Tobacco: health effects, and socio-economic issues

1. Tobacco: health effects,and socio-economic issues Joy de Beyer Tobacco Control Coordinator World Bank Lecture at George Washington University, October 24, 2001

2. Diseases caused by tobacco use • Lung cancer • COPD (emphysema, bronchitis, etc) • Stroke (bleeding in the brain) • Heart attack and heart disease • Narrowing and clogging of arteries • Cancers of mouth, throat, larynx, esophagus • Other cancers – bladder, kidneys, pancreas • Peptic ulcers (stomach bleeding) • Respiratory infections and compromise (cough, wheezing etc) • Gum disease and tooth loss • Low birth weight and SIDS • Asthma • Ear infections • Compromised sexual performance • Greater susceptibility to TB?

3. Why does tobacco kill? • Burns at 1000o C • Cig smoke has > 4,000 chemicals, 43 known carcinogens/harmful substances (tar, cadmium, lead, cyanide, nitrogen oxides, benzo(a)pyrine, carbon monoxide, vinyl chloride, acetaldehyde…. ) • Damages tissues throughout the body, clogs arteries, causes blood clots/bleeding

4. Are some cigarettes better? • No such thing as a safe cigarette • “light”, “low tar” cigarettes are deceptive – - Manipulation by maker - Compensation by smokers so actual yields not = FTC (machine) yield

5. 1st Surgeon General’s Report Broadcast Ad Ban End of WW II Master Settlement Agreement Fairness Doctrine Messages on TV and Radio Number of Cigarettes Nonsmokers Rights Movement Begins 1st Smoking- Cancer Concern Marlboro Friday Federal Cigarette Tax Doubles Great Depression Source: USDA; 1986 Surgeon General's Report Adult Per Capita Cigarette Consumption and Major Smoking-and-Health Events -- United States, 1900-1998

6. Global Trends in tobacco use • 1.1 billion smokers, 80% in low- and middle income countries (1 in 3 adults) • 1.6 billion by 2025 • 85% of all tobacco used is smoked (cigarettes, bidis, kreteks)

7. Smoking is increasing in the developing world Male adult prevalence, 1995 US 28 % (was 61% in 1939) East Asia 61 % Europe, Central Asia 57 % Latin America, Caribb 40 % South Asia 41 % (cigs + bidis) Sub-Saharan Africa 29 %

8. Burden of Tobacco Deaths Shifting World: Annual Tobacco deaths (in millions) 2000 2030 Developed2~3 Developing~2~7 World Total 4 ~10 • 1 in 2 long-term smokers killed by their addiction • 1/2 of deaths in middle age (35-69)

9. Tobacco deaths are on the increase in India

10. Smoking is more common among the less educatedSmoking prevalence among men in Chennai, India, by education levels Source: Gajalakshmi and others, background paper

11. Nicotine is highly addictive • Nicotine --> release of serotonin, dopamine, norepinephrine • Neuro-adaptation • Each year, nearly 35 million people make a concerted effort to quit smoking. < 7% stay smoke-free for a year; most start smoking again within days.

12. Helping smokers to quitCessation Treatments • Cessation support from health professionals is key • NRTs double the effectiveness of cessation efforts • Quit lines, community support, etc., also work • Governments may increase accessibility and affordability of NRTs by: • OTC sales, allowing advertising, licensing • Conducting more studies on cost-effectiveness (especially in low/middle income countries) • Considering NRT subsidies for poorest smokers

13. Unless current smokers quit, smoking deaths will rise dramatically over the next 50 years Source: Peto and others, 1994; Peto, personal communication.

14. Effective Interventions • Information • Health warnings on tobacco products • Comprehensive bans on ALL advertising and promotion • Smoking bans in public places (including work places) • Cessation support

15. Comprehensive advertising bans reduce cigarette consumptionConsumption trends in countries with such bans v. those with no bans(n=102 countries) Source: Saffer, background paper

16. Taxation is the most effective measure • Higher taxes induce quitting and prevent starting • A 10% price increase reduces demand by: • 4% in high-income countries • 8% in low or middle-income countries • Young people and the poor are the most price responsive

17. Price Elasticity EvidenceAs real price decreases, consumption increasesEvidence from South Africa

18. Evidence from the UK

19. Why do policy makers resist tax increases?Will higher tobacco taxes: • Reduce revenues ? Tobacco is a good source of revenue. Revenues rise as a result of higher taxes • Cause job losses ? Farmers, tobacco industry workers, others • Increase smuggling ? smuggling loses revenues, and is a crime • Hurt poor smokers ?

20. Tobacco Taxes generate Revenues

21. Tobacco Taxes- Important source of revenue!

22. As Cigarette Tax Rises Revenue IncreasesTax per pack and cigarette tax revenues in Norway, 1990-1998

23. Revenue Generating Potential of Tobacco Taxes • As price rises, consumption falls, but by less than the percentage rise in price (demand is price-inelastic). • As incomes rise, so does consumption - and total revenue (the income elasticity of demand is greater than one). • Production can be closely supervised by the government – easy to collect taxes.

24. Cigarette tax levels are lower in low or middle-income countries Source: Authors’ calculations

26. Total Tobacco Taxes as % of Retail Price in Mediterranean Countries

27. Low cigarette prices in Eastern Europe

28. Studies on the employment effects of dramatically reduced or eliminated tobacco consumption Source:Buck and others, 1995; Irvine and Sims, 1997; McNicoll and Boyle 1992, van der Merwe and others, background paper; Warner and others 1996

29. What about Smuggling? • More smuggling if : • Public is tolerant • Controls are weak • corruption in the country is high • tobacco industry is complicit • organized crime plays a big role

30. Tobacco smuggling tends to rise in line with the degree of corruptionSmuggling as a function of transparency index

31. Smuggling: What is the Solution?Canadian Government reduced tobacco tax rates dramatically in February 1993

32. Smuggling Sweden decreased cigarette taxes (17%) due to fear of smuggling in 1998

33. What about the impact on poor smokers? • Poor smokers tend to spend the highest % of income on tobacco • How do they react to a tax/price rise ? • more likely to quit/reduce consumption, which will improve health outcomes, release income for other uses • increased tax revenue can be used in ways that benefit poor • Help smokers who want to quit

34. High opportunity Cost: Evidence from Belarus

35. High opportunity cost: Evidence from Bulgaria

36. Allocating Tobacco Expenditure to Other Goods and ServicesBetter Nutrition, Better Health: Evidence from Hungary

37. Why should governments intervene?Economic rationale – “market failures” • People do not know the risks of tobacco use • Most smokers start young – protect youth • Nicotine is VERY addictive • Tobacco users impose costs on others • second hand smoke harms non-smokers • children and infants need protection • health care costs (families and government) • opportunity cost for families

38. Protect YouthSmoking and Addiction Starts Young

39. Protect Youth:Smoking and Addiction Starts Young

40. Key stakeholders • Ministry of Finance: Tobacco Tax Revenues • Customs Administration: Smuggling, Border Control • Ministry of Labor: Farmers and Manufacturing Labor • Ministry of Agriculture: Tobacco Production • Ministry of Education: Youth education on tobacco • Smokers: Low prices, variety and appealing products • Producers: Profit, market share, sales • Ministry of Trade: Export earnings from tobacco