Attracting Funding for Cancer Prevention Using Economic and Fiscal Tools
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1 Attracting Funding for Cancer Prevention Using Economic and Fiscal Tools Frank J. Chaloupka, University of Illinois at Chicago World Cancer Congress Kuala Lumpur, Malaysia, 3 October 2018
2 "Sugar, rum, and tobacco, are commodities which are no where necessaries of life, which are become objects of almost universal consumption, and which are therefore extremely proper subjects of taxation.
3 Why Tax Unhealthy Products? Efficient Revenue Generation Historically and still the most important rationale To Improve Public Health Given evidence on effects of taxes on consumption and consequences To Cover the Economic Costs Given extensive economic costs from smoking, excessive drinking, poor diets, etc.
4 Million Sticks Price, 2011 Forints/Pack Cigarette Price & Consumption Hungary, , Inflation Adjusted 27, , , , , , , , Consumption, Million Sticks Price, 2011 Forints 0 Sources: EIU, ERC, and World Bank
5 Million Litres Price per Litre, 2016 UAH 475 Distilled Spirits Sales and Prices Ukraine, , Inflation Adjusted Sales Volume, Million Litres Real Price Sources: Chaloupka, et al., forthcoming
6 % Change Soft Drink Consumption Soft Drink Prices & Consumption Percentage Change, , Selected Countries % Change Soft Drink Prices -20 Source: Euromonitor, 2015, and author s calculations
7 Cigarette Price & Youth Smoking Prevalence Chile, Source: Paraje, 2017
8 Excise tax per pack (constant 2012 Rands) Excise revenue (billions, constant 2012 Rands) Taxes & Tax Revenues, South Africa 12 Excise Tax per Pack and Excise Tax Revenue South Africa, Inflation Adjusted, Excise tax Excise revenue Sources: Blecher & Van Walbeek, 2014
9 Cigarette Excise Tax, 1000 Sticks Tax Revenues, Billions Cigarette Taxes and Cigarette Tax Revenues Ukraine: Average excise rate for cigarettes increased 10-fold Cigarette Tax Revenue increased 6-fold Average excise per 1000 cigarettes, UAH Tobacco excise revenue, bln UAH 3.5 Source: Syvak and Krasovsky, 2017
10 Tax per Barrel (1/14 dollars) Revenues (Millions of 1/14 dollars) U.S. Federal Beer Tax and Tax Revenues , Inflation Adjusted $85 $7,900 $75 $6,900 $65 $55 $5,900 $45 $4,900 $35 $25 $3,900 $ Tax per Barrel Tax Revenue $2,900 Source: Brewers Almanac, 2013, ATTTB, 2014, and author s calculations
11 Tobacco Taxes and Revenues The Addis Ababa Action Agenda states: price and tax measures on tobacco can be an effective and important means to reduce tobacco consumption and health-care costs, and represent a revenue stream for financing development in many countries
12 Tobacco Taxes Popular Tobacco Excise Tax Increases: Generally supported by the public Including significant number of smokers More support when framed in terms of impact on youth tobacco use More support when some of new revenues are used to support tobacco control and/or other health-related activities Greater support than for other revenue sources Comparable evidence for alcohol tax increases and new sugary drink taxes
13 100% Support for 20% Price Increase Non-Smokers, % 80% 70% 60% 50% 40% 30% 20% 10% 0% Hungary Croatia France Latvia Bulgaria Poland Czech Rep. Portugal Greece Spain Sweden Austria England Italy Ireland Romania Finland Albania Strongly Support Moderately Source: Gallus, et al., 2012
14 70% Support for 20% Price Increase Current Smokers, % 50% 40% 30% 20% 10% 0% Bulgaria Hungary Czech Rep. Portugal Austria Croatia Latvia Greece France Italy Poland Finland Romania Spain England Sweden Albania Ireland Strongly Support Moderately Support Source: Gallus, et al., 2012
15 California s Comprehensive Tobacco Control Program
16 California s Comprehensive Tobacco Control Program Proposition 99 Tobacco Tax and Health Protection Act easily approved by CA voters in Nov cent increase in cigarette tax (to 35 cents per pack) 20% of revenues earmarked for tobacco-related education efforts Countermarketing, community programs, support for cessation, and more Broad focus Strong industry denormalization approach 5% for tobacco-related research Additional 50 cent per pack tax increase approved in Nov Helped restore program funding Relatively well funded but ups and downs as governor cut program funding in early years, the restored after opposition Eventually declines as tobacco use declines Well below CDC recommended levels in recent years
17 Program Funding CATCP Funding, Inflation Adjusted, FY1990-FY2010 M i l l i o n s $200.0 $150.0 o f F Y 1 0 D o l l a r s $100.0 $50.0 $ Source: ImpacTeen Project,
18 CA Tobacco Control Program $80 CA Program Funding, by Category, FY % M i l l i o n D o l l a r s $70 $60 $50 $40 $30 $20 $10 $0 28% $5.64 Administrative and Management $ % State and Community Interventions $3.67 3% Cessation Interventions $ % Health Communication Interventions 10% $3.91 Surveillance and Evaluation Total 17% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% P e r c e n t o f C D C Funding % of CDC Recommended Level Source: ImpacTeen Project, 2010
19 California s Comprehensive Tobacco Control Program Very effective in reducing tobacco use and its consequences Reductions in CA greater than rest of the US: Cigarette consumption Adult and youth smoking prevalence Health consequences of smoking (lung cancer, cardiovascular disease, others) Health care costs Source: Tobacco Control, 2010
20 California, Per capita cigarette consumption Per Capita Cigarette Consumption (Packs/Year) United States - California California Prop 99 Tax increase Year Source: Glantz, 2011
21 California - Consumption Fit Per Capita Cigarette Consumption (Packs/Year) Actual, given funding Projected without program If fully funded Year Source: Glantz, 2011
22 California Age Adjusted Heart Disease Mortality Age-Adjusted Heart Disease Mortality (deaths/100,000) Prop 99 Tax increase United States - California California Year Source: Glantz, 2011
23 Results Heart Disease Mortality Fit Age-Adjusted Heart Disease Mortality (deaths/100,000 Resident Population) Actual, given funding Projected without program If fully funded Year 1994 Source: Glantz, 2011
24 California s Comprehensive Tobacco Control Program Source: Tobacco Control,
25 California s Comprehensive Tobacco Control Program Source: Lightwood et al., 2008
26 Total Funding $Millions (FY10 dollars) Percent Current Smoking State Tobacco Control Program Funding and Youth Smoking Prevalence, United States, $1, $ $ $ $ $ Year 19 total state program funding high school prevalence Source: ImpacTeen Project, UIC; YRBS
27 Thai Health Promotion Foundation
28 Thai Health Promotion Foundation 2001 Health Promotion Foundation Law Creates Thai Health Promotion Foundation Funded by a 2% surcharge on tobacco products and alcoholic beverages Nearly US$2 billion in total revenues US$120 million in most recent year Funded over 1,000 health promotion activities across 15 categories
29 29
30
31
32 Thai Health Promotion Foundation Funded many effective health promotion programs Supported efforts to strengthen tobacco control policies and reduce tobacco use Contributed to significant strengthening of alcohol control policies and reduced alcohol use Funded variety of road safety efforts that have reduced incidence of traffic crashes and injuries Supported efforts to promote healthier diets and increased physical activity Much more
33 Philippines Sin Tax Reform
34 Philippine s Sin Tax Reform 2012 Sin Tax Law Simplification and significant increases in cigarette taxes Simplification and modest increases in taxes on beer and distilled spirits Most of incremental revenues allocated to universal health care program Investments in infrastructure Expansion of national health insurance program Development programs Health information programs Special fund for low-income households Some of the incremental revenues targeted to tobacco farmers
35 Pesos per Pack 35 Cigarette Excise Tax per Pack Philippines, Low Medium High Premium
36 Million Cigarettes Pesos per Pack (2016 pesos) 105,000 Cigarette Sales and Prices Philippines, , Inflation Adjusted , , , , , , , Cigarette Sales, Millions Price (2016 pesos) Sources: Euromonitor, World Bank, and Authors Calculations
37 Billion Pesos Incremental Revenues for Health and the Poor, Philippines, Department of Health Budget, Billion Pesos Allocation for Health Insurance Premiums for the Poor, Billion Pesos Source: Adapted from Jeremias Paul, 2017
38 Summary
39 Summary Taxes on unhealthy products generate significant revenues And also reduce their consumption and consequences Revenues can be dedicated to a variety of cancer prevention and other health promotion programs
40
41
42 Thank You! Tobacconomics
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