“We know that tobacco is bad for health and bad for economics, but we lacked quantification at the country level” – Dr. Andres Pichon-Riviere, Institute for Clinical Effectiveness and Health Policy (IECS), Buenos Aires.
A key part of Canada’s foreign policy efforts, the International Development Research Centre (IDRC) supports research in developing countries to promote growth and development. Tobacco use remains one of the highest contributors to the burden of disease in low- and middle-income countries. One of the most effective tools to address this problem, tobacco taxation, contributes both to the economic empowerment of governments and promotes downward pressure on the consumption of tobacco products. This is why IDRC has given priority to generating local evidence for fiscal policies on tobacco control in the region, especially in the past five years, to strengthen the leadership of researchers and policy makers in ministries of finance. Research results presented in this issue help to address the evidence gaps and industry opposition that have posed a barrier to tobacco policy adoption in the region.
Country-level data matters
The lack of specific country information has been an important barrier to policy adoption. Questions such as “How many deaths are caused by tobacco use and what are the health care costs?” or “What will be the impact on consumption and revenues?” are important to answer before policy options are considered and prioritized.
Researchers in the region are working with policy makers to show exactly how the relationships between tobacco, taxation, illicit trade, and population health play out in different settings. Since statistics on the prevalence of conditions such as cancer, stroke or heart disease are not systematically collected in most Latin American countries, the innovative work of the LatinCLEN Tobacco Research Group and IECS helped to overcome important obstacles. They developed methods to calculate incidence rates by working backwards from death statistics. This became a starting point for modeling the health impacts of smoking and the subsequent economic costs (11 Pichon-Riviere A, Augustovski F, Bardach A, Colantonio L, Latinclen Tobacco Research Group. Development and validation of a microsimulation economic model to evaluate the disease burden associated with smoking and the cost-effectiveness of tobacco control interventions in Latin America. Value Health. 2011;14(5):S51–9.).
The result of this process is a wealth of information estimating, for instance, the annual, continent-wide incidence of diseases attributable to smoking; the ranking of tobacco use as a contributor to health care costs; and the financial savings and averted death and disease that would result if a country raised the price of tobacco by 50%. This is crucial information to help policy makers set tax rates with health outcomes in mind. Another valuable output of this research was the creation of the model itself, which can be used by other countries to make their own projections.
Household-level data is also critical
National statistics and health economics modelling shed light on important facts about the health status of populations and cost-effectiveness of interventions, and obtaining this information is an important step towards policy implementation. To strengthen the arguments for tobacco control further, there remains a need to address two important knowledge gaps that contribute to inaction on the policy front.
The first gap relates to the economic impact of strong tobacco taxation policies on the poor. As Guindon et al. highlight in a thorough systematic review included in this thematic issue (22 Guindon GE, Paraje GR, Chaloupka FJ. The impact of prices and taxes on the use of tobacco products in Latin America and the Caribbean. Am J Public Health. 2015; 105(3):e9–19.), the majority of the region’s studies on the impact of tobacco tax and prices share the limitation of only using aggregate time series data (as opposed to disaggregated individual or household level data). Given data scarcity in most countries, these types of studies can produce very useful population estimates that can help decision-making around tobacco control policy. Time series data does not, however, allow the observation of the distinct price change effects on smoking onset, participation, consumption, or cessation, nor the examination of price responsiveness by individual characteristics such as gender, age, and socioeconomic status. These dimensions are important to address health equity questions and to alleviate the fears that sustained increases in tobacco taxation will disproportionately affect poorer populations.
The review also concluded that the evidence from the region is too limited in relation to differences in price responsiveness across socioeconomic status, despite evidence from studies elsewhere that show higher responsiveness among lower-income and lower-consuming populations. This raises important unresolved questions on the responsiveness of different income groups to price increases, and the optimal tax policies that may be needed to effectively curb tobacco use and reduce the disproportionate burden of illness borne by the poor.
Understanding stakeholders’ discourses can overcome policy barriers
The second gap relates to the interplay between tax increases and illicit trade. In the absence of independent analyses, countries are often forced to rely on the tobacco industry’s estimates of the size of the illicit trade market. The article from Iglesias included in this issue exposes the policy barriers associated with these knowledge gaps and points to ways of overcoming them (33 Iglesias RM. Increasing excise taxes in the presence of an illegal cigarrette market: the 2011 Brazil tobacco tax reform. Rev Panam Salud Publica. 2016;40(4):243–8.). The lessons from Brazil have useful implications for actors in other countries.
In sum, the knowledge gaps on the economics of tobacco control remain important barriers to policy change in the region, but good progress has been made in recent years to bring the facts to the surface and promote action, including significant tobacco tax increases. While this field of research remains in development across the region, this thematic issue presents a sample of the evidence base and testifies that foundations of research capacity and leadership have been laid, on which future efforts and successes will surely be built.
- 1Pichon-Riviere A, Augustovski F, Bardach A, Colantonio L, Latinclen Tobacco Research Group. Development and validation of a microsimulation economic model to evaluate the disease burden associated with smoking and the cost-effectiveness of tobacco control interventions in Latin America. Value Health. 2011;14(5):S51–9.
- 2Guindon GE, Paraje GR, Chaloupka FJ. The impact of prices and taxes on the use of tobacco products in Latin America and the Caribbean. Am J Public Health. 2015; 105(3):e9–19.
- 3Iglesias RM. Increasing excise taxes in the presence of an illegal cigarrette market: the 2011 Brazil tobacco tax reform. Rev Panam Salud Publica. 2016;40(4):243–8.
- Publication in this collection