Clive Bates
Director of Counterfactual
& Public Health Commentator
Counterfactual
The Unholy Trinity
www.clivebates.com @clive_bates
Value proposition: a smokers’ cost-benefit analysis
1. Keep smoking Benefit: nicotine effects, ritual, brand-related
Cost: illness, money, stigma, addiction
2. Quit smoking Benefit: avoid smoking harm
Cost: withdrawal, craving, sustained willpower, lost smoking benefits
3. Switch to e-cigs
Benefit: most smoking benefits*, no/minor smoking harms, personalisation, buzz, cash saving
Cost… addiction?
* Full benefits – subject to continued innovation
“Quit or die”
War against the poor
0
5
10
15
20
25
30
35
40
Largeemployers &
highmanagerial
Higherprofessional
Lowermanagerial &professional
Intermediate Smallemployers &own account
Lowersupervisory &
technical
Semi-routine Routine
Pe
rce
nta
ge s
mo
kiin
g ag
e 1
6+
(GB
)
Smoking prevalence 2012 by socio-economic classification (UK ONS)
Unintended consequences
Advertising ban or restrictions
Favours incumbents Reduces appeal – protects cigarettes Harms innovation Limits recruitment
Unintended consequences
Advertising ban or restrictions
Favours incumbents Reduces appeal – protects cigarettes Harms innovation Limits recruitment
Ban flavours Reduces appeal – protects cigarettes Limits full migration from tobacco Black market, DIY – more risk
Unintended consequences
Advertising ban or restrictions
Favours incumbents Reduces appeal – protects cigarettes Harms innovation Limits recruitment
Ban flavours Reduces appeal – protects cigarettes Limits full migration from tobacco Black market, DIY – more risk
Ban vaping indoors Damages vaping value proposition Exposes vapers to smoking Promotes relapse
Unintended consequences
Advertising ban or restrictions
Favours incumbents Reduces appeal – protects cigarettes Harms innovation Limits recruitment
Ban flavours Reduces appeal – protects cigarettes Limits full migration from tobacco Black market, DIY – more risk
Ban vaping indoors Damages vaping value proposition Exposes vapers to smoking Promotes relapse
Technical compliance regime
Reduce range of products and firms Increase cost Harms innovation
Unintended consequences
Advertising ban or restrictions
Favours incumbents Reduces appeal – protects cigarettes Harms innovation Limits recruitment
Ban flavours Reduces appeal – protects cigarettes Limits full migration from tobacco Black market, DIY – more risk
Ban vaping indoors Damages vaping value proposition Exposes vapers to smoking Promotes relapse
Technical compliance regime
Reduce range of products and firms Increase cost Harms innovation
Strength Warnings Refillables Bottle size Internet Tax
Unsurfaced assumptions: How much does marketing really determine substance use?
15.7
23.4
0
5
10
15
20
25
Cigarettes Marijuana
Percent
Marijuana and cigarettes US high school prevalence 2013
Source: CDC MMWR Youth Risk Behavior Surveillance — United States, 2013 Current use: used at least once in last 30 days Approximately age 14-18 – grade 9-12
Diminishing and negative returns to regulation
Net health
Net harm
Val
ue
to
so
cie
ty
Regulatory costs, burdens and restrictions
Builds confidence
Destroys viable firms and products
Compromises design & consumer appeal
Sweet Spot
Bureaucratic regulators
Predatory companies
Public health’s “useful idiots”
The Unholy Trinity
Diminishing and negative returns to regulation
Net health
Net harm
Val
ue
to
so
cie
ty
Regulatory costs, burdens and restrictions
Builds confidence
Destroys viable firms and products
Compromises design & consumer appeal
Sweet Spot
Unholy Trinity at work Implicit collusion
between naïve NGOs, risk-averse regulators and predatory majors
Morgan Stanley
Ultimately, the proposed regulations will likely limit product variety and competition among e-cigarettes. The greater barriers to entry (slower approval process, higher costs, higher product standards), will ultimately take a toll on the number of available products and rationalize the category.
This could result in the larger tobacco companies, which have greater financial resources and legal experience, dominating the category in the future, given the burden it would place on smaller manufacturers.
Good regulation
• Liquids
• Devices
• Testing
• Packaging
• Labelling
• Marketing
• Quality control
Changing perceptions – for the worse
Birth defects
Lipid pneumonia
Third hand nicotine exposure
Ultrafine particles
Blindness
Anti-freeze
Poisoning
WE JUST DON’T
KNOW!!!
Winning hearts and minds?
85%
65%
0%
20%
40%
60%
80%
100%
2010 2013
Believe e-cigs safer than cigarettes?
US adult smokers
Tan ASL, Bigman CA. E-cigarette awareness and perceived harmfulness: prevalence and associations with smoking-cessation outcomes. Am J Prev Med 2014; 47: 141–9.
Perceived e-cig risk in young British smokers
Trends in electronic cigarette use in young people in Great Britain over 2013-2014 Arnott, Britton, Cheeseman, Dockrell, Eastwood, Jarvis, & McNeill ASH, CR-UK, PHE 2014
Conclusion
• Regulation can work against health
• Regulations can support for the cigarette business model
• Competition and light regulation will keep Big Tobacco honest (and keep Big Pharma out?)
• Elements of the public health community are doing far more harm than good
www.clivebates.com @clive_bates
Thank you… questions…