PMI Plans IQOS Launch in South Carolina as State Proposes Low Tax Rate for HNB Products

Key Points:

The state of South Carolina is considering establishing a separate tax rate for heated tobacco products, with a tax burden much lower than traditional cigarettes. 

Public health organizations are concerned about the risk of youth exposure and oppose a lower tax rate, while industry supporters argue that heated tobacco products are a safer alternative. 

PMI plans to sell the IQOS product in the state, targeting only adult smokers. 

The bill has passed its initial review with only one opposing vote, but due to time constraints, the likelihood of it being passed in the near future is low. Currently, IQOS is only legally sold in Texas, with no sales record in South Carolina. 

According to Live5news report on April 24th, the South Carolina legislature held a preliminary hearing on a bill (H.4303) regarding heated tobacco products, proposing a separate tax rate for these products much lower than that of traditional cigarettes. This has sparked opposition from public health groups, while also gaining support from some legislators and industry representatives.

Currently, only Philip Morris International's (PMI) heated tobacco product IQOS has obtained FDA authorization for sale in the market. Texas is the only state where this product can be purchased. South Carolina currently has no record of sales of such products, but supporters of the legislation believe market entry is imminent.

Beth Johnson, representative of the American Cancer Society, stated that even though South Carolina has not yet started selling heated tobacco products, their introduction is imminent and policy intervention should be carried out early to prevent youth exposure. The association opposes setting a tax rate lower than traditional cigarettes for heated tobacco products, emphasizing that price policy is an effective tool for reducing tobacco use.

Johnson told the lawmakers during the hearing that

"We hope that you treat these products equally to traditional cigarettes and tax them at the same rate."

Philip Morris International (PMI) representative Jake Jacobs stated at a hearing that they hope to sell heated tobacco products in convenience stores and retail outlets in the state in the future, promising to market exclusively to adult smokers.

However, the bill also faced criticism from some lawmakers. Republican representative Heather Crawford from Horie County expressed concerns about it.

"I am concerned that the way we are promoting this product to the public as being '95% safe' may inadvertently encourage a new generation to develop an unsafe habit."

The bill passed its initial vote in the subcommittee of the State House Appropriations Committee on April 23. With less than two weeks left in the 2025 legislative session, the likelihood of the bill reaching the governor's office during this session is low.