Embed Size (px)
Citation preview
Economics of Tobacco Control in Developing Countries
Syed AljunidMD (UKM) MSc Public Health (Singapore) PhD (Health Econs and
Financing) (London) FAMMProfessor of Health Economics and
Senior Research FellowUNU-International Institute For Global Health
Kuala Lumpur
UNU- International Institute For Global Health (UNU-IIGH)
OUTLINE Introduction Smoking in Developing Countries Healthcare Cost of Smoking Smoking and Poverty Tobacco Control Price Measures Non-price measures Conclusions
Introduction Health Systems of developing countries is
facing major crisis due to internal and external factors.
World Health Report (2008) identified Five Shortcomings of Health Systems Inverse Care Impoverishing Care Fragmented and Fragmenting Care Unsafe Care Misdirected Care
Introduction Health System is excessively burdened by
increasing prevalence of Chronic and Non-communicable Diseases Most are linked to unhealthy lifestyles including
Smoking The poor living in low and middle income
countries are the main victims Some economist argued that smokers
contribute to economy by paying high taxes
Shift towards Non-communicable Diseases/Accidents as Cause of
Deaths
Projected Deaths (Millions) and DALYS in 23 Selected
Countries
Source: Abegunde et all (2007) Lancet 370:1929-38
Leading Cause of Deaths in Malaysian Hospitals
(2008)Cause of Deaths %
Heart and Cardiovascular
16.5
Septicaemia 13.2 Malignant Neoplasms
11.2
Pneumonia
9.3
Cerebrovascular diseases 8.6 Disease of Digestive System 5.2 Accidents 5.0 Perinatal Conditions 4.0
Nephritis, Nephrosis and Nephrotic Syndrome 3.8
Ill Defined Conditions 2.6
Healthcare Costs from Smoking
Annual (gross) healthcare costs: 0.1-1.1% of GDP, or 6 -15% of total health costs in
high-income countries proportionally similar in lower-income countries
Annual Global Net Loss due to smoking USD 200,000 million One third of loss is in developing countries
Annual Cost of Selected Chronic Illness in Malaysia (2005)
Chronic Diseases Annual Cost(Millions, RM)
Ischemic Heart Diseases 1,432
Chronic Obstructive Airway Diseases
2,919
Cervical Cancer 247
Lung Cancer 146
In-Patient Utilisation For Smoking Related Diseases in
Malaysia, 2004IHD CA LUNG COPD Average
Average Number of Admissions 1.6 2.4 1.3 1.8Average Annual Fees (RM)
151.51 213.47 47.50 137.49
Average Length Of Stay (ALOS)
5.32 6.73 5.67 5.88
Minimum Length Of Stay (LOS)
1 1 1 1
Maximum LOS 19 43 25 43
Total Cost Per Year for Malaysia
IHD CA Lung
COPD
Annual Cost per patient
21,676 42,287 32,172
Nos. of new cases
32,816 2,881 12,776
Nos. of old cases 99,852 1,701 233,857Total Cost per Year (Nation)(Mill)
630.4 116.6 2,306.0
Annual Cost per Patient (RM)
Patients’ Cost
Providers’ Cost
Total Annual cost
IHD 1,362 20,134 21,676
CA Lung 7,758 34,529 42,287
COPD 12,757 19,415 32,172
HealthCare Cost of Smoking for IHD (RM Millions)
580600620640660680700720
2004 2005 2006 2007 2008 2009 2010
RM (M
illio
ns)
IHD
HealthCare Cost of Smoking for Lung CA (RM Millions)
0
20
40
60
80
100
120
140
2004 2005 2006 2007 2008 2009 2010
RM(M
illio
n)
HealthCare Cost of Smoking for COPD (RM Millions)
2,000
2,1002,200
2,3002,400
2,500
2,6002,700
2,800
2004 2005 2006 2007 2008 2009 2010
RM (M
ill)
Age Start Smoking Among Secondary Age Start Smoking Among Secondary School Children in Selangor, Malaysia School Children in Selangor, Malaysia
(2006(2006
Students Exposed to Tobacco Smoke at Home and Outside
Home
Global Youths Tobacco Survey: 1999-2005
Health and Poverty:The incidence of catastrophic out-of-
pocket payments in 59 countries
Risk of Distress Borrowing and Selling During Hospitalisation in
India, 1995-1996
Source: Bonu et al (2005) Health Policy and Planning 20 :41-49
Prevalence of Daily Smokers:
Poorest vs Richest Quintiles in Low and Middle Income
Countries
Ratio of Expenditure on Tobacco vs Education in Bangladesh,
1995-96
Efroymson et al (2001): Tobacco Control 10:212-17
Which interventions are effective?
Measures to reduce demand Higher cigarette taxes Non-price measures: consumer
information, research, cigarette advertising and promotion bans, warning labels and restrictions on public smoking
Increased access to nicotine replacement (NRT) and other cessation therapies
Taxation is the Most Effective Tobacco Control Measure
Higher taxes induce quitting, reduce consumption and prevent starting
A 10% price increase reduces demand by: 4% in high-income countries 8% in low or middle-income countries long-run effects may be greater
Young people and the poor are the most price responsive
Source: Chaloupka et al., 2000
Tobacco Tax and Economic Impact
Empirical evidence shows that higher tobacco taxes:
- improve public health- increase tax collection (even in the
presence of smuggling)- do not have negative impact on
employment - do not have negative impact on the
poor
Industry clearly understands the impact of tobacco
taxation"With regard to taxation, it is clear that in the US, and in most countries in which we operate, tax is
becoming a major threat to our existence." "Of all the concerns, there is one - taxation - that alarms us the most. While marketing restrictions and public and passive smoking (restrictions) do
depress volume, in our experience taxation depresses it much more severely. Our concern
for taxation is, therefore, central to our thinking...."
Philip Morris, “Smoking and Health Initiatives”, 1985
Cigarette price and consumption show opposite trends (1)
Real price of cigarettes and annual per adult cigarette consumption in South Africa 1970-1989
Source: Saloojee 1995
0.05
0.06
0.07
0.08
0.09
1970 1972 1974 1976 1978 1980 1982 1984 1986 1988
Year
Cig
aret
te c
onsu
mpt
ion
per a
dult
(in p
acks
)
0.7
0.8
0.9
1
1.1
1.2
1.3
Rea
l Pric
e
Real price
Consumptionper adult
Cigarette price and consumption show opposite
trends (2)
Source: ImpacTeen, 2003
$1.20
$1.70
$2.20
$2.70
$3.20
20000
22000
24000
26000
28000
30000
1970 1975 1980 1985 1990 1995 2000 Real
Cig
aret
te P
rice
Tota
l Sal
es (m
illio
n pa
cks)
Year
Total Cigarette Sales and Cigarette Prices, 1970-2002
Cigarette Sales (million packs) Real Cigarette Price
Youth and the Poor Most Responsive to Tax
Increases Effects on youth up to three times as
large as effects on adults low incomes, less addicted, greater effect of
peer influences, importance of current costs Large reductions in lowest income
populations compared to small reductions in highest income populations Consistent with economic theory Implies tax increases can be progressive
Source: Chaloupka et al., 2000
Cigarette price and youth smoking show opposite trends
Real price of cigarettes and youth smoking prevalence, US, 1975-2002
Source: ImpacTeen, 2003
$1.25
$1.50
$1.75
$2.00
$2.25
$2.50
$2.75
$3.00
$3.25
$3.50
1975 1980 1985 1990 1995 2000
Year
Real
Pric
e Pe
r Pac
k
26
28
30
32
34
36
38
40
Smok
ing
Prev
alen
ce
Cigarette Price 30 Day Smoking Prevalence
SEA and Australian SEA and Australian RegionRegion
Source: Judith Mackay, Michael Eriksen : Tobacco Atlas
Price of a 20 Cigarettes Pack (International Dollars, 2006)
Non-price measures to reduce demand
Increase consumer information: dissemination of research findings, warning labels, counter-advertising
Comprehensive ban on advertising and promotion
Restrictions on smoking in public and work places
Increase access to nicotine-replacement therapies (NRT)
Health information reduces the demand for
cigarettesCountry Time Event Immediate reduction in
cigarette consumptionThe US 1964 Surgeon General
Report1-2%
UK 1962 1st report of the RoyalCollege of Physicians
5%
Switzerland 1966 An anti-smokingcampaign
11%
Turkey 1982 Implementation ofhealth warning labels
8%
Source: Kenkel and Chen, 2000
Comprehensive advertising bans reduce cigarette consumption
Consumption trends in countries with such bans vs. those with no bans(n=102 countries)
No Ban
Ban
1450
1500
1550
1600
1650
1700
1750
1981 1991
Year
Ciga
rette
con
sum
ptio
n pe
r cap
ita
Source: Saffer, 2000
Effect of advertising bans and counter-advertising
A comprehensive set of tobacco advertising bans can reduce consumption by 6.3%
Counter-advertising messages (set at 15% of the total number of advertising messages) can reduce smoking by about 2% a yearSource: Saffer and Chaloupka, 2000
Effectiveness of Smoking Cessation Clinic in Malaysia
(2006)KLINIK KESIHATAN % QuitersKK Bandar Alor Setar 11.8KK Merbok 17.6KK Kg Simee 21.9KK Setiawan 16.1KK Bakri 24.2KK Segamat 12.0KK Selingsing 18.8KK Pulai Chondong 15.2All Klinik Kesihatan 17.3
Conclusions Chronic non-communicable diseases linked to
smoking pose major challenges to health systems Smoking is an effective agent causing negative
economic impact to individuals, families and nations especially to the poor living in low income countries
Cigarette tax is the single most effective measure to control smoking through price increase
Non-price measures should be systematically implemented to potentiate the effect of cigarette tax in tobacco control
