Delivering a
Smoke-Free Future
Globally, PMI is leading the way in the heated
tobacco product category. It is our intention toprovide a portfolio of smoke-free products to thoseadults who would otherwise continue smoking.

For over a decade, Philip Morris International (PMI)
has leveraged technology and science to develop,
assess, and commercialize less harmful alternatives
to cigarettes for adults who would otherwise
continue smoking. We are disrupting our businessto achieve a bold vision—replacing cigarettes with
science-based smoke-free products as soon as
possible. With over $10.5 billion in research anddevelopment (R&D) invested since 2008, we arefundamentally changing both our purpose and ouroperations. Progress has been made, but there ismore work to be done.

• As of September 30, 2023, our smoke-free
products are available in 82 markets.
• As of September 30, 2023, smoke-free products
represented 36.2% of our total net revenues.
• Our ambition is for over two-thirds of ourtotal net revenues to come from smoke-free
products by 2030.
• We estimate there were 27.4 million IQOSusers as of September 30th, 2023, withapproximately 72% (19.7 million adults) having
already switched to IQOS and stopped smoking.

PMI has leveraged
science andtechnology todevelop, assess, and,commercialize lessharmful alternatives
to cigarettes foradult smokers.

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These developments position PMI to create growth
opportunities in adjacent business areas that evolveit, in the long-term, into a broader lifestyle, consumer
wellness and healthcare company. PMI’s goal is togenerate at least $1 billion in net revenues by 2025,
from products “Beyond Nicotine”.1

Commitment to Science and Regulatory
Oversight

Substantial Investment and Advanced
Internal Transformation

PMI’s research program is inspired by long-heldpractices of the pharmaceutical industry and isin line with the draft guidance from the U.S. Foodand Drug Administration (FDA) for its modified
risk tobacco product (MRTP) application.
We conduct our research in accordance withinternationally accepted standards and practices
such as the Good Laboratory Practices (GLP) andGood Clinical Practices (GCP).

• Since 2008, we have invested morethan $10.5 billion in the development,scientific substantiation, manufacturing,commercialization, and continuous innovationof smoke-free products.

We share our evidence with governments forreview. For example, in April 2019 the FDA
authorized IQOS commercialization in the U.S.
upon verification of our evidence. And on July
7, 2020, the FDA authorized the marketingof IQOS in the U.S. as a modified risk tobacco
product (MRTP), stating that IQOS would be“appropriate to promote the public health and isexpected to benefit the health of the population
as a whole.” IQOS was the first novel productauthorized by the FDA as a modified risk tobacco
product. This authorization is also contingent onstrict post-market surveillance requirements tominimize unintended use of the product, including
underage use.

• In 2022, 99% of our R&D expenditures werededicated to smoke-free products.
• PMI employs over 1500 scientists, engineers,technicians, and support staff, to continuously
innovate and enhance our smoke-free
portfolio, and we have a network of researchand technology partners in over 30 locationsworldwide.
• PMI’s smoke-free research has been publishedin more than 425 peer-reviewed publications.
• More than 50 independent studies, including
by leading government research centers,
health authorities, and others confirm
important elements of our research.

1. PMI aspires to generate at least USD 1 billion in annual net revenues from wellness and healthcare products by 2025.

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Why better alternatives make sense

Preventing underage use

There are estimated to be about 1 billion
smokers today, and the World HealthOrganization (WHO) projected there will still beabout 1 billion smokers in 2025. The best thingsmokers can do is quit tobacco and nicotine
altogether, but the reality is that many don’t.
These people deserve a pragmatic approachthat moves them away from cigarettes. Today,
there are products that can help enable
such approach. The vast majority of harmful
compounds found in cigarette smoke andassociated with smoking-related diseases
are generated by combustion. Products thateliminate combustion, such as e-cigarettes,
heated tobacco products, and oral smokelessproducts, if scientifically substantiated, are amuch better alternative to continued smoking.

While adult smokers deserve access to, andinformation about, smoke-free products, theseproducts should also be properly regulated andresponsibly marketed to prevent unintended use,
especially by underage users. Internationally,
PMI applies global guidelines—often going
beyond local requirements—to our commercial
activities to reduce the likelihood that they will
be particularly appealing to minors.
PMI’s smoke-free products are intended for one
audience: adults who would otherwise continue
to smoke or use other nicotine products.

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Accelerating a Smoke-Free Future

PMI believes that with the right regulatory framework, dialogue and support from civilsociety, cigarette sales can end within 10 to 15 years in many countries. To achieve thisambitious goal, public policy and dialogue should support the following:• Eliminate Underage Use. Minors should
not use or have access to tobacco or
nicotine containing products. Responsible
marketing practices must be implemented,
age verification technology incorporated,
and increased monitoring and enforcement
deployed.
• Embrace Better Alternatives. Accept the roleof science and innovation and stop debating
whether scientifically substantiated smokefree products should be made available.
Rather, support adult smokers’ transition toscientifically substantiated alternatives fromcigarettes.

•A ddress Misinformation. Recent data showsthat many adults worldwide believe nicotine
causes smoking-related diseases. Combustionis the problem. There must also be education
about the role of nicotine and flavors toencourage switching.
• Regulatory Modernization. Technologyand innovation are advancing rapidly. The
regulatory environment must be nimble andmore responsive to the changing landscape.

• Risk-Based Taxation. Recognize a continuumof risk in tobacco and nicotine containing
products. Tax policy should reflect thatapproach and incentivize adult smokers
to switch.

Science-backed, smoke-free alternatives can complement
existing measures to help address the global health issue ofsmoking by providing an avenue for adults who don’t quit
tobacco and nicotine altogether to make a better choicethan continued smoking. Coupled with the right regulatory
encouragement and support from society, we can reach asmoke-free future, faster.

FOR MORE INFORMATION, PLEASE VISIT WWW.PMI.COM
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