Clive Bates

Director of Counterfactual

& Public Health Commentator

Counterfactual

The Unholy Trinity

www.clivebates.com @clive_bates

Value proposition: a smokers’ cost-benefit analysis

1. Keep smoking Benefit: nicotine effects, ritual, brand-related

Cost: illness, money, stigma, addiction

2. Quit smoking Benefit: avoid smoking harm

Cost: withdrawal, craving, sustained willpower, lost smoking benefits

3. Switch to e-cigs

Benefit: most smoking benefits*, no/minor smoking harms, personalisation, buzz, cash saving

Cost… addiction?

* Full benefits – subject to continued innovation

“Quit or die”

War against the poor

0

5

10

15

20

25

30

35

40

Largeemployers &

highmanagerial

Higherprofessional

Lowermanagerial &professional

Intermediate Smallemployers &own account

Lowersupervisory &

technical

Semi-routine Routine

Pe

rce

nta

ge s

mo

kiin

g ag

e 1

6+

(GB

)

Smoking prevalence 2012 by socio-economic classification (UK ONS)

Unintended consequences

Advertising ban or restrictions

Favours incumbents Reduces appeal – protects cigarettes Harms innovation Limits recruitment

Unintended consequences

Advertising ban or restrictions

Favours incumbents Reduces appeal – protects cigarettes Harms innovation Limits recruitment

Ban flavours Reduces appeal – protects cigarettes Limits full migration from tobacco Black market, DIY – more risk

Unintended consequences

Advertising ban or restrictions

Favours incumbents Reduces appeal – protects cigarettes Harms innovation Limits recruitment

Ban flavours Reduces appeal – protects cigarettes Limits full migration from tobacco Black market, DIY – more risk

Ban vaping indoors Damages vaping value proposition Exposes vapers to smoking Promotes relapse

Unintended consequences

Advertising ban or restrictions

Favours incumbents Reduces appeal – protects cigarettes Harms innovation Limits recruitment

Ban flavours Reduces appeal – protects cigarettes Limits full migration from tobacco Black market, DIY – more risk

Ban vaping indoors Damages vaping value proposition Exposes vapers to smoking Promotes relapse

Technical compliance regime

Reduce range of products and firms Increase cost Harms innovation

Unintended consequences

Advertising ban or restrictions

Favours incumbents Reduces appeal – protects cigarettes Harms innovation Limits recruitment

Ban flavours Reduces appeal – protects cigarettes Limits full migration from tobacco Black market, DIY – more risk

Ban vaping indoors Damages vaping value proposition Exposes vapers to smoking Promotes relapse

Technical compliance regime

Reduce range of products and firms Increase cost Harms innovation

Strength Warnings Refillables Bottle size Internet Tax

Unsurfaced assumptions: How much does marketing really determine substance use?

15.7

23.4

0

5

10

15

20

25

Cigarettes Marijuana

Percent

Marijuana and cigarettes US high school prevalence 2013

Source: CDC MMWR Youth Risk Behavior Surveillance — United States, 2013 Current use: used at least once in last 30 days Approximately age 14-18 – grade 9-12

Diminishing and negative returns to regulation

Net health

Net harm

Val

ue

to

so

cie

ty

Regulatory costs, burdens and restrictions

Builds confidence

Destroys viable firms and products

Compromises design & consumer appeal

Sweet Spot

Bureaucratic regulators

Predatory companies

Public health’s “useful idiots”

The Unholy Trinity

Diminishing and negative returns to regulation

Net health

Net harm

Val

ue

to

so

cie

ty

Regulatory costs, burdens and restrictions

Builds confidence

Destroys viable firms and products

Compromises design & consumer appeal

Sweet Spot

Unholy Trinity at work Implicit collusion

between naïve NGOs, risk-averse regulators and predatory majors

Morgan Stanley

Ultimately, the proposed regulations will likely limit product variety and competition among e-cigarettes. The greater barriers to entry (slower approval process, higher costs, higher product standards), will ultimately take a toll on the number of available products and rationalize the category.

This could result in the larger tobacco companies, which have greater financial resources and legal experience, dominating the category in the future, given the burden it would place on smaller manufacturers.

Good regulation

• Liquids

• Devices

• Testing

• Packaging

• Labelling

• Marketing

• Quality control

Changing perceptions – for the worse

Birth defects

Lipid pneumonia

Third hand nicotine exposure

Ultrafine particles

Blindness

Anti-freeze

Poisoning

WE JUST DON’T

KNOW!!!

Winning hearts and minds?

85%

65%

0%

20%

40%

60%

80%

100%

2010 2013

Believe e-cigs safer than cigarettes?

US adult smokers

Tan ASL, Bigman CA. E-cigarette awareness and perceived harmfulness: prevalence and associations with smoking-cessation outcomes. Am J Prev Med 2014; 47: 141–9.

Perceived e-cig risk in young British smokers

Trends in electronic cigarette use in young people in Great Britain over 2013-2014 Arnott, Britton, Cheeseman, Dockrell, Eastwood, Jarvis, & McNeill ASH, CR-UK, PHE 2014

Conclusion

• Regulation can work against health

• Regulations can support for the cigarette business model

• Competition and light regulation will keep Big Tobacco honest (and keep Big Pharma out?)

• Elements of the public health community are doing far more harm than good

www.clivebates.com @clive_bates

Thank you… questions…