Tobacco Control in Developing Countries andCurbing the Epidemic
Tobacco Control in Developing Countries andCurbing the Epidemic
The World Bank WHO
P Jha, FJ Chaloupka on behalf of the report team
Why this book?Why this book?Economic arguments around tobacco control are unclear and Economic arguments around tobacco control are unclear and
often debatedoften debated
In 1996In 1996, an Asian Health Minister stated “cigarette producers are , an Asian Health Minister stated “cigarette producers are making large contributions to our economy... we have to think making large contributions to our economy... we have to think about workers and tobacco farmers”about workers and tobacco farmers”
In 1997, In 1997, The EconomistThe Economist commented "most smokers (two-thirds commented "most smokers (two-thirds or more) do not die of smoking-related disease. They gamble and or more) do not die of smoking-related disease. They gamble and win. Moreover, the years lost to smoking come from the end of win. Moreover, the years lost to smoking come from the end of life, when people are most likely to die of something else anyway”life, when people are most likely to die of something else anyway”
Source: Tobacco Control 1996, The Economist 1997
MethodologyMethodology Consultation workshopsConsultation workshops: : Washington D.C. 1996, Beijing Washington D.C. 1996, Beijing
1997, Cape Town 1998 1997, Cape Town 1998 Cape Town Proceedings published in 1998Cape Town Proceedings published in 1998
19 Background papers 19 Background papers 40 economists, epidemiologists, and control experts from 13 40 economists, epidemiologists, and control experts from 13
countries.countries. Reviews of literatureReviews of literature New analysesNew analyses 2 rounds of peer review2 rounds of peer review
Synthesized in “Curbing the EpidemicSynthesized in “Curbing the Epidemic”, ”, Jha and Chaloupka, 1999Jha and Chaloupka, 1999
Outline of bookOutline of book
Tobacco use and its consequencesTobacco use and its consequences Analytics of tobacco useAnalytics of tobacco use Demand for tobaccoDemand for tobacco Supply of tobaccoSupply of tobacco Policy directionsPolicy directions
Most smokers live in developing countriesMost smokers live in developing countries
Source: Jha et al, 2002, AJPH
Current smokers in 1995 (in millions)
Region NumberLow/Middle income 933High Income 209World 1,142
Quit rates low in low income countries 5-10% in China and India15-21% in Hungary and Poland 30-40% in UK
Large and growing number of deaths from smoking
Large and growing number of deaths from smoking
Source: Peto and Lopez, 2001
Past and future tobacco deaths (in billions)
Time Billions of deaths1901-2000 0.1 (mostly in developed
countries)
2001-2100 1.0 (mostly in developingcountries)
0.5 B among people alive today 1 in 2 of long-term smokers killed by their addiction1/2 of deaths in middle age (35-69)
Trends in smoking in Norwegian males by Income Group
Trends in smoking in Norwegian males by Income Group
25%
35%
45%
55%
65%
75%
85%
1955 1960 1965 1970 1975 1980 1985 1990Year
Mal
e sm
oki
ng
pre
vale
nce
High income
Low income
Source: Lund et al., 1995
Smoking is more common among the less educated
Smoking prevalence among men in Chennai, India, by education levels
Smoking is more common among the less educated
Smoking prevalence among men in Chennai, India, by education levels
Source: Gajalakshmi and Peto 1997
64%58%
42%
21%
0%
20%
40%
60%
Illiterate <6 years 6-12years
>12years
Length of schooling
Sm
okin
g p
revale
nce
Nicotine addition and the poor:Plasma cotinine in adult smokers by socioeconomic status
Nicotine addition and the poor:Plasma cotinine in adult smokers by socioeconomic status
Source: Health Survey, England, 1999; Bobak et al, 2000
0 1 2 3 4
200
250
300
350
Pla
sma
coti
nin
e (n
g/m
l)
Socio-economic status
Smoking accounts for much of the mortality gap between rich and poor
Risk of death of a 35 year old male before age 70, by education levels in Poland, 1996
Smoking accounts for much of the mortality gap between rich and poor
Risk of death of a 35 year old male before age 70, by education levels in Poland, 1996
Source: Bobak et al., 2000
5% 9%19%1%
1%
5%
21%
22%
28%
0%
10%
20%
30%
40%
50%
60%
Higher Secondary Primary
Other causes
Attributed to SMOKINGbut would have diedanyway at ages 35-69
Attributed to SMOKING
Why should governments intervene?Economic rationale or “market failures”
Why should governments intervene?Economic rationale or “market failures”
Smokers do not know their risksSmokers do not know their risks Addiction and youth onset of smokingAddiction and youth onset of smoking
Lack of information and unwillingness to Lack of information and unwillingness to act on informationact on information
Regret habit later, but many addictedRegret habit later, but many addicted
Costs imposed on othersCosts imposed on others Costs of environmental tobacco smoke Costs of environmental tobacco smoke
and health costsand health costs
Source: Jha et al., 2000
Underestimated risks of smokingUnderestimated risks of smoking 7 in 10 of Chinese smokers thought smoking does 7 in 10 of Chinese smokers thought smoking does
them “little or no harm”them “little or no harm” Risks not internalized: personal risks perceived Risks not internalized: personal risks perceived
lower than average riskslower than average risks Risks of addiction downplayed: only 2 in 5 of US Risks of addiction downplayed: only 2 in 5 of US
adolescents intending to quit actually doadolescents intending to quit actually do in high-income countries, 7 in 10 smokers wish they in high-income countries, 7 in 10 smokers wish they
had not startedhad not started
Source: Kenkel and Chen, 2000; Weinstein, 1998; SGR, 1989 and 1994
Tobacco addiction starts early in lifeTobacco addiction starts early in life
Source: Chinese Academy of Preventive Medicine 1997, Gupta 1996, US Surgeon General Reports, 1989
Every day 80,000 to 100,000 youths Every day 80,000 to 100,000 youths become regular smokersbecome regular smokers
China
(males,1996)
India
(males, 1995)
US
(both sexes,
born 1952-61)
US
(both sexes,
born 1910-14)
0
20
40
60
80
100
15 20 25
Age
Cu
mu
lati
ve u
pta
ke in
per
cen
t
Healthcare costs from smokingHealthcare costs from smoking
Annual (gross) healthcare costs:Annual (gross) healthcare costs: 0.1-1.1% of GDP, or 0.1-1.1% of GDP, or 6 -15% of total health costs 6 -15% of total health costs in high-in high-
income countriesincome countries proportionally similar in lower-income countries proportionally similar in lower-income countries
Net (lifetime) healthcare costs: Net (lifetime) healthcare costs: Differences in lifetime costs are smaller than annual costsDifferences in lifetime costs are smaller than annual costs Best studies do suggest there are net lifetime costsBest studies do suggest there are net lifetime costs Pension or “smokers pay their way” arguments are complexPension or “smokers pay their way” arguments are complex
Source: Lightwood et al., 2000
Government roles in interveningGovernment roles in intervening
To deter children from smokingTo deter children from smoking To protect non-smokers from others’ smokeTo protect non-smokers from others’ smoke To provide adults with necessary information to make an To provide adults with necessary information to make an
informed choiceinformed choice
First-best instrument, such as youth restrictions, are usually First-best instrument, such as youth restrictions, are usually ineffective. Thus, tax increases are justified, and are effective.ineffective. Thus, tax increases are justified, and are effective.
Tax increases are blunt instruments.Tax increases are blunt instruments.
Source: Jha et al., 2000
Unless current smokers quit, smoking deaths will rise dramatically over the next 50 years
Unless current smokers quit, smoking deaths will rise dramatically over the next 50 years
0
340
520
70
500
220
190
0
100
200
300
400
500
1950 2000 2025 2050
Year
Toba
cco
deat
hs (m
illio
n)
Baseline
If proportion ofyoung adultstaking up smokinghalves by 2020
If adultconsumptionhalves by 2020
Source: Peto and Lopez, 2001
Which interventions are effective?Measures to reduce demand
Which interventions are effective?Measures to reduce demand
Higher cigarette taxesHigher cigarette taxes Non-price measuresNon-price measures: consumer : consumer
information, research, cigarette advertising information, research, cigarette advertising and promotion bans, warning labels and and promotion bans, warning labels and restrictions on public smokingrestrictions on public smoking
Increased access to nicotine replacement Increased access to nicotine replacement (NRT) and other cessation therapies (NRT) and other cessation therapies
Taxation is the most effective measure
Taxation is the most effective measure Higher taxes induce quitting, reduce consumption and Higher taxes induce quitting, reduce consumption and
prevent startingprevent starting A 10% price increase reduces demand by:A 10% price increase reduces demand by:
4% in high-income countries4% in high-income countries 8% in low or middle-income countries8% in low or middle-income countries About half of the effect is on amount and half on initiationAbout half of the effect is on amount and half on initiation Long-run effects may be greaterLong-run effects may be greater
Young people and the poor are the most price Young people and the poor are the most price responsiveresponsive
Source: Chaloupka et al., 2000
Cigarette price and consumption show opposite trends (1)
Real price of cigarettes and annual per adult cigarette consumption in
South Africa 1970-1989
Cigarette price and consumption show opposite trends (1)
Real price of cigarettes and annual per adult cigarette consumption in
South Africa 1970-1989
Source: Saloojee 1995
0.05
0.06
0.07
0.08
0.09
1970 1972 1974 1976 1978 1980 1982 1984 1986 1988
Year
Cig
aret
te c
on
sum
pti
on
per
ad
ult
(in
pac
ks)
0.7
0.8
0.9
1
1.1
1.2
1.3
Rea
l P
rice
Real price
Consumptionper adult
Cigarette price and consumption show opposite trends (2)
Real price of cigarettes and cigarette consumption in the UK, 1971-96
Cigarette price and consumption show opposite trends (2)
Real price of cigarettes and cigarette consumption in the UK, 1971-96
Source: Townsend 1998
Real price and consumption of cigarettes in the UK1971-1996
9000
10000
11000
12000
13000
14000
15000
16000
17000
1971 1974 1977 1980 1983 1986 1989 1992 1995
Year
Cig
aret
te C
on
sum
pti
on
1
99
4 p
rice
s (£
m)
£ 1.25
£ 1.45
£ 1.65
£ 1.85
£ 2.05
£ 2.25
£ 2.45
£ 2.65
Pri
ce (
£)
19
94
val
ue
PRICE
CONSUMPTION
There is still ample room, especially in lower-income countries, to raise cigarette taxes
There is still ample room, especially in lower-income countries, to raise cigarette taxes
0.00
0.50
1.00
1.50
2.00
2.50
3.00
3.50
High Income Upper MiddleIncome
Lower MiddleIncome
Low Income
Countries by income
Ave
rage
pric
e or
tax
per p
ack
(US$
)
0
10
20
30
40
50
60
70
80
Tax
as a
per
cent
age
of p
rice
Average price in US$Average tax in US$Tax as a percentage of price
Source: Chaloupka et al., 2000
Cigarette tax increases result in higher tax revenues (1)
Real cigarette tax rate and real cigarette tax revenue in
the US 1960-95
Cigarette tax increases result in higher tax revenues (1)
Real cigarette tax rate and real cigarette tax revenue in
the US 1960-95
Source: Sunley et al., 2000
Non-price measures to reduce demandNon-price measures to reduce demand Increase consumer informationIncrease consumer information: dissemination of : dissemination of
research findings, warning labels, counter-research findings, warning labels, counter-advertisingadvertising
Comprehensive ban on advertising and Comprehensive ban on advertising and promotionpromotion
Restrictions on smoking in public and work Restrictions on smoking in public and work places places
Increase access to nicotine-replacement Increase access to nicotine-replacement therapies (NRT)therapies (NRT)
Health information reduces the demand for cigarettes
Health information reduces the demand for cigarettes
Country Time Event Immediate reduction incigarette consumption
The US 1964 Surgeon GeneralReport
1-2%
UK 1962 1st report of the RoyalCollege of Physicians
5%
Switzerland 1966 An anti-smokingcampaign
11%
Turkey 1982 Implementation ofhealth warning labels
8%
Source: Kenkel and Chen, 2000
Comprehensive advertising bans reduce cigarette consumption Consumption trends in countries with such bans vs. those with no bans
(n=102 countries)
Comprehensive advertising bans reduce cigarette consumption Consumption trends in countries with such bans vs. those with no bans
(n=102 countries)
No Ban
Ban
1450
1500
1550
1600
1650
1700
1750
1981 1991
Year
Cig
aret
te c
on
sum
pti
on
per
cap
ita
Source: Saffer, 2000
Effect of advertising bans and counter-advertising
Effect of advertising bans and counter-advertising
A comprehensive set of tobacco A comprehensive set of tobacco advertising bans can reduce consumption advertising bans can reduce consumption by 6.3%by 6.3%
Counter-advertising messages (set at 15% Counter-advertising messages (set at 15% of the total number of advertising of the total number of advertising messages) can reduce smoking by about messages) can reduce smoking by about 2% a year2% a year
Source: Saffer, 2000
Clean indoor-air laws and youth access restrictions Clean indoor-air laws and youth access restrictions
Clean indoor-air laws:Clean indoor-air laws: can reduce cigarette consumption can reduce cigarette consumption can be self-enforcingcan be self-enforcing work best with social consensus against smokingwork best with social consensus against smoking Youth access restrictions:Youth access restrictions: mixed evidence of effectivenessmixed evidence of effectiveness require aggressive reinforcement require aggressive reinforcement
Effectiveness of cessationEffectiveness of cessation
Increase in 6 month Intervention quit rates (%)
Brief advice to stop by clinician 2 to 3
Adding NRT to brief advice 6
Intensive support plus NRT 8
Source: Raw et al., 1999; AHCPR, 1999
NRT and cessation therapiesNRT and cessation therapies
Adherence rates still low (<40%), and time Adherence rates still low (<40%), and time dependentdependent
Role of anti depressants, intensive efforts, Role of anti depressants, intensive efforts, combination agents still not clearcombination agents still not clear
Price and access issues remain barriersPrice and access issues remain barriers
Source: Novotny et al., 2000
NRT and cessation therapiesNRT and cessation therapies NRTs double the effectiveness of cessation NRTs double the effectiveness of cessation
efforts and reduce individuals’ withdrawal costsefforts and reduce individuals’ withdrawal costs Governments may widen access to NRT and Governments may widen access to NRT and
other cessation therapies by:other cessation therapies by: Reducing regulation (like cigarette markets Reducing regulation (like cigarette markets
today)today) Conducting more studies on cost-effectiveness Conducting more studies on cost-effectiveness
(especially in low/middle income countries)(especially in low/middle income countries) Considering NRT subsidies for poorest smokersConsidering NRT subsidies for poorest smokers
Source: Novotny et al., 2000
Impact of interventions on initiation and cessation
Impact of interventions on initiation and cessation
Intervention Initiation Cessation
Price increases 10% increase=3-10% decrease
10% increase=11-13% shorter duration, 3% higher cessation
Anti-smoking media
Weak evidence Increased number of attempts and success
Advertising and promotion bans
Reduces experimenting and initiation, higher effects on female
Complete ban reduces consumption by about 6%
Youth access Weak evidence No evidence
Smoking restrictions
Some evidence of lower initiation
Work and household restrictions most effective
NRT No evidence More decisions to quit and higher number of attempts
Source: Ross et al, 2001
Source: Ranson et al., 2002
Income group Price increases of
10%
Non-price measures
with effectiveness of 2 to 10%
NRT (publicly provided) with effectiveness of 0.5 to 2.5%
Low / middle 4 to 14 4 to 21 1 to 5
High 0.5 to 2 1 to 5 0.2 to 1
World 5 to 16 5 to 26 1 to 6
Potential reductions in deaths (millions) from a price and non-price measures
Potential reductions in deaths (millions) from a price and non-price measures
Documenting changes in response to control policies
Documenting changes in response to control policies
CALIFORNIACALIFORNIA: versus rest of the US: versus rest of the US 14% vs. 3% decline in lung cancer rates14% vs. 3% decline in lung cancer rates
MONICA analyses of 36 countries: MONICA analyses of 36 countries: control has been partially effectivecontrol has been partially effective male never smokers rosemale never smokers rose female ex-smokers rose, but new smokers female ex-smokers rose, but new smokers
roserose
Source: CDC, 2000; Molirus et al., 2000
Source: CMH, 2001
Cumulative deaths avoided (millions) before age 60 with interventions in low and middle-income
countries, 1998-2020
Cumulative deaths avoided (millions) before age 60 with interventions in low and middle-income
countries, 1998-2020
12483
4213 3220114
2005 2010 2015 2020
Infectious and maternal conditions ($26-46 billion/year)
Adult smoking cessation (self-financing)
Year
Which interventions are ineffective at reducing consumption?
Most measures to reduce supply
Which interventions are ineffective at reducing consumption?
Most measures to reduce supply
ProhibitionProhibition Youth access restrictionsYouth access restrictions Crop substitutionCrop substitution Trade restrictions Trade restrictions Control of smuggling is the only exception Control of smuggling is the only exception
and it is the key supply-side measureand it is the key supply-side measureSource: Jacobs et al., 2000; Woolery et al., 2000; Taylor et al., 2000
What are the costs of tobacco control?
What are the costs of tobacco control?
Revenue lossRevenue loss: : likely to have revenue gainslikely to have revenue gains a 10% tax increase would raise revenue by 7%a 10% tax increase would raise revenue by 7%
Job lossJob loss: : temporary, minimal, and gradualtemporary, minimal, and gradual Possible smugglingPossible smuggling: : crack down on criminal crack down on criminal
activity, not lower taxesactivity, not lower taxes Cost to individuals, especially the poor:Cost to individuals, especially the poor:
partially offset by lower consumptionpartially offset by lower consumption
Studies on the employment effects of dramatically reduced or eliminated tobacco consumption
Studies on the employment effects of dramatically reduced or eliminated tobacco consumption
Type of country Name and year Net change as % ofeconomy in base
year givenNet Exporters US (1993) 0%
UK (1990) +0.5%
Zimbabwe (1980) -12.4%
Balanced TobaccoEconomies
South Africa (1995) +0.4%
Scotland (1989) +0.3%
Net Importers Bangladesh (1994) +18.7%
Source:Buck et al, 1995; Irvine and Sims, 1997; McNicoll and Boyle 1992, Jacobs et al, 2000; Warner et al , 1996
Smuggling of cigarettesSmuggling of cigarettes
Industry has economic incentive to smuggleIndustry has economic incentive to smuggle Increase market share and decrease tax ratesIncrease market share and decrease tax rates
Best estimate: 6 to 8.5% of total consumptionBest estimate: 6 to 8.5% of total consumption Non-price variables importantNon-price variables important
Perceived level of corruption more important than cigarette Perceived level of corruption more important than cigarette pricesprices
Tax increase will lead to revenue increase, even in the Tax increase will lead to revenue increase, even in the event of increased smugglingevent of increased smuggling
Source: Merrriman et al. 2000; Joosens, 2000; BAT,1998
Estimated smuggling in 1995 in selected European countries
Estimated smuggling in 1995 in selected European countries
Country
Price per
pack in US$ 1995
Estimate of
smuggling as a percentage of 1995 domestic sales by expert
sources Austria
2.96
15%
Spain 1.38 15%
Germany 3.38 10%
Italy 2.19 12%
Greece 1.90 8%
Sweden 4.58 2%
UK 4.16 2%
Source: Merriman et al., 2000
Tobacco smuggling tends to rise in line with the degree of corruption
Smuggling as a function of transparency index
Tobacco smuggling tends to rise in line with the degree of corruption
Smuggling as a function of transparency index
Brazil
Pakistan
Cambodia
Indonesia
Sw eden
Austria
y = - 0.02x + 0.2174
R2 = 0.2723
0.00
0.05
0.10
0.15
0.20
0.25
0.30
0.35
0.40
0 2 4 6 8 10
Transparency index for country
Sm
ug
glin
g a
s a
sh
are
of
con
sum
ptio
n (
%)
Source: Merriman et al., 2000
Control of smuggling Control of smuggling Countries need not make a choice between higher cigarette Countries need not make a choice between higher cigarette
tax revenues and lower cigarette consumptiontax revenues and lower cigarette consumption Higher tax rates can achieve bothHigher tax rates can achieve both
Effective control measures of smuggling existEffective control measures of smuggling exist Focus on large container smugglingFocus on large container smuggling Prominent local language warnings and tax stampsProminent local language warnings and tax stamps Increase penaltiesIncrease penalties Licensing and tracking of containersLicensing and tracking of containers Increase export duties or bondsIncrease export duties or bonds
Multilateral tax increases help combat smugglingMultilateral tax increases help combat smuggling
Source: Merrriman Source: Merrriman et al.et al. 2000; Joosens, 2000; BAT, 1998 2000; Joosens, 2000; BAT, 1998
Lower tax rates in Canada in response to smuggling
Real price of cigarettes and annual cigarette
consumption per capita, Canada, 1989-1995
Lower tax rates in Canada in response to smuggling
Real price of cigarettes and annual cigarette
consumption per capita, Canada, 1989-1995 Tax reduced in an attempt to counter
smugglingI
V
0
1
2
3
4
5
6
719
89
1990
1991
1992
1993
1994
1995
Rea
l pri
ce p
er p
ack
(US
D)
0
10
20
30
40
50
60
70
80
90
Ann
ual c
igar
ette
con
sum
ptio
n pe
r ca
pita
(in
pack
s)
Real Price Consumption
Source: Jha and Chaloupka, 1999
Smuggling and tax revenue (1)Smuggling and tax revenue (1)SOUTH AFRICA, 1990sSOUTH AFRICA, 1990s Increased excise tax from 38 to 50% of retail priceIncreased excise tax from 38 to 50% of retail price
Smuggling rose from 0 to 6%Smuggling rose from 0 to 6% Sales fell 20%Sales fell 20% Revenue went up 2 foldRevenue went up 2 fold
CANADA, 1993-94CANADA, 1993-94 Lowered tax in response to organized smugglingLowered tax in response to organized smuggling
Retail price fell by halfRetail price fell by half Total consumption rose 30%, more so in youngTotal consumption rose 30%, more so in young Average revenue per capita fell by 35%Average revenue per capita fell by 35%
Source: Abedian, 1998; Sweanor, 1998Source: Abedian, 1998; Sweanor, 1998
Distribution of control policies scores by income group
Distribution of control policies scores by income group
Source: Chaloupka et al., 2001
Incomegroup
ETS A and P ProductRegula-
tion
Tax Total score
Low(n=51)
3.9 3.2 2.0 1.3 9.1
Middle(n=52)
6.0 3.7 1.3 2.6 13.7
Uppermiddle(n=30)
6.3 3.7 1.7 3.2 15.3
SummarySummary Tobacco deaths worldwide are large and growing, and have higher Tobacco deaths worldwide are large and growing, and have higher
burdens among the poorburdens among the poor
Specific market failures support government interventionSpecific market failures support government intervention
Demand measures, chiefly tax increases, information, and Demand measures, chiefly tax increases, information, and regulation are most effective to reduce consumption, and are also regulation are most effective to reduce consumption, and are also cost-effectivecost-effective
Helping adults quit is as important as preventing kids from startingHelping adults quit is as important as preventing kids from starting
Control of smuggling is the major supply-side interventionControl of smuggling is the major supply-side intervention
Poor coverage of known effective interventions in lower income Poor coverage of known effective interventions in lower income countriescountries
An agenda for cessation in EuropeAn agenda for cessation in EuropeGoal: raise ex-smoking rates to 50% by 2010 in Eastern and Central Europe European Tobacco Intervention Program (modelled after regional HIV/AIDS programming in Africa and Latin
America or ASSIST program by CDC); Major EU/World Bank support of 1 billion Euro/year for 7-10 years (1E/capita); WHO as accountable nodal agency (with separate governance board) with tasks as: research networks on
surveillance (inc. smoking on all death certificates), quit campaigns, cessation advice standards and warning label research, policy work on standardising EU entry, partnership with Big Pharma;
Regional centres for local publicity and clinical research (MONICA or EPIC as models or as a base), including regional training network on tobacco policy at 5-10 universities;
NGOs selected for advocacy and uncovering industry practices; Negotiated future price guarantees for better cessation products; and Only major supply-side focus is on smuggling, including industry involvement and impact on price (take little
action on the tobacco subsidy);
www.tobaccoevidence.orgwww.tobaccoevidence.org
Source: Jha, Ross, Chaloupka
International Tobacco Evidence Network (ITEN)
International Tobacco Evidence Network (ITEN)
internet-based information sharing enhancing research capacity in 5 regional technical
centres; providing a peer review function and dissemination
vehicle for primary research fostering interdisciplinary research using peer-reviewed
research protocols on priority topics
www.tobaccoevidence.orgwww.tobaccoevidence.org