Monthly Archives: April 2015

Open letter to the FDA on SNUS, Harm Reduction and cigarette sales still growing

Sorry for a very long posting.

I wrote the below letter to the FDA and the members of FDA TPSAC (Tobacco Products Scientific Advisory Committee) yesterday morning after their negative vote on +98% harm reduced smokeless tobacco.

Besides the letter itself i also wish to make you aware that the TPSAC Committee seems very short short on abled bodies and also lacks a chairperson at the moment, never a good position when voting on very controversial issues. Furthermore I also note that those members who remain on the Committee all seem to have made most of their careers in “Tobacco Control” research or public service.

Noting that, and that their earlier publications and research funding all seems to be geared toward complete cessation of all tobacco/nicotine; Makes the notion of them being able to vote objectively and in an unbiased manner on any product designed only to reduce harm, improbable to say the least.

I hope and think that you readers will enjoy, and find interest, in reading the below open letter to the FDA and the members of the TPSAC Committee, as everything in it is absolutely 100% true.

Thank you very much in advance and I wish you a pleasant week-end.
Atakan Befrits

Vidarebefordrat brev:

Från: Atakan Befrits <atakan.befrits@gmail.com>
Ämne: MRTP vote on Swedish Match products – Open Letter
Datum: 11 april 2015 09:48:23 CEST
Till: wkbickel@vt.edu, teissenb@vcu.edu, pfagan@cc.hawaii.edu, ggiovino@buffalo.edu, richard.oconnor@roswellpark.org, kurt.ribisl@unc.edu
Kopia: Caryn.Cohen@fda.hhs.gov

MRTP vote on Swedish Match products – Open Letter
Dear Members of the Committee,

First of all I would like to thank you all for the time and thought and deliberation that I am certain you have all put in to discussions, formulating your views and in most cases votes on the MRTP application in question.

Secondly I would like to please kindly ask you to disseminate this information to those members who were not represented with e-mail addresses in the information, thank you in advance.

My name is Atakan Befrits and I am a part the Tobacco Harm Reduction industry, but am writing this on my own accord and all the views expressed are my own. Official documents herein are obtained directly from the Swedish Government and can of course very easily be verified.

Although I am heavily biased based on my work, and my interpretation of the currently available science is of course to a certain extent a product of my bias, I still hope you will take this message under consideration. My current and future interests are, very importantly, based outside Sweden and outside North America, my ambitions on the longer horizon are focussed on the LMIC world.

Actual cigarette sales in my view is a good marker for smoking, something I would expect you all to agree with.

If the developed countries are to achieve double the rate of smoking (10%) that is considered “smoke-free” (5%) by 2050 cigarette sales will have do be roughly 1.1 trillion cigarettes less per year than 2012. At the current trendline based on 1980 and 2012, only 200 billion of 1.1 trillion in lower sales will be achieved, in effect less than 20% of “target + 100%”. I am of course hoping that “A war on Tobacco” will be more successful than earlier “Wars” on dangerous and unwanted behaviors proved to be.

In developing countries the smoking trend is unfortunately still pointing distinctly upward. The trendline, also based in 1980 and 2012, indicates 5.5-6.0 trillion cigarettes sold there in 2025 (4.4 in 2012). This trend is not taking population growth in to account. Population growth is expected to be a further billion by 2025 (8.2) and reach 9.6 billion by 2050. Therefore the existing trend and the population growth and increased disposable income have to be accounted for in projections.

If the FCA (Framework Convention Alliance / WHO) is correct in their calculations and in fact “Peak Cigarettes” was in or around 2013, then world sales of cigarettes should never exceed the roughly 6.2 trillion cigarettes sold around 2013.

Sum conclusion is that if the west were to manage to achieve her targets, in the Developing Countries smoking can continue to grow to another 1.6 trillion cigarettes sold per year by 2050 and “Tobacco Control” can in theory continue arguing that the cigarette epidemic has been halted.

If world “Tobacco Control” efforts are even more successful than they have ever been historically, then sales of cigarettes would still need to go down by a total of 3 trillion less cigarettes sold per year, to be half of today. This would mean some 500-600 million current smokers quitting or dying in 35 years and also ZERO uptake, a daunting proposition.

I am sure none of the above is any news to you Learned ladies and Gentlemen. Therefore quickly on to the subject matter, the vote on the Swedish Match North America MRTP application.

I have read the summary prepared by the FDA on the application. To the best of my understanding it is fairly clear that the FDA concludes that the evidence presented is in no way sufficient to state that the products in question are harmless and alludes to the voting outcome that this should lead to.

This would in effect mean that only harmless tobacco products will ever be considered Modified Risk. Or possibly products monitored over sufficiently long time to give an exact and unquestionable percentage of harm compared to cigarettes, in effect sometime between 2030-2050 at the earliest.

My impression is that “Significantly reduced harm” on the individual level is demonstrated. As well as a net, positive or at least not negative, “Population Level effect” is proven highly likely, and these are the main criteria for approval as an MRTP. (In “population level” I include all the other FDA criteria that also need to be met)

Harmlessness I cannot find anywhere in text, and is quite frankly a silly concept.

According to my opinion waiting another 20 years will prove far too little and far too late. Especially so since cigarettes are legally sold in every country in the world but US policy and Swedish Policy and EU policy on THR (Tobacco Harm Reduction) are “Public Health” export products of the first order, and successfully passed on to the LMIC world.

So even if your mandate only considers a US context (this ought to be the case) I urge you to consider that by 2050 the current Developed Countries will represent 13% of the world’s population.

Please browse the below letter to Minister of Health and Welfare in Sweden from 2013 from Tobacco experts and Tobacco Harm Reduction experts.

http://www.clivebates.com/documents/swedenletter.pdf

Please see below an official copy of (Swedish) the order from the Council of Ministers of the Kingdom of Sweden to a named group of public health institutions 4 months later:

(contact me if you want a copy of it, it is only in swedish but summarizes as follows below)
The order translates to roughly:

Calculate total morbidity, total mortality and total cost from total tobacco in Sweden. This is very important because in Sweden 50% of total tobacco are, are equal to, or comparable to, the products that TPSAC voted on yesterday.

The concurrent report supplied as a result of this order is named:
Registry data on ill-health from ***smoking tobacco***

http://www.socialstyrelsen.se/publikationer2014/2014-3-4

As you can plainly see from also the title there simply aren’t any registry data on ill-health from the use of smokeless tobacco as it is made in Sweden. Nothing for over 90 years.

The report can not present one single data point on “snus” use ill-health even though ordered specifically to do so by the Government and given money to do it. The report touches very briefly on “snus” and concludes that, while clearly less dangerous than smoking, is probably quite dangerous. It also concludes that long term research needs to be initiated and more funding is needed to do so.

This conclusion is presented 15 years after “snus” again captured more than 50% of total tobacco use in Sweden and is also based on precisely ZERO data available from the health data registry databases (outcome). Should not then this research, if really necessary, have been immediately initiated 15-30 years ago, upon a hitherto unresearched product reaching a whopping 50% market share in a market as dangerous as tobacco?

Is a mistake of this magnitude even theoretically possible in a country like Sweden?

The Swedish Medical Journal started publication in 1904 and was digitalized in 1995. A manual archive search in their records returned ZERO results on the index word “snus” between 1904-1995.

In 1904 smokeless tobacco was by far the most prominent tobacco product used in Sweden and was surpassed by smoking only in the 60’s and is again the largest tobacco category today with 50% of total tobacco use in Sweden being “snus” (smokeless tobacco).

Sweden has one of the top 10 health registry databases functions in the world and set the standards for this more than 50 years ago, yet there is absolutely ZERO data on ill-health from use of “snus” but a crystal clear calculation of 11,881 dead from smoking every year 2010-2012.

Please bear in mind that we knew almost enough already on smoking when the report was commissioned by the Government, and the order from the Government was for total tobacco but the report conspicuously left out 50% of total tobacco consumed in Sweden.

I ask you, learned Ladies and Gentlemen: Is this Plausible? Is this even possible? Provided your vote yesterday was balanced and correct an represented actual ill-health?

In 2014 a total or 89,000 people died in The Kingdom of Sweden. 12,000 of these deaths were statistically caused by cigarette smoking (roughly one million smokers). There is ZERO data on deaths (or disease) from calculated, demonstrated, suspected or other causes directly connected to the use of “snus” (Swedish Smokeless Tobacco also roughly one million users).

If total in vivo harm (outcome) from snus use in sweden is even 10% of the harm from smoking then logically would follow:

1. 1,200 swedes should/would have succumbed to some form of illness as a direct result of using snus.
2. 90% of these would have been men (100% 1904-1960)
3. Snus again became extremely prominent in 1980’s and as such has been in very very widespread use again for 35 years
4. This has been happening every year, year after year, without anyone noticing it, or being able to or bothering to, measure it

I ask you, learned Ladies and Gentlemen: Is this plausible? Is this possible, even in a catastrophic administrative worst case scenario?

Is it not in fact more likely that ill-health from “snus” use has not been measured because there is not very much ill-health to measure?

Does that not sound like a “MRTP” as compared to cigarettes?

Thank you very much for taking the time to read this

With my regards

Atakan Befrits
Biased but also reasonable THR activist and entrepreneur

Fantastisk debattartikel av barnläkare, som mellan raderna ger stöd för Tobacco Harm Reduction!

“Barnläkare tar ställning för ett tobaksfritt Sverige”

http://www.dagensmedicin.se/artiklar/2015/03/23/svenska-barnlakare-tar-stallning-for-ett-tobaksfritt-sverige/

Vi strävar efter ett rökfritt Sverige 2025, skriver tre representanter för Barnläkarföreningen.

Svenska barnläkarföreningen tar i dag offentligt ställning mot snus­användning under graviditet och mot rökning. Vi ställer oss därmed bakom såväl Svenska läkare­sällskapet som Sveriges läkarförbund i vår strävan efter ett rökfritt Sverige 2025 – ”Tobacco Endgame”.

Snusanvändning under graviditet medför ökade risker för dålig fostertillväxt och andningsstörning hos det nyfödda barnet men också en alltför tidig förlossning, vissa missbildningar och till och med dödföddhet.

Att snus skulle ge lägre risker för graviditetskomplikationer än rökning (med undantag för en något lägre risk för dålig fostertillväxt) har inte kunnat beläggas. Snus är till exempel kopplat till en ökad risk för preeklampsi (graviditetstoxikos) hos den gravida kvinnan. Vi vill därför betona att alla gravida bör avstå från snus.

Socialstyrelsens beräkningar har visat att 12 000 svenskar dör på grund av rökning varje år. Världshälsoorganisationen, WHO, eftersträvar därför en lång­siktig minskning av rökning, en målsättning som delas av Sverige (”Tobakskonventionen”). Det finns ett starkt folkligt stöd för att begränsa rökningen i samhället och i flera andra länder har man redan tagit beslut om ett rökfritt samhälle, till exempel Skottland 2034 och Finland 2040. Vi i Svenska barnläkarföreningen ställer oss nu bakom ”Tobacco Endgame” tillsammans med bland annat Läkare­sällskapet och Läkarförbundet men även enskilda läkarföreningar som Svensk förening för allmänmedicin, Sfam, och Sjukhusläkarna.

Rökning leder till ökad sjuklighet, vårdbehov och för tidig död. Upprepade studier visar också negativa effekter hos barn av passiv rökning. Därför är det angeläget att svenska barnläkare tar ställning emot tobak.

Kommentarer

Jag godkänner för artikelkommentarer Dagens Medicins regler
  • Tack snälla, äntligen!

    Att helt undvika nikotin under graviditet är lika självklart som att undvika alkohol eller produkter som kan innehålla listeria, och det är mycket glädjande att detta uttrycks solklart och på ett sätt som är omöjligt att missförstå.

    Att helt undvika rökning, eller om man en gång börjat, sluta röka så snart som möjligt och med vilket som helst av till buds stående medel, inklusive snus, som uppfyller grundläggande krav på minskad risk, är den andra centrala poängen i debattartikeln om man väljer att läsa mellan raderna. Snus som alternativ nikotinkälla till cigaretter utsätter inte brukaren eller närmiljön för de omvittnat mycket skadliga effekterna av cigarettrök. 300,000 svenska män skattar sig som före detta rökare tack vare snus men endast 90,000 kvinnor.

    I takt med att portionssnuset flyttade in på kontor och i styrelserum i början av 80-talet kan man i dag helt utan tvekan säga att en helt ny användargrupp har använt snus i mer än 30 år. Med hänsyn taget till den högre utbildningsnivå och starkare socioekonomiska status som denna nya användargrupp dessutom har, ter det sig obegripligt och osannolikt att varken gruppen själv eller vården inte skulle ha larmat om allvarliga konsekvenser av snusbruk vid det här laget. Så har alltså inte skett och larmen om snus kommer i stort sett endast från laboratoriemiljö, forskningsmiljö och särskilda intressegrupper. Det verkar alltså finnas en kraftig skillnad/dissonans mellan laboratoriemiljö och klinisk miljö.

    In vitro verkar inte matchas av in vivo, ens på långa vägar.

    Det är synd att en saklig debatt inte kan föras i Sverige om mindre skadliga alternativ till cigaretter som kan hjälpa rökare till en väsentligen bättre hälsa och lägre kostnader för rökrelaterad ohälsa.

    Det är synnerligen synd att behöva utläsa det “mellan raderna”, särskilt i en miljö som denna, som oundgängligen borde präglas av en öppen och inklusiv inställning till interventioner som kan ge bättre folkhälsa och bättre hälsa hos enskilda individer.

    Senast i februari 2014 uttalades behovet av en långsiktig forskningsinsats för att bättre kunna bedöma snusets farlighet då inga som helst siffror kunde presenteras gällande skador eller kostnader av snusbruket i Sverige, ens på direkt uppmaning av Regeringen och med tillhörande budget.

    Jag kan inte se hur den forskningsgärningen inte borde/skulle ha inletts redan 1990 som allra senast? Såvitt jag vet är det samma personer idag som då, som har centrala och tongivande röster i tobaksdebatten och inom tobaksforskningen.

    Jag kan också hålla med om att målsättningen med ett tobaksfritt samhälle är lovvärt. Men till dess att jag ser några som helst utsikter att lyckas med det väljer jag dock att nöja mig med målsättningen ett rökfritt Sverige. Nöjd, numera rökfri, nikotinist

Vaping and snus can save 87% more than the Tobacco Master Settlement generates per year!

With grateful credit to J. Scott Moody

E-Cigarettes Poised to Save Medicaid Billions

State Budget Solutions | by J. Scott Moody | March 31, 2015

Electronic cigarettes (e-cigs) have only been around since 2006, yet their potential to dramatically reduce the damaging health impacts of traditional cigarettes has garnered significant attention and credibility. Numerous scientific studies show that e-cigs not only reduce the harm from smoking, but can also be a part of the successful path to smoking cessation.

The term “e-cig” is misleading because there is no tobacco in an e-cig, unlike a traditional, combustible cigarette. The e-cig uses a battery-powered vaporizer to deliver nicotine via a propylene-glycol solution-which is why “smoking” an e-cig is called “vaping.” The vapor is inhaled like a smoke from a cigarette, but does not contain the carcinogens found in tobacco smoke.

Unlike traditional nicotine replacement therapy (NRT), such as gum or patches, e-cigs mimic the physical routine of smoking a cigarette. As such, e-cigs fulfill both the chemical need for nicotine and physical stimuli of smoking. This powerful combination has led to the increasing demand for e-cigs-8.2% use among nondaily smokers and 6.2% use among daily smokers in 2011.1

The game-changing potential for dramatic harm reduction by current smokers using e-cigs will flow directly into lower healthcare costs dealing with the morbidity and mortality stemming from smoking combustible cigarettes. These benefits will particularly impact the Medicaid system where the prevalence of cigarette smoking is twice that of the general public (51% versus 21%, respectively).

Based on the findings of a rigorous and comprehensive study on the impact of cigarette smoking on Medicaid spending, the potential savings of e-cig adoption, and the resulting tobacco smoking cessation and harm reduction, could have been up to $48 billion in Fiscal Year (FY) 2012.2 This savings is 87% higher than all state cigarette tax collections and tobacco settlement collections ($24.4 billion) collected in that same year.

Unfortunately, the tantalizing benefits stemming from e-cigs may not come to fruition if artificial barriers slow their adoption among current smokers. These threats range from the Food and Drug Administration regulating e-cigs as a pharmaceutical to states extending their cigarette tax to e-cigs. To be sure, e-cigs are still a new product and should be closely monitored for long-term health effects. However, given the long-term fiscal challenges facing Medicaid, the prospect of large e-cigs cost savings is worth a non-interventionist approach until hard evidence proves otherwise.

E-cig Table 1Prevalence of Smoking in the Medicaid Population

According to the Centers for Disease Control and Prevention, in 2011, 21.2% of Americans smoked combustible cigarettes. However, as shown in Table 1, the smoking rate varies considerably across states with the top three states being Kentucky (29%), West Virginia (28.6%), and Arkansas (27%) and the three lowest states being Utah (11.8%), California (13.7%), and New Jersey (16.8%).3

Additionally, the smoking rate varies dramatically by income level. Nearly 28% of people living below the poverty line smoke while 17% of people living at or above the poverty line smoke.4

As a consequence, the level of smoking prevalence among Medicaid recipients is more than twice that of the general public, 51% versus 21%, respectively. However, this too varies considerably across states with the top three states being New Hampshire (80%), Montana (70%), and Pennsylvania (70%) and the three lowest states being Mississippi (35%), New Jersey (36%), and South Carolina (41%).5

In absolute terms, the U.S. Medicaid system includes 36 million smokers out of a total Medicaid enrollment of over 68 million. As such, this places much of the health burden and related financial cost of smoking on the Medicaid system which strains the system and takes away scarce resources from the truly needy.

Economic Benefit of Smoking Cessation and Harm Reduction

Smoking creates large negative externalities due to adverse health impacts. Table 2 shows the results of a comprehensive study that quantified the two major costs of smoking in 2009-lost productivity and healthcare costs.6

Lost productivity occurs when a person dies prematurely due to smoking or misses time from work due to smoking. This cost the economy $185 billion in lost output in 2009.

Smokers incur higher healthcare costs when those individuals require medical services such as ambulatory care, hospital care, prescriptions, and neonatal care for conditions caused by smoking. This cost the economy $116 billion in extra medical treatments.

Overall, in 2009 alone, the negative externalities of smoking cost the U.S. economy $301 billion in lost productivity and higher healthcare costs. Not surprisingly, these costs were centered in high population states such as California ($26.9 billion), New York ($20.6 billion), and Texas ($20.4 billion).

Literature Review On E-cig Impact On Harm Reduction Through Reduced Toxic Exposure and Smoking Cessation

E-cigs have only been around since 2006, yet their potential to dramatically reduce the damaging health impacts of traditional combustible cigarettes has garnered significant attention and credibility. Numerous scientific studies are showing that e-cigs not only reduce the harm from smoking, but is also a successful path to smoking cessation.

E-cig Table 2In perhaps the most comprehensive e-cig literature review to date, Neil Benowitz et al. (2014) identified eighty-one studies with original data and evidence from which to judge e-cig effectiveness for harm reduction.7 They concluded:

“Allowing EC (electronic cigarettes) to compete with cigarettes in the market-place might decrease smoking-related morbidity and mortality. Regulating EC as strictly as cigarettes, or even more strictly as some regulators propose, is not warranted on current evidence. Health professionals may consider advising smokers unable or unwilling to quit through other routes to switch to EC as a safer alternative to smoking and a possible pathway to complete cessation of nicotine use.”

There are two ways that e-cigs benefit current smokers. First, there is harm reduction for the smoker by removing exposure to the toxicity associated with the thousands of compounds, many carcinogenic, found in the burning of tobacco and the resulting smoke. Second, smoking cessation efforts by the smoker are enhanced by simultaneously fulfilling both the chemical need for nicotine and physical stimuli of smoking.

In the last few years the academic literature has exploded with articles on these two topics. The following is a selection of some of the most recent studies and their conclusions.

Reduced Toxic Exposure

Igor Burstyn (2014) concludes, “Current state of knowledge about chemistry of liquids and aerosols associated with electronic cigarettes indicates that there is no evidence that vaping produces inhalable exposures to contaminants of the aerosol that would warrant health concerns by the standards that are used to ensure safety of workplaces . . . Exposures of bystanders are likely to be orders of magnitude less, and thus pose no apparent concern.”8

Neal Benowitz, et al. (2013) concludes, “The vapour generated from e-cigarettes contains potentially toxic compounds. However, the levels of potentially toxic compounds in e-cigarette vapour are 9-450-fold lower than those in the smoke from conventional cigarettes, and in many cases comparable with the trace amounts present in pharmaceutical preparation. Our findings support the idea that substituting tobacco cigarettes with electronic cigarettes may substantially reduce exposure to tobacco-specific toxicants. The use of e-cigarettes as a harm reduction strategy among cigarette smokers who are unable to quit, warrants further study.”9

Kostantinos E Farsalinos et al. (2014) concludes, “Although acute smoking inhalation caused a delay in LV (Left Ventricular) myocardial relaxation in smokers, electronic cigarette use was found to have no such immediate effects in daily users of the device. This short-term beneficial profile of electronic cigarettes compared to smoking, although not conclusive about its overall health-effects as a tobacco harm reduction product, provides the first evidence about the cardiovascular effects of this device.”10

Smoking Cessation

Emma Beard et al. (2014) concludes, “Among smokers who have attempted to stop without professional support, those who use e-cigarettes are more likely to report continued abstinence than those who used a licensed NRT [Nicotine Replacement Therapy] product bought over-the-counter or no aid to cessation. This difference persists after adjusting for a range of smoker characteristics such as nicotine dependence.”11

Christopher Bullen et al. (2013) concludes, “E-cigarettes, with or without nicotine, were modestly effective at helping smokers to quit, with similar achievement of abstinence as with nicotine patches, and few adverse events . . . Furthermore, because they have far greater reach and higher acceptability among smokers than NRT [Nicotine Replacement Therapy], and seem to have no greater risk of adverse effects, e-cigarettes also have potential for improving population health.”12

Pasquale Caponnetto et al. (2013) concludes, “The results of this study demonstrate that e-cigarettes hold promise in serving as a means for reducing the number of cigarettes smoked, and can lead to enduring tobacco abstinence as has also been shown with the use of FDA-approved smoking cessation medication. In view of the fact that subjects in this study had no immediate intention of quitting, the reported overall abstinence rate of 8.7% at 52-weeks was remarkable.”13

Konstantinos E. Farsalinos et al. (2013) concludes, “Participants in this study used liquids with high levels of nicotine in order to achieve complete smoking abstinence. They reported few side effects, which were mostly temporary; no subject reported any sustained adverse health implications or needed medical treatment. Several of the side effects may not be attributed to nicotine. In addition, almost every vaper reported significant benefits from switching to the EC [e-cigarette]. These observations are consistent with findings of Internet surveys and are supported by studies showing that nicotine is not cytotoxic, is not classified as a carcinogen, and has minimal effects on the initiation or propagation of atherosclerosis . . . Public health authorities should consider this and other studies that ECs are used as long-term substitutes to smoking by motivated exsmokers and should adjust their regulatory decisions in a way that would not restrict the availability of nicotine-containing liquids for this population.”14

E-cig Table 3Potential E-cig Medicaid Cost Savings

To date, the academic literature strongly suggests that e-cigs hold the promise of dramatic harm reduction for smokers simply by switching from combustible tobacco cigarettes to e-cigs. This harm reduction is due to both its positive impact on smoking cessation and reduced exposure to toxic compounds in cigarette smoke.

As a result, we can expect the healthcare costs of smoking to decline over time as the adoption of e-cigs by smokers continues to grow. Additionally, we can expect greater rates of adoption as e-cigs continue to evolve and improve based on market feedback-a dynamic that has never existed with other nicotine replacement therapies.

As discussed earlier, the potential savings to the economy are very large. In terms of healthcare alone, most of that cost is currently borne by the Medicaid system where the prevalence of cigarette smoking is twice that of the general public, 51% versus 21%, respectively. So what are the potential healthcare savings to Medicaid?

Brian S. Armour et al. (2009) created an impressive economic model to estimate how much smoking costs Medicaid based on data from the Medical Expenditure Panel Survey and the Behavioral Risk Factor Surveillance System.15

Overall, their model “. . . included 16,201 adults with weighting variables that allowed us to generate state representative estimates of the adult, noninstitutionalized Medicaid population.”

The study concluded that 11% of all Medicaid expenditures can be attributed to smoking. Additionally, among the states these costs ranged from a high of 18% (Arizona and Washington) to a low of 6% (New Jersey).

This study uses their percentage of Medicaid spending due to smoking and applies it to the latest year of available state-by-state Medicaid spending. As shown in Table 3, in FY 2012, smoking cost the Medicaid system $45.7 billion. Of course, the largest states bear the brunt of these costs such as New York ($5.9 billion), California ($5.5 billion), and Texas ($3.1 billion).

To put this potential savings to Medicaid into perspective, in FY 2012, state governments and the District of Columbia combined collected $24.4 billion in cigarette excise taxes and tobacco settlement payments. As shown in Table 4, the potential Medicaid savings exceeds cigarette excise tax collections and tobacco settlement payments by 87%.

However, this varies greatly by state with high ratios in the South Carolina (435%), Missouri (409%), and New Mexico (260%), Arizona (238%), and California (238%) and low ratios in New Jersey (-39%), New Hampshire (-31%), Rhode Island (-17%), Connecticut (-13%), and Hawaii (-4%). Overall, 45 states and D.C. stand to gain more from potential Medicaid savings than through lost cigarette tax collections and tobacco settlement payments.

Note that many of the five states with negative ratios are distorted because excise tax collections are based on where the initial sale occurred and not where the cigarettes were ultimately consumed. This can vary greatly because of cigarette smuggling and cross-border shopping created by state-level differentials in cigarette excise taxes.16

For instance, New Hampshire has long been a source for out-of-state cigarette purchase from shoppers living in Massachusetts, Maine, and Vermont because of its lower cigarette excise tax. As such, the ratio is too high for Massachusetts, Maine, and Vermont and too low for New Hampshire. The same applies to New Jersey and Connecticut vis-à-vis New York and, more specifically, New York City, which levies its own cigarette tax on top of the state tax.

Hawaii is an exception due to its physical isolation which creates monopoly rents. Rhode Island levies a very high cigarette excise tax, but not relatively high enough compared to neighboring Connecticut and Massachusetts to drive a lot of cross-border shopping.

E-cig Table 4Other Potential E-cig Cost Savings

Another area of cost savings from greater e-cig adoption is the reduction in smoke and fire dangers in subsidized and public housing. According to a recent study, smoking imposes three major costs:

1. Increased healthcare costs from exposure to second hand smoke within and between housing units.

2. Increased renovation costs of smoking-permitted housing units.

3. Fires attributed to cigarettes.

As shown in Table 5, the study estimates that smoking imposes a nationwide cost of nearly $500 million.17 The top three states facing the greatest expenses are New York ($125 million), California ($72 million), and Texas ($24 million) while the top three states with the lowest expenses are Wyoming ($0.6 million), Idaho ($0.8 million), and Montana ($1 million).

Applying Cigarette Taxes to E-cigs?

Many policymakers around the country have suggested applying the existing cigarette tax, wholly or in part, to e-cigs. This is bad public policy and is based on a fundamental misunderstanding of the cigarette tax.

The cigarette tax is what economists call a “Pigovian Tax” which is designed to mitigate negative externalities of certain actions. Cigarette smoking creates many negative externalities such as harmful health consequences to the user or to those in near proximity (second-hand smoke).

E-cig Table 5As detailed in this study, the negative externalities associated with traditional smoking are all but eliminated by e-cigs.  Without evidence of actual negative externalities, applying the existing cigarette tax to e-cigs is simply bad public policy.

Conclusion

Policymakers have long sought to reduce the economic damage due to the negative health impact of smoking. They have used tactics ranging from cigarette excise taxes to subsidizing nicotine replacement therapies. To be sure, smoking prevalence has fallen over time, but there is more that can be done, especially given the fact that so much of the healthcare burden of smoking falls on the already strained Medicaid system.

As with any innovation, no one could have predicted the sudden arrival into the marketplace of the e-cig in 2006. Since e-cigs fulfill both the chemical need for nicotine and physical stimuli of smoking the demand for e-cigs has grown dramatically. The promise of a relatively safe way to smoke has the potential to yield enormous healthcare savings. The most current academic research verifies the harm reduction potential of e-cigs.

As shown in this study, the potential savings to Medicaid significantly exceeds the state revenue raised from the cigarette excise tax and tobacco settlement payments by 87%. As such, the rational policy decision is to adopt a non-interventionist stance toward the evolution and adoption of the e-cig until hard evidence proves otherwise. While cigarette tax collections will fall as a result, Medicaid spending will fall even faster. This is a win-win for policymakers and taxpayers.

Notes and Sources

1. Maduka, Jeomi, McMillen, Robert, and Winikoff, Jonathan, “Use of Emerging Tobacco Products in the United States,” Journal of Environmental and Public Health, 2012.www.hindawi.com/journals/jeph/2012/989474

2. Armour, Brian S., Fiebelkorn, Ian C., and Finkelstein, Eric A., “State-Level Medicaid Expenditures Attributable to Smoking,” Centers for Disease Control and Prevention, Preventing Chronic Disease,Vol. 6, No. 3, July, 2009. www.cdc.gov/pcd/issues/2009/jul/08_0153.htm

3. “Tobacco Control State Highlights 2012,” Centers for Disease Control and Prevention.http://www.cdc.gov/tobacco/data_statistics/state_data/state_highlights/2012/pdfs/by_state.pdf

4. “Current Cigarette Smoking Among Adults – United States, 2005-2012,” Centers for Disease Control and Prevention, Morbidity and Mortality Weekly Report, Vol. 63, No. 2, January 17, 2014, p. 31. http://www.cdc.gov/mmwr/pdf/wk/mm6302.pdf

5. See Endnote 2 for data source.

6. Hollenbeak, Christopher S., Kline, David, and Rumberger, Jill S., “Potential Costs and Benefits of Smoking Cessation: An Overview of the Approach to State Specific Analysis,” PennState, April 30, 2010. http://www.lung.org/stop-smoking/tobacco-control-advocacy/reports-resources/cessation-economic-benefits/reports/SmokingCessationTheEconomicBenefits.pdf

7. Benowitz, Neal, Eissenberg, Thomas, Etter, Jean-Francois, Hajek, Peter, and McRobbie, Hayden, “Electronic cigarettes: review of use, content, safety, effects on smokers and potential for harm and benefit,” Addition, 109, June 2014, pp. 1801-1810.

8. Burstyn, Igor, “Peering through the mist: systemic review of what the chemistry of contaminants in electronic cigarettes tells us about health risks,” BMC Public Health, 2014.

9. Benowitz, Neal, Gawron, Michal, Goniewicz, Maciej Lukasz, Havel, Christopher, Jablonska-Czapla, Magdalena, Jacob, Peyton,  Knysak, Jakab, Kosmider, Leon, Kurek, Jolanta, Prokopowicz, Adam, and Sobczak, Andrzej, “Levels of selected carcinogens and toxicants in vapour from electronic cigarettes,” Tobacco Control, January 2013.

10. Farsalinos, Konstantinos, Kyrzopoulos, Stamatis, Savvopoulou, Maria, Tsiapras, Dimitris, and Voudris, Vassilis, “Acute effects of using an electronic nicotine-delivery device (electronic cigarette) on myocardial function: comparison with the effects of regular cigarettes,” BMC Cardiovascular Disorders, 2014.

11. Beard, Emma, Brown, Jamie, Kotz, Daniel, Michie, Susan, and West, Robert, “Real-world effectiveness of e-cigarettes when used to aid smoking cessation: a cross-sectional population study,” Addition, 109, 2014, pp. 1531-1540.

12. Bullen, Christopher, Howe, Colin, Laugesen, Murray, McRobbie, Hayden, Parag, Varsha, Williman, Jonathan, Walker, Natalie, “Electronic cigarettes for smoking cessation: a randomized controlled trial,” The Lancet, September 7, 2013.

13. Caponnetto, Pasquale, Campagna, Davide, Caruso, Massimo, Cibella, Fabio, Morgaria, Jaymin B., Polosa, Riccardo, and Russo, Cristina, “EffiCiency and Safety of an eLectronic cigarette (ECLAT) as Tobacco Cigarettes Substitute: A Prospective 12-Month Randomized Control Design Study,” Plos One, Vol. 8, Issue 6, June 2013.

14. Farsalinos, Konstantinos E., Kyrzopoulos, Stamatis, Romagna, Giorgio, Tsiapras, Dimitris, Voudris, Vassilis, “Evaluating Nicotine Levels Selection and Patterns of Electronic Cigarette Use in a Group of ‘Vapors’ Who Had Achieved Complete Substitution of Smoking,” Substance Abuse: Research and Treatment, 2013.

15. See Endnote 2 for reference.

16. For more information, see Fleenor, Patrick, “Tax Differentials on the Interstate Smuggling and Cross-Border Sales of Cigarettes in the United States,” Tax Foundation, Background Paper No. 16, October, 1996. http://taxfoundation.org/sites/taxfoundation.org/files/docs/d037e767938088819c1168609e179a70.pdf

17. Babb, Stephen D., King, Brian A., and Peck, Richard M., “National And State Cost Savings Associated with Prohibiting Smoking in Subsidized and Public Housing in the United States,” Centers for Disease Control and Prevention, Preventing Chronic Disease, Bol. 11, E171, October 2014. www.cdc.gov/pcd/issues/2014/14_0222.htm

Read more: http://www.statebudgetsolutions.org/publications/detail/e-cigarettes-poised-to-save-medicaid-billions#ixzz3W1uQ5Zow