Author: Taco Tuinstra

Innovation and creative destruction in the evolving tobacco market will render cigarettes obsolete and end the burden of smoking-related disease—if we let it.

By Clive Bates

Let’s play strategy consultants. Imagine an international public health agency has hired us. We are tasked to advise on reducing the global burden of noncommunicable disease associated with tobacco and nicotine use and how to do it as deeply and rapidly as possible. Our assignment is to propose a clear-eyed, unemotional and results-driven approach to addressing this problem. What would we do?

First, we define, limit and quantify the problem. According to the Global Burden of Disease study published in The Lancet, in 2019, around 1.1 billion people smoked 7.4 trillion cigarettes. Worldwide, 7.7 million died from smoking-related disease and 200 million disability-adjusted life-years were lost. On top of the burden of mortality, there are additional economic and welfare harms from smoking. Then there are further harms caused by the policy response, such as regressive taxes, stigmatizing campaigns and restrictions on smoking. These policies might be justified to reduce disease and protect nonsmokers, but they add to the welfare burden for people who continue to smoke. The problem is overwhelmingly caused by smoking tobacco—inhaling products of tobacco combustion—and not directly by the use of the drug nicotine.

Second, we determine why this problem persists. If it causes so much harm, surely it is just a matter of informing people? This seemed like the obvious answer to the anti-smoking pioneers of the 1960s onward. Doctors would educate people on the risks, and people who smoke would reassess their interests and would stop smoking or never start. Some analysts suggest that this could be the only anti-smoking strategy that has ever worked, but it has been painfully slow. Our working theory is that the underlying demand for nicotine is robust and potentially dependence forming. We determine that for some people, nicotine use may be rational or appealing for its mood control, cognitive advantages and pleasurable sensations. We note the long delay between the positive reinforcing experience of smoking and the most severe health effects and how people tend to devalue or discount negative impacts far in the future compared to gratification today. But if we can separate the experience of using nicotine from the harms of using it by smoking, maybe there is a way around this.

Third, we ask what is wrong with what we are already doing. Maybe it is a matter of letting evidence-based tobacco policy work through multiple countries and generations. Yet, despite 50 years of concerted action, we still have about one in seven adults smoking in the United Kingdom and the United States and about one in four in the European Union. Now that 80 percent of the world’s smokers are in low-income and middle-income countries, we ask if the intense and sustained regulatory, fiscal and campaign focus necessary to drive down smoking and nicotine use are viable and sustainable. Or would the process be slow and incremental as it has been in Europe and North America? We look for signs that the World Health Organization Framework Convention on Tobacco Control (FCTC) has been working but find surprisingly little credible evaluation. The available analysis, published in the BMJ, found no evidence “to indicate that global progress in reducing cigarette consumption has been accelerated by the FCTC treaty mechanism.”

Fourth, can we go further with the established measures? The problem with pulling harder on the existing levers is that we may start to run up against barriers of public consent and political acceptability (politicians are only willing to be tough on voters up to a point), or we start to see escalating unintended secondary consequences. For example, high tobacco taxes are regressive and likely to trigger black markets or adverse behavioral responses. The public might see smoking bans in workplaces as acceptable to protect workers, but would they feel the same way about banning smoking outdoors? We might push harder with enforcement, but the danger is that the measures start to look illiberal, excessive or unfair. What about escalating and just banning cigarettes or forcing manufacturers to remove the nicotine? After all, if that is the problem, why not take the most direct way to address it? Again, we run into difficulties of public consent, political appetite and perverse consequences that are all too foreseeable given the experience with drug and alcohol prohibitions.

Fifth, what innovative options are available to expedite progress? Here, there really is a potential game-changer. If the underlying demand is for the experience of using nicotine and the harm is caused by the use of nicotine by smoking and inhaling products of combustion, then there is an obvious path forward. Our key strategy advice is to do everything possible to refocus the nicotine market from the dangerous smoking products to the much safer smoke-free products, for which estimates suggest there are already more than 100 million users. There are two reasons to adopt this strategy. First, it provides a relatively simple way for existing smokers to switch to products that eliminate nearly all the additional risks of continued smoking. When someone who smokes switches, they do not have to give up the nicotine, a sensory experience, or much of the behavioral ritual. Second, these products provide low-risk alternatives available to people who wish to use nicotine in the future. This second function is essential because we do not believe it will be possible to stop future nicotine use any more than we could wind down the use of caffeine, alcohol or cannabis. To the extent we have managed to reduce demand for nicotine, it is mainly on the back of messaging and measures to address the harm caused by smoking. But it is precisely that harm we are trying to eliminate. We need to rethink our relationship with nicotine.

Sixth, how could we expedite progress? Here, we may rely on what the economist Joseph Schumpeter termed a “gale of creative destruction” or the “process of industrial mutation that continuously revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one.” So, should we just wait for this process to run its course? Of course not! Four critical contextual pressures will drive the inevitable creative destruction of the cigarette market. The right strategy for government, civil society and the tobacco industry is to shape them to expedite the obsolescence of smoking to create a viable nicotine market with acceptable risks:

1. The information environment – what do people believe about smoking and the alternatives? What do trusted professionals and organizations say and advise? What do newspapers report, and how reliably do scientists communicate their findings in scientific papers and press releases? A significant tobacco control effort has been made to engineer misperceptions about relative risk and to dissuade smokers who would switch from making that move. The information environment is highly contaminated with harmful misinformation.
2. The regulatory environment – regulations can encourage consumers to move from high-risk to low-risk products—an approach we know as “risk-proportionate regulation.” However, the regulatory landscape for cigarette alternatives is filling up with anti-proportionate regulation: prohibitions and stealth prohibitions, including outright bans, bans on flavors, limits on nicotine levels, advertising bans and so on. Again, the current trends protect the cigarette trade.
3. The fiscal environment – the tax system can create incentives for consumers, retailers and manufacturers to favor low-risk smoke-free alternatives over high-risk cigarettes. But we now see persistent calls to raise taxes on vaping and heated-tobacco products to equivalent levels to cigarettes. Again, the direction is anti-proportionate when it comes to taxation.
4. The innovation environment – how favorable are the market conditions to the emergence of improved products and new entrant firms? Is the market competitive, or does oligopoly form a barrier to innovation? Does it require massive regulatory costs and delays to bring a product to market (e.g., the U.S. Food and Drug Administration) or notification or compliance with standards (e.g., the European Union)? Can innovators communicate with consumers and explain their innovation, or are advertising and other commercial communications banned? Does innovation go into improving customer experience relative to cigarettes, or is it primarily directed to regulatory compliance that does little for product users?

These pressures will fundamentally change the tobacco market, perhaps ruining some companies but making revitalized giants out of others. A determined goal-driven strategist would shape these four environments to harness market dynamics for public health. That will mean challenging those purporting to represent public health interests while doing all they can to delay the market-based obsolescence of the cigarette. They may slow a necessary and inevitable transformation and cost thousands of lives. But ultimately, innovation and creative destruction will prevail. Every stakeholder involved should grasp the implications of that and act accordingly.

“Accessing Innovation” is the theme for this year’s GTNF, to be held in Washington, D.C., Sept. 27–29, 2022.