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What's more, American cigarette makers embraced NTR as a business opportunity. Combined with counseling, nicotine patches, gum, lozenges, inhalers or nasal sprays - together known as NRT - came into play in 1984 as prescription medicine. In 1996, at the urging of pharmaceutical companies, the U.S. Food and Drug Administration (FDA) allowed those products to be sold over-the-counter. The tobacco industry once viewed nicotine patches and gum as a threat to their cigarette sales. However, with formerly secret internal documents known as the "Tobacco Papers," dated between 1960 and 2010 from the seven major tobacco companies operating in the United States, researchers at the University of California, San Francisco, revealed that cigarette makers had started investing in alternative forms of nicotine delivery as early as the 1950s, but stopped short because people largely regarded nicotine as harmful, and such products might have attracted the attention of FDA regulators. Published this week in the American Journal of Public Health (AJPH), the study titled "Tobacco Industry Research on Nicotine Replacement Therapy: 'If Anyone Is Going to Take Away Our Business It Should Be Us'" found that in 1987, three years after FDA first approved nicotine gum as a quitting aid, the tide had turned on the public perception of nicotine; and that by 1992, the tobacco industry had determined that patches and gum by themselves do not help smokers quit. For more than a decade, the companies did not act on this knowledge out of fear of FDA regulation. But once the federal agency started regulating cigarettes in 2009, they went all out in their bid to develop and sell NRT. The Tobacco Papers reveal that companies conjectured that their new nicotine products could successfully compete with pharmaceutical NRT and they set the goal of gaining market control of all products containing nicotine. "It was surprising to discover the industry came to view NRT as just another product," Dorie Apollonio, associate professor in clinical pharmacy and lead author of the study, was quoted as saying in a UCSF news release.
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Altria Group Inc. , estimated that domestic cigarette industry shipment volume decreased by about 3.5 percent in the first half of 2017. Moody’s Investors Service projects 80 percent of the securities won’t make scheduled payments based on historical declines of 3 percent to 4 percent in U.S. smoking. A U.S. Food and Drug Administration proposal in July to cut the amount of nicotine in cigarettes to non-addictive levels cut tobacco bond returns 0.4 percentage point in the third-quarter, a potential buying opportunity, Barton said. Tobacco companies are expected to vigorously oppose the proposal. “Near-term, we don’t see a ban of nicotine in cigarettes," Barton said. There’s also value in certain zero-coupon tobacco bonds trading at discounts of more than 50 percent to accreted value that may be refinanced, said Ben Barber, who manages Goldman Sachs Asset Management’s $5.2 billion high-yield muni fund. The fund returned 8.2 percent through the third quarter and had 8.8 percent of assets in tobacco debt at the end of August.
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