Transcript Nicotine tax - EndSmoking NZ

Three policy options to reduce nicotine in
combustible tobacco sold in NZ by 2020:
with special focus on Nicotine tax
Murray Laugesen, End Smoking NZ trust
Nick Wilson, University of Otago, Wellington
Paper presented at APACT Conference,
Sydney, 8 October 2010
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Glossary
HN = high nicotine = most cigarettes sold today.
MN = medium nicotine
LN = low nicotine
VLN = very low nicotine.
RNC = Reduced nicotine cigarette, nicotine yield
proportional to nicotine content.
Yield =smoke-machine-measured nicotine.
Content =nicotine in an unlit cigarette
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Three policy options to reduce nicotine
1) Mandated sinking nicotine content, all brands
together.
Lower nicotine content -20% p.a. Little effect until 80%
reduced. (USA FDA could do this in future)
2) Mandate increase in VLN share of sales by 20% p.a.
However there is no economic incentive to buy these
VLN cigarettes.
3) Nicotine tax makes VLN cigarettes a smart way for
smokers to avoid paying more for their smoking.
Similar to a tax on tobacco content.
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Justification for taxing nicotine in
combustible tobacco products
Smoking is highly
addictive.
- NZ Health warning.
85% of NZ smokers want cigarettes to be less
addictive
- Thomson G, Wilson N, Edwards R.
Letter, NZ Med J. 2010;123(1308).
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Nicotine content of leading brands, NZ 1997
per 0.7 g moist tobacco cigarette
Nicotine content mg
20
15
Nicotine content of all cigarettes is at least five times the
2 mg content (0.2 mg yield) per cigarette needed, at 25
cigarettes daily, to equal the addiction threshold.
10
5
0
FM regular
FM regular
FM regular
FM Mild
RYO regular RYO regular
Blakely, Laugesen, Symons, Fellows, NZ Health Report 1997; 4:33-34,85
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Nicotine content, yield and tax
Nicotine
content
mg*
High HN
Medium MN
12 **
8
Nicotine
yield
mg*
0.8
0.6
Nicotine tax
$ / cigarette
proposed
1.00
0.75
Low LN
4
0.4
0.50
Very low VLN
2
0.2
0.00
*Benowitz 2007
**most NZ brands 1997
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The concept of a nicotine threshold
A threshold implies that addiction only begins to
decline markedly below the threshold.
• Nicotine threshold = total of nicotine absorbed
needed to sustain addiction.
• Estimated at 5 mg per day (Benowitz and Henningfield 1994)
• 5 mg = up to 25 VLN of (0.2 mg machine yield), or 6 HN
of 0.8 mg machine yield.
• Further research needed on the actual threshold so as to
include 90-95% of smokers. A range may be needed.
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Testing and labeling for nicotine
content
• Government publishes a list of government
approved laboratories, independent of
industry, whereby manufacturers can arrange
nicotine content and yield testing at their own
expense.
• Government requires all brands sold to be
labeled for nicotine content in mg per
cigarette, from 6 months before the nicotine tax
takes effect.
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Tax nicotine content, not yield
• Tobacco excise is levied on tobacco content.
• Nicotine tax is extra, and levied on nicotine
content.
• Tax is levied per milligram of nicotine content
per average unburnt cigarette. eg $1 per HN
cigarette
• VLN cigarettes are much less addictive and
would attract zero nicotine tax.
• As nicotine content rises above threshold, tax
rises steeply at first and less steeply thereafter.
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Nicotine yield and price choices
for smokers paying nicotine tax
Nicotine threshold for maintaining addiction 5 mg/day
$ price per pack
50
40
20 HN
30
20 MN
20
20 LN
10
1-2 HN + 18 VLN
0
0
5
10
mg nicotine yield per pack
15
20
Price of 20 cigarettes, all HN, 2010
Estimated from pervious slides
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Research evidence
• Reduced nicotine content cigarette studies –
Benowitz 2007. Lowers smokers’ addiction.
• Review Hatsukami Tob Control 2010;19 e1-e10.
Nicotine reduction is an important area for research
• Denicotinised cigarettes – can reduce motivation to
continue smoking by 30% but not by 100%. (Brody
2009)
• Clinical simulations of policy eg Johnson 2004 needed
to ensure accurate national statistical modeling of
addiction policy (Cavana 2008)
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More questions
Major immediate and permanent reduction in sales?
As tax increases price of HN, nicotine consumption should fall.
Could Industry pricing soften nicotine tax effect?
Board game simulations needed.
Will the tax over the long term enhance quitting?
Yes, if at every quitting attempt the smoker is less addicted..
Risk of blackmarket? HN cigarettes though expensive, will be legally
on sale in all shops.
End game role? More useful as a component of a more
comprehensive policy? - as End Smoking NZ has proposed
www.endsmoking.org.nz/Fourpolicies14May2010.pdf
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Expected industry response
• Nicotine tax pressures manufacturers to
sell less nicotine in the average cigarette.
• Government may wish to ban composite
packets of high and low nicotine, which
would otherwise allow manufacturers to
control the smoker’s nicotine choices.
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Tax forces change at the factory Commercial Cigarettes become RNCs
• Today’s Commercial Cigarette contains far
more nicotine than needed for maintaining
addiction.
• After nicotine tax, all cigarettes except HN
will contain much less nicotine, and
function like Reduced Nicotine Content
cigarettes (RNCs).
• RNCs minimise compensatory smoking
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Expected industry pricing response
• Manufacturers if permitted, might wish to
discount the price of high nicotine
cigarettes to offset the effect of nicotine
tax, and so keep smokers addicted.
• SFE Act could be amended to outlaw this
practice.
• Or, the nicotine tax might be increased.
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Expected smoker responses
• Most smokers will inhale less nicotine.
• Smokers could smoke 1-2 HN cigarettes to start the day
and use 18-19 VLNs over the rest of the day to minimise
their nicotine tax and still obtain nicotine satisfaction.
• More quit attempts, more success in quitting.
• Nicotine becomes a luxury, to be savoured. Wealthy
smokers could pay up to $20 per day for nicotine.
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Biological effect on smokers who, not
wishing to quit, switch to very low
nicotine (VLN) cigarettes
•
•
•
•
•
•
Cigarettes smoked per day:
Addiction score (FTND):
Self efficacy in quitting
Nicotine inhaled per day:
CO exhaled (toxicity indicator):
NNAL in urine (carcinogen indicator):
halved
halved
doubled
halved
- 66%
halved
based on Benowitz 2007 10 week study of reduced nicotine cigarettes, smokers
not intending to quit.
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Appendix - Check list for
government before taxing nicotine
Commission nicotine tax simulation studies.
Publish a discussion of proposed changes.
Consult with stakeholders and experts
Require annual testing of all brands for nicotine
content as well as nicotine yield.
Regulate for nicotine content labels on all packets
Ban import and sale of liquid nicotine.
Allow manufacturers 6 months to re-tool.
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