by Carl V Phillips
Continuing this series. Sorry about the cheesy title. But it never hurts to have a reminder that Sweden is the most important population in the annals of tobacco harm reduction. (Click here to get ABBA-rolled.)
The sale of cigarettes generates an enormous amount of net revenue. Truly enormous. A pack of cigarettes costs tens of cents to produce and sells for 5, 10, or even 20 dollars in places where most readers of this blog live. Manufacturers and merchants keep some of that. But the vast majority of those purchase prices are taxes. In the order of 90% of the net revenue accrues to governments. Few consumers realize this, perhaps because unlike most other sales, excise, and value-added taxes, these taxes are intentionally never broken out. Look at a the receipt from purchasing cigarettes, and it does not tell you that most of what you just paid was tax.
With so much money at stake, it is not surprising that those profiting would try to defend their income. It turns out, however, that those who score the bulk of the money — which funds general government expenses just like income taxes — have only recently been particularly motivated to be anti-THR. Consumers practicing THR by switching to smokeless tobacco were few in number in North America, fewer still Europe outside Sweden, and even less everywhere else. Moreover, in North America, smokeless tobacco users are forced to pay similar taxes (usually somewhat less than on cigarettes, though more in some places). It would have been a serious threat to government revenuers if the public learned about THR, and thus began to object to it being disincentivized via those taxes, but that was not yet a risk so a few educated switchers mattered little.
Enter e-cigarettes, and government revenue started to face a serious threat. Though smokeless tobacco sales still dwarf e-cigarette sales, the switching rate — the number giving up smoking in favor of the substitute — is currently considerably higher for e-cigarettes. Very few jurisdictions have excise taxes on e-cigarettes. It is easy for consumers to evade such taxes via black or grey markets, which means that even if taxes were imposed, they could never be nearly as high as they are on traditional tobacco products without triggering massive evasion. Figuring out how to even define a tax for open-system e-cigarettes (one that is not easy to work around) is difficult, thus the revenuers have a particular interest in preventing THR via open-system vaping.
And, of course, the political mobilization of vapers causes a lot of — usually successful — pushback against tax proposals. Moreover, this has had the spillover effect of creating CASAA and a few other THR advocates who also fight smokeless tobacco taxes. That is an uphill battle, but at least it has been joined. (For a long time, this was practically a one-man fight, in the person of Bill Godshall, who was remarkably successful in his home state of Pennsylvania — there is no excise tax on smokeless tobacco there.)
Thus the e-cigarette phenomenon has put governments in the scary position of having to find other revenue rather than just gouging poor smokers and smokeless tobacco users. For government officials concerned about revenue, THR is just collateral damage. Few of them actively want THR to fail, in contrast with anti-tobacco extremists. (Some government agencies like CDC and the National Institutes of Health were long-ago captured by the extremists and so are a different story; the revenuers might appreciate the political cover they offer, but do not share their motives). Today’s THR movement is very inconvenient for government revenue, resulting in government officials who have no hatred of THR per se being motivated to try to discourage it.
Of course, government officials do not personally profit from taxes. But they do want to get reelected (for some unfathomable reason) and have to deal with an electorate that likes having schools, bridges that do not fall down, and such, but still punishes legislators for trying to raise the revenue to pay for them. Thus the temptation to brutally tax the “sinners” is overwhelming. The revenue threat from THR makes many legislators happy to become useful idiots by uncritically accepting the blatant lies from those who are actively anti-THR, which provide them with political cover.
If the money did accrue to the decision-makers themselves, the state anti-THR efforts would be pretty overwhelming (and so do not expect to see THR in places like China or Thailand for a very, very long time). But a steady stream of that revenue does accrue personally to tobacco controllers. A portion of those taxes is typically earmarked for them to pocket. There are also other channels by which they acquire tax money, such as the recent FDA grants (those “user fees” that the tobacco companies are forced to pay to FDA are effectively yet another tax).
In the USA, the taxes on cigarettes grew slowly at first as a result of tobacco controllers pushing for them as a method of discouraging smoking[*]. They took a huge jump in 1998 with the Master Settlement Agreement, which was mostly just a ~50 cent/pack national sales tax on smokers, though those who imposed it managed to trick people into believing it was a fee paid by the manufacturers. It is paid to the states, with huge earmarks for tobacco controllers. That was the moment of transformation of the tobacco control movement into the tobacco control industry, which I will discuss later in the series. The taxes then continued to increase massively, and now there is barely even a pretense that they are about anything other than increasing government revenue.
[*It is worth noticing that governments are funding a bunch of pseudo-scientific “researchers” whose job includes providing justification for the government to grab more revenue. If you detect a certain similarity between this and the billionaire-funded “think tanks” whose mission is to provide pseudo-scientific political cover for policies that enrich billionaires, you are not mistaken. It is also worth a reminder that the tobacco control claim that has the most immediate bearing on taxation — that smokers cost society money when they damage their own health — is patently false. You can manipulate the numbers so they look like there is a tiny increase in healthcare costs in isolation, though even this is pretty dubious. But this is swamped by the reduction in other consumption due to earlier mortality (or in government accounting terms, by pension savings). So in reality, smokers are being taxed extra even though the health problems they suffer actually save everyone else money.]
The lavish tax funding flowing to tobacco controllers is directly responsible for various blights, like the deluge of anti-tobacco junk science and various illiberal and costly anti-tobacco-use policies. It did not create anti-THR; the anti-THR opinion leaders, motivated by NIH Syndrome and extremism, were already there. But it did increase their absolute power and probably redoubled their desperation to not be shown up by successful THR, and no doubt heightened their fantasies that they have so much power they can bring about their “endgame”. It also increased their relative power within tobacco control by creating another motivation to oppose THR: If THR succeeds, the money will dry up. This is not just because it would diminish the flow of cigarette taxes. Even if THR products were heavily taxed, the money would stop flowing to tobacco control; there would be little interest in giving them absurd sums of tax money if the products most people were using caused very little harm.
As noted in the previous post, the extremists who are desperate to achieve a tobacco-free world actively prefer people keep smoking because it is better for that goal. With massive funding at stake, the now massively expanded population of tobacco controllers — most of whom have no skills that could command such income and job security anywhere else — are financially dependent on people smoking rather than adopting THR. A THR revolution could dramatically reduce smoking rates below the level necessary for sustaining a lucrative tobacco control industry in less than a generation.
This may seem like a rather odd observation to make about people whose activities are ostensibly intended to reduce smoking. But keep in mind the glacial pace of smoking reduction and the trivial impact all of those policies have. Without THR, they can be pretty sure they can coast to retirement. You might find it even odder that the same people who talk about the “endgame” are also comfortable in their job security, but we know that doublethink is not exactly rare in the tobacco control world.
It is also worth noting that non-governmental funding creates similar incentives. The American Cancer Society, American Lung Association, et al. get a lot of donations and bequests thanks to people dying from smoking, in addition to their direct tobacco control funding. An executive of one of those organizations was notoriously overheard issuing a profanity-laced complaint about e-cigarettes hurting their fundraising.
In fairness, if offered the magic-wand option of losing their job because everyone switched to a low-risk alternative, some (though far from all) people working in tobacco control would be willing to pack up their desk and go home. A few truly decent people in the bunch would even be willing to give up their jobs to get a few hundred people to quit smoking who would not have otherwise done so, realizing that this probably exceeds what they would otherwise accomplish during the course of their career. But the choice about whether or not to be evil is never quite so clear as in children’s stories or philosophy exercises that include magic wands. If you apportion it out, each person actively supporting anti-THR does own responsibility for hundreds of people not quitting smoking. But the money makes it easy to quietly agree to be a useful idiot, choosing to believe the lies that interfere with the most promising methods of smoking cessation and perpetuate the lucrative busy-work methods. To paraphrase Sinclair, it is not nearly as difficult to get someone to believe nonsense when that nonsense keeps his salary flowing.
The picture is even worse if we move beyond the rich countries to places where the WHO holds sway. The WHO is thoroughly captured by the anti-THR extremists, whose tendencies are further amplified by WHO exemplifying European grandees’ tendency toward feudalism. In poor countries, many government officials dream of sucking-up enough to get a cushy WHO job, and even the non-venal ones are beholden to the WHO to pay for important programs that genuinely help their people, and so are forced to just go along with the absurd (when starvation and infectious disease are serious problems) anti-tobacco agenda, including anti-THR.
I tend to distill this into messaging along the lines of: “Governments derive enormous revenue from taxing cigarettes and generally lose that when smokers switch to vaping. The tobacco control industry owes its entire existence to cigarettes, both because they get billions of cigarette tax dollars and because they are only given money because of public concern about the health impacts of smoking. Thus, the very people who lead anti-smoking efforts have a serious financial conflict of interest about succeeding. While they might consider succeeding on their own terms to be worth going out of business, this is yet another reason they are inclined to oppose THR.”
You may have noticed that I am 1700 words into this analysis without having yet mentioned corporate money. That is because that, compared to tax money, it is just not very important.
If you believed the idle chatter about e-cigarette politics, you might think that the pharmaceutical industry engineered anti-THR and it exists because of their funding. Readers of this series should already understand why attributing anti-THR mainly to money is wrong. But even to the extent that money has amplified and perpetuated anti-THR, as described above, the real money is from taxes, not competing industries. Here is a reality check: The various governments of the USA collect in the order of $50 billion each year from cigarettes sales — all pure profit — and several percent of that is skimmed off by the tobacco control industry. By contrast, worldwide gross sales of pharmaceutical smoking cessation products are less than $10 billion/year. There is simply not enough net revenue there to matter much compared to the tax revenue. If anti-THR did not exist naturally and if pharmaceutical companies wanted to create it, they might create a few anti-THR voices (and arguably they did back at the dawn of anti-THR), but they obviously could not engineer the entire enterprise.
I am not suggesting I doubt that pharmaceutical money is corrupting; there is overwhelming evidence of that across many sectors. Nor am I overlooking the fact that corporate spending is usually more precisely targeted than the boatloads of tax money. I have little doubt that corruption by the pharmaceutical industry is substantially responsible for the continuing embrace of their proven-barely-effective drugs by tobacco controllers, healthcare financiers, and regulators. Spending a bit of money to motivate claims that bad pharma products are actually good, and especially to get insurers and governments to pay for them, is a direct pathway from buying influence to increasing sales, and so clearly worth their effort. The tertiary path — encouraging tobacco controllers to discourage THR, resulting in a little bit more anti-THR, resulting in a tiny bit more smoking, resulting in a fraction of those extra smokers buying more pharmaceuticals — is clearly not worth much effort.
When given easy opportunities to support anti-THR, the pharmaceutical companies seem to take them, having their minions speak up and helping to amplify those who are already speaking up. But whatever you might think of tobacco controllers’ ethics in general, it is simply impossible to imagine that a few million extra dollars — on top of the billions of tax dollars they already get — is going to cause many of them who would not already be anti-THR to become anti-THR.
Oh, and the global pharmaceutical market is in the order of $1 trillion. Thus the entire smoking cessation sector is a drop in the bucket, so it is not as if the companies as a whole care much about this. Of course the industry is not a unitary actor, and the individuals in the smoking cessation units are focused on their own product lines. But those units are smaller than the e-cigarette industry and much smaller than the smokeless tobacco industry. So suggesting there is some David-and-Goliath story of being up against a monolithic gigantic “Big Pharma” is fairly silly.
[Update 31-jul-15: There has been an extensive discussion of this point in the comments, which are worth reading. Commentators seemed to have little doubt that it is indeed silly to suggest that defense of the smoking cessation drug market motivates much action. The suggestion was made that they have more to gain by encouraging people to smoke because that makes them sick and thus buy other drugs. I was aware of this claim, of course, but intentionally avoided it in the post mostly because it is so horrific that it is genuinely difficult to believe anyone is acting on it, and also the more technical point that it is not entirely clear that the net impact on sales is positive. More details of that can be found in the comments. Nothing that was said by proponents of this hypothesis changed my mind about this claim being highly non-convincing.
However, it was pointed out that something in between is a more compelling hypothesis: Use of any tobacco products competes with pharmaceuticals used to treat a wide variety of psychological (and a few physical) conditions. Thus pharmaceutical companies have a substantial reason to discourage both smoking and THR product use to bolster this market, which is much bigger than their smoking cessation products market. This does not require that they actually want someone to get COPD so that they can sell them drugs; they can tell themselves that their products work better than tobacco products and so they are doing good (never mind that this does not appear to be true).
Note that this does not change the main points I originally made. Anti-THR exists due to the “natural” behavior of tobacco controllers and was clearly not engineered by outside forces. The anti-THR activists take all the money they could ever use from taxes, so a bit more money makes little difference. Still, this is a plausible story about why pharma companies would devote more than a trivial effort to helping the tobacco controllers discourage THR.]
I have talked about messaging several times, and there is no doubt that stories about the magical influence of corporate money usually plays well with naive audiences, so it might be worth keeping in the messaging as a tertiary point. It is certainly fair to say that it matters some. In particular, pharma influence matters when the useful idiots are tricked into believing that these products can help all smokers quit; this reinforces the aforementioned “we don’t need to bother with THR” belief and the extremists’ endgame fantasy. But suggesting that pharmaceutical money plays a substantial role in the existence or power of the anti-THR movement is tinfoil hat territory.
Blaming a mythical monolithic “Big Tobacco” for creating or financing anti-THR is even more a tinfoil hat. Once you extricate yourself from the thrall of tobacco control propaganda, you realize that the tobacco industry is not threatened by THR on net. The major tobacco companies (excluding the government of China, which is always a different story) have all developed or acquired promising THR product portfolios. Unlike the tobacco control and pharmaceutical industries, the tobacco industry derives no benefits from people suffering disease from tobacco use. Obviously the humane side of all people — whether in one of those industries or not — does not want that suffering to occur. But while tobacco controllers and pharmaceutical marketers derive benefits from the disease, for the tobacco industry it is pure cost. It reduces the appeal of their products which costs them customers, leads to lawsuits and other punishments, and generally makes them the bad guys.
Every tobacco company would rather sell its customers low-risk alternatives rather than cigarettes. That is importantly not the same as saying they are anxious to see all their customers switch to some low-risk alternative, which means they take some specific positions or actions that are bad for THR. From a pure business perspective, they would rather sell their customers cigarettes than have someone else sell them low-risk products, so they have plenty of incentive to try to keep their loyal cigarette customers.
Moreover, tobacco product manufacturers (including those that only make e-cigarettes) actively fight amongst themselves for THR product market share in ways that are contrary to the public interest. Manufacturers who are highly invested in one product, variety, or category have the incentive to favor it at the expense of others, whereas the public interest in THR is to elevate all products and categories up to their potential. For example, PMI is highly committed to heat-not-burn products, and so everyone else has the incentive to denigrate those. (Did I mention that the tobacco industry is not a monolith?) Reynolds is a constant thorn in CASAA’s side, actively supporting banning open-system e-cigarettes — which, of course, compete with their closed-system market leader — and calling for various restrictions that they can meet but their competitors cannot. Business decisions are seldom public-spirited.
On the other hand, some of the major tobacco companies contributed more to establishing the promise of THR than anyone else could have, and almost all are doing so now. They fund research no one else could afford. They lobby powerfully against many anti-THR regulations; while it would be delightful if CASAA could wield enough influence to cause something like HR 2058 to happen, it was not us. Some companies spent enormous sums on what were clearly bad gambles from a purely business perspective in an effort to try to expand the reach of THR (via their own products, obviously) into new populations. In sum, while it would be wishful thinking to say that tobacco companies function as full-on THR advocates, it is far closer to the truth than blaming them for anti-THR. The net effects of their actions lie somewhere in between, but pretty close to the former.
Money, money, money makes anti-THR powerful, but it is not fundamental to it. The money does motivate anti-THR efforts to a limited extent, due to the banal urge to not have to shut down their lucrative industry; this turns out to have practical implications that are quite similar to anti-tobacco extremism. But mostly it just increases the power of those who are anti-THR. The simplistic version of the money story — that anti-THR actors are just a bunch of paid mercenaries — might play well in some circles, but it is factually incorrect and thus making the claim is ethically dubious and a step down a very dangerous path. There is no reason to believe there are any suitcases full of cash at work here (well, at least outside the European Parliament). Definitely do not let the real enemy — tobacco control — trick you into blaming anti-THR on companies in the tobacco industry that are mostly allies in this fight. Acting based on false premises is a recipe for ineffectiveness, but merely perpetuating the claims is also harmful. Finally, it is also useful to understand that even the boatloads of tax money would not have the effect they do were it not for the characteristics of tobacco control I will address later in this series.
(Years later, this series continues here.)
“Definitely do not let the real enemy — tobacco control — trick you into blaming anti-THR on companies in the tobacco industry that are mostly allies in this fight.”… Spot on but then there is the pharma money and THIS is the money which influences WHO, FDA, MHRA and Tobacco Control in general.
As for tobacco taxes? … Well, this allows governments to sit back and relax while the fight goes on around them.
Hmm, I could have sworn I just explained whey attributing anti-THR to pharma money is implausible and distracts from the real causes. (And also why the tax structure now makes government revenuers interested players in this, not bystanders.)
It is interesting, though tangential to the main analysis, to consider the source of the vaper myth that anti-THR was caused by corporate money. Presumably it is closely tied to the point I made in Part 1, that people stick to the narrative that they constructed, or that was constructed for them, in the face of even blatantly contrary evidence, unless offered a competing narrative. Of course, I am offering the competing narrative here.
That does not address the question of where the myth came from in the first place. I tend to guess it probably just bubbled up and was reinforced by blind repetition until it became conventional wisdom within the network. I am not aware of any particular attempt to engineer its creation as is the case with many such political myths. The creation of a population that goes from a standing start to immersed is certainly a myth-creation cauldron. People start drawing conclusions without gaining knowledge or instantly glomming onto claims before even knowing enough to know who to believe. (Indeed, the average person tends to be quite bad at the important skill of figuring out who to believe, and so this is often not a brief period for them.) We see that repeat every week as new people pour into the conversation.
That explains why this is such fertile ground for myths. It does not address why the particular myths arose. Half of it is pretty easy to explain: Tobacco control has done such a good job of convincing people about the motive-free evil behavior of the mythical actor, “Big Tobacco”, that it is easy for people to get tricked into blaming it. The explanation for the myth about pharma influence is more difficult. My speculation is that it was mostly a default choice. People with no understanding of what I am presenting in this series — the real motives and goals of tobacco control and “public health”, the enormity of the tax money involved, etc. — found themselves baffled that various actors were anti-THR. (Actually they probably merely realized they were anti-ecig, not even understanding that this is merely a subset of a larger phenomenon. This, in turn, is a subset of most people’s inability to look beyond their own perspective which, despite a lifetime of evidence to the contrary, prevents them from understanding that someone else simply might not share their goals.) So they flailed about, looking for a tie among these actors, and discovered that most have some ties to the pharmaceutical industry (as is the case for basically everyone working in health fields).
I have never seen any basis for this claim. The chatter about this supposed strong motivation of and power exerted by pharma seems to always be either substance-free assertions or circular — taking the conclusion as a premise, making some substantive observation, and declaring that based on the premise the evidence supports the conclusion (which is the premise). There actually are touchstones for the claims about “Big Tobacco” — someone might know just enough to have seen a particular anti-THR action by a particular company (and, as I noted, there are certainly plenty of those), and inappropriately extrapolate from that. But I am not sure where you find even that much for pharma. As I indicated in the post, I have little doubt that corruption explains the continuing embrace of proven-lame products; that is easy to predict based on both the practicalities of financing and human nature. But notice that I pointedly phrased even that as compelling speculation. As I noted, the factors that make that conclusion compelling are absent from the hypothesis that they are putting concerted effort into anti-THR (let alone that this is the primary explanation for anti-THR).
pharma could make more money, if e-cigs become more common- e-cigs all need pharma grade nicotine, no?
Thank you for taking so much time and effort in creating your response to my comment.
There is absolutely no doubt that entrenched attitudes remain the most significant hurdle that THR has to face.
On re-reading the article and the response to my comment, yes, perhaps there is an exaggeration of the effect that pharma money has to play, but it is not just the money, it is the revolving door, it is reputation and the enhancement of such. But as for evidence regarding pharma’s involvement… well…. as you point out, not much there. but there would not be because, is it not possible, that it comes to us second hand via Tobacco Control?
I do not know what sums of money are involved but I do think that Pharmas motivation to encourage anti-THR goes way beyond sales of cessation products – It is loss of revenue due to a potential threat of a substantial decline in smoking related illness. How do you put a figure on that?
Having said all this, more importantly – much more importantly, is the fact that there is someone like yourself who takes the time and the effort for all of the right reasons to put everything into perspective – despite the likes of myself, who, enthusiastic, does not have the experience, indeed only just over two years of vaping experience, to get things right. as such, I beg your forbearance.
No problem. I am glad my effort was appreciated rather than resented.
I agree that we would probably not know the whole story of how some hypothetical plotting was going on. But usually there are some pretty good clues. To compare something of similar magnitude, venality, and blatantcy (blatantness?) as the accusations: it is not as if we doubted FIFA was corrupt before the smoking guns from the indictments (see: Qatar). To borrow the language of the crime/detective stories I have inadvertently become a fan of, the only substance I ever notice in the claims about pharma playing some important role are about motive and ability. But I pointed out the numbers, which show rather less ability than is claimed, and the tenuousness of the motive.
The hypothesis about pharma wanting more disease because that sells more products of various kinds does crop up and it would up the motive. It is a really enormous accusation of evil, of course. Tobacco control are committing crimes against humanity, yes, but the motives of the actors a mix of genuine stupidity, workaday “just following orders”, willful ignorance, authoritarian idealism (stupid, arrogant, and clueless, but not genuinely evil), the echo chamber, emotional immaturity, and, yes, a bit of genuine evil at the top. But the act of intentionally seeking to cause mass death and disease in order to profit a bit from it? I can buy that about Halliburton and the Skull And Bones crowd, but whatever may be wrong with the behavior of pharma companies, that is quite difficult to imagine. No doubt some corporate types in those companies have made observations or even suggestions to that effect, so if we had a random of collection of documents like the silly tobacco industry files, and willfully misinterpreted every comment by an employee as if it were company policy, we could “prove” this was happening. But it seems like an terribly bold claim to base on merely having some motive.
Believing that corporations and government agencies are not evil enough to conspire to cause the death of thousands is naivety in the extreme. Perhaps the author of these comments is too young to remember Vietnam?
The story of the Vietnam War contains a cocktail of reasons that are actually strangely similar to anti-THR: the methods morphing into the goal; utopian idealism overwhelming tactical hopelessness; desperation about failing after committing so much; echo chambers; etc. There certainly have been wars that appear to be substantially motivated by corporate profit — if you read the post, you notice that I allude to them — but the Vietnam War was not one of them.
Oh, and before taking a comment personal, you might want to do some research. It shouldn’t take two minutes searching to figure out my age, at least within a couple of years. As an added bonus, during that search you might discover that among my various studies was a degree that focused on national security policy and the origins of wars.
In the future, please explain your acronyms. I’ve been vaping for almost two years now and I’ve never heard of THR! I had to read a good deal of your article before it was explained so, if this was your intent, i worked! lol
You could read the top entry in the sidebar. Or click on the “About” tab (which I just realized is horrifically out of date — I need to fix that).
Another excellent entry in the series. Most instructive and enlightening to be sure.
I do question the stance on the PHARMA involvement, though your dispensation plays perfectly with the notion that has been argued as pertains to NRT and cessation pharmaceuticals. Indeed, if this was the only consideration you would be entirely correct. However, there is a certain opportunistic action in play to protect markets beyond mere smoking cessation, vis. COPD medications account for approximately $9 billion of the market, antibiotics (necessary due to the increased rates of upper respiratory infection in smokers) account for a significant percentage, and certainly chemotherapeutic agents (most of which also represent a substantial personal subsidy to practitioners as well) figure prominently as do hypertensive medications. When taken together these modes of treatment represent a substantial market that does stand to be threatened if THR is successful. Thus, though not a primary driver in the anti-THR space, it is clear that they are not benignly involved in support of the efforts. If it were otherwise, there would be a push to capture the space as part of their own revenue stream, expanding NRT and THR products.
I welcome your further commentary/rebuttal to this perception as it further defines and expands understanding of the players and their roles in the limitation and/or elimination of harm reduction in the marketplace.
The pharmaceutical industry make far more money selling drugs that treat lung cancer, COPD, and other smoking related diseases than from selling nicotine patches, gums etc. I have read that the NHS in Britain spends £4 billion per annum on drugs for lung cancer. NRT is small money, for pharma the biggest problem with e cigarettes is that they will drastically reduce smoking related illness and associated profits.
“Some companies spent enormous sums on what were clearly bad gambles from a purely business perspective in an effort to try to expand the reach of THR (via their own products, obviously) into new populations.”
Theory I think you’ll agree to: HR 2058 ensures big (tobacco?) industry dominance over the market in the long run. There’s no way legislatures (especially today’s Republican Congress) could withstand a backlash from abrupt death to vape-shops across America; the reaction would not be politically sustainable.
On the other hand, HR 2058 allows for a much slower death which could never generate the same political outrage, assuring a big industry comeback.
You have that mostly backward. Enforcing the intentionally-dysfunctional FDA approval processes on e-cigarettes ensures only the largest companies will be in the market. Without something like HR 2058, they will be 100% of it (setting aside the black and grey markets I have written about) two years after the regulation is issued. With HR 2058, many other products would be legally available for a while longer.
Also, you have it wrong about the political impacts were HR 2058 to pass, but that is a topic for another day.
2007 grandfather date: sudden prohibition would generate significant political backlash and self-destruct.
HR 2058: gradual takeover by larger companies as technology advances, could generate much less backlash and is much more sustainable.
I don’t know which of these are better for PH, though.
I returned from holiday yesterday and read the first three episodes last night. I have just read the 4th episode. There are a lot of tricky connections and a lot of actors with differing objectives, often seemingly unfathomable. But there is one thing that shouts out loudly to me, which is the ‘partnership’ (‘stakeholder’?) between the WHO and Big Pharma – not only about tobacco, but also many other areas where Big Pharma has a profitable interest, such as Africa and Asia.
Part of the problem is knowing what UN States finance for the WHO and what Big Pharma finances. It is true, is it not, that Big Pharma finances lots of conferences? Is that because UN States’ contributions are not intended to fund such jollies? What was the reason for the FCTC jolly in Moscow? What was the point of it? It hardly had any bearing upon the direct line of UN/WHO/FCTC/STATE law-making.
The impression I have is that Big P’s smoking cessation products are no big deal in themselves, but it suits Big P to keep the pot boiling.
Perhaps that is one of the reasons that THR has been sidelined. It might be a good idea in itself, but it introduces grey colours into a black and white picture, which is not desirable.
What other reason can there be for the ban on the marketing of snus in the EU? What sense does it make, other than that snus introduces a ‘grey’ colour? Is that not also the reason for attempts to undercut the effectiveness of ecigs?
The ‘powers-that-be’ have every reason to maintain the ‘quit or die’ scenario, for their edifice is built upon that falsehood as a solid foundation. If that foundation is ruptured, the whole edifice might collapse.
Carl I am not sure about ‘hard to tax’ – while the web and things like VPN are popular , many people like being able to without much planning just duck in to a physical shop (fairly easy to tax transactions in bricks and mortar stores). Many also like talking to real people, who are enthusiasts, about the at times bewildering range of e-cigs (and terms like ‘ ohm’ ).
Think the factors that would matter are; how much tax is charged , over all unit prices and availability, if the devices can be found-bought easily, are intrinsically less than about $100 a pop, and the tax is lowish – similar to our GST @ 10% , then the incentive to dodge is provably less than the ease and convenience factor.
I (and my editors) debated whether to explain this very point, and I decided not to. Apparently the wrong choice.
I have written a bit about this before. The main reason open system products are hard to tax is that if the definitions/bases for the tax depend on nicotine delivery (and it gets much harder still to create a definition for the products without that), then hardware and zero-nic liquid can be sold excise-free. To keep it fully excise tax free, then, all you need is a high-concentration nicotine liquid, so that would be all that needed to be smuggled. Or it might be legally tax-free two since, being unsuitable for human consumption in its present form, it might not trigger the definition. This is not to say that the laws could not be written, but it would be tricky and the people doing this are not too bright. Every round of amendments or court fights when the holes are discovered creates a new opportunity for a political fight, which lawmakers will not like to deal with.
Taxing disposables is a lot easier, especially if it is ad valorem. However, if it is very high, it will at the very least drive consumers to higher concentration products which will have noticeably better value at that point. So then they might try a nic-volume-based tax, but that has its own problems (“funny how this vape shop’s records show it selling only 0.3% nic, even though they have other strengths on the shelf”). None of it is impossible to tightly define and then enforce — in theory — and many would not be evaded if modest. But crank them up anywhere close to the taxes on cigarettes and they will be evaded.
Yes an excise would be impossible, but a simple goods and services tax on everything (bar fresh food and education), as we have in Australia, would tax the sales of e-cigs, least in physical shops, no? Mind It would not generate nearly as much as the tax on fags, and there would be no reason to hypothecate it. And if the e-cig industry is allowed to grow it would generate employment and taxes, yes?
I was not being entirely precise in my language. Everywhere I meant taxes akin to those on cigarettes, which are many multiples of the wholesale value (often 500%; sometimes >2000%). It is easy enough to impose normal consumption taxes (sales tax, VAT) on the products. It would not have a huge impact to impose an extra 20% or even 50% tax on top of that (other than driving people to mail-order if the tax was not effectively enforced for that). But push that to 200% and people will make a lot of effort to evade that.
In terms of economic stimulus, the industry would be pretty close to a wash for the cigarette business it eliminated, although particular places could have net gains or losses. The increasing market could create a net increase in the sector (though it might displace other goods — see comment thread started by “gdf1”). Though this only matters when the economy is slowed and so there is excess capacity and demand driven recession (like now), otherwise it just displaces other consumer economic activity. Of course, we might be in the world of Summers/Krugman “structural stagnation”, in which case we will stay in that situation, so any stimulus is good. But I suspect I am getting rather far afield now, so: Ultimately none of this compares to the massive punitive excise taxes on traditional tobacco products in terms of taxes.
I mostly agree
Yes, I do appreciate your efforts. And do you know, I agree with just about everything you say. (and blatancy would be correct) however, there are aspects of the issues regarding Pharma influence on THR that I am very uncomfortable with. Out of respect for you and the value which I place on your thinking, if you deem it worthwhile, would you e mail me at email@example.com so that I can then write and express my thoughts, and, continue to learn more and act accordingly as a result of your own. (No need to publish this response)
Feel free to drop me a note. My address is public: firstname.lastname@example.org
Tin-foil-hat question on this excellent post hailing from Sweden: A billion or so operating profit from Cessation products to Pharma from 10 billion in sales is pretty much agreed. Of the resulting 990 billion USD in global pharma sales, what portion would you guess is attributable to smoking related disease (smoking related portion thereof) such as COPD, lung cancer, CVD etc.? Napkin calculation in 2013 gave about 40 billion operating for 2012 using the then lower calculations used in the USA for smoking related disease. How far off the mark do you think that is? Also private hospital care globally does account for rather a lot of “sick smoker care” as does medical products in the form of pacemakers, shunts, valves, O2 systems and wheelchairs. Thanks in advance for your take.
After reading your explanation, I still think the Pharmaceutical Industry has a huge influence (for the bad) on ecig regulation and Anti THR. The EU TPD is very much Anti THR. See here for example
The first of the examples in Chris’s blog is a perfect example of the circularity I mentioned in my first comment in this thread: Assume that pharma money is being used to have a particular influence; observe merely that pharma money exists; conclude that these two combine to support the claim that is the premise. (Note: Chris was not making any claims that relate to the current thread.) The second point in his blog and the Bloomberg story, about EU Parliament activity, are presumably your focus here. And I did make an allusion to the fact that this particular worst-case excuse for a republican government is, indeed, one place where corruption is easy and a little bit of corruption goes a very long way. But these allegations are about a rare leverage point where a small sum can be spent to try to increase the large but not huge smoking cessation drug market, as is the case with corruption I talked about that ensures keeping these lousy products listed in the favored pharmacopeia. That is akin to someone like Reynolds speaking in favor of a US state bill that prevents internet sales. Obviously that happens. But it is a far cry from these corporate actors being responsible to any great extent to there being anti-THR in the first place, and their little bit of leverage only matters because anti-THR is so influential already.
Ah, where to start with this round of comments? I am going to attach particular points as replies where they seem most relevant. I will number the several about the pharma conspiracy theory in the order I would choose if I were creating a narrative.
No, after further contemplation, I changed my mind and am going to respond generally here instead of to the specific posts. I welcome further substantive discussion. Please use the topic numbers or threads I am creating here.
The point that pharma companies would not put much effort into opposing THR to preserve the smoking cessation medicine market seems to have been accepted. That is good progress. The conversation has morphed into suggesting they oppose THR because smoking generates a lot of income for them.
1. Apart from all practical issues, keep in mind just how an enormous an accusation this is: Multiple major corporation are intentionally seeking to cause people to suffer and die — not as collateral damage, but as the goal; not because they hate these people or think they are sinners, but just for money. Whatever you might say about pharma companies, it is really hard to imagine that much concentrated sociopathy (in the energy industries, no doubt; in military contractors, probably; but in pharma, biiiiig stretch). Moreover, they are doing it not through some movie-story special ops team that reports directly to the CEO, but by visibly moving hundreds of millions of dollars a year (that’s a minimal sum that would be needed to have the supposed influence). And no one in their operations, even though quite a few people got there via (obviously detoured) career paths that were motivated by their exceptional humanity, no one in the corporations blows the whistle on it.
Meanwhile the money is having these magical effects without the paymasters every saying “we want you to create an anti-THR movement” (in this fantasy scenario, we are pretending it did not already exist; there is also the little matter that the fact that it did is sufficient to conclude that this scenario is not responsible). Because if they did ever say that, there is zero chance that it would not get out. And the risk of being caught even hinting that this was your goal would just be mind boggling.
2. If your goal were to cause more disease to sell more treatments, why the hell would you choose this pathway? My first thought would be releasing dengue into Florida and Italy (that could be done totally black ops), and other biological agents elsewhere. I am sure anyone in the biz could figure out other more cost effective ideas with a few hours’ thought. Recall that I pointed out we are talking about a very tertiary pathway here: throw a few more dollars toward anti-THR or potentially-anti-THR people (who are already flush, so it does not matter that much), without being able to openly state what is expected for the money, causing them to be a bit more effective at anti-THR, causing a few more people to smoke, causing a few more of them to get sick in a way that sells products. Dengue is much more efficient.
I think the reason that tobacco product users (mostly vapers, but occasionally others) come up with these stories are simple standard human tendencies toward self-centeredness and over-focus biases. “If someone had this goal, they would naturally put it into practice in my backyard because, well, where else is there.” Kind of like Bond Villains usually attacking England of all places.
3. (Specifics related to this noted by Bruce, but it responds to many points.) Are we really sure that smoking makes money for pharma companies. This is one of those things that is “so obviously true” that no one stops to notice that it is far from clear that it is true. I alluded in this very post that the “obviously true” point that smoking increases healthcare costs overall is a close enough call that it hinges on choice of discount rate for the calculations. Someone who dies of a sudden cardiac even saves the system lots of money, and stops consuming pharmaceuticals. Lung cancer diagnosis creates a burst of demand — which merely replaces the burst of demand that would be fairly likely to come five years later as a result of some other disease — but there is relatively little that can be done usually. The rapid death that usually ensues puts an end to someone who, based on demographics, is probably a good pharmaceutical customer. COPD treatment does linger and is expensive, and that definitely cuts in favor of the “smoking increases healthcare costs” and “pharma profits from smoking” hypotheses. But most of the endpoints do not.
So it could plausibly go either way. If they have run the numbers, they did not publish them anywhere I have ever seen. But It is pretty certain that whichever side of the null it is on, it is not all that far from it. The gross sales of treatments to people suffering smoking-caused diseases grossly overestimates the net effect of smoking on sales.
Those making these claims seem unaware that this is even a point and it is far from obvious there is any motive here (and that it is clear it is not all that huge). They certainly do not seem to ever present any estimates or evidence. I guess we can trace this one back to tobacco control lies, just like the “Big Tobacco” myth: It is they who have everyone convinced that smoking massively increases healthcare spending on net, and so those who buy into that just guess that it must be the case that it increases pharma purchases.
Well said Carl. I so enjoy the dialog formed by this latest series, it is really helping define the problem space we are operating in.
Indeed, the PHARMA economics are fraught with some pretty significant caveats. The most significant, as you point out, are the self-limiting market for terminal disease, and the reliability that the disease was actually caused by smoking (as opposed to other exo/endogenous causes).
One of the interesting model effects is the high cost of the terminal disease medications that results from the market limitations. In short, a patient survives the treatment and no longer needs it, or the patient dies during treatment and no longer needs the treatment. What matters, financially, in this scenario is volume of patients to be treated. There is certainly ample evidence to realize that smoking is not anymore reliable a method to increase the volume of patients. Indeed, the volume of patients appears to correlate better with the increase of population as a whole, while the smoking prevalence has declined. However, for anti-THR purposes, it is far better to support an external cause than to admit the truth that the cause of most of these conditions isn’t a simple demon to be exorcised.
The other side of the equation are the chronic diseases, many have other contributing factors far more contributory than smoking, which present a long-term market potential as “curing” the conditions isn’t likely so symptom management becomes the standard of care. In this space there are two major diseases, COPD and hypertension/heart disease, which the anti’s have made appear as preventable by smoking cessation. PHARMA acts little more than benignly (and I mean just a little) in supporting research and rhetoric which bolsters this viewpoint. This, then, creates a perception among the unaware that health costs could be lowered if smoking is stamped out as the number of cases would be lower. That this is not even remotely shown by evidence makes little difference as the enemies in the space are PHARMA and BT. Reducing PHARMA’s profits on diseases, and eliminating BT make good press. However, if there were a way for PHARMA to become independent of this dialog, it would be to support THR, which has the sense of reducing their profits in favor of public health. That they do not pursue this is interesting for a variety of reasons, not the least of which is the inability to operate in the consumer product space. Thus gaining a regulatory environment more familiar might entice them forward, but I don’t know if that is enough. In my own view, PHARMA is more of a captured agent suffering from Stockholm syndrome than a wholly independent actor.
In both cases, PHARMA is contributory, though we are both in agreement that that contribution is not motivational but more supportive of the anti-THR movement. In your terms, they are wealthy and useful idiots, though their wealth isn’t the primary factor, it’s their size and their ability to take the public heat that is.
4. Note that I am not claiming that tobacco controllers intentionally tricked people into blaming their willful crimes against humanity on “Big Tobacco” and “Big Pharma”. They are not that smart. The consistently prove unable to think two moves in advance. These are just accidental side-effects of their actions that happen to have worked out great for them, distracting the naive masses with a Great And Powerful Oz so they don’t look behind the curtain.
Dear Carl and others, and in response to answer points 1,2 and 3.
I will try and crunch numbers on Pharma top 15 over the weekend. I agree with C that without numbers it is a moot point. My last estimate of app. 40 billion was for 2012 but it may have been completely wrong (I doubt it strongly though).
I don’t think any here truly believe there is intention to cause harm. Continuing to make honest money treating real disease, caused by a habit that has nothing to do with you, that is different. Drugs are routinely sold in LMIC for decades after they were pulled from Western shelves because of horrific side effects. There is no doubt about this and the regulatory bodies in those countries are said to have a different cost – benefit calculation than the west.
Lifetime earnings may well be similar between smokers and non smokers. Net present value calculations change that result dramatically and eliminates a huge amount of risk for externalities.
I think there is also a small lapse when we discuss these issues. 80% of cig sales will soon be in LMIC. One of the first things that happens with higher standards of living is better and more aggressive treatment for disease in the young and working populations. Aggressively treating people over 70 is a quarter of a century off for the majority of the worlds population.
So in terms of protecting a significant (unclear how large) portions of future medium term shareholder value growth and minimizing external risks, status quo may very well be in the best interest of Pharma and should be discussed. Based in facts and figures of course.
Pharma “Nudging” in a friendly way that simply keeps the limelight on certain views in Tobacco Control is not completely unthinkable. Especially since the Tobacco Industry is “The usual suspect”
I hope I am wrong, and would gladly admit to be wrong, on this.
Well, so much for trying to make this into separate organized threads rather than having everything weave together. :-)
You make a weaker claim about pharma companies being happy to serve the market created by disease, from smoking or whatever, and that they make a lot of money this way. This is obviously true — it is most of what they do. It is also the case that they are often quite happy to sell products whose net effects are negative (compared to cheaper older drugs or the generics they try to eliminate; or because of side effects). This is ugly, but still not as ugly as the implicit claims in this discussion. The harms caused also translate far more immediately and reliably into big net profits. The claims I am responding are premised on (typically without recognizing just how strong a claim that is) them actively trying to increase the disease to expand their market. The latter claim, not just the former, is needed to support the claim that “Big Pharma” is engineering anti-THR.
Re Discount rates: It is true that corporations employ much higher discount rates than are proper for public policy analyses (which should basically be zero right now, given that we have a massive deficit of demand, are at the ZLB for interest rates, and thus governments can borrow for approximately zero cost). This could create a situation where social healthcare costs caused by smoking are properly estimated as being wash, but companies value the short term sales enough higher that they benefit on net. Still, you do have to net out the losses in other sales, not just look at the gains.
Re LMICs: Yeah, that gets more complicated, I agree. Of course, anti-THR does not matter much in most of those countries because there is little demand or knowledge. On the other hand, if the anti-THR did not stand in the way of pro-THR there, that might change. On the other other hand…. Yes, it is complicated. So you could imagine some kind of really long game trying to block the interest in THR that would emerge at about the same time they became lucrative markets for pharmaceuticals. On the other hand, see point about companies having high enough discount rates that they probably do not care about the results of this hypothetical long game.
Re Nudging at easy points of leverage re specific policy proposals: No doubt. See my response to Jonathan re the EU Parliament. But this only matters because anti-THR is already strong, and thus these are even on the table. It does nothing to cause anti-THR to exist.
Thank you for your excellent post. $money$ and related jobs are major influences.
I would suggest that the Big Pharma’s long tentacles are still everywhere. J&J seeded RWJF & CFTFK seeded the MSA effort and the Turning Point program. They are self sustaining now so they can say that the pharmaceutical industry is not “directly” involved today. But the “War on Tobacco” effort certainly greased the wheels.
Ineffective pharmaceutical NRT products have just not produced the revenue they thought it would. They don’t work. Consumer oriented e-ciggies, vaporizers and SNUS work better. But even they do not work for everyone. Free market competition would further improve their efficacy.
Government (FDA) over regulation would simply stifle innovation. Many would return to NRT products in social settings, and traditional tobacco privately.
It would also increase $money$ for Tobacco Control related “jobs” for further job enhancing regulation, research, advocacy(lobbyists), policing and the therapy industry, …yes, an industry.
The Anti-THR retoric simply proves that the Tobacco Control retoric was never about health in the first place.
I’m sorry if I missed it — but I didn’t see anyone making the following point about the motivation for GiganticPharma to oppose THR.
I have always thought that Pharma’s opposition to so called THR products, as well as to tobacco, alcohol and marijuana was because all of these substances compete with their own stable of mood altering drug products. (NOT that these substances compete with their little piddly sales of nicotine gums)
I think we all know that anti-anxiety and anti-depressant drugs are a huge market. In addition, these are often life-long drugs (not like the shorter term (and later in life) cancer or COPD drugs) and (even if not planned to be long term) are usually quite physically addictive. Why wouldn’t Pharma see the (ex) tobacco and (ex) alcohol and (ex) marijuana markets as all potential future customers for their mood-altering or mood-stabilizing products?
In essence, I see vaping or snus, for example, (as well as the other more traditional self-medicating, mood-altering substances) as direct competition for Pharma hugely profitable drugs such as Xanax and Prozac. I don’t think it escapes their notice that sales of such drugs have risen dramatically as smoking rates have fallen.
What say you Carl?
Hmm. That is a different take on it that I did not mention because I had not really thought much about it and it does not get mentioned in the standard chatter I was responding to. But, yes, there does seem to be something to that. Much more realistic than either believing they care so much about the impact on NRT or that they want people to contract COPD.
Tobacco products definitely compete with the classes of drugs you are talking about, as well as a few other (Adderall comes immediately to mind). That includes cigarettes, so if people quit to abstinence, they have a bigger market for these big drugs, and without killing anyone (well, not too many anyway). But if they quit to THR products — and more so if non-users learn about THR and take up the products to enjoy their benefits — that business is lost.
Unlike the other two scenarios, I am not inclined to dismiss this as one that motivates substantial action on their part. I will have to think about it more.
That does not change the primary relevant point, however — that anti-THR evolved and is maintained naturally, and is reliably funded with tax dollars now, and so the pharma money is not fundamental. But it is a plausible story for why they would bother to give it a push.
Thanks – yes, I agree. As I think you see, I simply wanted to make the point that Pharma has other interest in anti-THR without ascribing the evil motives associated with wanting people to get cancer or COPD.
No apologies needed for the cheesy title… ’cause it’s all ’bout dat gollllllllden rich cheddah!
No wonder it appears that they’re heartless. They prolly clogged that thing decades ago. Which also proves that it was never ’bout health either.
Metaphorically speakin’, of course. ;-)
— Mark B.
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I have seen someone from the ALA or ACS at pretty much every legislative meeting I attend or watch online (mostly attend.) When asked if they get tobacco tax money or MSA money, they unequivically say they do not. When ask if they get BP money they dodge the question.
But when watching legislators, who are almost certainly motivated by revenues to fund the programs they truly care about AND use to run for election (doubly important where there are term limits!) I truly believe that a significant portion of them deeply need the ALA/ACS cover for their motives, and if they did not have that cover, we’d see more people breaking ranks with anti-THR, pro-taxation. Not claiming that would fix everything, but I learned back when I was in Amnesty International that the ability to hide from others is crucial to the ability to hide from oneself. Take that away and quite a few break ranks with their bosses — not to disobey them, but to go from enthusiastically doing evil to quietly diminishing the impact of that evil as much as they dare.
So no matter how much of the money is coming from BP, I submit that the result of even their few hundreds of million is devastating. And a contribution of 10% to a multi-million-$$ program can provide a steering wheel that changes its direction and its hiring practices enough to cause complete capture. Given anti-smoking, offer more money to make it anti-tobacco and nobody will notice at the time.
The same goes for the cover Tom Frieden gives all the Tobacco Control personnel in every health department in the nation. I see them spew lies in reports, both written and spoken, at the county level all the time. The “Public Health” chain goes National->State->County, and as long as the CDC sends lies to the state anti-THR folks, they will gleefully pass it on to the counties, pressure them to use it, and KNOW their behinds are covered. Their money does come from taxes and MSA. Their influence, however, appears to be heavily at the county level, and maybe huge cities (like San Francisco, which is both a city and a county.)
Third is the media — they may be lazy or ignorant at the reporter-level but the editors know full well they’d be broke w/o the Pharma ads. BP does not have to spend money to influence the media, the influence comes free with the advertising dollars that are for a different purpose. But that does not mean BP ignores the available influence on editorial policiy.
Take away the CDC’s coverage (MSA-and-tax- funded) and the ALA/ACS’s lobbying using their extremely-respected names, and we’d be finding more people uncomfortable with having to admit they’re just after the tax and MSA funds because they are addicted to them.
If there were no BP ads allowed, more reporters might have gotten permission to publish articles with more truth in them. Maybe not a LOT more, but a little more would have, again, possibly broken the dam up a little.
All I am seeing there is a long version of the circular non-argument I have responded to before: Assume pharma funding causes the behavior. Observe a case where there is pharma funding (which is ubiquitous, so that is not a very interesting observation) and the behavior. Based on the premise, the funding must have caused the behavior. Therefore we have found evidence to support the premise, so it must be true, so this must really be evidence….
No, that was not my point. My point was that BP funding causes the behavior to WORK well. Without these very respected voices, the other motives would be more in the open, and harder to defend.
To support that hypothesis, a necessary (but far from sufficient) observation would be that there are many important players in anti-THR who are funded by pharma money and would hurt for funding without it. I doubt they exist given the resources of Tobacco Control Inc.
I did note that there is enough incentive for the pharma industry to throw a few dollars at the issues when it was convenient and an easy point of leverage. But this is a much weaker claim.
I should add that you can make a case for the analogous claim about the traditional tobacco companies playing a critical role in developing the science and voices in favor of THR. While there is zero reason to believe their funding caused anyone to become pro-THR who would not have otherwise done so, it contributed a lot to helping them work on it since anyone working on THR was cut off from TCI (including government) funding. It is difficult to imagine there would be an effective voice for THR now without their help in the past.
I still can’t get my head around the logic of a global pharma company hiring as medical officer for a brand of NRT, the only scientist ever to make a calculation of relative harm from snus compared to smoking and coming up with 0,3%, which is a harm reduction of 99,7%. If the only motive was to hire a person with impeccable credentials to promote this brand against other brands, or to be vocal against THR, wouldn’t it make more sense to hire someone who has always been negative to THR?
Hiring this specific guy seems like good business compared to hiring someone else, only if there is another element of benefit or precaution along with the choice. This guy was never very well known in the first place and the only unique thing he ever did was put a number, 35 cancers per million snus user years, in a paper.
Sorry, I missed that. As far as I knew, I am the only scientist ever to make a calculation of that relative harm. At the very least, that makes this other person “one of the few” rather than the only. But I have never seen such a calculation from anyone else and have no idea who that is.
Just so other readers know, he sent me a copy of that paper (from 2005, which would predate my calculation) and a translation (does something that was never published in English actually count as being published? :-). I will try to take a look.
My hypothesis is that NON-tobacco-control organizations such as the American Lung Association and the American Cancer Society were very easily “steered” away from opposing smoke and towards opposing tobacco before vaping came along because the propaganda had already vilified tobacco of any kind, and the ALA, at least, does not appear to be medical, they are social workers and lobbyists. Boards of Directors of such groups are put in place to maximize funding, and they will as long as they see no harm to it. Before vaping, there was harm but they didn’t see it. But since those two groups should be about Lungs and Cancer, respectively, I think they would each have at least 51% of people who would object to the ACTIVE promotion of continued lung disease and cancer that they are now persuing if they had not been captured by BP money and ONLY BP money. And I’m saying that without those names, revenue-hungry legislators would have a lot less cover to hide behind. I also think the CDC and FDA are captured by ONLY BP money, though all lower levels are captured by taxes as you say. So while the real power is not BP money, the armor is BP money and without the armor, we’d be able to make more progress.
Yesterday, I met with PA House Majority Leader Dave Reed urging him to reject any taxes on smokeless tobacco and vapor products (during his ongoing budget negotiations with PA Gov. Tom Wolf, who proposed a 40% tax on vapor products and OTP), and to increase the cigarette tax if the legislative leaders decide to increase any taxes.
A recent study found that healthcare costs caused by cigarette smoking were $170 Billion in the US in 2010 (and with a 4% annual increase, $200 Billion in 2015), and about 70% of those costs were incurred by federal, state and local governments. Since 13 billion packs of cigarettes will be consumed in the US this year, overall healthcare costs to treat cigarette diseases and disabilities in the US are now $15/pack (with governments paying $11/pack), and will continue increasing as cigarette healthcare costs continue to increase and as cigarette consumption consumption declines.
Click to access ajpm_annual_healthcare_spending_smoking,%2012-10-14.pdf
So while cigarette companies make about $1/pack profit, the healthcare industry (including drug companies) now make $15/pack from cigarette consumption. Drug companies also generate far more revenue marketing drugs to treat cigarette caused diseases and disabilities than they generate by marketing NRT, Zyban and Chantix.
Another study estimated similar Medicaid expenditures to treat cigarette diseases, found that $2.2 Billion were spent to treat cigarette diseases for PA Medicaid recipients (i.e. $2.5 Billion in 2015 with a 4% annual increase) and that 70% of PA Medicaid recipients are smokers (indicating that future costs will continue increasing).
But PA’s $1.60/pack cigarette tax will generate about $900 million, and the MSA payments will generate an additional $335 million, totaling about $1.235 million (or only about half of what PA Medicaid will spend this year to treat smoking diseases). And of course, PA taxpayers spend far more to treat cigarette diseases than just Medicaid.
Regarding Big Pharma financing, had it not been for the several hundred million dollars Big Pharma gave to CTFK, ACS, AHA, ALA, AMA, AAP, ADA, WHO and many other THR opponents during the past 20 years, very few (if any) of the many anti-THR policies would have been enacted (or even proposed) at the local, state, federal levels, and abroad.
1. Well done. Too bad you had to endorse further abuse of smokers, though.
2. That study is utter junk — even worse than average for the genre. It is complicated so some of the errors are subtle, but some are not. Most notably, they ignore the healthcare cost savings from the people who died early due to smoking. They are only counting one side of the ledger. Also, the statistical model is grossly inadequate. But even if their number were right, it would still be swamped by the reduction in other consumption, as I noted. It is curious that the people who wrote this are also responsible for anti-THR lies that you rail about, but it does not occur to you to question if this might be junk also.
3. This is based on a fictitious number and your calculation does not make a lot of sense, but even setting that aside, you are comparing net revenue to total cost. Apples and oranges. And you are ignoring the much bigger number, the net revenue from taxes.
4. This merely assumes the junk claims about smoking imposing net costs on the rest of society are right and then does some calculations based on that. But garbage in, garbage out.
6. I am aware of no basis for that assertion. Several hundred million, divided by 20 years, divided by eight organizations is a million or two per year each. Most of those organizations would not even blink over that sum, let alone sell their souls.
Was wondering; how long has a person have to been a non smoker, before their eventual, inevitable, death is regarded as unrelated to smoking? Or is it that if you ever smoked, no matter how long ago, and eventually die of something that might be smoking related, then it is counted as a smoking caused death?
For example if somebody smoked, socially, for 10 years between 1955 and 1965, and then ceased smoking. If that person happened to die today at a age of 75 to 80, of heart disease or bladder cancer is that death listed as smoking related ?
As for the costs of treatment, I would guess that they would vary as much or more by the cost of the sort of drugs used, than by the length of illness. Some of the latest treatments are very expensive.
This is trending off-topic, but since we are already going down the path and I am not sure where else to start the day….
The answer is that is not about how long — that influences the true value of interest, of course, but it is not the right way to think about it. (That is not a criticism — read on.) Any epidemiologic question should be answered by first carefully identifying the contrast that you are trying to measure. Only by doing this do you have any hope of knowing if your statistics actually get at that. The reason that might seem unfamiliar to you is that 99% of the people doing epidemiology do not know what they are doing, and so do not understand this.
So the main question of interest in this case is how many people (or what portion of people) who smoked die earlier than they would have had they not smoked. This will vary based what “smoked” means: how long they smoked, how much they smoked, how long ago they quit, how deeply they inhaled, what variety of cigarettes they smoked, and such. If we had access to divine data intervention (DDI) — i.e., we could ask a omniscient being for the data — the question we would ask if we were looking at deaths and trying to identify which ones we should attribute to smoking (there are other ways to go at this, but us this one) would be “which of these people died at this time, rather than later, because of smoking.” (We really should also net out the ones who would have already died had they not smoked — and there will be some of those — but set that aside for now.) With that information we could then back out other information like the example in the question: For the people with those particular characteristics, how many got a “yes, died from smoking” from the DDI. We could then compare that to how many who kept smoking got a “yes” to answer a different interesting question about the benefits of quitting.
Now you might have already noticed a really serious problem here, despite our access to DDI. What do we mean by dying now vs. later? If someone dies a microsecond earlier, do we count that as a premature death? How about one day? Where do we draw the line? Our DDI can answer whatever question we ask, but we have to figure out what to ask. If you look at the simplistic textbook answer in epidemiology, you will find that, technically, a microsecond counts for saying “that death was caused by smoking.” Of course, no one really cares about that microsecond. Presumably if you were querying the DDI, you would want to go with a few months minimum. Of course, since we don’t have the DDI there is no possible way we could measure a microsecond or a day even if we wanted to, so the question is largely made moot by the imperfection of our instruments. Except is someone wants to take advantage of that definition to lie with statistics — which almost all the anti-tobacco people want to do — they easily can. They can pretty accurately say that almost every death of a smoker was caused by smoking — using that simplistic technical textbook definition of “cause”. Smoking permanently weakens the lungs and cardiovascular system. Any smoker dying of most anything short of being blown to bits by a having a bomb dropped on them is likely to die a few seconds or days sooner if those systems are weaker. This includes even many of those killed in car crashes, who die an hour or day later, and pretty much everyone who dies a slower death from “natural causes”. So when the liars want to game the system, they can say most every death of a smoker or ex-smoker was caused by smoking, and be right by this technical definition which no one would actually use when trying to make sense of the real world.
Anyway, you get the point that there is a big problem there. Calling something a “death caused by smoking” is not actually a clear scientific statement, even apart from the imperfection of our ability to measure it without DDI. It requires specifying where the line is drawn for how much sooner it happened. Thus, all of these “deaths from smoking” statistics are, at best, vague rough cuts at an imprecisely defined phenomenon. This is not inherently a problem. Everything in science is of limited precision because not everything is perfectly specified and the measure is imprecise — it is just a question of degree of imprecision and how much the vagueness of the definition matters. In this case, it is very vague and very imprecise. Thus claims about these numbers that are offered with more precision than one significant figure are bullshit (e.g., 400K/year in the USA is already overstating the precision, let along 440K).
You may think I am wandering away from your question, but you have to go down this road before you can seriously answer a question like that. So far we see that almost every death of anyone who every smoked can be said to be caused by smoking by the textbook definition that is not how any normal person would interpret the statement. And we can also observe that no one making claims about this ever explains what they are actually trying to measure — assuming it is a more meaningful measure than that “one microsecond” thing.
So now we come back to analyzing actual non-DDI data. The limitations of that data force us into some more meaningful definition, with “cause” meaning at least a few days or months since we could never possibly measure the one microsecond changes. But it is inherently vague and never specified; effectively they are trying to measure that one microsecond and are stretching the time out by whatever random amount their imperfect data forces them to. What we would want to observe, ideally, is a group of people with a particular smoking history compared to a group of people who were otherwise identical but never smoked. We could do this by re-running the history of the world with those same people as never smokers. Obviously this is as fanciful as getting the DDI, but that is actually the experiment that epidemiologists (the few competent ones, that is) imagine themselves trying to substitute for with worldly data. The optimal worldly data is then obvious: Find a group of people who happened not to smoke but are otherwise identical. Oh, but wait. Identical? Good luck with that.
So what we try to do is get an unexposed group that is very similar to the exposed group, and then try to correct for any remaining differences. Now this is probably starting to sound familiar. That is what appears in epidemiology papers. The problem is that most people working in the field just blindly and naively start at this point, without every engaging in the real scientific thinking about what it means. They are just naively turning a crank that works fine for simpler stuff, but they do not have the skills to see why it fails here. The methods we have available are good enough to figure out whether lifelong smokers have massively higher rates of lung cancer. It is even good enough to get a pretty good cut at how much more massively. It is also good enough to figure out they have a much higher rate of heart disease. But we already start to run into problems with precision.
Even if there is no measurement error (which there will be — the data will not perfectly represent reality), the two populations being compared will not be identical in all ways except the smoking. Indeed, we can safely predict that the smokers will also have a constellation of other traits that increase their risks on net. The attempts to “control for confounding” — to correct for these differences — will inevitably be inadequate even if the researchers are skilled and honest, which they generally are not in this area. Once someone starts playing with such statistics (and other statistical choices) and lacks the ethics to seek the truth rather than confirmation of their preferred conclusion, it is easy for them to get the answer they want. But even pretending that a skilled research made every effort to get the truth, there is no way they can sort through the confounding to determine whether smoking causes a 17-fold increase in lung cancer rates, or 20-fold. Or whether fatal heart disease rates are increased by a factor of 1.8 or 2.2. The former uncertainty does not matter much for calculating totals, but the latter does.
Oh, and to circle back a bit to clarify that: If what you wanted to know was how many smokers died, say, six months sooner, the best approach would be to look at mortality statistics without regard to official cause of death. This is still fraught with confounding and other errors, but it is cleaner than what they actually (apparently) do to produce the most quoted statistics. What they do there is estimate the increased risk for various diseases and then portion out fatalities attributed to those diseases as being caused by smoking or not.
…to be continued…
1. Taxing cigarettes to reimburse taxpayer expenditures to treat smoking diseases is not “abuse of smokers”, but rather being fiscally responsible. In contrast, continuing to force nonsmoking taxpayers to subsidize most costs of treating smoking diseases is “abuse of nonsmokers”.
2. The study wasn’t junk, as it estimate the costs incurred by cigarette smoking (and I didn’t even mention the costs of lost productivity due to smoking diseases). And I’m not aware of any studies finding that cigarette smoking reduces healthcare costs, although I’d acknowledge that Social Security expenditures would increase if smokers lived as long as nonsmokers. But the argument that future SS savings (or even future healthcare cost savings) must be included when considering the costs imposed by any disease is not only incorrect, but in my view is as unethical as the arguments by advocates of eugenics. Also, just because ANTZ are wrong about THR doesn’t mean they are wrong about everything.
3. Don’t know what Carl is referring to in his first two sentences, as I was comparing 2015 PA cigarette revenue with expenditures.
4 and 5. See 1,2 and 3 above.
6. As one who has personally known and collaborated with many execs and staff of those organizations during the past 30 years, and as one who has actively tried to convince them to support THR at least weekly for the past decade, its clear to me that Carl’s assertion is dead wrong. Big Pharma has given those organizations far more money than they’ve spent opposing THR. The only way those organizations obtained those grants and contracts from Big Pharma was by selling their souls.
From about 1995-2005, many anti smoking activists (myself included) were extremely critical of Big Pharma’s attempted takeover of our grass roots movement by creating CTFK (with a $35 million grant in 1995), giving lots of money to ACS/AHA/ALA/AAP/AMA etc and funding the creation of state ACS/AHA/ALA coalitions (that all agreed to become partners with and implement public policies advocated by CTFK).
There’s also the nearly decade long secret exclusive endorsement contract between GSK and ACS (from 1999 to abound 2008) whereby ACS’s logo and endorsement appeared on every GSK NRT package and advertisement. Like all other lucrative exclusive endorsement contracts (e.g. Nike’s contracts with Michael Jorden and Tiger Woods), GSK almost certainly included a clause in that contract prohibiting ACS from endorsing any competitor product (including all other smokefree nicotine alternatives). Its possible that exclusive endorsement clause is still in existence (just as Nike’s contracts probably still prohibit Jorden and Woods from endorsing other athletic wear and equipment companies).
1. That would only be true if smokers cost the rest of society money. They do not. As I have repeatedly pointed out, it is a borderline claim — at best — that they increase healthcare costs considered in isolation. If you consider the other consumption reduction from early mortality there is no question that smokers save the rest of the population money. By this logic, then, they should get subsidies. Instead, taxes long ago were raised high enough to cover even the worst-plausible-case claims of healthcare costs (even ignoring the credit they should get back for the other savings), and they are still being increased. That is abuse.
Moreover, even if their choice was imposing a net cost on Medicaid etc., this is still about punishing them for their moral turpitude. None of the other many things people do that increase those costs result in them having to pay money, not for having a high-risk pregnancy, nor being fat, nor driving, nor participating in dangerous sports. Nothing. So this is clearly not a matter of there being a policy to charge people for imposing such costs. We as a society have decided to cover those costs, however high or low they might be for any eligible person. We have implicitly decided that it is not appropriate to do otherwise. And yet smokers get singled out for impoverishment.
2. To paraphrase Monty Python (http://www.mindspring.com/~mfpatton/sketch.htm) this is not an argument, it is just contradiction. I pointed out the simplest of the reasons that it is very wrong, and there are others. You seem to have no reply to that.
It is true that someone can lie a lot of the time but be truthful every now and then. But it makes a lot more sense to recognize that they are probably lying elsewhere too. In this case, it appears that you do not understand how this number should be calculated (that is fine, most people do not) and yet you assume these people — who I believe you would refer to as “those liars at Obama’s CDC” or some such if they were talking about e-cigarettes — were accurate and honest despite me pointing out it was wrong. I would tend to say that you are suffering from a bad case of confirmation bias, making your decision about whether to believe something based entirely on whether its implications agree with your politics.
As for the eugenics rant, you are descending into batshit crazy there. Your position is that smokers should pay the cost they are inflicting. Setting aside whether this is ethical or the real motivation of those advocating this policy, and just accepting that as your position, you then need to count up the costs, not just look at one in isolation. The somewhat defensible version of that position would be for them to pay for all net externalities, not just those that show up on the government coffers; just breaking out government expenditures makes no sense at all from an ethical or good public policy standpoint. But even set that aside and just take your gerrymandered version of it. Social Security and other pension savings are part of the net impact on government coffers, and reduced future medical consumption is even on the *same* ledger you are talking about. We are obviously not talking here about celebrating the fact that they are dying and thus providing society with these savings (which I assume was the motivation for your eugenics silliness). Most everyone outside of tobacco control feels bad about that. Your claim is about making them pay for what they are costing the rest of us, and that obviously should consider what they are saving the rest of us. It is only the net that matters.
As I have pointed out to you before, by your logic, you should be paying a eco tax for driving that Prius. It uses a lot of environmentally unfriendly rare earth elements in the battery. I would imagine you would say that the overall net effects on the environment are positive. But, hey, I am not counting those other things — I want you to pay a penalty for the damage you are causing by using those rare earths, because when considered in isolation, they impose environmental damage that someone driving an F-250 does not. Actually, come to think of it, by your logic, you should be penalized for driving that Prius in the first place — after all you are emitting carbon and such. What, you say? You are emitting less than you would driving something else? So what — I just don’t like it that people drive Prii, and there should be a special levy against them for the environmental damage they are causing.
Oh, and before getting high-and-mighty with that “unethical as eugenics” silliness, keep in mind that you are the one who wants to further punish those poor people who are dying early.
3. Um, no you weren’t (or at least that is not at all what you wrote). But that is such a minor point I will not pursue it.
6. Again, no argument, just contradiction. You claim great knowledge, but you offer no information or analysis, just a repeat of your original assertion. The only substantive addition you offer is that ACS may have a contract that keeps the from actively endorsing certain products. That obviously is not sufficient to explain their active campaigning against THR. Most of the rest is just random tangents about things you personally did not like. The bit about them getting more from pharma than they spent opposing THR is, even if true, not indicative of anything.
The healthcare cost alone imposed by cigarette smoking in the US have increased from an estimated $45 billion in 1991 to $200 billion in 2015 as cigarette consumption declined from 25 billion packs in 1991 to 13 billion pack in 2015. These costs will only continue to increase, and nonsmokers will continue to be unfairly forced to subsidize the vast majority of them.
Perhaps Carl can provide some economic research or data to justify his claims.
First I think I will just copy-paste my response to your comment on another post. You do realize that your response to me pointing out that these claims are junk science was to just repeat some trend claims from the same junk science:
…Bill, if you ever offered a substantive argument rather than just repeating your assertions again after someone points out why they do not hold up to scrutiny, you might convince someone. As it stands, you are just paying one side of an eight-year-old’s game of “nuh-uh” “uh-huh” “nuh-uh” “uh-huh”…. The thing is that on the other side of that dialogue is someone making cogent substantive arguments, while you continue to reply with nothing more than the equivalent of “uh-huh”….
But to answer your question, here are some summaries of the literature that shows these claims are wrong (that point back to the original studies but also summarize them for the lay reader). This is what I could find in 20 seconds (and you could have done so too). I could have organized it better and pointed out exactly what information was key with a bit more effort, but why bother. I also would not spend that time looking for evidence that the people who say the earth is flat are just repeating junk science.
It is notable that at the end of one of those, your hero Pechecek is failing around trying to salvage his junk claims with an appeal to the value grandparents bring to a family. Um, yeah, Terry, because that costs the government money (which is what you are claiming)????
I apologize for being quite so brutal about that, Bill, but I just have very little patience for epistemic closure and interpreting science entirely based on what conclusions suit your political preferences. Even apart from it being bad for the world generically — as well as extremely annoying in conversation, when someone takes the time to explain something and make a substantive argument but the reply is just to repeat what was already rebutted — it is exactly what the blog fights. These are the exact same phenomenon that creates many of the huge corps of useful idiots for anti-THR. This is exactly what the ANTZ do with their junk science (and, indeed, it is ANTZ junk science that you keep reciting).
Dear Mr Phillips, Dear Mr Goodshall, Dear everyone else partaking in this intense exchange,
CVP is probably right that lifetime net for smokers is lower to society than being healthy and getting really old.
BG is probably right that he has been treated in a less than courteous and understanding manner (Sic), by NGO’s and Pharma to such an extent that any normal person would have gone “Una” ages ago.
Cred to Bill for still being stubborn and not giving in, cred to CVP for not budging one inch from the demand of total rigor in the discourse and disqualifying anything that does not hold up.
It still remains pretty clear that Bill definitely has a point, if one shaves away all claims, whatever studies they may be based on. The core of the point is still that a massive and rapid shift toward THR would rock a lot of boats on the short to medium term (10-30 years). I think we can all agree on that much at least.
Almost never will a for profit business sector act in a way that increases uncertainty. Almost always they will go with the devil they know compared to the devil they don’t.
I certainly can imagine a situation where persons in different positions, by doing pretty much nothing at all different from any other day (such as arguing precaution for other products but arguing less need of precaution for their own products), keep the boat calm and steady with fewer risks of major change and fewer crises.
I think I would sum it up as that I do not believe anyone (in the mentioned health sector) will act actively to harm the advent of THR. On the other hand I also do not see any benefit for them in a massive and rapid change toward THR, and quite some risks for them with such a change. They are therefore best off (risk/benefit/cost) by mostly sitting on the sidelines and continuing to fund NGO’s who are very successful at prolonging a status quo.
On a final note: Lifetime public health net cost for a life, to society and in dollars, is one thing. Nature/nurture/lifestyle choice impact on short to medium term health expenditure is quite another. When I went to business school I was taught to worry about the short to medium term only, and that the long term would sort itself out nicely while I was on the road to get there.
Question therefore seems to be: Certain notable others doing “nothing” (provided we agree with CVP that they do nothing), could that still be considered extremely unethical and harmful? If by doing nothing in a system that they are extremely fine tuned to, will undoubtedly prolong the smoking status quo.
The health industry/public health industry being inside they system and THR being decidedly outside the system, but trying to get in; it seems kind of like golf handicap in reverse.
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New estimate out of Germany about how much governments profit thanks to smoking: http://www.ksta.de/wirtschaft/karlsruher-studie-widerlegt-bisherige-thesen-steuer–und-beitragszahler-sparen-milliardenbetrag-durch-raucher,15187248,31617886.html?dmcid=f_msn_web Mostly parking it here so I can find it later.
Carl, the journalist seems to have gotten the picture pretty OK. Don’t you worry that this may be bad for THR? In this scenario the ANTZ could in theory argue that THR would allow people to enjoy tobacco/nicotine AND live as long and costly lives as the puritan’s do (may or may not cancel a life of paying tax on the pleasure), mightn’t they then prefer smoking? Keeps them employed and gives a certain, albeit perverse, satisfaction?
The ANTZ do not dare argue that since it would undermine their more important lies. But they undoubtedly do get it (the opinion leader, not the useful idiots). Of course, the main thesis of this post was that government revenuers and tobacco controllers do know that their income depends on people continuing to smoke.