This panel on the economic dimensions of smoking control and harm reduction, coordinated by Professor Andrzej Fal, president of the Polish Society of Public Health, discussed extensively the available financial tools, prices, differential taxation based upon potential harm.
Through an introduction on the matter, the Prof. Fal addressed how higher income levels are associated with longer life expectancy, a phenomenon also observed over the last two centuries. The speaker suggested that this phenomenon is driven by two risk factors, infectious and chronic diseases. In the past, these risk factors encompassed malnutrition, indoor air pollution, water, sanitation, and hygiene, whereas the past 30 years novel risk factors have affected life expectancy. These include tobacco smoking and physical inactivity. Dr Fal stressed that tobacco smoking is the second largest risk factor of chronic disease, as mortality is nine times higher compared to infectious diseases.
In 2015, the United Nations established the Sustainable Development Goal (SDG) 3.4 that stated, “by 2030 reduce by 1/3 pre-mature mortality from non-communicable diseases (NCDs) through prevention and treatment and promoting mental health and wellbeing”. One of these factors incorporated reducing the smoking prevalence. Dr Fal then referred to the Polish experience regarding the smoking prevalence. The speaker advocated that there is a conflict of interest when selecting between a hight tax revenue and improved public health, something that the Polish government needs to re-consider.
Porfessor Fal then discussed that the impact of cancer on morbidity and mortality can be reduced based on behavioural changes. Based on 14 publications, Tobacco Harm Reduction (THR) products such as heat-not-burn (HnB) may reduce cancer by a factor of 100 compared to traditional combustible products. The speaker concluded that the first step towards reducing the tobacco prevalence is through THR products.
The second speaker Professor Viktor Mravcik, MD, PhD and Head of the Czech National Monitoring Centre for Drugs and Addiction, then discussed how THR policies may comprise of any tobacco prevention and treatment strategies, that reduce adverse consequences. The speaker highlighted the importance of correctly informing the active tobacco users about the relative health risks and enhancing the promotion of THR products.
Professor in Economics at the University of Verona Emanuele Bracco expressed his thoughts on how governments should be more proactive when implementing THR policies. Even though long term risk factors are not yet available for THR products, there is evidence that they do assist in smoking cessation. The relative price between traditional combustible cigarettes and the innovative THR products may serve as a convoy, effecting consumer behaviour towards acquiring safer alternatives. The speaker concluded that tax and pricing tools promote the transition from traditional cigarettes to THR products.
Mr Arkadi Sharkov, healthcare consultant and an expert in macroeconomics, discussed how 10 years ago, Bulgaria suffered from contraband cigarettes, where a lot of cigarettes were smuggled from Turkey and other bordering countries without paying domestic duty. This created a Laffer curve as there was a marginal taxation increase, after which the revenue dropped. Therefore, the speaker stressed, taxation should be carefully implemented when governments want to shift active combustible smokers to using THR products. Unfortunately, the Bulgarian government almost equalized the excise for combustible tobacco products with non-combustible products. The president of the Bulgarian Financial Committee argued that both are tobacco products and did not present any public health argument. A study was then carried out aiming to measure the economic and public health effects of transitioning from traditional cigarettes to THR products. Based on the Disability-Adjusted Life Years (DALYs), the potential loss of profits on the economy in 2019, showed that the smoking related damages incurred by the economy amounted to 2.8-4.8 of the Bulgarian GDP. The study concluded that when transitioning from traditional combustible cigarettes to non-combustible, the morbidity and death rate can be reduced by 48-83%, depending on the situation. Mr Sharkov concluded that in Bulgaria, policy makers do not use health data when conducting analysis and that there is a lack of coherent communication between policymakers and institutions.
Professor Bracco then discussed how the costs of smoking related diseases can be divided into three major components. First, direct health care costs. These include medications, doctors, and hospital care that are compensated through national health care systems or insurances. Approximately 60% of the total direct health care costs of European countries are attributed to Chronic Obstructive Pulmonary Diseases (COPDs) which is highly associated with smoking. Second, indirect costs. This includes loss of productivity of an ill individual. Third, the Quality-Adjusted Life Years (QALYs) lost.
Former Minister of Health and Minister of Interior of the Slovak Republic, Mr Tomáš Drucker, then summarized the wider picture of the health care expenditures associated with smoking. The speaker stated that according to the European Commission, 74% of European government expenditures on health care are attributed to smoking related diseases. Mr Drucker suggested that the major issues of the health care systems are that they are unable to measure, observe and monitor results, something policymakers need to consider.
Professor Mravcik then expressed his thoughts on the difficulty that governments have on allocating set budgets on THR policies. Mr Sharkov responded that to be cost-effective, two strategies are available to stimulate companies for innovation. The first is directly subsidizing them. The second is through taxation where innovation can be enhanced. The speaker then discussed that there is limited research on THR products in Bulgaria due to the lack of funding available.
The three panellists, Mr Sharkov, Prof. Bracco and Prof. Mravcik all agreed that there is limited medical data and robust research in their countries (Bulgaria, Italy, and Czech Republic respectively) that assess the effectiveness of THR.
Professor Fal closed the discussion panel by summarizing that THR is the only innovative tool available for combating the tobacco epidemic. The speaker stressed the need for future research of THR policies and their cost-effectiveness.