Tobacco Control Policies:The National Picture

and where Virginia stands

• Tobacco Taxes

• Smoke-free Laws

• Comprehensive Prevention & Cessation

Programs

• Limits on Industry Behavior (e.g., FDA)

TO BRING ABOUT

• Social & Environmental Change

Evidence-Based Tobacco Control

THE TRIFECTA

Smoke-Free

Tax

Program Funding

Tobacco Taxes

TOBACCO EXCISE TAXES

• A win for public health

• A win for state budgets

• A win among voters

Total Cigarette Prices and Cigarette Sales

18000

20000

22000

24000

26000

28000

30000

1970 1973 1976 1979 1982 1985 1988 1991 1994 1997 2000 2003 2006

Year

Sal

es (

mill

ion

pac

ks)

$1.25

$1.75

$2.25

$2.75

$3.25

$3.75

$4.25

Pri

ce (

Jan

. 200

7 d

olla

rs)

Sales Price

Cigarette Pack Price Trend vs. Youth Smoking Prevalence, 1991-2007

Sources: Tax Burden on Tobacco, 2007; Youth Behavioral Risk Surveillance System, 2007; U.S. Bureau of Labor Statistics.

20.0%23.0%21.9%

28.5%

34.8%36.4%

34.8%

30.5%

27.5%

$3.93$3.97$4.19

$3.65

$2.71

$2.39$2.39$2.64

$2.33

0%

5%

10%

15%

20%

25%

30%

35%

40%

1991 1993 1995 1997 1999 2001 2003 2005 2007

$0.00

$0.50

$1.00

$1.50

$2.00

$2.50

$3.00

$3.50

$4.00

$4.50

Youth Smoking Prevalence Cigarette Pack Price (in 2007 dollars)

Calls to Wisconsin Tobacco Quit Line Break All RecordsDate Posted:  February 28, 2008

As February winds down, the Wisconsin Tobacco Quit Line today announced that in the first two months of 2008 it has fielded a record-breaking 20,000 calls from Wisconsinites looking for help to quit. To put this in context, during a typical year, the quit line provides services to about 9,000 state residents.

“This unprecedented success in assisting Wisconsin smokers through 1-800-QUIT-NOW breaks all previous state records,” said Dr. Michael Fiore, director of the University of Wisconsin Center for Tobacco Research and Intervention, which manages the quit line. “National peers who provide quit services in other states report they have never before seen such a successful state effort to help smokers quit.”

Three factors led to this increase in quit attempts by Wisconsin smokers:

• A $1 increase in the state’s tobacco excise tax • New Year’s resolutions • Free coaching and medication provided through the Wisconsin

As February winds down, the Wisconsin Tobacco Quit Line today announced that in the first two months of 2008 it has fielded a record-breaking 20,000 calls from Wisconsinites looking for help to quit. To put this in context, during a typical year, the quit line provides services to about 9,000 state residents.

Impact of Federal Tobacco Tax Increase

Statistics: Call volume to 17 states (tobacco users registered):Source: Free and Clear, Inc.

Time PeriodPercent Increase in Quit Line Calls

March ’08 compared to March ‘09 148%

Monday, March 31, 2008 compared to Monday, March 30, 2009

124%

Tuesday, April 1, 2008 compared to Tuesday, March 31, 2009

179%

Average calls per day in 2008 compared to the last nine days in March 2009

129%

April 1, 2008 compared to April 1, 2009752 calls compared to 3530

369%

RI:346

CALIFORNIA

NEVADA

80

OREGON

118

WASHINGTON

202.5

ARIZONA

200NEW MEXICO

91

TEXAS

141

OKLAHOMA

103

UTAH

69.5 COLORADO

84KANSAS

79

NEBRASKA

64

IDAHO

57

MONTANA

170NORTH DAKOTA

44

SOUTH DAKOTA

153

MINNESOTA

156

IOWA

136

MISSOURI

17

ARKANSAS

115

36LOUISIANA

MS

68

ALABAMA

42.5GEORGIA

37

FLORIDA

133.9

SOUTH CAROLINA

7

TENNESSEE62

KENTUCKY60

ILLINOIS

98

WISCONSIN

252MICHIGAN

200

IN

99.5

OHIO

125WV55

30VIRGINIA

PENNSYLVANIA

160

NEW YORK275

MAINE200

VTNH: 178

MA

CT:300NJ:270

DELAWARE:160

MARYLAND:200

DC:250

HAWAII

260

ALASKA

200

States that have recently passed or implemented a cigarette tax increase (since 1999)

WYOMING

60

Cigarette Tax Rates, December 2009(cents per pack)

State Average: $1.34 Per Pack

CT

MA:251

87

VT:224

States that have not passed tax increases since 1999

NH

45NORTH CAROLINA

VA ranks 49th

The Virginia Tax ExperienceFrom 2.5¢ to 20¢ on 9/1/04; from 20¢ to 30¢ on 7/1/05

719.6 million

617.6 million

597.2 million

0

100

200

300

400

500

600

700

800

FY 2004 FY 2005 FY 2006

- 15.6%Packs Sold

$16.1 million

$111.6 million

$172.1 million

$0

$50

$100

$150

$200

FY 2004 FY 2005 FY 2006

Revenues Collected

+ 968.9%

Orzechowski & Walker, The Tax Burden on Tobacco, 2009

Benefits of a $1.00 Tax Increase in Virginia

• 66,800 fewer kids become smokers

• 45,100 adult smokers quit

• Saving 30,600 premature deaths from tobacco in Virginia

• $1.5 billion in lifetime health care savings

• $348 million in new revenue for the state

$0.00

$0.50

$1.00

$1.50

$2.00

$2.50

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

Federal Cigarette Tax State Cigarette Tax federal rate ($1.01) + current

state average ($1.34): $2.35

per pack

November 2009

1996 federal rate (24¢) + state average

(33¢): 57¢ per pack

Federal Cigarette Excise Tax + Average State Cigarette Tax

Despite more states taxing all tobacco products…

There is still a big discrepancy between tax rates for OTPs and cigarettes

Smoke-Free

Effects of Smoke-free Laws

• Protect everyone from secondhand smoke

• Prompt more smokers to try to quit

• Increase the number of successful quit attempts

• Reduce the number of cigarettes that smokers consume

• Discourage kids from starting

• Do NOT hurt business

March 2010

State Smoke-free Laws Including Restaurants & Bars

Smoke-Free Restaurant and Bar Laws

Local Smoke-free Laws Including Restaurants & Bars

•MI law effective 5/1/10, WI law effective 7/5/10, KS law effective 7/1/10.

VA’s smoke-free law does not cover

____.

0%

10%

20%

30%

40%

50%

60%

70%

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

Percent of Population Covered BySmoke-Free Laws (Including Bars)

2010: 62%28 states and hundreds of

communities are smoke-free

Includes state and local laws passed by March 15, 2010

1/1/1998: 12%CA becomes 1st

smoke-free state

11/27/2002: 13%DE becomes 2nd

smoke-free state

1996: < 1%Smoke-free laws in 13

communities nationwide

State-wide Smoke-Free Laws• Number of state laws including restaurants and bars: 28 (62% of the population covered)

– California, Delaware, New York, Maine, Connecticut, Massachusetts, Michigan, Rhode Island, Vermont, Washington, New Jersey, Colorado, Hawaii, Ohio, Arizona, New Mexico, New Hampshire, Minnesota, Illinois, Maryland, Iowa, Utah, Oregon, Nebraska, Montana, North Carolina, Wisconsin, Kansas

• Number of state laws including restaurants but not bars: 4 (9% of the population covered) – Florida– Idaho– Louisiana– Nevada

• Number of restaurant laws with significant exemptions: 8 (14% of the population covered) – Arkansas - Smoking prohibited in restaurants, except those that prohibit entry to persons under 21. – Georgia – Smoking prohibited in restaurants, except for those that deny access to minors. – North Dakota – Restaurants may permit smoking in separately enclosed bar areas. – Oklahoma – Restaurants must either be non-smoking or have separately ventilated rooms. – Pennsylvania – Restaurants may permit smoking in separately ventilated attached bars. – South Dakota – State law prohibits smoking in restaurants, except those licensed to sell alcohol. – Tennessee – Smoking is prohibited in restaurants, except those that prohibit entry to persons under 21.– Virginia - Restaurants must either be non-smoking or have separately ventilated rooms.

• Number of states with no law addressing restaurants and bars: 11 (15% of the population NOT covered by statewide law)

– Alabama, Alaska, Indiana, Kansas, Kentucky, Mississippi, Missouri, South Carolina, Texas, West Virginia, Wyoming

Funding for Tobacco Prevention

.

Evidence Base

If every state funded TP at CDC minimum, states would prevent nearly two million kids alive today from becoming smokers, save more than 600,000 of them from premature, smoking-caused deaths, and save $23.4 B in smoking-related HC costs.

If every state funded TP at CDC minimum, states would prevent nearly two million kids alive today from becoming smokers, save more than 600,000 of them from premature, smoking-caused deaths, and save $23.4 B in smoking-related HC costs.

States with best funded and most sustained tobacco prevention programs during the 1990s – AZ, CA, MA and OR, reduced cigarette sales more than twice as much as the country as a whole

Best Practices 2007

• State and Community Interventions

• Media Interventions• Cessation Interventions • Surveillance/Evaluation• Administration/Management

December 2009

CALIFORNIA

NEVADA

OREGON

WASHINGTON

ARIZONANEW MEXICO

TEXAS

OKLAHOMA

UTAHCOLORADO

KANSAS

NEBRASKA

IDAHO

MONTANA NORTH DAKOTA

SOUTH DAKOTA

MINNESOTA

IOWA

MISSOURI

ARKANSAS

LOUISIANA

MS ALABAMAGEORGIA

FLORIDA

SOUTH CAROLINA

NORTH CAROLINATENNESSEE

KENTUCKY

ILLINOIS

WISCONSIN

MICHIGAN

INOHIO

WVVIRGINIA

PENNSYLVANIA

NEW YORK

MAINE

VT

MA

RHODE ISLAND

NEW JERSEY

DELAWARE

MARYLANDWASHINGTON, DC

WYOMING CT

NH

ALASKA

HAWAII

FY2010 Funding for State Tobacco Prevention Programs

States that are spending 50% or more of CDC recommendation on tobacco prevention programs.

States that are spending 25% - 49% of CDC recommendation on tobacco prevention programs.

States that are spending 10% - 24% of CDC recommendation on tobacco prevention programs.

States that are spending less than 10% of CDC recommendation on tobacco prevention programs.

ND is only state to meet CDC Recommendation

VA ranks 32nd

History of Tobacco Prevention Fundingin Virginia (State Dollars)

(in millions)

$13.1 $12.6

$19.2

$22.2

$17.4

$13.0 $12.8 $13.5$14.5

$12.7 $12.3

$0

$5

$10

$15

$20

$25

FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10

Virginia: Tobacco Money for Tobacco Prevention, FY 2010

$0

$50

$100

$150

$200

$250

$300

$350

Total State TobaccoRevenues

CDC RecommendedAnnual Investment

Actual State TobaccoPrevention Spending

$103.2 Million

$13.4 Million

$307 Million

$173 Million Estimated Tobacco

Tax Revenues

$134 MillionEstimated Tobacco

Settlement Revenues

Virginia’s Tobacco Control Spending vs. Tobacco-Related Healthcare Cost

$0

$500

$1,000

$1,500

$2,000

Tobacco Control Spending Tobacco-Related Healthcare Costs

$13.4 Million

$2.08 Billion

Virginia’s Tobacco Control Spending vs. Tobacco Industry’s Marketing Spending

$0

$150

$300

$450

Tobacco Control Spending Tobacco Industry Marketing Spending

$13.4 Million

$411.3 Million

U.S. Cigarette Advertising and Promotional Expenditures 1996 - 2006

(thousands of dollars)

$0

$2,000,000

$4,000,000

$6,000,000

$8,000,000

$10,000,000

$12,000,000

$14,000,000

$16,000,000

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

All Others

Retail Value Added

Coupons

Internet

Telephone

Direct Mail

Sponsorships

Public Entertainment

Specialty Item Dist.

Sampling Dist.

Promotional Allowance

Point of Sale

Transit

Outdoor

Magazines

Newspapers

Source: Federal Trade Commission Cigarette Report for 2006

$11.22Billion

$9.59Billion

$8.24Billion

$6.73Billion

$12.47Billion

$9.8b

price discount

$15.15Billion$14.15

Billion

$10.9b price

discount

$13.11Billion

$10.8b price

discount

$7.9b

price discount

$9.2b

price discount

$12.49Billion

$5.66Billion$5.10

Billion

*

* Before 1997, Coupons and Retail Value Added were combined into one category.

If VA decreased its FY 2010 tobacco prevention funding by 15%...

• Youth smoking rates would increase by 0.4%• 1,720 more kids would become addicted smokers• 550 more kids would die prematurely from

smoking• Future healthcare costs in VA would increase by

$30.1 million– State Medicaid program spending would

increase by $3.6 million Increasing VA’s cigarette tax rate by just a nickel

would generate more than enough revenue to offset a 15% decrease in funding.

Federal Activities

• Stimulus Funds

• Health Care Reform

• FDA regulation

Stimulus Bill Provides Funding Opportunity for Tobacco Control

$0

$50

$100

$150

$200

$250

$300

$350

$400

CommunityInitiative

State Non-competitive

State Competitive State Quitlines

Mil

lio

ns

$45 Million$30 Million

$373 Million

$44.5 Million

Total of $650 million was made available to HHS for community-based prevention and wellness programs to address chronic disease, including obesity, nutrition, physical activity and tobacco prevention and cessation. Approx. $500 million has been made available to states or otherwise accounted for.

* $5.5 million will support national quitline efforts

Health Care Reform

Health Care Reform: Three Key Elements

• Private Health Insurance – Both Senate and House bills include coverage for tobacco cessation services with no cost-sharing requirements.– Insurance rating

• House bill – insurers not permitted to vary premiums based on tobacco use

• Senate bill – premiums could vary based on tobacco use

• Medicaid– House bill – States required to cover tobacco cessation services in

their Medicaid programs with no cost-sharing requirements– Senate bill – States required to cover tobacco cessation services

for pregnant women with no cost-sharing requirements. States are provided a financial incentive to cover all preventive services recommended by USPSTF and immunizations recommended by ACIP, but are not required to do so.

• Prevention Trust Fund– House bill – Public Health Investment Fund: total of $34 billion for

FY2011 –FY2015 for community health centers, workforce development and prevention; Prevention and Wellness Trust: authorized to receive $15.4 billion from Public Health Investment Fund for prevention and wellness services and research and to build core public health infrastructure for state, local and tribal health departments and CDC. Community Prevention and Wellness Services grants for community-based prevention and wellness services in HHS priority areas.

– Senate bill - Prevention and Public Health Fund: total of $7 billion for FY2010 –FY2015 and $2 billion annually thereafter. Funding used for programs authorized by the Public Health Service Act for prevention, wellness and public health activities. New grant programs that could be used to reduce tobacco use include Community Transformation grants and Healthy Aging, Living Well

Health Care Reform: Three Key Elements

FDA Regulation of Tobacco:

What Does it Mean?

What Happens Now?

79 – 17 Senate Vote (June 11)

307 -- 97 House Vote (June 12)

15 YEARS IN THE MAKING

June 22, 2009

Key Substantive Elements

1. Require the Industry to provide information to the Gov’t that allows Gov’t to better inform consumers

2. Restrict marketing that appeals to kids, misleads adults, deceptively encourages tobacco use and discourages quitting

3. Strengthen restrictions on sales to youth

4. More Accurately Inform consumersA. Improved warning Labels

B. More accurate testing of tar, nicotine and other harmful substances

C. Standards to prohibit unsubstantiated health claims

5. Regulation of the Contents of the Product to protect consumers

6. Protect and Expand State authority

Key Substantive Elements

Limitations on FDA Authority

• FDA can’t ban all cigarettes, all smokeless tobacco products, … or all roll your own tobacco products;

or

• Require the reduction of nicotine yields of a tobacco product to zero.

Immediate:

•States can restrict Time, Place and Manner of tobacco marketing

•No health claims without review

•Review of new products

•Broader advertising restriction authority

Implementation Milestones

44

States may now for the first time, to the extent permitted

under the First Amendment, do such things as…

• Supplement the new FDA requirement that all retail ads for cigarettes and smokeless consist only of black text on white background by applying the same restrictions to cigar and other tobacco product ads;

• Restrict or eliminate “power walls” of cigarettes being offered for sale at retail outlets (which will be the only remaining presentation of cigarette brand logos, labels and colors in retail outlets after the FDA black-text-on-white-background restriction goes into effect);

Continued…

• Limit the number or size of tobacco product ads at retail outlets;

• Require that all tobacco products or tobacco product ads be kept away from cash registers in order to reduce impulse purchases by smokers trying to quit.

3 months:

•No candy-flavored cigarettes

Implementation

47

12 months:

• No “light,” “low,” “mild,” descriptors

• Youth access provisions – contracts with states

• Marketing restrictions – magazines, points of sale, sponsorship, etc

• New warning labels on smokeless

• Scientific Advisory Committee appointed within 15 months

Implementation

48

In the slightly longer term….

• Larger, stronger graphic warning labels on cigarettes

-- Rule issued within two years

-- Implementation – 15 months later

Implementation

49

Cigarette pack now Cigarette pack under FDA Regulation

Front

Back

Front

Back

WARNINGLABEL

WARNINGLABEL

Menthol Study and Report• 1 Year after Scientific Advisory

Committee appointed

Implementation

Dissolvable Tobacco Products Study and Report • 2 Years after Scientific Advisory Committee appointed

51

Magazine Ad for Camel No. 9 Stiletto, Fall 2007

RJR document Identified the Specific RJR document Identified the Specific Characteristics to Be Used in Characteristics to Be Used in

Developing "New Brands Tailored to Developing "New Brands Tailored to

the Youth Market."the Youth Market."

Nicotine level of 1.0- 1.3 mg/cigarette;

Nicotine absorption minimized “by holding pH down”

Tar content of 12-14 mg/cigarette to achieve desired taste and "visible" smoke

* Bland smoke to address “low tolerance for smoke irritation”

of “beginning smoker[s] and inhaler[s]”

* Suggests 100 mm "to facilitate lighting”

* “Reasonably firm" rod

“[It] will not kill them as quick or as much as other brands,”

Bennett LeBow, CEO, Vector,

Manufacturer of new Omni cigarettes. -- USA Today 1/11/02

Challenges to the Law:Court Upheld all Except Two

• The requirement of large graphic health warnings on cigarette packs;

• The prohibition of tobacco companies making health claims about tobacco products without FDA review;

• The ban on brand name sponsorships of events like sports and entertainment

• The ban on tobacco-branded merchandise like caps and t-shirts• the ban on free samples and free gifts with purchase• the authority of the FDA, as well as state and local

governments, to impose additional marketing retrictions on tobacco companies

• Restricting tobacco advertising at point of sale and in magazines with high youth readership to black and white/text only format

• Prohibition on saying products are FDA approved because Court interpreted it to apply to parties independent of the tobacco companies as well as to tobacco companies

Both Sides Likely to Appeal

• We believe all of the marketing restrictions can be upheld

• We believe opinion misinterpreted the ban on statements about FDA approval to suggest even non-industry types were banned from talking about this

• Even if decision on black and white/text only is upheld, the decision seemed narrowly focused on use of corporate and brand logos – not on banning the colors and images used to attract kids, so rule should be able to be revised if necessary

• Because of severability clause, challenges do not stop other provisions of law from going into effect

• Continue with More of What We Know Works

• Tobacco Taxes

• Smoke-free Laws

• Funding for Tobacco Prevention & Cessation

• Coverage for Smoking Cessation Services

• FDA is a Complement – not a Substitute

What is Our Role?

For more information www.tobaccofreekids.org

Amy BarkleyDirector, Tobacco States and Mid-Atlantic

abarkley@tobaccofreekids.org502-777-8148