Altria (NYSE:MO) and Philip Morris International (NYSE:PM) are no longer able to sell or import Iqos tobacco devices in the U.S. after the Biden administration opted to take no action on an ongoing patent dispute.
Rival R.J. Reynolds, a subsidiary of British American Tobacco, had filed a claim with the U.S. International Trade Commission. In late September, the ITC ruled that the Iqos device infringed on two of Reynolds’ patents. As part of the process, the Biden administration conducted a 60-day administrative review and decided to not take any action to reverse the ITC’s decision.
Altria launched the Iqos device in the United States two years ago, but it began development of the product more than a decade ago before Philip Morris was spun off from the company. The device heats tobacco without burning it, which is meant to give users the same rush of nicotine without as many toxins as smoking a cigarette.
Philip Morris sells the device in dozens of international markets and has granted Altria a license to sell it in the U.S. While Iqos doesn’t represent a large portion of Altria’s U.S. business, it’s part of the company’s shift away from traditional tobacco products, which have seen falling demand.
Altria said it counts 20,000 U.S. consumers as users of the device, but they will no longer be able to purchase it in the U.S. The company is offering refunds to existing users.
Altria started Tuesday trading down 60 cents, or 1.4%, to $42.88, while Philip Morris subsided $1.15, or 1.3%, to $86.20.
