Snuffing out competition

Gregory Conley writes:

When the success of America’s largest companies is threatened, they often turn to the government for a helping hand. They have been doing that for at least the past century. In recent years Congress gave more than $1 trillion in bailouts to banks, car companies, and credit lenders in the midst of great financial turmoil. But that kind of generosity isn’t the only way Uncle Sam has helped many of America’s biggest companies maintain market share. Using the growing bureaucracy’s powerful regulations, many corporations have worked hand in hand with government to snuff out competition.

A recent example of this offensive is Big Tobacco’s actions against the thousands of small startups that are helping people quit smoking. Cigarette companies are spending millions of dollars to push product bans, higher taxes, and expensive regulations on their competitors.

The cigarettes sold by Reynolds American Inc. and Altria (formerly Philip Morris) are highly taxed and regulated by the Food and Drug Administration, and over the past several years cigarette consumption has declined more rapidly than forecast by analysts and shareholders. Electronic cigarettes (“e-cigs,” or “vapor products”) have accounted for a significant portion of this reduction. These battery-operated and smokeless devices represent a free-market solution to a grave public-health problem. As alternatives to cigarettes, which kill more than 400,000 people each year, vapor products are far less hazardous.

In this excellent article Conley explains the difference between "cigalikes" developed by big tobacco companies such as Reynolds and Altria, and premium vapor products (PVs).

Reynolds also has urged the FDA to ban all PV and e-liquid products as well as most flavored vapor products. That’s right. A company that made $4.6 billion in profits in 2013, selling products that cause cancer, illness, and disease, asked the FDA to ban the products that are both preferred by consumers and proven to help people quit smoking.

In Big Tobacco’s war on these innovative technology products, it’s not just adult smokers and ex-smokers who will suffer at the hands of misguided regulators and lawmakers. Most of the sales in the $1.5 billion vapor product market are taking place in the more than 5,000 specialty retail outlets (“vape shops”) across the country. These new businesses are occupying what may otherwise be empty storefronts. They are also providing local jobs, paying sales and income taxes, and improving communities by helping reduce the toll from smoking.

Reynolds’s push for more-coercive taxation, burdensome regulations, and even bans on their competitors make sense, as no company wants to see its consumers switch to products it doesn’t sell. Unfortunately, if the FDA and state lawmakers merely accept the agenda being pushed by Reynolds and other large cigarette companies, public health and market freedom will suffer. It’s time lawmakers and bureaucrats realize this and stop trying to protect cigarette companies from consumer choice.

Read more here.

To your health

Peter Hajek writes:

Electronic cigarettes (EC) are a consumer product appealing to smokers looking for a safer way to obtain what they want from their cigarettes. From what we know about EC ingredients, toxicology and the chemical and physical processes involved, they can be expected, outside pregnancy, to be at least 95% less harmful than cigarettes [1]. There is now a sufficient body of evidence available on several aspects and effects of EC for recent reviews to conclude that health care professionals and public health bodies should encourage smokers who cannot stop smoking using available treatments, or do not want to do so, to switch to EC [2],[3].

Yet at the same time, the World Health Organisation (WHO) have labelled EC a threat to public health, issued a strong advice to smokers not to use them [4], and urges policy makers to limit their use by prohibition or strict regulation [5]. This and other negative campaigns are starting to have an alarming effect of persuading smokers that EC are as harmful as cigarettes [6] and discouraging them from making the switch [7],[8].

This commentary argues that EC have a potential to generate substantial public health benefits and that discouraging smokers from using them and regulating EC as severely as cigarettes, or even more severely, is detrimental to public health.

Today’s e-cigarettes appeal to only a fraction of the smoking population, but if they are allowed to carry on competing with cigarettes as a consumer product and innovate and evolve, there is a good chance that they will continue to improve in offering smokers what they want, cigarette sales will continue to fall, and over the next 10 years, in countries where EC are available and competitively priced, the use of combustible tobacco will virtually disappear. The public health benefit would be huge, even if recreational use of nicotine carries on. If, on the other hand, misleading public health messages discourage smokers from switching and drastic regulations stop EC evolution and make them uncompetitive, the opportunity for a dramatic reduction in smoking related disease and death will be postponed by many years or even missed altogether. Future commentators are likely to consider attempts to remove safer alternatives to cigarettes from the market unethical, however virtuous the missionaries of the nicotine eradication gospel may feel. In the meantime, clinicians facing smokers who cannot or do not want to stop smoking and who follow evidence and common sense rather than ideologically and commercially driven agendas should recommend that their patients try several types of e-cigarettes to see if they can find one meeting their needs.

Read more here.