Science for sale: Philip Morris’s web of payments to fund tobacco research

1 July 2024

By Fin Johnston, The Bureau of Investigative Journalism

Whistleblower reveals tactics used by tobacco giant to push flagship product

High up in the Tokyo offices of the one of the world’s largest tobacco companies, a stone’s throw from the prime minister’s building, Shiro Konuma took a moment to process what he’d just been told.

Konuma had joined Philip Morris International two months earlier, having spent his career in health: first as a doctor, then a diplomat. He had helped fight malaria, Ebola and Aids. Now, after two decades in government, Konuma wanted to address what he describes as “one of the biggest remaining issues of public health”. His reason was personal: “I’m a smoker.”

So he went to work for Big Tobacco.

But Philip Morris is a tobacco company with a difference – it says it wants to rid the world of cigarettes. And in April 2019, he joined its Japanese arm as director of medical and scientific affairs. As he puts it: “I believed the smoke-free vision of Philip Morris.”

At the heart of this vision was the company’s flagship heated tobacco product, Iqos, which it markets as a healthier alternative to cigarettes.

With his black book thick with contacts, Konuma was an attractive hire. “The reason why I was recruited is that they want access to the leaders,” he says. “I had the access.”

But now, just a few weeks into his new job, he had discovered something that raised huge questions about his new employer.

A colleague had told him about payments the company was making to a consultancy firm founded by a professor at one of Japan’s elite universities. It wasn’t long before he was informed about a second similar project, again involving a top university, again involving six-figure payments to a third party. Both schemes aimed to bolster scientific support for Iqos. Konuma wondered how transparent the flow of tobacco money really was.

Suddenly Konuma had reason to doubt the integrity of the research being done under his watch. “Can we believe what [Philip Morris] says about the … ‘better alternative’?” he says. “Can we believe that?”

Sitting in his office in the summer of 2019, Konuma had a choice to make. “A longtime employee advised me, ‘You don’t have to react [ …] That will hurt your career,’” he remembers.

Regardless, he composed an email detailing his concerns and addressed it to the company’s highest-ranking executives. He says doing so was his “duty” – both as a senior employee and a medical doctor.

That email kickstarted a four-year journey that has seen him sacked by Philip Morris, report the company to state authorities in two countries and, in talking to the Bureau of Investigative Journalism (TBIJ), go public with his story.

Philip Morris told TBIJ: “His allegations were taken seriously and investigated thoroughly at the time. His allegations of unlawful conduct were found to be without merit.”

Going public is not a decision Konuma has taken lightly: the number of whistleblowers who have spoken out against Big Tobacco over the decades can be counted on one hand. Jeffrey Wigand, who blew the whistle on Brown & Williamson in the 1990s, resorted to hiring bodyguards after being followed on the street and receiving death threats.

“They’re going to try and crucify [Konuma] and make him a devil.” Wigand told TBIJ.

Speaking to TBIJ, Konuma appeared calm. “I don’t look anxious,” he says, “but I am very anxious.”

Konuma believes his story needs to be told. It is a story that leads from the boardrooms of Big Tobacco to the campuses of Japan’s most prestigious universities and finally into the corridors of government power.

At the centre of it all is Iqos, the linchpin of Philip Morris’s $13bn-a-year portfolio of smoke-free products. In Japan, where Iqos sells more than anywhere else, it has become a major player in the country’s tobacco market. Konuma believes public health was compromised to get it there.

Explaining his decision to take on a tobacco giant, he speaks in plain terms: “Sunlight is said to be the best disinfectant,” he says. “I wanted the sunlight to pierce through the clouds of Philip Morris.”

A safer alternative?

Philip Morris made more than $20bn from cigarettes last year. It sold nearly 80 for every person on the planet. And it is the maker of Marlboro, the world’s best-selling cigarette. So the company’s “mission to deliver a smoke-free future” may sound like a strange ambition.

In fact it is a calculated corporate strategy.

Philip Morris still makes nearly two-thirds of its revenue from cigarettes, but with smoking rates across the world in decline and stricter measures being put in place to combat smoking, the company has taken the decision to drastically reinvent its image.

Since launching its “smoke-free” pledge in 2016, Philip Morris has invested heavily in a new line of smoking cessation devices, such as vapes and heated tobacco. At the same time, it has adopted the public health language of “harm reduction”. It says that smokers who can’t quit nicotine should switch to these less harmful alternatives – also sold by Philip Morris.

Chief among them is its range of Iqos heated tobacco products. These devices, which consist of a pen-like holder and a disposable stick, heat tobacco without burning it.

This so-called “smokeless cigarette” still contains nicotine but is pitched as a “better alternative” to conventional smoking. Philip Morris says its own studies show it is exactly that. And it’s in the marketing wherever you look for it.

But the adverts don’t tell the whole truth.

One independent study, which analysed Philip Morris’s own research results, concluded that the data “fails to show consistently lower risks of harm” from using Iqos than conventional cigarettes. A separate analysis of 10 studies, all funded by tobacco companies, said its findings supported claims of reduced harm from heated tobacco but stressed that industry involvement meant that further independent research was needed to confirm or refute the findings.

Theodore Friedman of the Charles R Drew University of Medicine and Science told TBIJ: “I don’t think Iqos is any healthier than cigarettes, there haven’t been any independent studies that show they’re healthier […] You have to look at who’s funding it.”

Most surprising of all is the fact that Philip Morris has itself made this very admission behind closed doors. In a confidential submission to the US Food and Drug Administration (FDA) made in December 2016, the company wrote: “It has not been demonstrated that switching to the Iqos system reduces the risk of developing tobacco-related diseases compared to smoking cigarettes.”

 
 

Its huge outlay on research and PR – including the recruitment of the FDA’s top tobacco scientist – has gone some way to boosting Philip Morris’s credibility. But research produced by the company is still met with scepticism by many.

After all, Big Tobacco has not always been synonymous with scientific integrity.

“[Tobacco companies] have marketed and sold their lethal product with zeal, with deception, with a single-minded focus on their financial success, and without regard for the human tragedy or social costs,” wrote Judge Gladys Kessler in her landmark 2006 ruling of United States of America vs Philip Morris.

The case saw the US government successfully holding nine cigarette manufacturers liable for a decades-long conspiracy to deceive the American public. Among the examples cited by Kessler was companies’ “deceptive” marketing of low-tar cigarettes as healthy alternatives to regular brands.

Stella Bialous, a tobacco specialist at the University of California and adviser to the World Health Organization, believes a similar attitude prevails today. “What [Philip Morris] tells us is what they find the most convenient,” she said.

Philip Morris, meanwhile, claims its in-house researchers are “doing science with the highest level of quality and integrity”, developing non-combustible tobacco products “for the larger public health good”.

Healthier or not, Iqos has been a commercial triumph. Last year it made more money for Philip Morris than Marlboro. More than a third of those sales were made in Japan. And this year it will be rolled out in the US.

Konuma’s story, though, pulls back the curtain on this success.

“They do not reduce harm,” he says of Iqos. “They do not reduce health risks. They do not reduce mortality. It is not proven.”

Asked if the company conducted its research activities in Japan transparently, he is emphatic.

“No. No. No,” he says. “Their science is not credible.”

Paying the professor

The University of Tokyo’s Hongo campus is famed for its imposing gothic revival architecture. In autumn, the yellow ginkgo trees lining its footpaths draw flocks of tourists. The university is also one of Japan’s most prestigious, respected across the world for the quality of its scholars. But one of them has been on the payroll of Big Tobacco.

As well as holding the post of project professor, Hiromichi Kimura is also founder and CEO of a Japanese consultancy firm called FTI Innovations (FTI-I), which between 2015 and 2019 was paid $300,000 a year by Philip Morris.

Professor Kimura’s company was being paid to help Philip Morris engage with the scientific community. But the services being provided by the professor went some way beyond this remit.

In fact, Kimura was a piece in a much larger jigsaw puzzle. His services to Philip Morris were part of the company’s plan to secure lower tax rates for Iqos in Japan.

The plan was laid out in an internal company document, seen by TBIJ, which offers a rare glimpse into the inner workings of a global tobacco corporation. This Business Objectives paper details an exhaustive corporate strategy that involved lobbying lawmakers and establishing a presence at the Tokyo Olympics.

It also involved installing a Philip Morris employee as a visiting scholar at Tokyo University, within the professor’s own department. Documents suggest that Kimura would use his position to get them there. Once in place, the plan was that they would publish research showing how heated tobacco products could benefit Japan’s economy.

This research, carrying the stamp of a top university, would then be shown to Japan’s Ministry of Finance as part of negotiations over the tax rates on Iqos.

Kimura told TBIJ: “I have never advocated for, facilitated the hiring of, or actually hired an employee of PMI as a visiting researcher.”

On discovering the arrangement with FTI-I, Konuma became suspicious. The professor, he says, had already told him and other Philip Morris staff to keep the contract with FTI-I a secret. Now, he wondered whether the money changing hands was legitimate – and if it amounted to bribery.

It was then that he wrote his email to the senior executives, laying out his concerns that the payments presented a reputational risk to Philip Morris and his belief that there had been a lack of due diligence conducted on the FTI-I contract.

A second former Philip Morris employee, who asked to remain anonymous for fear of reprisals, told TBIJ the payments to FTI-I were “huge” and would be difficult to justify to outside investigators.

Konuma asked himself whether they could constitute a violation of the Foreign Corrupt Practices Act (FCPA), a major piece of US legislation that covers companies listed on the country’s stock exchange. It prohibits US companies using payments or rewards to influence foreign officials – including employees at state-funded universities abroad.

When approached for this story, FCPA experts gave different opinions over whether this would attract the attention of US prosecutors.

Brian Frey, a former prosecutor at the US Department of Justice and a partner at the law firm Alston & Bird, reviewed the allegations and said they have “the hallmarks of a bribery scheme that is actionable under the FCPA”.

FCPA expert Leo Cunningham, a partner at the law firm Wilson Sonsini Goodrich & Rosati, said: “The facts provide a sound basis for a responsible regulator to look further into whether or not there’s an FCPA violation.”

Other experts approached by TBIJ said they felt it was unlikely to be treated as an FCPA matter. Mike Koehler of the University of Houston Law Center Faculty said it would be unlikely to be investigated by prosecutors as it was not directly related to influencing government policy or decision-making.

 
 

What the payments do show is that Professor Kimura was acting as a paid go-between, with one foot in the world of Big Tobacco and the other in the world of reputable science.

Kimura did not disclose to the university that his company was being paid six-figure sums by Philip Morris.

Nor did his services stop at recruitment. Konuma recalled attending a May 2019 meeting when the professor updated Philip Morris staff on his company’s work.

“I thought that that meeting was very, very strange,” he said. The professor stood up and “presented the achievements [he had made for Philip Morris] within Tokyo University”.

One of those was to get a Philip Morris employee invited to speak at a university event. FTI-I also stated it planned to “start a new course at Tokyo University”. (TBIJ has not been able to establish what this course was.) And another presentation given by the professor’s company boasted that his university research unit – rather than FTI-I, which received the payment – would deliver “high-impact achievements” for Philip Morris.

 
 

FTI-I told TBIJ: “We do not provide any academic activities or achievements to our clients as contractually defined deliverables. Furthermore, FTI Innovations complies with all relevant regulations and rules in every project.”

The University of Tokyo’s ethics guidelines state that employees “shall never use their work duties or position to advance private interests for their own benefit or for the benefit of organisations to which they belong”.

Kimura told TBIJ: “I am not aware of any situation involving PMJ that would constitute a violation of the law. Additionally, in my position […] at the university, I have not received any funding from PMJ.

“Due to [the] part-time nature of my position, I am not institutionally required to report any concurrent employment to the university. However, in cases where a conflict of interest with the industry is anticipated, I disclose the relationship to the university authorities and consult with them to confirm if it is truly appropriate to take action.”

The University of Tokyo told TBIJ the institute’s conflict of interest advisory board investigated after it “became aware” of the matter in 2020, five years after Philip Morris started paying Kimura six-figure sums.

It said: “No problems such as violations of the university’s rules of duty or unacceptable conflicts of interest were identified.” It added the board issued advice to Kimura to “prevent the appearance of misconduct” in the future. 

The Kyoto connection

Three-hundred miles west of the capital, in Japan’s “cultural heartland”, lies Kyoto University. It was where the second plan was to play out – again involving undisclosed payments.

Part of Philip Morris Japan’s corporate strategy involved getting scientists outside of the company to produce research supporting Iqos. Or in the words of its Business Objectives document: “Expand third party scientific endorsement for Tobacco Harm Reduction.”

What Konuma discovered was that Philip Morris was using a healthcare contractor called CMIC Holdings to fund research taking place at Kyoto University into smoking cessation products.

Documents provided to TBIJ by Konuma show that in October 2017, CMIC agreed to pay Kyoto University 49.5m Yen ($445,000) for a study on “smoking cessation aids”.

Further documents show that in May 2018, CMIC sent Philip Morris Japan a cost estimate for work it had conducted. This included 49.5m Yen for “planning and support of conducting epidemiology research” – exactly the same amount it had paid Kyoto University.

Using CMIC as a go-between, said Konuma, meant the university’s ethics committee was unaware that a tobacco company was paying for the research when it gave the green light. Contracts signed between CMIC and Kyoto University make no mention of Philip Morris.

 

Konuma’s concern was not that Philip Morris was sponsoring research. Companies do it all the time (and the results tend to benefit the company who paid for it). What worried him was the risk that people might think “the research was done independently from – and without funding from – the tobacco company”.

 
 

Kyoto University told TBIJ that its ethics committee approved the project in July 2018 but that the minutes of that meeting have not been made public. It said that Philip Morris’s funding was known to the professor in charge of the study but not described in the university’s official records.

It told TBIJ: “It cannot be said that the university was officially aware of PM’s involvement.”

And it was not just the financial arrangements that raised ethical questions. The way the study was conducted did too.

A July 2019 email from a senior Philip Morris International staff member sets out the official position: “Study and costs managed completely by CMIC.”

The reality, though, was less clearcut. The study did not appear to be free of Philip Morris input. Emails seen by TBIJ show that Philip Morris was in direct contact with the Kyoto academics. In one, a Philip Morris employee tells a professor: “We would also like to have a discussion with you on the test details and questions.”

 
 

CMIC told TBIJ it is convinced there were no problems with the study.

Kyoto University said Philip Morris presented the results of the study at a conference, acknowledging the contribution of a professor from the university.

Though documents show the study was commissioned and paid for, it was not published.

Speaking about the industry, Robert Jackler, a tobacco expert at Stanford University, told TBIJ: “The tools of the trade are to commission research with as much possible deniability and arm’s length management,” he said. “For example, working through noble-sounding third-party organisations, sometimes not disclosing in their publications.”

Konuma hopes that in hearing of the tactics his former employer used in Japan, other governments “will be vigilant” about Philip Morris’s engaging of scientists in their countries.

Sacked

Back in the offices of Philip Morris, Konuma’s email had sparked a chain of dramatic events.

After he flagged his concerns about the payments to Professor Kimura, the Tokyo plan appeared to have been called off: the company scientist never took up the post. “That finally failed as a result of my whistleblowing,” he says.

For Konuma, though, this was not enough; a proper inquest was needed. He continued to force the issue.

When he took his concerns further up the business, Konuma says he was met with resistance by senior staff. He said he was shouted at in a meeting where he raised concerns. One senior figure, he said, “tried to intimidate me and shut my mouth”.

The regional head of compliance at Philip Morris International wrote Konuma an email saying he had found “no evidence of a breach of […] PMI’s anti-corruption policy”. Konuma says he followed up by asking whether the cases violated the FCPA, but got no answer.

Then Konuma was shown the door.

 
 

He was told that he had failed his probation. The performance evaluation gave several reasons from his line manager, including that Konuma had not “fully understood the internal process and importance of respecting the reporting line”. It said Konuma had sent emails to the president of Philip Morris Japan without consulting with his line manager.

Konuma believes he was really fired in retaliation for flagging his concerns.

A former Philip Morris employee familiar with the matter told TBIJ they believed Konuma was fired because he raised the alarm.

Another former Philip Morris employee said: “the top management of Philip Morris Japan didn’t understand public health, that’s the real issue.” They added that sacking Konuma was another example of Philip Morris “prioritising its profits over public health”.

Philip Morris told TBIJ that Konuma’s employment was “lawfully terminated […] after evaluation of his performance during his six month probationary period” and that his allegations “were not the basis of the termination of his employment”.

It added: “As a company, we uphold the highest standards for integrity and respect for our employees, including former employees.”

Corridors of power

Philip Morris’s efforts to supercharge Iqos sales in Japan were not limited to university campuses. The company was also attempting to influence medical professionals of all stripes in the hope that they would support regulation in favour of Iqos. One email to Konuma from a senior colleague had even asked him to reach out to psychiatry and pain management specialists in pursuit of this goal.

But it was crucial the message got to politicians, too. And the internal Business Objectives document, seen by TBIJ, sets forth the company’s extensive lobbying plans for 2019.

The company planned to “[map] 100 politicians for THR [Tobacco Harm Reduction] engagement”. To seek preferential tax treatment, presentations would be delivered to officials in the finance and health ministries.

Another key message to be impressed on politicians was that Iqos should be exempted from the impending indoor smoking ban, due to come into effect in April 2020. In October 2018 – while the ban’s rules were being decided on – Philip Morris employees held a meeting with an official from the Ministry of Health and presented them with documents, obtained by TBIJ via freedom of information requests. The documents outlined research, conducted by Philip Morris scientists, claiming that Iqos had only a limited impact on indoor air quality and that passive exposure to Iqos caused “no adverse effects”.

Those findings are disputed by other scientists. Multiple independent studies have reached different conclusions, with one finding that using Iqos indoors resulted in “significant levels” of carcinogenic particles being released into the air. It concluded that “Iqos should be restricted in indoor environments”.

“It strains credibility to claim that [Iqos emanations are] harmless,” said Stanford University’s Jackler, adding that the substance that users exhale “has a number of chemicals in it that have never been looked at long term”.

“There is a century-long history of the tobacco industry […] using science to expedite regulation – through claims that are made that are very often contrary to those in scientific reality.”

When Japan’s smoking ban arrived in 2020, the Ministry of Health made exceptions for the use of heated tobacco products indoors. In restaurants and bars, special heated-tobacco smoking rooms were allowed, where customers can use Iqos while enjoying a meal or cocktail.

Philip Morris had got what it wanted.

‘Playing by different rules’

In October 2019, Konuma walked out of Philip Morris’s central Tokyo offices for the final time, his notice of dismissal in hand. The last few months had seen him placed under unbearable pressure – but he left with his head held high. “I felt freed and relieved,” he remembers.

Over the next few months, Konuma would take his concerns to all the relevant authorities. First to Japan’s Ministry of Finance, which he told about the projects at Tokyo and Kyoto universities. Then he went to the US Securities and Exchange Commission, raising the question as to whether Philip Morris might have breached the FCPA.

But if he had expected swift consequences, none were forthcoming. The Ministry of Finance told him it was “voluntarily confirming the facts” but has since made no comment as to the outcome of any investigation. The US Securities and Exchange Commission interviewed Konuma but did not inform him about the outcome or progress of any investigation. The agency also declined to comment.

In the face of this apparent inaction, Konuma made his final decision as a corporate whistleblower: to go public. Japanese institutions have “failed to address the cases”, he says.

 
 

The finance and health ministries did not respond to TBIJ’s questions.

Konuma’s actions have already come at acute personal cost. “I was unemployed for more than a year, exhausted my savings and became indebted while I escalated my [complaints],” he says. “Some may say it’s a waste of time, but I don’t.”

It is easy to see why he thinks so: Konuma’s story has implications that stretch way beyond his home country. Philip Morris’s plan for Iqos – a product that, by the company’s own admission, has not been demonstrated to reduce smokers’ health risks – are resolutely global.

Ahead of the launch of Iqos in Japan, Philip Morris had aimed to convince national regulators that Iqos should be treated differently to cigarettes and then use this as a “reference point to other countries”. Ten years on, the success story of Iqos in Japan is undeniable – and the long-term plan appears to have been put in action.

In a wide-ranging September 2023 speech laying out his company’s vision of a “near-future when cigarettes are obsolete”, Philip Morris CEO Jacek Olczak railed against the various parties trying to restrict the world’s access to heated tobacco products.

“Instead of implementing policies to promote adult smokers’ access to these better products, many global regulators are defaulting to inaction,” he said. “Look at Japan, where just five years after heated tobacco products were introduced in 2014, independent studies showed an unprecedented decline in cigarette sales in the country.”

Olczak said it was time for more countries to “follow the lead” of nations like Japan.

Later the same month, his company revealed that preparations were underway for a US launch of Iqos.

The company has hired lobbyists in at least 19 states ahead of the launch, according to Reuters, with registers showing that lobbying activity will cover topics including heated tobacco products and taxation. For those who followed the company’s activities in Japan, the playbook appears to be a familiar one.

Stella Bialous of the University of California, San Francisco, said it is vital regulators around the world take notice of Konuma’s revelations and cast a sceptical eye on Philip Morris’s claims about the safety of its products.

“I think it’s important to highlight,” she said. “Because there are governments out there that are maybe vulnerable and may be seduced by some of these arguments.”

As for Konuma, he is equally strident that the science behind Iqos is a major public health issue, one that should be treated with full transparency. It is a cause he is not ready to give up.

“I can now fight back for protection of public health,” he says. “Playing by different rules – outside the house of Philip Morris.”

Reporter: Fin Johnston
Illustrations: Eleanor Shakespeare
Global Health editor: Fiona Walker
Deputy editor: Chrissie Giles
Editor: Franz Wild
Impact producer: Paul Eccles
Production editor: Alex Hess
Fact checker: Somesh Jha