President Biden’s Build Back Better agenda depends a lot on smokers and their compulsive habit.
Smoking generates tax revenue — lots of it. Part of the theory is that high taxes, restrictions on advertising, research on the deleterious health effects of smoking, and the cultural stigma surrounding smoking will wean Americans off tobacco, but too much success on that front also will dry up big tax revenue.
As part of the package of funding measures, the administration had sought to raise federal taxes on cigarettes by 50 percent and on other tobacco products like dipping tobacco by 1,600 percent. Today, the federal tax on cigarettes is $1.01 per pack while the average state tax is $1.81 per pack. That proposal got dropped — but then the Build Back Better plan went after electronic cigarettes and other nicotine products. Sen. Joe Manchin (D-W.Va.) told Fox News’ Bret Baier that a nicotine tax “doesn’t make any sense to me whatsoever” because it just makes poor people poorer. On top of that, the administration’s plan would tax the products where technology stands a chance of reducing harm, like some e-cigarettes. It’s like taxing windmills instead of coal plants.
The nearly 20 percent of Americans who can’t or won’t kick the habit are paying for a lot of what government does for us — but what can we do for them? Can science deliver harm-reducing cigarette-like platforms that help these Americans who won’t or can’t stop smoking? According to the Food and Drug Administration (FDA), there is at least one such option in the U.S. market now, but a controversial ruling by the International Trade Commission (ITC) in a patent case may remove this product from the U.S. market.
One of the interesting trends in the tobacco industry has been the move to various forms of e-cigarettes, like vaporizers and other electronic tobacco heating products, as well as tobacco-free nicotine patches. Juul’s vaping products attracted the ire of regulators when it marketed fruity flavors that clearly were attracting youthful users, and some of those users allegedly mixed oil into the tobacco products being breathed into their lungs in aerosol form. But there are other new, patented technology products that give smokers options that “reduce health risks” to themselves.
The FDA decided last year to allow the IQOS tobacco heating system made by Philip Morris International (PMI) to use language indicating that its product reduced risks to a person through its use. The specific language is: “Scientific studies have shown that switching completely from conventional cigarettes to the IQOS system significantly reduces your body’s exposure to harmful or potentially harmful chemicals.” (Full disclosure: The Hill accepts advertising revenue from Philip Morris.)
What interests me personally in this issue is that my parents were chain-smokers most of their lives. My mother stopped after she contracted breast cancer; my father died at age 39, and smoking was deemed to be a contributing factor. My grandmother smoked and died of emphysema; my grandfather smoked several packs a day. My brother smoked. Most of my friends from high school became smokers.
Years ago, I moderated forums about lung cancer in Las Vegas and Louisville, Ky., two of the places in the nation with the highest incidence of lung cancer deaths. I have always felt that smoking was killing those I loved, but I knew they couldn’t quit — and while society asked me to look down on and to demean people for their smoking habits, I have always felt empathy toward smokers and have tried to understand their needs and the challenge of breaking their habit.
At the 2018 Las Vegas “Cancer and the Community” sponsored by The Atlantic, where I worked at that time, I asked some of the professional health experts in attendance what would be the likely health impacts of waving a magic wand to transition all smokers to heated tobacco electronic products. The answer was that, while many studies would have to be done around e-cigarette habits and health outcomes, it was clear that not ingesting all of the chemicals in burned tobacco would be better in terms of risk than just heating parts of tobacco and breathing that.
Since then, research in Japan has shown that as smokers moved from burned products to the IQOS heating device, health outcomes improved — and, now, that product has nearly 20 percent of the total tobacco industry market share in Japan. Similarly, the FDA determined that heating product reduces risk. At this point, it’s the only inhalable product with such a designation from the FDA in the U.S. market.
Yet, an odd decision by the International Trade Commission in a patent-infringement case between two giant tobacco products firms, British American Tobacco (BAT) and PMI, could result in the only risk-reducing tobacco platform product being blocked in the U.S. market. The Wall Street Journal’s Carol Ryan recounts how technology has become a key feature of the future of the tobacco industry — with PMI receiving 1,300 patents since 2020, up from just 170 in 2016. BAT has fewer but has been challenging PMI on patent infringement and, according to Ryan, “has recently lost disputes against its rival in Poland, the Czech Republic, Romania, Bulgaria, Greece and the U.K.”
The patent-infringement dispute actually is in process at the U.S. Patent and Trademark Office, but the ITC ruling came before Patent Office could issue its finding. Since the ITC, a trade oversight body, ruled on this, the U.S. Trade Representative’s office has to write a review of the ITC decision and hand its recommendation to President Biden in the next few weeks. The ITC decision is to ban the IQOS product from the U.S. market. The FDA was not a party to this decision — and neither was America’s chief patent regulatory platform.
What stands out in this case is not whether one big tobacco company should get an edge over another but, instead, where the public’s interest stands. In 2016, then-Vice President Biden told me that the Democratic Party had a problem, that “it had become a party of snobs.” A lot of Americans will continue to smoke no matter how high the tax goes, and that is what the U.S. Treasury is counting on. Is President Biden really going to remove from the U.S. market the only option that could decrease the health risks for tens of thousands of Americans who can’t or won’t stop smoking?
I hope that big tobacco firms continue to invest in science and key research that reduces the life-threatening impacts of burned tobacco — but gut-punching one of the first products that moves that way, and that was FDA-approved, seems like yet another slap in the face of those who can’t or won’t quit their smoking habit.
Source: The Hill