How E-Cigs Have Pharmaceutical Companies Worried

I’ve always stated that technology is changing the way we interact with each other. It’s also changed the way we take part in conventional activities. For example, online gaming has changed the way we interact with other sports enthusiasts because you simply log into a gaming portal. You no longer make several trips to the bank to transfer money and pay bills because you now have the concept of online banking. However, technology hasn’t only changed what we do online because it’s changed the way we indulge in our pleasures – good and bad.

Over the years, the concept of e-cigs and vapes has become very popular in society. No matter where you look, you’ll see someone smoking an e-cig. Even manufacturers of vapes have found creative ways to appeal to both hard smokers and those you haven’t smoked a cigarette in their lives. For example, hardcore smokers can purchase vapes with different degrees of nicotine to help them quit, and non-smokers can purchase them without tobacco but different flavors for recreation. Let’s just say e-cigs are increasing in popularity each year with online sales totaling 3.5 billion.

At this point, it’s time to step back and wonder who are the ones feeling the pressure from increasing e-cig sales? I once thought it was the government, but I’m sure they’ll find creative ways to tax the vape industry gaining much of the taxes lost. Could it be tobacco companies? They too are finding ways to enter the market so they can compete and stay up to date with the changing trends. Not to mention most people buying vapes do so with nicotine liquid, and some big tobacco companies have started to create liquid nicotine as an alternative to actual tobacco. This means they too will find ways to recover profits, however, pharmaceutical companies have a big battle going forward. These companies spend billions of dollars developing drugs to help people quit smoking, and have invested money in “the patch” and “nicotine” gum too. But, even with aggressive lobbying, the vape industry continues to grow each year.

Here’s something from reuters.com

Wells Fargo Securities analyst Bonnie Herzog estimates the entire U.S. market for “vapor devices” will grow to $3.5 billion by the end of the year

This is great news for e-cig sellers since the profit margins will continue to grow throughout the year. However, Big Pharma (who represents drug manufacturers) and tobacco companies are trying to find ways to eliminate the vaping industry because it’s now cutting into their profits. In my eyes, the vaping industry has two major wars they’ll keep fighting for a long time – one against the tobacco industry who can’t find ways to compete in the vaping industry, and the other against pharmaceutical companies who have spent millions of dollars towards nicotine replacement therapies.

The government who regulates the industry is also worried, but not as much because they’ll just find ways to tax the vaping industry for lost income from conventional tobacco sales. Even though they are feeling the pressure from large tobacco companies to regulate vape usage, it’s not aggressive as before since companies like R.J. Reynolds, Lorillard, and Philip Morris have already jumped into the e-cigarette game years ago.

The Pharmaceutical Companies

Big Pharma is one company who has a lot to lose from vapes entering the market, and they are investing enormous money trying to get stricter regulations put on the sales. Big Pharma is responsible for representing some of the largest drug and medical devices companies in the United States. For example, they represent Nicorette gum by GlaxoSmithKline, and “the patch” by Johnson & Johnson. Both which have a lot to lose if e-cig popularity continues to grow over the years. Think about it, smokers will no longer require the patch or nicotine gum if they have found a safer alternative to smoking.

Big Pharma companies are responsible for manufacturing some of the most popular drugs in the market. These medications cost hundreds and/or even thousands of dollars per pill. If you compare this to the cost of a cigarette pack, it’s but a tiny fraction of what tobacco companies profit per sale. Big Pharma makes more money than big tobacco and can afford to pay off as many politicians as it wants to win the War on Vaping. I’ll be surprised to see how this will play out throughout the years.

Bad News for Small Tobacco Companies

The big tobacco companies are investing money in vapes and liquid nicotine, however, what about the smaller companies that can’t expand just yet? They have two options, first lobby with the big pharmaceutical companies for stricter regulations against vapes. This will aggressive pushdown vape availability and keep tobacco sales steady. Secondly, sell and join a larger tobacco company who can afford to manufacture vape products and compete in a growing industry. Either way, I believe the smaller companies will lose because on one hand you have a lengthy battle which costs millions of dollars, and on the other, you are giving up ownership to larger companies and this means you’ll lose control of your company.

Featured photo credit: commons.wikimedia.org via commons.wikimedia.org

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