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►  Big tobacco’s new cigarette is sleek, smokeless — but is it actually healthier?

Philip Morris says it has created aless toxic cigarette - an innovation it claims could save lives and eliminate smoking in America.

The new technology, called IQOS, consists of a tube that gently heats up sticks of tobacco instead of burning them. By using heat instead of flame, the company says, IQOS eradicates 90 to 95 percent of toxic compounds in cigarette smoke.

The Food and Drug Administration is expected to decide in the next two months whether to allow IQOS into the U.S. market. And that has triggered heated debate and worries among health experts about whether IQOS will help or hurt public health in this country.

Among their most pressing concerns: whether the new device will lower tobacco-related deaths, or if it is just substituting one harmful product for another.

Fueling such doubts is the fact that many of America’s leading health organizations and experts remain deeply suspicious of Philip Morris.

This is the company, they point out, that makes Marlboro - the world’s best-selling cigarette - and misled the public for years about the hazards of smoking.

“They are masterful liars. That’s not an exaggeration - that’s a fact proven by decades of evidence,“ said Matthew Myers, longtime president of the Campaign for Tobacco-Free Kids. “So the question we’re all asking ourselves is: What’s their ultimate game plan with this thing?“

Only one independent study so far has examined the risks of IQOS and found higher levels of several toxic compounds produced by the device than Philip Morris has claimed. The company’s response to the study was so forceful that the independent researchers have now gone silent, refusing to talk publicly about their work.

Even if Philip Morris’ health claims turn out to be true, health officials warn, IQOS could be a Trojan horse. Smoking in America has dropped to an all-time low. Some health advocates worry Philip Morris - which spent $3 billion to develop IQOS - wants to use its new machine to halt that progress. If IQOS attracts new smokers, it could hook a new generation on nicotine.

“The skepticism is not surprising for us,“ said one of Philip Morris’ chief scientists, Moira Gilchrist. “You don’t have to trust or believe us. You don’t have to take our word for it. But what we ask is that people have an open mind. Look at the science we’ve done on this and base your decision on that.“

But even the harshest skeptics acknowledge that there is a chance Philip Morris is right and IQOS could save lives.

“If we’re being honest, we’re dealing with a big unknown here,“ said Myers, who has fought for three decades to keep tobacco products away from kids. “One thing’s for sure: The stakes here are huge.“

On a recent sunny day, standing outside Philip Morris’ Washington office - just two blocks from the White House - Gilchrist clicked open a smooth, sleek battery pack.

With two fingers, she pulled out what looked like a hollowed-out electronic cigar - the latest IQOS prototype.

To use it, she explained, you push into its hollow end a short modified cigarette, called a HeatStick. A heating blade inside the IQOS pierces the HeatStick and gently warms the tobacco inside.

Gilchrist lifted the IQOS and took a long drag. As she exhaled, a slight musty-sweet smell permeated the air.

“Because there’s no combustion involved, there’s no smoke,“ she said.

Unlike vaping machines, which use a liquid solution to deliver nicotine, the IQOS deliberately uses tobacco. Many smokers have trouble quitting cigarettes even after trying vaping, studies have shown. Philip Morris scientists argue that for smokers to quit, you need to offer something with the same buzz and taste of tobacco.

“You have to give them that satisfying experience,“ Gilchrist said. “You have to deliver nicotine at roughly the same speed and amount.“

The first thing that now greets customers on Philip Morris’ home page is this question: “How long will the world’s leading cigarette company be in the cigarette business?“

Philip Morris chief executive André Calantzopoulos predicts that smokeless products like IQOS will one day be so common that his company stops selling all regular cigarettes. In a recent interview with the BBC, he said, “I hope this time will come soon.“

The company - which makes the world’s best-selling cigarette - has built a new $120 million research center in Switzerland to focus entirely on smokeless products. The gleaming glass-enclosed facility, called the Cube, consists of three wings - dubbed Earth, Wind and Air. (There is, notably, no section named Fire.) Of all the Cube’s new products, IQOS is the most advanced. It is now sold in 25 countries.

But the clearest sign of its potential has been Japan.

Last spring, IQOS became available nationwide there, and in the brief time since, IQOS has grabbed 10 percent of Japan’s tobacco market - a feat that has investors salivating over its U.S. prospects.

Philip Morris says 72 percent of users in Japan quit cigarettes entirely and converted to IQOS. That’s significantly higher than the 7 percent quit rate among those who tried vaping and 6 percent quit rate of nicotine patch users in a trial published by the journal Lancet.

Japanese demand has so outstripped capacity that Philip Morris can’t produce HeatSticks fast enough. It had to limit the number of IQOS devices sold in Japan. And last month, it shut down two cigarette plants in Europe to convert them into HeatStick factories.

This year, the company plans to more than triple its manufacturing capacity, from 15 billion HeatSticks to 50 billion. By the end of 2018, it plans to produce 100 billion.

Two months ago, three Swiss researchers published the only independent study so far on IQOS’s health risks.

When contacted by a Washington Post reporter, however, the researchers refused to talk. A spokeswoman for the University of Lausanne (where one of them works) explained in an email that after their study published, the bosses of all three received an alarming letter from Philip Morris.

The letter was personally addressed to the heads of the University of Bern, Lausanne University Hospital and University of Lausanne, accusing their employees of bad methodology.

Such a letter is almost unheard of in the scientific community, University of Lausanne spokeswoman Francine Zambano noted. Usually, if someone disagrees with a study, they contact the journal where it appeared or challenge its findings by publishing their own evidence.

When informed of Philip Morris’ unusual letter to the researchers’ bosses, Mitchell Katz, deputy editor of the journal JAMA Internal Medicine, which published the study, said: “That certainly smacks of intimidation. I’ve been deputy editor here eight years, and I’ve never seen that happen before.“

The Swiss study compared the harmful compounds in the air generated by IQOS with those of regular cigarettes. The study found that although IQOS generated many toxic chemicals at lower rates, some were much higher than Philip Morris claimed. It also found that IQOS produced 295 percent more of one hazardous compound than traditional cigarettes.

In their study, the scientists accused Philip Morris of “dancing around the definition of smoke” and argued that “there can be smoke without fire.“

Philip Morris has posted an academic rebuttal online, questioning the Swiss study’s methodology and interpretation. Company officials would not discuss their letter to the Swiss bosses but defended their actions.

“When a study like that picks up so much media interest, smokers who have already converted to IQOS and been helped by it have the potential to be misled,“ spokesman Corey Henry said.

This isn’t the first time tobacco companies have trumpeted the arrival of a healthier cigarette.

In the 1950s, they marketed filtered cigarettes as much safer, but that proved an exaggeration. In the 1970s, they came out with “light” and “low-tar” cigarettes, and it took health experts decades to prove those weren’t safer at all. Internal documents showed tobacco manufacturers deliberately designed their light cigarettes to fool government smoke-testing machines.

At his office at the Campaign for Tobacco Free-Kids, Myers keeps a museum on his bookshelf of all the ways tobacco companies have tried to fool the public over the years. There are strawberry-shortcake-flavored products aimed at kids and tobacco embedded into dissolvable breath mint strips.

Myers worries IQOS - with its sleek, sexy, Apple-like design - could be used to attract younger consumers.

Brian King, a deputy director at the Centers for Disease Control and Prevention’s Office on Smoking and Health, worries IQOS could make tobacco acceptable again. “We’re finally at a place where smoking isn’t accepted as normal and isn’t allowed in public places. We’re making progress on the smoking rate. All that could easily be reversed.“

Stanton Glantz, a tobacco researcher at the University of California at San Francisco, says that even if IQOS reduces carcinogens, it could still cause serious heart problems because of nicotine and ultrafine particles. “It probably isn’t as bad as a cigarette, but that’s like saying jumping out of a 10-story building isn’t as bad as jumping out a 50-story building.“

A few health researchers, however, support Philip Morris’ effort.

“If you have a company willing to shift to a less harmful product, is that something we should be getting in the way of?“ said Jonathan Foulds, a smoking cessation expert at Penn State University.

Ultimately, the FDA will have the final word on science and health concerns over IQOS.

Philip Morris’ case for IQOS got a boost last month when the FDA’s commissioner stressed the need for innovation and alternatives to cigarettes in a speech.

The agency is expected to decide in the next two months whether IQOS can be sold here, but it won’t rule on its health claims until the beginning of next year.

If the FDA approves those health claims, IQOS would be the first tobacco product to carry the U.S. government’s stamp as a less harmful alternative to cigarettes - a marketing coup for Philip Morris. And competitors are already racing to catch up by rushing out prototypes of their own.

Included in Philip Morris’ FDA application are more than 2 million pages of scientific data. Health organizations - such as the American Lung Association and the American Cancer Society - are just beginning to sift through them to make their recommendations to the FDA.

Even if anti-tobacco groups don’t trust Philip Morris’ moral reasons or scientific claims on IQOS, there are compelling business reasons to believe the company really wants to save smokers’ lives, argued industry analyst Michael Lavery.

“If you can find a way to keep your consumer alive longer,“ he said, “you’ll make more money off them. It’s a better business moDelegate”


►  Procter & Gamble takes calculated risk with ‘The Talk’ ad

It’s a simple message: Beware of racism in the United States.

But Procter & Gamble took a calculated risk with its ad that features black mothers speaking to children about racial bias through the decades. The company says it knew there might be a backlash — and the ad has been criticized as being anti-police or anti-white. But it says it felt after hearing from consumers that the ad would be worth it.

“The Talk,“ which makes no mention of any P&G product, has been the talk of social media.

The ad is part of a shift by some corporations that are making emotional appeals to consumers by treading into territory that could be polarizing. But experts say there are likely to be more of these ads, as companies seek younger customers who respond to them.

“Brands just can’t push their messages out there,“ said Luis Garcia, president and lead strategist of MarketVision, a San Antonio, Texas-based marketing firm. “They have to create meaningful ways that are going to engage people.“

Consumers have so many choices among so many brands, Garcia said, that people remember only what matters to them.

In the P&G video released online last month, a mom in the 1950s tells her daughter she is not just “pretty for a black girl,“ as someone told the girl, but “beautiful, period.“ And a mom in the 1960s tells her son he may hear an epithet, but not to let it hurt him. Another mom, this time in the 1990s, reminds her son to take his identification with him as he sets off for practice.

None of the company’s products, like Pampers diapers, Tide detergent or Crest toothpaste, are shown. Instead, after clips of mothers giving children “the talk,“ the video invites people to discuss it online with the hashtag #TalkAboutBias.

The ad is scheduled to begin airing on national television next week.

Damon Jones, a spokesman for Cincinnati-based Procter & Gamble, said not including products in “The Talk” was a conscious decision because the company wanted viewers to focus on its message. Ads for P&G products often feature smiling babies wearing its diapers or highlight dishes that sparkle after using its soap.

“There’s a time for product placement,“ Jones said. “There’s a time to do something broader.“

Jones said the company believed now was the time to tackle racial bias after hearing feedback from consumers. He said “The Talk” ad seemed like an evolution from other socially conscious Procter & Gamble efforts, and cited its #LikeAGirl campaign that criticized emojis for being “stereotypical” and “limiting” toward women.

Procter & Gamble isn’t the first company to try to tackle difficult topics. Some brands are specifically known for taking positions on political or social issues. Other big brands have tried it too. Earlier this year, Nike unveiled its “Equality Has No Boundaries” commercial featuring well-known athletes. And Anheuser-Busch released a Super Bowl ad that focused on its founder’s immigrant past.

Such ads often draw criticism, not only from those who oppose the social message but also sometimes from people it’s trying to appeal to.

Pepsi was reproached early this year over a video that took images from Black Lives Matter protests and ended with Kendall Jenner, a white woman, giving a police officer a can of Pepsi. Critics said the commercial trivialized the issue of black residents’ interaction with police.

And two years ago, Starbucks launched a “Race Together” campaign aimed at getting customers to talk about race, only to end it shortly after critics claimed it was poorly executed and a marketing ploy.

The P&G ad has drawn positive and negative reactions.

Jennifer Johnson of Detroit said the conversations portrayed in the ads are rooted in real life. She says she’s had similar talks with her now-adult daughter over the years.

“She liked to go out and I would tell her to be careful,“ said Johnson, 55, who is black. “She would say ‘alright, ma. I got you.‘“

Johnson also believes that the ad, although illustrating black experiences, is meant for all audiences and that it may steer more business toward P&G products.

Victor Taylor, a black 63-year-old retiree in Bakersfield, California, called the ad “reality.“

“That’s what (black) children go through every day,“ Taylor said about being treated differently. “I don’t find the ad prejudiced. I found it informing to the children growing up.“

Still, the ad didn’t make him want to go out and buy Crest or Tide, Taylor added.

Some social media users saw the ad as stroking racial animosity. Conservative columnist Michelle Malkin said it amounted to “identity-politics pandering” and alienated law enforcement.

“P&G should stand for quality consumer goods, not empty Protest & Grumble that divides more than it unites,“ Malkin wrote.

Robert Passikoff, president of the customer research firm Brand Keys Inc. in New York, said that’s the risk Procter & Gamble took and wondered how shareholders, even those who agree with the ad’s message, might respond. P&G is currently resisting activist investor Nelson Peltz, who is seeking faster changes and better financial results from the consumer products company.

“I’m the last of the Mad Men era,“ Passikoff said. “I believe companies are not there for social change. They are there to sell products.“

But Benjamin Bates, a professor of health communication at Ohio University’s Scripps College of Communication, said he believed the reward outweighed the risk since the ad appealed to African-Americans, and younger consumers who are more comfortable with diversity.

“The people the ad would alienate are a small percentage,“ Bates said. “I, as a CEO, would probably think, ‘If I lose some racists because of this, I’m OK with that’.“

Jones said the company is exploring more campaigns that tackle difficult issues about gender, racial and equality.


►  Trump to request possible probe of China trade practices

Even as he seeks Beijing’s help on North Korea, Donald Trump plans to sign an executive order asking his trade office to consider investigating China for the alleged theft of American technology and intellectual property, an administration official said Saturday.

That step is expected Monday but won’t come as a surprise to the Beijing government. There is no deadline for deciding if any investigation is necessary. Such an investigation easily could last a year.

In a phone call Friday, Trump praised Chinese President Xi Jinping for backing the recent U.N. vote to impose tougher sanctions on North Korea, and the leaders reaffirmed their commitment to a nuclear-free Korean Peninsula. But Trump also told Xi about the move toward a possible inquiry into China’s trade practices, according to two U.S. officials familiar with that conversation. They were not authorized to publicly discuss the private call and spoke on condition of anonymity.

Trump wants government officials to look at Chinese practices that force American companies to share their intellectual property in order to gain access to the world’s second largest economy. Many U.S. businesses must create joint ventures with Chinese companies and turn over valuable technology assets, a practice that Washington says stifles U.S. economic growth.

Trump’s action amounts to a request that his trade representative determine whether an investigation is needed under the Trade Act of 1974. If an investigation begins, the U.S. government could seek remedies either through the World Trade Organization or outside of it.

China’s foreign and commerce ministries did not immediately respond to faxed requests for comment Sunday.

While Beijing has promised to open more industries to foreign companies, it also has issued new rules on electric car manufacturing, data security, internet censorship and other fields.

Trump, who is on a working vacation at his New Jersey golf club, said Friday that he planned to be in Washington on Monday “for a very important meeting’” and “we’re going to have a pretty big press conference.” It was not immediately clear whether he was talking about trade was the subject.

The administration official who confirmed that Trump would sign the order contended it was unrelated to the showdown with North Korea. The official spoke on condition of anonymity to discuss the order before Trump’s formal announcement.

As the crisis has unfolded, Trump has alternated praising China for its help and chiding it for not ratcheting up pressure on its Asian neighbor.

“I think China can do a lot more,” Trump told reporters Thursday. “And I think China will do a lot more.”

Trump has escalated his harsh criticism of North Korea for days, tweeting Friday that the U.S. had military options “locked and loaded.” Xi, in his phone conversation with Trump, urged calm.

“At present, relevant parties should exercise restraint and avoid words and actions that would escalate tensions on the Korean Peninsula,” Xi said, according to the statement provided by China’s government.

Trump, in the past, has tied trade policy to national security. In April, he said he wouldn’t label China a currency manipulator, in return for help in dealing with North Korea. This past week, Trump said he could soften his views on trade if China stepped up its assistance, leading to speculation that the investigation could be a negotiating tactic.

The forced sharing of intellectual property with Chinese firms has been a long-standing concern of the U.S. business community.

A 2013 report by a commission co-chaired by Jon Huntsman, ambassador to China under President Barack Obama and Trump’s nominee to be Russian envoy, pegged the losses from US intellectual property theft at hundreds of billions of dollars annually that cost the U.S. economy millions of jobs.

Trump has requested similar inquiries on trade, but the reports haven’t been delivered on deadline. Trump made addressing the U.S. trade deficit with China a centerpiece of his campaign last year and has suggested raising tariffs on goods from China.

At the end of March, Trump asked the Commerce Department to prepare a report on the causes of the trade deficit, country by country and product by product, in 90 days. The report has yet to be released.

Similarly, the president also asked for a review about whether steel and aluminum imports were jeopardizing national security. Commerce Secretary Wilbur Ross had hoped to finish the review by June, but parts of it remain in the final stages of interagency review.

Business and Financial News

The Free Press WV

►  Trump’s verbal shots against McConnell complicate his agenda

Donald Trump’s attacks on Senate Majority Leader Mitch McConnell come at the worst possible time, if the president’s goal is actually to advance his agenda on health care, infrastructure and taxes that he’s goading his GOP ally to pass.

Congress, now on summer break, will return next month to confront a brutal workload that includes two absolute must-do items: funding the government to head off a shutdown, and raising the federal borrowing limit to avert a potentially catastrophic first-ever default on U.S. obligations.

Both will require bipartisan cooperation, something in short supply on Capitol Hill this year.

That’s in addition to Trump’s demand for a tax rewrite to lower rates, a public works bill, and renewed efforts to repeal the Obama-era health law. McConnell, R-Ky., tried but failed last month to replace the Affordable Care Act — an outcome that Trump called “a disgrace.”

So the president’s rhetoric this past week has widened divisions at a moment when his party should try to work together on shared goals. His agenda only can pass if McConnell navigates it through the Senate. The veteran lawmaker may not feel more motivated to do that with his president working against him.

U.S. Market Weekly Summary – Week Ending 08.11.2017

S&P 500 Posts 1.4% Weekly Drop in Broad Decline Led by Energy, Financials; Consumer Staples Only Gainer
The Free Press WV

The Standard & Poor’s 500 index fell 1.4% this week, with the energy and financial sectors leading a broad decline amid concerns about tensions between the US and North Korea.

The market benchmark ended the week at 2,441.32, down from last Friday’s closing level of 2,476.83. The energy sector had the largest percentage decline of the week, down 2.9%, while the financial sector wasn’t far behind with a 2.7% drop. The materials sector was also down more than 2% while another six sectors were down by at least 1% each. Just one managed to eke out a gain this week: Consumer staples added a mere 0.1%.

The week’s broad decline came as threats were exchanged between the US and North Korea, with US President Donald Trump’s “fire and fury” remark drawing particular attention.

The energy sector’s drop also came as the Organization of the Petroleum Exporting Countries released data showing its oil output increased in July even as OPEC has been trying to cut down on oversupply. Among the week’s decliners, Chesapeake Energy (CHK) tumbled 8.6%, Apache (APA) shed 6.3% and Concho Resources (CXO) lost 2.8%.

Financial stocks were among the hardest-hit by investors’ move away from riskier assets amid the concerns about tensions between the US and North Korea. Among the decliners, MetLife (MET) shares fell 13% this week after the insurance company completed its spin-off of Brighthouse Financial (BHF) and said it is seeking consent from holders of four outstanding series of junior subordinated debt and MetLife Capital Trust IV’s trust securities to amend supplemental indentures.

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►  CPI for all items rises 0.1% in July; food, shelter, medical care indexes rise

In July, the Consumer Price Index for All Urban Consumers increased 0.1 percent seasonally adjusted; rising 1.7 percent over the last 12 months, not seasonally adjusted.

The index for all items less food and energy rose 0.1 percent in July (SA); up 1.7 percent over the year (NSA).


►  Real average hourly earnings increase 0.2% in July

Real average hourly earnings increased 0.2 percent in July, seasonally adjusted.

Average hourly earnings increased 0.3 percent, and CPI-U increased 0.1 percent. Real average weekly earnings increased 0.2 percent over the month.


►  The TV-streaming paradox: Why you may miss the cable bundle

The future of TV may well be a mishmash of streaming services that could rival the cost of a $100 cable bundle — but that are way more difficult to use.

Disney’s plan for two new streaming services (and possibly more) is just the latest sign that everyone is jumping into the streaming business. It intends to launch a kids-oriented movie and TV streaming service in 2019 that will pull Disney and Pixar films from Netflix, as well as an ESPN sidekick service (minus pro football and basketball) expected early next year. The company is even exploring the possibility of separate streaming services for its Star Wars and Marvel superhero films.

All of that will simply add to a cacophony of existing Netflix-style video services that let you watch what you want, when you want. More are probably on their way, as entertainment companies see profits in controlling not only the creation of their films and shows, but also their distribution.

The downside? Potentially bigger bills, and more work for people who just want to find something to watch. “Ultimately for consumers, it means that experience is dreadful,” says Paolo Pescatore, a vice president with research firm CCS Insight.

PROBLEM ONE: FINDING STUFF TO WATCH

New Yorker David Berkowitz still pays for cable, streams from Netflix and Amazon, and sometimes buys individual movies from Amazon; his three-year-old daughter already watches “Finding Dory” and “Finding Nemo” on two separate services. The prospect of a new Disney-only service isn’t reassuring. “Having a third thing in the mix seems like a lot to juggle,” he says.

To find stuff to watch, Berkowitz’s family uses a Roku box attached to their TV, which suggests streaming channels the family may like and lets them search for the shows and movies he wants to watch. There are also websites to guide streamers, like justwatch.com.

That’s fine if you know what you’re looking for. But the modern-day channel surfer has it much harder. “There’s going to be a proliferation of niche content,” says Colin Petrie-Norris, CEO of Xumo, a streaming-channel provider for smart TVs. “The way for it to be managed, findable for a user — that has not emerged yet.”

PROBLEM TWO: PAYING THE PRICE

People quit cable because they can’t justify a $100-and-always-climbing monthly payment, especially with so much good stuff on cheaper services. But the cost of multiple streaming services adds up, too.

A $30 TV antenna gets you local channels — CBS, NBC, ABC, Fox, PBS, Univision — for free, though you have to watch whatever’s on at the moment unless you have a DVR. If you want to see the edgy shows everyone talks about, then Netflix is, for most, $10 a month; Amazon is $8.25 a month if you sign up for a year. Hulu starts at $8. HBO Now, $15.

Tickled by ads for a specific network show? “The Sinner,” an eerie-looking new Jessica Biel vehicle on USA, costs $20 on Amazon for the season. All that together is already more than $60 a month. It’s even worse if you’re a sports fan. MLB.TV is $113 for the year, and you won’t get hometeam games .

Berkowitz says he’s curious about the Disney service, especially since he expects to save money by cutting cable. “For us, if it’s $5 a month it’ll almost be like that impulse buy, go to a store and pick up a candy bar,” he says.

Disney hasn’t settled on prices yet, saying only it wants an affordable service that’s broadly appealing. Its DisneyLife streaming video app in the U.K. launched at 10 pounds a month in November 2015 and now costs half that — about $6.50.

Of course, Disney might still bundle Marvel movies and the Star Wars franchise into its service, which would help it appeal to a wider demographic. For kid’s programming, there’s already a lot out there. Much of it is free.

Darcy Hansen, a communications consultant and stay-at-home mom in the Dallas suburbs, has two kids under age 5 whose favorite show — “Sheriff Callie’s Wild West” — is a Disney series on Hulu. But a Disney app isn’t a must-have for her.

Her kids already watch “all sorts of things” on YouTube and on the free PBS Kids app, and they have Netflix too, Hansen says. “I don’t think Disney has a monopoly on children’s programming, in our house at least.”

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