Blog - Tobacco Reporter

Virginia Tech to Study Impact Tobacco Taxes

Scientists with Virginia Tech’s Fralin Biomedical Research Institute at VTC are leading a five-year, $3.5 million study to predict the impact of tobacco taxes on health.

“Taxes are one of the most effective ways to change behavior—they make people think about their choices, including their choice to use tobacco,” said Warren Bickel, a professor at the Fralin Biomedical Research Institute and director of the institute’s Addiction Recovery Research Center, in a statement.

Funded by the National Cancer Institute of the National Institutes of Health, Bickel’s research project will forecast the impact of tobacco tax proposals in a complex experimental marketplace that continually changes with the introduction of new products, such as low-nicotine cigarettes or electronic cigarettes.

According to Virginia Tech, the work has potential to deliver research-based health policy guidance for new tobacco regulations as well as evaluate the health consequences of people’s economic choices.

“Taxes are one of the most effective ways to change behavior—they make people think about their choices, including their choice to use tobacco.”

Warren Bickel, director, Fralin Biomedical Research Institute Addiction Recovery Research Center

“Taxes can help people achieve better health by discouraging them not to smoke. If you make the product more expensive, people will use less of it. They can also leverage people to move from the most harmful tobacco products to the least harmful,” said Bickel, who is also the director of the institute’s Center for Health Behaviors Research.

He will take tobacco-related health disparities into account by investigating socioeconomic factors.

“People with low incomes have a higher prevalence of smoking, and disproportionate tax policies could have far-reaching direct and unintended effects,” said Bickel, who is also a professor of psychology in the Virginia Tech College of Science.

To get clear answers, Bickel’s approach involves the Experimental Tobacco Marketplace, an invention of the Addiction Recovery Research Center. Participants have an account and buy tobacco products to reflect their typical purchasing. Co-investigators at the Fralin Biomedical Research Institute working on the project with Bickel include Jeff Stein and Allison Tegge.

The marketplace places the mix of products, prices and specific regulations under experimental control for researchers to estimate policy impact in real-world circumstances.

In this environment, researchers can forecast the impact and health equity of tax proposals, including a proposal that equally levies taxes across all tobacco products as well as others that issue tax based on a product’s nicotine content, potential for harm or whether it has received a modified-risk designation from the Food and Drug Administration.

“We can implement policies in the experimental tobacco marketplace and provide information about the impacts on people’s tobacco purchasing,” said Bickel. “For example, if lawmakers or regulators restrict access to one product versus another, will it result in smokers making less healthy or more healthy choices? It is an ideal resource to investigate the harm reduction potential of low-nicotine cigarettes and alternative nicotine products.”

November 21, 2022

Miller to Lead 22nd’s Tobacco Business

22nd Century Group promoted John Miller to president of its tobacco business unit on Nov. 11, reports the Winston-Salem Journal, citing a Nov. 17 regulatory filing. Miller was hired by the manufacturer in May.

Miller has more than 35 years of experience in the tobacco and consumer packaged goods industries, including most recently as president and chief executive of Swisher International, which makes cigars and smokeless tobacco products.

He also worked for more than 20 years in various management positions at U.S. Smokeless Tobacco Co. through its acquisition by Altria Group Inc. in 2009.

November 21, 2022

Cochrane: Quitting Easier with Vapes

Quitting combustibles is easier with e-cigarettes, according to the most recent Cochrane Review on e-cigarettes. An update to the think tank’s ongoing review of the topic, the latest research includes 17 additional studies that conclude that smoking cessation works significantly better with e-cigarettes than with other nicotine-replacement therapy (NRT) products.

“Electronic cigarettes have generated a lot of misunderstanding in both the public health community and the popular press since their introduction over a decade ago,” lead author Jamie Hartmann-Boyce said. “For the first time, this has given us high-certainty evidence that e-cigarettes are even more effective at helping people to quit smoking than traditional nicotine-replacement therapies, like patches or gums.”

The total Cochrane analysis of e-cigarettes now includes 78 studies with over 22,000 participants. The body of evidence overwhelmingly supports the current update’s findings.

The just-released Cochrane review also indicates that e-cigarettes containing nicotine are more effective than e-cigarettes without nicotine or smoking cessation without aids containing nicotine. However, there is less data for these comparisons, which is why the authors rate the reliability of the evidence as only moderate.

Co-author Nicola Lindson from the University of Oxford and managing editor of the Cochrane Tobacco Addiction Group said that while not risk-free, e-cigarettes containing nicotine only pose a fraction of the risk of smoking.

“However, due to the lack of data on possible harmful effects from long-term use of nicotine-containing electronic cigarettes, i.e., over a period of more than two years, questions remain about the long-term effects,” Lindson said.

According to the authors, the study’s key messages include:

Nicotine e-cigarettes can help people to stop smoking for at least six months. Evidence shows they work better than nicotine-replacement therapy and probably better than e-cigarettes without nicotine.
E-cigarettes may work better than no support or behavioral support alone, and they may not be associated with serious unwanted effects.
However, more evidence is needed, particularly about the effects of newer types of e-cigarettes that have better nicotine delivery than older types of e-cigarettes, as better nicotine delivery might help more people quit smoking.

The Cochrane Review already found in 2016 that e-cigarettes were more likely to help smokers quit than nicotine patches or gum, but the available body of evidence at that time was slimmer.

“This comprehensive evidence review confirms, once again, that nicotine e-cigarettes help smokers to quit smoking and that these products are more effective than medically licensed nicotine-replacement therapies,” said John Britton, emeritus professor of epidemiology at the University of Nottingham. “All smokers should therefore try vaping as a means to end their dependency on smoking tobacco.”

November 18, 2022

New Zealand Smoking at All-Time Low

The share of people in New Zealand who smoke cigarettes daily has dropped to an all-time low of 8 percent, down from 9.4 percent this time last year, reports The New Zealand Herald, citing figures from the annual NZ Health Survey.

The decline in smoking has been accompanied by a rise in vaping. Some 8.3 percent now use e-cigarettes daily compared with 6 percent 12 months ago.

And while the daily smoking rate for Maori, at 19.9 percent, remains far higher than that for the population at large, this figure, too, is down; one year ago, the Maori smoking rate stood at 22.3 percent.

The Aotearoa Vapers Community Advocacy (AVCA) said the latest numbers are evidence that New Zealand’s tobacco harm reduction (THR) strategy is working.

“New Zealand’s smoking rates are now half of what they were 10 years ago. In the past year alone, the number of people smoking fell by 56,000. That is amazing when you consider the extra stress on people with the pandemic and increasing cost of living,” said AVCA co-founder Nancy Loucas.

AVCA says the government has done well making stop-smoking services more accessible and introducing tailored Maori and Pacific services.

“Other countries have seen a rise in their smoking rates during the Covid lockdowns and restrictions, but New Zealand has once again bucked the trend. That’s because our Ministry of Health and health providers have adopted a THR strategy, transitioning smokers to vaping as a safe and incredibly effective smoking cessation tool,” said Loucas.

“New Zealand is showing the world how to achieve smoke-free. These latest statistics are more proof that countries which adopt a THR approach to public health end up saving a lot of lives,” says Loucas.

November 18, 2022

Video: TGA Boss Admits Problems with Australian Model

The head of Australia’s Therapeutic Goods Administration (TGA) has acknowledged shortcomings in the country’s vaping regulations, according to tobacco harm reduction activist Colin Mendelsohn.

Writing on his website, Mendelsohn says TGA boss John Skerrit “has finally admitted the disastrous and predictable failure of Australia’s vaping regulations,” which among other things require vapers to obtain a doctor’s prescription to buy nicotine-containing e-cigarettes.

During questioning in Australia’s Senate, Skerrit acknowledged not only that there has been a dramatic increase in youth vaping but also that large numbers of low-quality products are entering the country and are being sold on the black market, according to Mendelsohn.

In addition, Skerrit noted that only 1,353 out of 130,000 registered doctors have applied to be authorized e-cigarette prescribers, and less than 10 percent of adult vapers have a prescription for nicotine.

According to Mendelsohn, Skerritt had previously promised a review of the regulations, which were introduced on Oct. 1, 2021, at three, six and 12 months. Instead, he wrote, the TGA and government had a secret meeting of unnamed vaping experts.

Mendelsohn said it is likely that further restrictions and enforcement will be recommended by “the experts” to double down on their de facto prohibition. “This will only lead to greatly reduced legal vaping and more deaths from smoking,” he wrote.

November 18, 2022

Russia Developing New Excise Technology

Russian authorities are developing technology for digital excise tax on tobacco, reports Interfax, citing comments made by State Secretary and Deputy Finance Minister Alexei Sazanov during a meeting with foreign businesses at the American Chamber of Commerce in Russia.

“It is assumed that the tax service will automatically calculate tax liabilities when products are released into circulation as based on data that is in the information systems for labeling tobacco and beer,” said Sazanov. “This should further reduce the number of disputes between taxpayers and the tax service.”

Further digitalizing and transferring tax calculation functions to the tax authorities are part of a drive to simplify administration, according to Sazanov. “This has already been implemented for the majority of property taxes,” he added.

November 18, 2022

Framtiden Tenders its Swedish Match Shares

Framtiden Management Co. has tendered its Swedish Match shares to Philip Morris International despite reservations about the takeover.

“As a Swedish Match shareholder since 2003, I believe that this deal does not make sense for long-term shareholders,” said the Framtiden Partnerships managing member Dan Juran in a statement. “Through a press release and white paper, my partner Chris Anderson and I shared our view in the hope other shareholders would see the merits of our position. Philip Morris has since acquired nearly 86 percent of shares.

“Failing our preferred outcome, an independent public company, our intention was to continue on the Swedish Match journey as a minority shareholder of a majority-owned public company. Unfortunately, during the current offer ending Nov. 25, or soon thereafter, we believe the odds are high Philip Morris will attain the 90 percent threshold necessary to delist the shares and commence a compulsory offer. Given a likely choice between tendering now or owning private shares for a short period before a compulsory offer, we have regretfully tendered our shares.”

In May, PMI bid about $16 billion for Swedish Match. Swedish Match’s board of directors recommended shareholders accept the offer, but some investors, including Elliott Management Corp. and Framtiden, objected, saying the bid undervalues their firm.

In October, PMI increased the price of its bid to SEK116 per share from the SEK106 per share offered in May. Swedish Match’s board of directors advised shareholders to accept PMI’s revised offer.

Elliot Management Corp. then accepted the sweetened bid, contributing to PMI’s 86 percent shareholding.

Under Swedish law, PMI needs 90 percent of shareholders to agree to the deal in order to get full control over the company.

The Framtiden Partnerships owned over 14.5 million Swedish Match shares, representing about 1 percent of outstanding shares.

November 18, 2022

Experts Urge Holistic Addiction Policies

National addiction policy makers and experts met in Brussels on Nov. 15 to discuss the Czech presidency of the Council of the EU and the best way to tackle various addictions, including alcohol, tobacco, gambling and digital technologies, at the EU level. The consensus is that the priority should be a holistic, compassionate and realistic approach to help those in need.

“A world without drugs, tobacco, alcohol is not realistic and perhaps not healthy for people’s mental health. Extreme regulations have little effect on addictive behavior,” national drug coordinator Jindrich Voboril was quoted as saying in a press note. “What we can effectively do is to minimize the impact. Addiction policy should give adults access to less risky addictive products and let people make their own choices.”

The roundtable, organized by The Institute for Rational Addiction Policies, also discussed the perspective on tackling addiction and the role that EU agencies such as the EMCDDA should play in this regard.

“The European Parliament has sent a clear signal in its report on the Europe’s Beating Cancer Plan by stressing the importance of realistic, evidence-based policies. The European Commission should listen to the experts and take a rational and science-based approach,” said MEP Radka Maxova.

Viktor Mravcik, Head of IRAP’s Science Department, presented examples from the Czech Republic, where a comprehensive harm reduction approach to alcohol and tobacco dependence has led to success. In the discussion that followed, Ales Rod, member of the National Advisory Committee on the Economy and Head of the Centre for Economic and Market Analysis, presented his recent study on best practices in managing tobacco dependence policies in several Member States, including the Czech Republic and Sweden.

“If we conclude that a drug-free world is not possible, we should consider the implications of regulation. I also call on the upcoming Swedish presidency of the Council of the EU to address these issues as a matter of priority and ultimately help Europeans to tackle their addictions. After all, Sweden has done a lot in this area,” added Swedish psychologist and expert on addictions Karl Fagerstrom.

November 18, 2022

Philippines Tax Service Sets ENDS Floor Prices

The Philippine Bureau of Internal Revenue (BIR) has set a floor price for heated, vapor and other electronic nicotine-delivery devices, reports ABS-CBN News.

The floor price for a 0.7 mL pod of nicotine is PHP131.04 ($2.29). For 1.8 mL and 1.9 mL nicotine salts, the minimum prices are PHP306.88 and PHP318.08, respectively.

Meanwhile, the floor price for a 15 mL bottle of conventional freebase nicotine is PHP207.2. A bottle that contains 30 mL of classic nicotine has a PHP352.8 minimum price.

According to BIR East NCR director Edgar Tolentino, the new guidelines will help the economy and protect the health of minors.

“BIR will have exclusive jurisdiction over taxpayer registration, setting the products’ floor price, drafting and publication of revenue regulations covering vape items,” Tolentino said.

He also said the newly appointed BIR Commissioner Romeo Lumagui Jr. has a mandate to crack down on illicit vape traders.

“We need to support the plans of the commissioner; one thing is to focus on illegal vape sellers because if smuggling persists, we will be losing huge revenues from vape products,” he said.

Since 2019, the government has collected about PHP15.3 billion in vape taxes.

November 18, 2022

Vapor Group Files Amicus Brief

The Vapor Technology Association (VTA) has filed an amicus brief with the U.S. Supreme Court in support of a petition for writ of certiorari in a case against L.A. County’s ordinance banning flavored tobacco products.

Citing the substantial impact on America’s economy created by the sale of tobacco products, the trade group says Supreme Court review of the flavor ban is critical.

According to an economic impact report prepared by John Dunham and Associates, the independent vapor industry comprises more than 10,000 companies across the United States and is responsible for generating more than 130,000 jobs and more than $22 billion in economic activity for the U.S. economy.

In its amicus brief, the VTA argues that this industry would be devastated by unrestricted flavor bans given its unique and substantial reliance on the sale of flavored vapor products to adult consumers.

The trade group also notes that since the passage of the L.A. County Ordinance, leading tobacco control scientists have challenged the notion of banning e-cigarette flavors and have warned that decreasing availability of flavored vaping products harms the ability of adult smokers to quit smoking cigarettes.

Instead of blanket bans, these tobacco control scientists endorse alternative time, place and manner restrictions for the sale of flavored vaping products, the VTA notes in its amicus brief.

Permitting local and state governments to implement unscientific bans that directly interfere with the fundamental purpose of the Tobacco Control Act and would overrule the Food and Drug Administration’s decision-making for products deemed appropriate for the protection of public health is not only unlawful but is dangerous from a public health perspective, the VTA wrote.

Tobacco and vape flavor bans have gained momentum in the U.S. On Nov. 8, Californians voted to uphold a state law ending the sale of most flavored tobacco products.

November 17, 2022