A Couple of Quick Thoughts on Tobacco Regulation

1.  I have observed before that many Nanny-state initiatives are driven by politician's own personal experience and weaknesses.  Mike Huckabee started a kids obesity program because he had trouble with his weight, and now Barack Obama regulates tobacco because he has had trouble quitting smoking:

Obama, who has spoken of his own struggle to quit smoking, praised the bill, saying it "will make history by giving the scientists and medical experts at the FDA the power to take sensible steps."

Couldn't politicians just focus on their own behavior without projecting their personal weaknesses on me?  Let's just be glad that we avoided whatever regulatory regime that would have occurred had these guys had a male enhancement issue.

2.  I know zero about smoking and cigarettes.  However, it is my understanding that while the nicotine is the addictive part, it is other components of combustion that cause the health risk.  If this is the case, then doesn't regulated reduction in nicotine content of cigarettes actually pose a health risk?  Won't folks suck on more cigarettes with reduced nicotine, trying to get back to their preferred nicotine dose, and thereby consume more rather than less cancer causing substances?

3.  There is nothing that regulators hate more than free market alternatives to themselves for solving problems.  It is clear they are going to mandate reduced tar and other components in cigarettes, but they want those mandates to come from them, not emerge on their own from the market.  Thus:

[the new FDA rules will] prohibit use of words such as "mild" or "light" that give the impression that the brand is safer

Yep -- wouldn't want private folks getting credit for exactly what the regulators intend to mandate.

4.  I have often observed that regulation tends to favor incumbent companies.   Regulations tend to raise barriers to new entrants, and it imposes costs that are more easily born by larger players in the market.  Further, incumbents often have the political muscle to influence regulation in their favor  (and in fact potential future new market entrants don't even exist today, so they certainly have no lobbying voice).  And, we see this same effect here:

Altria Group, parent company of Philip Morris USA, the nation's largest tobacco company, issued a statement Thursday supporting the legislation and saying it approved "tough but reasonable federal regulation of tobacco products" by the FDA. Rival companies have voiced opposition, saying FDA limits on new tobacco products could lock in market shares for Philip Morris, maker of Marlboro cigarettes.

No surprise there.  Despite all the fighting words about the evils of big Tobacco around the Tobacco settlement a decade or so ago, the result was big gains for the major tobacco companies.

Big tobacco was supposed to come under harsh punishment for decades of deception when it acceded to a tort settlement seven years ago. Philip Morris, R.J.Reynolds, Lorillard and Brown & Williamson agreed to pay 46 states $206 billion over 25 years. This was their punishment for burying evidence of cigarettes' health risks.

But the much-maligned tobacco giants have subtly and shrewdly turned their penance into a windfall. Using that tort settlement, the big brands have hampered tiny cut-rate rivals and raised prices with near impunity. Since the case was settled, the big four have nearly doubled wholesale cigarette prices from a national average of $1.25 a pack (not counting excise taxes) in 1998 to $2.10 now. And they have a potent partner in this scheme: state governments, which have become addicted to tort-settlement payments, now running at $6 billion a year. A key feature of the Big Tobacco-and-state-government cartel: rules that levy tort-settlement costs on upstart cigarette companies, companies that were not even in existence when the tort was being committed.


  1. Michael:

    I know zero about smoking and cigarettes. However, it is my understanding that while the nicotine is the addictive part, it is other components of combustion that cause the health risk.

    I remember that cigarette adds in print media used to list nicotine and tar levels. A buyer could look at to different products and pick the nicotine level they wanted. The courts have now ruled that words like "mild or lights" constitute fraud and entitle smokers to millions in compensation.

    Are concepts like freedom and personal responsibility just to hard to grasp?

  2. CTD:

    "Won’t folks suck on more cigarettes with reduced nicotine, trying to get back to their preferred nicotine dose, and thereby consume more rather than less cancer causing substances?"

    This is only confusing if you actually think the .gov's interest in the cigarette industry is out of a concern for "public health", and not for the enormous revenue stream it generates for them.

  3. Arieh:

    "I remember that cigarette adds in print media used to list nicotine and tar levels. A buyer could look at to different products and pick the nicotine level they wanted. The courts have now ruled that words like “mild or lights” constitute fraud and entitle smokers to millions in compensation."

    Relatedly, cigarette advertising, by focusing consumers' attention on the health risks of smoking (i.e., "our brand is healthier than theirs!"), can actually *decrease* smoking. From Cato (http://www.cato.org/pubs/handbook/hb106/hb106-22.pdf):

    "If advertising were deregulated, newer and smaller tobacco companies
    would vigorously seek to carve out a bigger market share by emphasizing
    health claims that might bolster brand preference. But in 1950 the Federal
    Trade Commission foreclosed health claims—like ‘‘less smoker’s
    cough’’—as well as tar and nicotine comparisons of existing brands. To
    get around that prohibition, aggressive companies created new brands,
    which they supported with an avalanche of health claims. Filter cigarettes
    grew from roughly 1 percent to 10 percent of domestic sales within
    four years.
    Then in 1954 the FTC tightened its restrictions by requiring scientific
    proof of health claims, even for new brands. The industry returned to
    advertising taste and pleasure; aggregate sales expanded. By 1957 scientists
    had confirmed the benefit of low-tar cigarettes. A new campaign of ‘‘Tar
    Derby’’ ads quickly emerged, and tar and nicotine levels collapsed 40
    percent in two years. To shut down the flow of health claims, the FTC
    next demanded that they be accompanied by epidemiological evidence,
    of which none existed. The commission then negotiated a ‘‘voluntary’’
    ban on tar and nicotine comparisons.
    Not surprisingly, the steep decline in tar and nicotine ended in 1959.
    Seven years later, apparently alerted to the bad news, the FTC reauthorized
    tar and nicotine data but continued to proscribe associated health claims.
    Finally, in 1970 Congress banned all radio and television ads. Overall
    consumption has declined slowly since that time. In today’s climate, the
    potential gains from health-related ads are undoubtedly greater than ever—
    for both aggressive companies and health-conscious consumers. Thanks
    in good part to ill-advised government regulation, however, those gains
    will not be realized. Instead of ‘‘healthy’’ competition for market share,
    we can probably look forward to more imagery and personal endorsements—
    the very ads that anti-tobacco partisans decry."

  4. Esox Lucius:

    I think we need a comprehensive Cap-And-Trade system for reducing Nicotine consumption.

    Nice joke about the make enhancement thing by the way...

  5. dr kill:

    1. Yes.
    2. Yes.
    3. Yes.
    4. Yes.

  6. Sean Wise:

    I have taken a new approach to encouraging smokers that I know to quit...do it as a tax protest. In Maryland, it costs nearly $6 a pack for cigarettes. I suspect that between 65 to 80% of the price of cigarettes are state and federal taxes plus the more incidious tobacco settlement money. If a pack a day smoker is contributing up to $5 per day to state and federal revenue this is an extra tax burden of $1800 per year AFTER all income and FICA taxes are paid. For a low income person making $25K per year this can increase their marginal tax rate by 10%. All this is a voluntary contribution to state coffers. To add insult to injury, the rational behind this burden is that the state feels it is bearing the costs to treat the ill health effects of this vice but in reality, reduced life spans and a terminal health care that's less costly than caring for very elderly dimensia patients for the last years of their lives. I guess the nanny state does not mind spending money on folks who have lost theirs.

  7. Dr. T:

    2. Yes, this was shown in numerous studies. Reduced tar and nicotine cigarettes result in longer and deeper inhalations and shorter breaks between puffs. Total smoke inhaled is greater, so the risk of cancer increases.

    4. The big tobacco companies built up their funds for years while the court cases were pending, then they sprung their multi-billion dollar proposal on the states, whose greedy politicians readily accepted. They did the same thing with Obama regarding tobacco regulation.

    If enough smokers could be outraged by this to quit, then big tobacco would be severely punished. But, as we already have seen, most people won't be outraged until jackbooted federal thugs bash in their doors and haul them to re-education camps for being too fat or too sedentary, drinking, being a veteran, or being a libertarian.

  8. Matt:

    Lol on the male enhancement.

  9. rxc:

    I wonder why the anti-smoking campaigners don't make more of the fact that tobacco smoke contains Polonium-210, which is a strong alpha-emitter, and which is certain to increase cancer risk because it is inhaled as a smoke, and goes everywhere in the lungs. I would think that the thought of inhaling radioactive material would scare the bejesus out of most people, given the level of radio-phobia in our society. But maybe they don't do this because it might involve educating people about radiation in general, and the anti-smoking activists are also generally anti-nuclear as well.

    Full disclosure: I don't smoke, have never done so, consider it a terrible habit, and had my father die from a heart attack while enjoying a (forbidden) smoke. However, I think that the attendent risks (see e.g., prohibition and the war-on-drugs) of creating yet another forbidden subtance do not justify banning or otherwise restricting the availability of tobacco to adults.

  10. Highway:

    A further twist on this story is the government's repudiation of 'e-cigarettes' which are nicotine delivery devices without the actual smoke. Carrying none of the health risks of burning tobacco, anti-smoking folks are still dead set against them, and lobby the FDA and the rest of the government hard to keep them off the market.

    It's not about the health risks. It's about behavior that people don't like, possibly even as basic as people enjoying something that others don't, and the ones that don't just can't seem to stand that.

  11. Les:

    The 'reducing nicotine to reduce health risk' bondoogle sounds alot like regulations in my home state on beer. Beer in Oklahoma has strict regulations on maximum alcohol content, barring many high-quality craft beers like belgian lambics and british barley-wines from the market. Also, only 'low-point' beer can be sold outside of licensed liquor stores which have tight restrictions on their operating hours. The intent is to reduce alcohol consumption, particularly among young people.

    The result? Young people consuming beer by the case rather than the six-pack, gorging themselves beyond capacity on cheep 'piss-water beer' until they're forced to throw it all up, then starting the process all over again on empty stomaches.

  12. Barak A. Pearlmutter:

    You say that nicotine is "not the health risk." That's not true. See Heeschen et al (2001, "Nicotine stimulates angiogenesis and promotes tumor growth and atherosclerosis", Nature Medicine 7:833-9 doi:10.1038/89961, http://www.nature.com/nm/journal/v7/n7/full/nm0701_833.html)

  13. rxc:

    “Nicotine stimulates angiogenesis and promotes tumor growth and atherosclerosis”

    So what? Reducing nicotine levels to the point that people have to inhale lots more vegetable combustion products to get their resired "dose" is not a good thing, either. The only way this meme is headed is to do away with nicotine. There are already a lot of nannies who want to abolish tobacco, and they are gradually tightening the screws with that goal in mind.

    Will the authors of your Nature study eventually get around to studying the health effects of weapons wielded by drug dealers selling illegal tobacco products? Or the health effects of the incarceration of tobacco users who are arrested and imprisoned for their soon-to-be-illegal habit?

    We need someone to save us from all the nannies who are trying to save us from all of these perceived threats to our health.

  14. John Moore:

    You have it right. When I used to smoke, I was frustrated at the amount of smoke I had to inhale in order to get the nicotine "fix." Low tar and nicotine cigarettes were just dumb - what they needed was low tar and high nicotine cigs. I was "protected" by the FDA from getting nicotine from other sources like patches and gum (they had to do years of "safety" studies on them) and had to quite "cold turkey."

    While nicotine is hardly harmless, there is no excuse for requiring people to inhale smoke to get it.

    My aunt died a couple of years ago of emphysema. It certainly wasn't caused by the nicotine! She was the model for women's cigarette ads in the '50s, and the tar in those cigarettes killed her.