NEW YORK (CNN/Money) - A failed attempt by Philip Morris to create a safer cigarette has resulted in a device that may help the company get into the pharmaceutical business, according to a report published Thursday.

The Wall Street Journal said scientists at the No. 1 cigarette maker in the country are developing a hand-held inhaler designed to deliver drugs into the body. The product, called Aria, could help treat a variety of illnesses, including lung disease and asthma, the report said.

The Philip Morris device produces a fine mist that can be absorbed into the lungs, and since the patient's breathing activates the inhaler, the company believes patients will be better able to control their dosing, the report said.

Philip Morris USA -- a unit of Altria (Research) whose brands include Marlboro and Virginia Slims -- sold 187.1 billion cigarettes last year, the paper said. But as more Americans turn away from smoking, the company is aiming to diversify into pharmaceutics.

The Aria inhaler was born when Philip Morris began looking for a way to create a cigarette that would appeal to health-conscious smokers and developed a device that allowed smokers to inhale a mist laced with nicotine rather than inhale smoke, the Journal said. That product didn't take off, but scientists discovered that the aerosol device could also be used to deliver drugs to the lungs, the report said.

The need for an easy-to-use, sophisticated inhaler that delivers drugs deep into the lungs is great, the newspaper reported, adding that the market for the drugs and inhalers could reach an estimated $25 billion annually.

However, the new device is facing some challenges from public health advocates wary of the company's intentions, the Journal said.

"People are going to ask whether this device is an attempt by Philip Morris to undo all the damage the company did to the public health, " James F. Donohue, chief of the division of pulmonary and critical care at the University of North Carolina School of Medicine, told the paper.

The American Thoracic Society already has blocked one effort by the company to promote the device at a medical conference, due to its ties to the tobacco industry, the report said.

Those ties have become more visible since the healthcare unit holding Aria's core technology, Chrysalis Technologies, became tied to Philip Morris earlier this year due to a corporate restructuring at parent company Altria earlier this year, the report said.

But some in the medical community say Chrysalis' tobacco ties shouldn't overshadow the potential benefits of the new device, the report said.

"If they have a good product that is medically useful, I don't see how the tobacco-company affiliation is an issue," Norman Edelman, chief medical officer for the American Lung Association and vice president for Health Sciences and professor of medicine at State University of New York at Stony Brook, told the paper.

The Philip Morris device is still being researched, and the company is seeking partnerships with drug companies and biotech firms, the report said. But it said, the device would need approval from the FDA, which is likely to look closely at the way the inhaler controls dosing.

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