By Tom Lasseter, Duff Wilson, Thomas Wilson and Paritosh Bansal
TOKYO/NEUCHATEL, Switzerland (Reuters) - In seeking regulatory approval for a new smoking device called iQOS, Philip Morris International Inc is claiming the electronic gadget is less likely to cause disease than traditional cigarettes. But the iQOS holds another, less obvious advantage over regular smokes: the ability to harvest personal data about users' smoking habits.
The tobacco giant is already building a database of iQOS customers who register with the company. And it has developed a software application that could take things a step further.
The initiative, if allowed by regulators, could extract information about a user's smoking routine from the device and use it for marketing purposes, said a former project manager at the company who tested the software in Japan. That data would include the number of puffs and average consumption per day, said Shiro Masaoka, who worked at Philip Morris in Japan from 2012 to 2016.
Asked about Masaoka's comments, Philip Morris said the software in the device that controls temperature and duration of use "is not used for marketing purposes whatsoever."
A Canadian firm that specializes in reverse-engineering tech devices says the iQOS is equipped with two microcontroller chips, including one that, with modifications to the device, could support the storing of usage information that could then be transmitted back to Philip Morris. From the product description of the chips used, the data could include details like the number of puffs by a user and how many times a person smoked the device in a given day, according to Ottawa-based TechInsights Inc, which examined the iQOS' innards for Reuters.
The firm's inspection included the hardware and components; it did not test the functionality of the device's software. Reuters is publishing TechInsights' teardown report as part of a searchable repository, The Philip Morris Files, which includes internal company documents.
Presented with the TechInsights findings, Philip Morris said in a statement: "No data information from the device is linked to a specific consumer, only the device."
A patent filed by a Philip Morris subsidiary in 2009 suggests how communication with the smoker would work. It describes an iQOS-like device as having "an interface for establishing a communications link for uploading data to and downloading data from an Internet-enabled host."
Gregory Connolly, a professor at Northeastern University in Boston who has studied iQOS technology and patents, said Philip Morris' ability to gather user data could give the device remarkable power.
"What they're going to have is a mega database of how Americans smoke," he said. "Then they'll be able to reprogram the current puffing delivery pattern of the iQOS to one that may be more reinforcing and with a higher addiction potential."
Told about those comments, Philip Morris referred to remarks in January by its vice president for scientific and public communications, Moira Gilchrist.
"I can reassure that there's no technology in there that's intended to manipulate in any way what is delivered from iQOS," Gilchrist told a panel of scientific advisers for the U.S. Food and Drug Administration (FDA).
The only time the company extracts data from the device, Philip Morris says, is when trying to figure out why there's been a malfunction.
Gilchrist told the FDA panel that iQOS delivers roughly the same level of nicotine as a standard cigarette. Philip Morris says the device's nicotine delivery cannot be altered.
Gilchrist did say, though, that the company is able to "capture data," such as the number of puffs taken on an iQOS, but doesn't do so unless it's necessary to examine a device that has a technical problem. The number of puffs by a user and smoking time per tobacco insert are automatically regulated by the device, she said.
The company says that by heating tobacco instead of burning it, the iQOS significantly reduces a user's exposure to the levels of carcinogens and other toxic substances found in a regular cigarette. As a result, the company claims, the device "is likely to reduce the risk of smoking related diseases."
The iQOS system uses cigarette-like inserts containing tobacco, branded in some markets as HeatSticks. They slide into a pen-size holder, equipped with a heating component called a "blade." The device comes with a USB cord, and has Bluetooth wireless communication availability in some markets.
Philip Morris says iQOS is for smokers who would otherwise not quit. It is applying to the FDA for permission to market the device in America as being less harmful than cigarettes.
The panel of advisers at the FDA hearing in January voted its approval of a finding that scientific studies show switching completely from cigarettes to iQOS significantly reduces a smoker's exposure to harmful chemicals. But it also found that Philip Morris had not demonstrated that the reduction is "reasonably likely" to result in a "measurable and substantial" reduction in disease and/or death.
A Reuters investigation published in December identified shortcomings in the training and professionalism of some of the lead investigators in the clinical trials that underpin the tobacco giant's application to the FDA. Former Philip Morris employees and contractors described irregularities in those studies. Reuters did not find any evidence that the outcome of the experiments was manipulated or falsified.
Philip Morris said in a statement to Reuters that "all studies were conducted by suitably qualified and trained Principal Investigators," researchers who oversee a clinical trial.
In a letter in February, which mentioned Reuters' findings, a group of 10 U.S. senators asked FDA Commissioner Scott Gottlieb to "avoid rushing" the approval of products such as iQOS "without requiring strong evidence that any such product will reduce the risk of disease, result in a large number of smokers quitting, and not increase youth tobacco use."
The company has filed a series of patents related to electronic smoking devices. One such patent published in 2016 describes a mouthpiece with a sensor to measure the amount of nicotine byproduct in a user's saliva and allows for remote adjustments to the device. Such changes would allow for the monitoring and controlling of the "maximum threshold" for the amount of nicotine that a user receives, according to the patent.
In a statement in December, Philip Morris said that patent "is not used in any of our products and we have no plans for it in the foreseeable future."
At the January meeting of the FDA advisory panel, Gilchrist was quizzed on how the company is using Bluetooth, which provides for greater connectivity with iQOS users. She replied that it is used to remind consumers, for instance, when they have to clean their device or re-order HeatSticks so they didn't run out and have to revert to regular cigarettes.
"You know, for example, a message may come up: 'Hey, you haven't used your iQOS device today,'" Gilchrist said. "Have you stopped smoking, or is it because you've gone back to combustible cigarettes?"
In Japan, which has more permissive tobacco marketing laws than many countries, Philip Morris is collecting user information through registrations for the device.
At a flagship boutique in Tokyo's fashionable Harajuku district, where the word iQOS stretches down the side of a glass-encased building, customers were offered a discount on buying the device in exchange for signing up on the company's iQOS website.
The company offered incentives on the website for people to register, including the iQOS discount. In doing so, potential customers were asked to enter a list of smoking preferences as well as the user ID for their Instagram social media account.
Philip Morris said in a statement that it does so "to ensure that these consumers can follow the iQOS Instagram account, which is closed and limited to age-verified consumers registered in the Philip Morris Japan iQOS consumer database."
An internal Philip Morris handbook dated 2016 discussed approaches to social media. It gave examples of possible Facebook posts aimed at customers. "Did you know?" one suggested post reads. "Our newest version of iQOS can be connected to an app that'll help you adjust to the product much quicker. Take it for a spin and learn more."
(For a graphic on 'Scientists describe problems in Philip Morris e-cigarette experiments' click https://www.reuters.com/investigates/special-report/tobacco-iqos-science/)
(For a graphic on 'How Philip Morris is selling regulators on its hot new smoking device' click https://www.reuters.com/investigates/special-report/tobacco-iqos-marketing/)
(Additional reporting by Aditya Kalra in New Delhi, and Ami Miyazaki and Taiga Uranaka in Tokyo. Edited by Peter Hirschberg.)