Policies to control tobacco use, including tobacco tax and price increases, can generate significant government revenues for health and development work, according to a new landmark global report from WHO and the National Cancer Institute of the United States of America. Such measures can also greatly reduce tobacco use and protect people’s health from the world’s leading killers, such as cancers and heart disease.
But left unchecked, the tobacco industry and the deadly impact of its products cost the world’s economies more than US$ 1 trillion annually in healthcare expenditures and lost productivity, according to findings published in The economics of tobacco and tobacco control. Currently, around 6 million people die annually as a result of tobacco use, with most living in developing countries.
The almost 700-page monograph examines existing evidence on two broad areas:
- The economics of tobacco control, including tobacco use and growing, manufacturing and trade, taxes and prices, control policies and other interventions to reduce tobacco use and its consequences; and
- The economic implications of global tobacco control efforts.
“The economic impact of tobacco on countries, and the general public, is huge, as this new report shows,” says Dr Oleg Chestnov, WHO’s Assistant Director-General for Noncommunicable Diseases (NCDs) and mental health. “The tobacco industry produces and markets products that kill millions of people prematurely, rob households of finances that could have been used for food and education, and impose immense healthcare costs on families, communities and countries.”
Globally, there are 1.1 billion tobacco smokers aged 15 or older, with around 80% living in low- and middle-income countries. Approximately 226 million smokers live in poverty.
The monograph, citing a 2016 study, states that annual excise revenues from cigarettes globally could increase by 47%, or US$ 140 billion, if all countries raised excise taxes by about US$ 0.80 per pack. Additionally, this tax increase would raise cigarette retail prices on average by 42%, leading to a 9% decline in smoking rates and up to 66 million fewer adult smokers.
“The research summarized in this monograph confirms that evidence-based tobacco control interventions make sense from an economic as well as a public health standpoint,” says the monograph’s co-editor, Distinguished Professor Frank Chaloupka, of the Department of Economics at the University of Illinois at Chicago.
The monograph’s major conclusions include:
- The global health and economic burden of tobacco use is enormous and is increasingly borne by low- and middle-income countries (LMICs). Around 80% of the world’s smokers live in LMICs.
- Effective policy and programmatic interventions exist to reduce demand for tobacco products and the death, disease, and economic costs resulting from their use, but these interventions are underused. The WHO Framework Convention on Tobacco Control (WHO FCTC) provides an evidence-based framework for government action to reduce tobacco use.
- Demand reduction policies and programmes for tobacco products are highly cost-effective. Such interventions include significant tobacco tax and price increases; bans on tobacco industry marketing activities; prominent pictorial health warning labels; smoke-free policies and population-wide tobacco cessation programmes to help people stop smoking. In 2013-2014, global tobacco excise taxes generated nearly US$ 269 billion in government revenues. Of this, less than US$ 1 billion was invested in tobacco control.
- Control of illicit trade in tobacco products is the key supply-side policy to reduce tobacco use and its health and economic consequences. In many countries, high levels of corruption, lack of commitment to addressing illicit trade, and ineffective customs and tax administration, have an equal or greater role in driving tax evasion than do product tax and pricing.
- Tobacco control does not harm economies: The number of jobs dependent on tobacco has been falling in most countries, largely due to technological innovation and privatization of once state-owned manufacturing. Tobacco control measures will, therefore, have a modest impact on related employment, and not cause net job losses in the vast majority of countries.
- Tobacco control reduces the disproportionate health and economic burden that tobacco use imposes on the poor. Tobacco use is increasingly concentrated among the poor and other vulnerable groups.
- The market power of tobacco companies has increased in recent years, creating new challenges for tobacco control efforts.
- Dr Douglas Bettcher, WHO Director for the Prevention of NCDs, says the new report gives governments a powerful tool to combat tobacco industry claims that controls on tobacco products adversely impact economies. “
Source: Health new NG