The Future of Nicotine Was Not Invented by Big Tobacco

There is a convenient story often told about tobacco harm reduction. It says that vaping, heated tobacco and nicotine pouches are simply the latest inventions of the tobacco industry, created to protect cigarette profits, recruit another generation and preserve nicotine addiction under a more respectable name. It is a politically useful story because it removes the need to think seriously about relative risk, consumer behaviour or the possibility that technological disruption may succeed where decades of conventional tobacco control have struggled. Once every smoke-free nicotine product is labelled an industry trick, the product itself no longer needs to be judged by what it does. Its origin is treated as sufficient evidence against it.

The problem is that this story is not historically accurate.

The modern electronic cigarette was not invented by Philip Morris, British American Tobacco, Imperial Brands or Japan Tobacco. It is generally credited to Hon Lik, a Chinese pharmacist and smoker who developed and patented his design in 2003. His device used electricity to create an inhalable nicotine aerosol without burning tobacco. It was not perfect, and the technology has evolved enormously since then, but the central idea was revolutionary: preserve enough of the familiar ritual and nicotine delivery of smoking while removing combustion, the process responsible for most of the disease caused by cigarettes.

Hon Lik was not acting as the research arm of a multinational cigarette company. He was trying to solve a problem that millions of smokers understood intimately. They wanted nicotine, relief, ritual and satisfaction without continuing to inhale smoke. Earlier attempts had been made to develop non-combustible nicotine devices, including by tobacco companies, but it was Hon Lik’s modern e-cigarette that helped trigger the consumer technology movement we recognise as vaping today.

That distinction matters because tobacco harm reduction was not imposed on consumers from above. It grew from below.

Smokers discovered early devices, experimented with them, modified them and told other smokers about them. Small manufacturers improved batteries, coils, tanks and e-liquids. Independent vape shops appeared. Online forums became informal technical-support centres where consumers compared equipment, nicotine strengths and methods for switching. The technology was often untidy and decentralised, but it was driven by a very clear demand: people wanted an acceptable alternative to smoking.

The early vaping market looked less like a coordinated tobacco-industry strategy than a disruptive consumer movement. Much of the innovation came from independent manufacturers, small businesses and users who were dissatisfied with both cigarettes and the limited alternatives offered by conventional cessation products. Tobacco harm reduction did not wait for permission from public health institutions, pharmaceutical companies or cigarette manufacturers. Consumers began doing it themselves.

This is one reason vaping produced such an uncomfortable reaction from parts of tobacco control. It did not emerge through the approved channels. It was not developed as a medicine, distributed through clinics or controlled by public health agencies. It was a consumer product that smokers actually wanted to use. Rather than asking people to surrender nicotine, pleasure and ritual all at once, it separated nicotine use from combustion and allowed smokers to change how they consumed it.

The breakthrough was not merely chemical. It was behavioural.

Nicotine replacement therapies had already demonstrated that nicotine could be delivered without smoking, but vaping added something patches and gum usually could not provide: an experience capable of competing directly with a cigarette. It preserved the hand-to-mouth action, inhalation, sensory feedback and social ritual that many smokers associated with nicotine use. For some people, these features may appear trivial. For someone who has smoked every day for decades, they can be the difference between briefly attempting to quit and permanently leaving cigarettes behind.

The tobacco companies did not create this consumer shift. They noticed it.

They could see smokers buying products from independent manufacturers. They could see vape shops growing, cigarette sales declining in some markets and new nicotine categories developing outside their traditional control. They could also see the strategic danger. A technology capable of delivering nicotine without smoke was not merely another tobacco product. It was potentially the digital camera arriving in a world built around film.

The industry’s response was predictable. Some companies acquired brands, developed competing products, invested in heated tobacco and entered oral nicotine markets. This does not rewrite the history of vaping, nor does it transform independent innovation into an industry conspiracy. It shows that even the companies most financially dependent on cigarettes have recognised that combustion is becoming an increasingly vulnerable business model.

The financial data now make that recognition impossible to dismiss.

Philip Morris International reported that its smoke-free business generated US$16.9 billion in net revenue during 2025, accounting for 41.5 per cent of its total annual net revenue. It estimated that approximately 43.5 million adults were using its smoke-free products across 106 markets. By the first half of 2026, smoke-free products were available in 109 markets and were generating around 42 per cent of PMI’s global net revenue. The company says it has invested more than US$16 billion in developing, substantiating and commercialising smoke-free products since 2008, and it wants more than two-thirds of its worldwide revenue to come from them by 2030.

These are no longer the figures of an experimental side business. Smoke-free nicotine has become central to PMI’s commercial strategy. By the end of 2025, more than half of the company’s revenue was already coming from smoke-free products in 27 markets. A company once almost entirely identified with cigarettes is now publicly measuring its future by how rapidly it can increase the proportion of its business that does not depend on combustion.

British American Tobacco is travelling in the same direction. In its 2025 results, BAT reported that it had added 4.7 million consumers to its smokeless brands in a single year, bringing the total to 34.1 million. Its New Categories business generated £3.621 billion in revenue, while smokeless products accounted for 18.2 per cent of group revenue. BAT says it wants at least half of its revenue to come from smokeless products by 2035.

Imperial Brands reported that net revenue from its next-generation products grew by 13.7 per cent in 2025, driven by growth across vaping, heated tobacco and oral nicotine. Over the previous five years, its next-generation-product revenue had risen by 83 per cent. Imperial remains more dependent on cigarettes than some of its competitors, but its strategic direction is still clear. It is building a larger non-combustible business because it expects these categories to become increasingly important.

Japan Tobacco announced an investment of ¥650 billion in reduced-risk products between 2025 and 2027, with a significant proportion directed towards its Ploom heated-tobacco platform. By May 2025, Ploom had expanded into 26 countries. Again, this is not the behaviour of a company treating non-combustible products as a public-relations accessory. It is a multibillion-yen commitment to changing the way nicotine is delivered.

The transformation is especially visible in Japan. By December 2025, heated-tobacco products reportedly represented more than half of total nicotine-product sales nationally. PMI reported that IQOS consumables alone accounted for 32.6 per cent of the total nicotine market in the fourth quarter, while the entire heated-tobacco category exceeded 50 per cent of nicotine sales nationally in December.

Altria, whose business is concentrated almost entirely in the United States, is also investing heavily in a smoke-free future despite operating in one of the world's most complex regulatory environments. Its corporate vision is to "responsibly transition adult smokers to a smoke-free future," supported by major investments in the NJOY e-cigarette business, the on! nicotine pouch brand and the Horizon Innovations heated-tobacco joint venture. In its second-quarter 2026 results, Altria reported net revenues of US$6.1 billion and reaffirmed its full-year earnings guidance, while continuing to direct substantial investment towards smoke-free products. The company acknowledged that competition from illicit disposable vapes and the temporary absence of NJOY ACE from the market had affected performance, with on! nicotine pouch shipment volumes declining 4.2% in the quarter amid intense competition. Even so, Altria has not retreated from its smoke-free strategy. Instead, it continues investing in research, regulatory applications, manufacturing capability and new product development because it believes the long-term future of nicotine is increasingly non-combustible.

None of this proves that tobacco companies have become charitable public health organisations. They have shareholders, commercial incentives and long histories that justify scrutiny. They will pursue markets that produce growth and profit. Their statements should be tested rather than accepted uncritically, and their political conduct should remain open to examination.

The categories themselves also require care. “Smoke-free”, “smokeless”, “reduced-risk” and “next-generation” are company reporting terms, and they do not always describe exactly the same products. One company may include vaping, heated tobacco and oral nicotine, while another may define its portfolio differently. The figures are largely self-reported and should not be mistaken for independent public health evaluations.

Nor does smoke-free mean harmless. Inhaling nothing and using no nicotine is likely to carry less risk than using any nicotine product. Some products may be substantially less harmful than cigarettes while still carrying risks of their own. The greatest health benefit is also likely to come when a smoker switches completely rather than continuing to smoke regularly while using another product.

But these qualifications do not erase the underlying reality. Combustion is the central problem, and the nicotine market is moving away from it.

The companies know this because they can see where consumers are going. Their investment decisions are not abstract public health arguments. They are bets involving billions of dollars, product-development programmes, manufacturing capacity, acquisitions, distribution systems and long-term revenue targets. Businesses do not redirect that scale of capital merely to create the appearance of transformation. They do it because they believe the market itself is changing.

Some critics respond that tobacco-company involvement contaminates the entire idea of harm reduction. Yet this is a strange standard. We do not normally decide whether a product reduces risk by examining the moral character of its manufacturer. We examine the product, its emissions, its patterns of use, its effect on behaviour and the alternatives available to the consumer.

A seatbelt does not stop reducing injury because it is manufactured by a car company. Lower-alcohol drinks do not become equivalent to spirits because a major alcohol producer sells them. Sunscreen does not cease to protect skin because a large corporation makes a profit from it. Commercial motives may justify vigilance, but they do not repeal chemistry, toxicology or human behaviour.

The important question is not whether a tobacco company earns money when a smoker switches. The important question is whether the smoker is substantially less likely to become sick or die.

There is also something deeply contradictory about demanding that cigarette companies move away from cigarettes and then treating every investment they make in alternatives as evidence of deception. For decades, critics have condemned tobacco companies for profiting from combustible products. Now that these companies are investing billions in non-combustible products, some of the same voices insist that this, too, proves their wickedness.

Under that logic, no transformation can ever count.

If the companies continue selling only cigarettes, they are accused of refusing to change. If they invest in vaping, heated tobacco or nicotine pouches, the alternatives are dismissed because tobacco companies are involved. If consumers switch voluntarily, they are described as victims of manipulation. If cigarette sales fall, the decline is credited to traditional tobacco control alone. The argument is structured so that harm reduction can never be acknowledged, regardless of what happens in the real world.

This does not protect public health. It protects an ideology from being tested.

The more honest interpretation is that tobacco harm reduction began outside the established cigarette industry, was propelled by consumers and independent innovators, and has now become too commercially significant for major tobacco companies to ignore. Their participation is evidence that the transition has reached scale, not evidence that they invented it.

Most vaping products are still manufactured by independent companies, particularly across the enormous and diverse Chinese manufacturing sector. Independent manufacturers continue to develop open-system devices, disposable products, e-liquids, coils and other technologies. The global vaping market is not synonymous with the tobacco industry, even though major tobacco companies now own prominent brands and compete within it.

This distinction is routinely blurred in public debate. Images of cigarette executives are used whenever vaping is discussed, creating the impression that the entire category is simply an extension of Big Tobacco. The independent companies, specialist retailers and millions of adult consumers who built the market disappear from view. Their experiences are replaced with a simpler narrative in which tobacco companies created vaping, and smokers obediently followed.

History shows almost the reverse. Consumers moved first. Much of the industry followed.

That sequence should matter to policymakers because it reveals what is actually driving the transition. People are not moving away from cigarettes merely because a corporation instructed them to do so. They are moving because non-combustible products can offer something they value: nicotine without smoke, lower exposure to toxic products of combustion, greater social acceptability, less smell, and an experience that many find more satisfying than traditional cessation aids.

The role of government should be to shape this transition so that it produces the greatest public health benefit. That means enforcing age restrictions, setting sensible product standards, requiring accurate labelling, monitoring ingredients, controlling irresponsible promotion and ensuring that adult smokers receive truthful information about relative risk. It does not require pretending that all nicotine products are equally harmful or attempting to suppress the alternatives so thoroughly that cigarettes and illicit suppliers are left with the advantage.

Australia has chosen a different path. While the commercial and consumer transition towards non-combustible nicotine is accelerating internationally, Australia continues to make lawful access to regulated vaping products unusually difficult. The pharmacy model places a consumer product behind a medicalised system that many smokers do not want to use, while ordinary retail and domestic online sales remain prohibited. Legal products face tight restrictions while illicit products have become widely available through an enormous uncontrolled market.

The result is an extraordinary contradiction. Australia claims to want a smoke-free future while obstructing many of the products capable of making smoking obsolete.

In countries where smokers can legally purchase regulated alternatives, governments can impose standards, collect data, enforce age controls and communicate relative risks. In Australia, much of the market has instead been handed to criminal suppliers who do not check identification, disclose ingredients, follow product standards or care whether their customers previously smoked. The policy has not eliminated consumer demand. It has simply separated that demand from legal oversight.

Meanwhile, the rest of the nicotine market is evolving. Tobacco companies are investing billions. Independent manufacturers continue to innovate. Consumers are switching. Heated tobacco has taken a large share of Japan’s nicotine market. Nicotine pouches are expanding rapidly in several countries. Vaping remains a significant alternative to smoking. The transition is not hypothetical, and it is no longer confined to a small group of enthusiasts.

Australia can object to this change, regulate it responsibly or attempt to suppress it, but it cannot make the underlying technological shift disappear.

The cigarette is a remarkably durable product, but its dominance was never guaranteed to last forever. It survived for more than a century partly because it delivered nicotine rapidly and efficiently in a cheap, portable and familiar form. Its terrible defect was combustion. Once technology found credible ways to preserve much of what smokers valued while removing the smoke, the cigarette became vulnerable to disruption.

Hon Lik helped open that door. Independent manufacturers pushed through it. Consumers demonstrated that there was a market on the other side. The major tobacco companies, recognising what was happening, began redirecting enormous amounts of money towards the non-combustible future.

That history does not require us to trust tobacco companies. It requires us to understand the direction of travel.

Tobacco harm reduction should never belong to an industry, an activist movement, a government department or a public health institution. It should belong to the people whose lives depend on escaping smoking. Products should be judged according to whether they help those people move away from combustion, not according to whether their manufacturer passes an ideological purity test.

The future of nicotine was not invented by Big Tobacco. It emerged because a smoker searched for another way, independent innovators improved the technology, and millions of consumers decided that they no longer wanted to inhale smoke.

The tobacco companies eventually recognised the value of that transition. The financial figures show just how seriously they now take it.

The remaining question is whether Australian policymakers will recognise it too, or whether they will continue defending a regulatory model built for a nicotine world that is rapidly disappearing.