from the UK's Royal College of Physicians argued that there are no adverse effects from long-term use of NRT. The 2009 law authorizing the FDA to regulate tobacco products also urged the agency to remove the usage warnings and even to consider advocating extended or permanent use of NRT, if it is successfully preventing the user from smoking.
Factors discouraging NRT
These circumstances all seem to suggest promising growth opportunities for the NRT market, but other events cast the opposing view. Chiefly among these is the outcome of a Harvard University and University of Massachusetts study published online in January 2012 in Tobacco Control. The study found that NRT products, such as patches and gum, do not appear to be effective in helping smokers quit long-term, even when combined with cessation counselling. Researchers noted no difference in quitting relapse rates for NRT users, with our without counselling, for heavy or light smokers. Though clinical studies have supported the efficacy of NRT treatments, real world usage in the general population may be very different. Indeed, the study authors directly debate the value of public policies that advocate NRT and allocate public funds to provide it, arguing that clinical outcomes distort real-life results. A March 2012 study in the British Medical Journal came to the same conclusion. Part of the study investigated whether expanding the standard English National Health Service Stop Smoking Services offerings (advice letters, e-mails, texts, and helpline access) to include free nicotine patches would result in higher quit rates. On the contrary, though, less than 18% of those who received free patches quit versus 20% of those who did not. The Department of Health has already determined that it will no longer offer free patches, based on this evidence.
Shifting from efficacy to safety, GlaxoSmithKline Plc (GSK), producer of the Nicorette and NicoDerm CQ NRT product lines, registered a protest in November 2011 to a US FDA Tobacco Product Center proposal to list nicotine as a potentially harmful ingredient in tobacco products, maintaining that it would discourage people from using NRT treatments. A new Brown University study, however, may provide support for the FDA's position. The research, presented at the February 2012 Annual Meeting of the Biophysical Society, found that nicotine can change cellular structure in such a way as to give rise to blood vessel damage and heart disease, thus calling into question the effectiveness of replacing smoking with NRT specifically to prevent atherosclerosis.
Between increased competition from e-cigarettes and unfavourable recent research findings, the outlook for the NRT market seems more pessimistic. There are, however, still some factors in NRT's favour. Though e-cigarettes are growing in popularity, they are also in a regulatory “grey area.” A US appeals court ruled in December 2010 that e-cigarettes are a tobacco product and that the FDA must regulate them as such. In March 2012, several US states supported the ruling by introducing legislation placing limitations on e-cigarettes, including such provisions as prohibiting their sale to minors and incorporating them into public smoking bans. As of January 2012 in the UK, e-cigarettes can neither be labelled as NRT nor shelved with NRT gums, patches, and other products because they are not approved by the Medicine and Health Products Regulatory Agency (MHRA). Further, the MHRA does not plan to make a final decision on how to regulate e-cigarettes until 2013.
In addition, NRT producers are introducing innovative offerings to sustain market appeal. Perrigo Co received in July 2011 US FDA approval to market generic versions of GSK's Nicorette NRT gums and lozenges. GSK, meanwhile, teamed with health and well-being management company Healthways in November 2011 to offer a smoking cessation program in the US called Blueprint to Quit exclusively at Wal-Mart stores. The package combines Healthways's QuitNet online information, support, and self-assessment tool with GSK's Nicorette and NicoDerm CQ NRT products. In Germany in 2011, Johnson & Johnson GmbH launched Nicorette Whitemint, the first NRT gum in the country to also promise teeth whitening benefits, while McNeil Healthcare Ltd released Nicorette QuickMist mouth spray in the UK.
A January 2012 study in the journal Neurology may provide an entirely different marketing angle for NRT. The study of adults with mild cognitive impairment (the intermediary stage between normal aging and dementia) found that those who received six months of nicotine patch treatment regained 46% of normal performance on long-term memory tests, versus a 26% decline in performance in the placebo group. Though the study was very small and it is unknown if the observed benefits are long-term, the findings still merit further research. With global sales of US$2.4 billion in 2011, nearly 80% of which occurred in North America and Western Europe, the untapped market for NRT is vast. To achieve sustained growth, however, producers will need to learn how to overcome recent scientific and regulatory obstacles and target their products to prove successful for the average consumer.