An Australian medical vape manufacturer pitching itself as an ethical alternative to big tobacco counts pharmacy heavyweights and a lobby group led by a former health minister among its investors.

Liber Pharmaceuticals is poised to capitalise if Australia succeeds in becoming the first country to regulate nicotine vapes as medical products sold to people with a doctor’s prescription but banned for general use.

George Tambassis, Chemist Warehouse, and a lobby group led by Michael Wooldridge are shareholders in Liber.Credit: Patrick Scala, Getty, Simon Schluter

The government’s approach has to date been undermined by a black market selling vapes online and at hundreds of convenience stores around the country, including to young people.

But a Therapeutic Goods Administration review last month recommended tougher import controls and product standards to crack down on bootleg sales and Health Minister Mark Butler says he is determined to “stamp this out”.

Liber, whose nicotine vapes are the only e-cigarette product stocked by national wholesalers and major pharmacy brands, is also hoping a strengthened prescription model succeeds.

Lobby group The Strategic Counsel, whose chief executive is former Coalition health minister Michael Wooldridge, has thousands of shares in Liber, which were issued in exchange for advice provided to the company’s founder years earlier. Wooldridge himself is not a shareholder.

Retail giant Chemist Warehouse has an 8.6 per cent stake in Liber, while a former head of the Pharmacy Guild, George Tambassis, is another shareholder and has done strategic work for the company.

The private company positions itself as a disruptor to the big tobacco companies that also make vapes and want them to be sold freely for everyday use.

Liber instead sees its market as Australia’s 2.8 million smokers and 1 million or more people vaping without a prescription who could use its product under medical supervision to eventually quit.

The Royal Australian College of General Practitioners says vaping should only be used as a smoking cessation tool as a last resort, and the limited number of doctors prescribing vapes means the Australian pharmaceutical market is currently small. But it will become more profitable if the government manages to force vapers into legal channels.

Liber is the only nicotine vape manufacturer in Australia that has distribution arrangements with national pharmaceutical wholesalers, according to the company’s submission to the TGA vaping review, and is stocked in 1400 pharmacies nationwide, including in each of the major banner groups Chemist Warehouse, Priceline and TerryWhite.

Its shares were first registered in Australia in January 2021, months after then-health minister Greg Hunt revealed he would pursue a prescription model, and it launched its vape product in pharmacies in October 2021 when the new laws came into effect.

The company evolved out of a previous business, Nicovape, which had operated out of New Zealand to supply medically prescribed e-cigarettes to Australians who imported them for personal use.

In 2019, founder Ryan Boulton said complying with Australia’s strict local laws and regulations would give it “a massive commercial advantage in Australia over the next few years” by keeping bad actors out and raising the barrier of entry for its competitors.

Wooldridge, who was health minister between 1996 and 2001 before retiring from politics, along with his colleagues at The Strategic Counsel provided formal advice to Boulton about his proposal when he was probing the idea in 2017.

In exchange, The Strategic Counsel was given 32,000 shares in Liber when the company incorporated in Australia in January 2021. At 1¢ a share, the 2.65 per cent stake was valued at $320.

It was part of Liber’s first funding round in Australia, which distributed 1.2 million shares between 21 accounts mainly linked to the company and its employees, according to Australian Securities and Investments Commission filings.

While Liber is a private company, meaning its shares are not traded, they were valued at $40 each in its latest stock issue on March 10.

Chemist Warehouse acquired more than 144,000 shares at $20 each in November 2021, a holding now valued at $5.8 million, according to Liber’s ASIC filings.

Tambassis has 2250 shares in the company, which he acquired in June last year.

Liber chief executive Richard Lee, a former investment banker, said there were no immediate plans to publicly list or sell the company. He said if Australia proved successful in implementing the medical model, the company would probably seek to expand globally.

“Our goal is to provide a high-quality product that has no affiliation to big tobacco and no history of consumer sales so that doctors can look at the science associated with using vaping products for smoking cessation and determine whether the technology is appropriate for their patients,” he said.

“Liber is proud to have no affiliation to the tobacco industry and to have shareholders that all support Liber’s approach to providing its [vaping] products exclusively for prescription by doctors, to be dispensed by Australian pharmacies.”

Wooldridge – an advocate for tobacco control – said he continued to provide informal and free advice to Liber and other companies from time to time, but that The Strategic Counsel had no formal involvement in the company and had never lobbied on its behalf.

He said he personally had no financial or governance interest in the lobby group, having ceased to be a director in 2019 around the time of an ASIC order that banned him from managing companies for a time.

But Wooldridge said he supported laws limiting vaping to people with a prescription. He has publicly called for stronger enforcement of the prescription-only system.

“If Australia achieves a medical model of e-cigarette control, then it will be the first country in the world to do so and something that other nations are likely to follow. It will also be due to the courage and persistence of ministers Hunt and [current Health Minister Mark] Butler,” he said.

“I am a strong and longstanding and consistent opponent of recreational e-cigarettes and tobacco use generally. My record as a minister attests to this.”

He also warned the tobacco industry and associated organisations would seek to jeopardise Australia’s approach to clamping down on consumer vaping.

Chemist Warehouse and Tambassis declined to comment.

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