Counterfactual

What would good regulation look like?Global Forum on Nicotine

Warsaw 18 June 2016

www.clivebates.com@clive_bates

1. Policy intent2. Unintended consequences3. Regulating vape tech

Be clear on policy objective

? Reduce disease

? Reduce smoking

? Reduce tobacco use

? Reduce nicotine use

? Reduce uptake by teenagers

? Reduce exposure to bystanders

? Defeat the tobacco industry

Policy objective

Reduce disease

✘ Reduce smoking

✘ Reduce tobacco use

✘ Reduce nicotine use

✘ Reduce uptake by teenagers

✘ Reduce exposure to bystanders

✘ Defeat the tobacco industry

Exploring the underlying ethics

The only purpose for which power

can be rightfully exercised over any

member of a civilized community,

against his will, is to prevent harm

to others.

His own good, either physical or

moral, is not sufficient warrant.

John Stuart Mill On Liberty, 1859

Discuss

Maximise informed choice?

1. Policy intent2. Unintended consequences3. Regulating vape tech

Relative risk is the key concept

“….the available data suggest that they are

unlikely to exceed 5% of those associated

with smoked tobacco products, and may well

be substantially lower than this figure.”

Regulatory double negative

Tough on harm reduction

Tough on e-cigarettes

Easy on harm

Most important paragraph in RCP report

“A risk-averse, precautionary approach to e-

cigarette regulation can be proposed […]

However, if this approach also makes e-

cigarettes less easily accessible, less palatable

or acceptable, more expensive, less consumer

friendly or pharmacologically less effective, or

inhibits innovation and development of new

and improved products, then it causes harm

by perpetuating smoking. (12.10)

Abstract

…Regression analyses consider how state bans on e-cigarette sales to

minors influence smoking rates among 12 to 17 year olds. Such bans

yield a statistically significant 0.9 percentage point increase in recent

smoking in this age group, relative to states without such bans.

UK Department of Health - a confession

Source: Department of Health, MHRA, Tobacco Products Directive, Impact Assessment,18 April 2016. [link]

117. [...] There may also be potential negative health implications if the restrictions on advertising reduce the number of consumers switching from tobacco products to e-cigarettes. [...]

207. There is a risk that due to the potential price increase and reduction of choice of e-cigarettes, people will choose to switch back to smoking, thus harming their health.

208. There is a risk that a black market will develop with potentially harmful e-cigarette products, due to consumers no longer having the same degree of choice in the legal market.

The case of flavours

Role of flavours in quitting

About three-quarters relied fully or partially on flavours

Choice of flavours by adults

Less than a quarter currently mostly use tobacco flavours

Did anyone ask the kids?

Shiffman S, Sembower MA, Pillitteri JL, Gerlach KK, Gitchell JG. The impact of flavor descriptors on nonsmoking teens’ and adult smokers' interest in electronic cigarettes. Nicotine Tob Res 2015

Participants indicated their interest (0-10 scale) in e-cigarettes paired with various flavor descriptors

Innovation

Diminishing and negative returns to regulation

Net benefit

Net harm

Valu

e to

soci

ety

Regulatory costs, burdens and restrictions

Builds confidence

Destroys viable firms and products

Compromises design & consumer appeal

Sweet Spot

Policy impact assessment

Regulatory conceptPossible unintended

consequence?Ban e-cigarette use in public places ?Ban advertising, promotion and sponsorship ?Product design restrictions and requirements ?Ban flavours ?Ban flavours that appeal to kids ?Ban open systems because they may be used for drugs ?Impose large scary health warnings ?Ban e-cigarette sales to under-18s ?Prohibit health claims ?Raise taxes on e-cigarettes ?

• Policy intent• Unintended consequences• Regulating vape tech

4 Ps of marketing

Promotion Price

Place Product

Marketing

Promotion Price

Place Product

MarketingPrice

"The art of taxation consists in so

plucking the goose as to obtain the

largest amount of feathers with the

least possible amount of hissing”

Jean-Baptiste Colbert

1619-1683

Promotion Price

Place Product

Marketing

European Finance Council (ECOFIN)

Conclusions 9 March 2016

12. [any e-cigarette tax] needs to be practical

and foresighted, and strike the right balance

between the revenue, expenses of tax

administration and public health objectives.

Promotion Price

Place Product

Marketing

Tax level compared to

cigarettes

Basis for equivalence

Tax base

Tax point

Promotion Price

Place Product

Marketing

Promotion Price

Place Product

MarketingStandards for devices

Mechanical risks

Thermal risks

Chemical risks

Information

Standards for liquidsPromotion Price

Place Product

Marketing

Liquid standards

Containers

Information

Testing protocol

Electrical safety - AFNORPromotion Price

Place Product

Marketing

• NF EN 60335-1:2013, Household and similar electrical appliances — Safety — Part 1: General requirements.

• NF EN 61558-1:2006+A1:2009, Safety of power transformers, power supply units and similar — Part 1: General requirements and tests.

• NF EN 62133:2013, Secondary cells and batteries containing alkaline or other non-acid electrolytes — Safety requirements for portable sealed secondary cells, and for batteries made from them, for use in portable applications.

• NF EN 62680-3:2014, Universal serial bus interfaces for data and power — Part 3: USB battery charging specifications, revision 1.2.

Uses existing standards

Intimidating consumersPromotion Price

Place Product

Marketing

This product contains nicotine which is a highly addictive substance. It is not recommended for use

by non-smokers

Informing consumersPromotion Price

Place Product

Marketing

This product is likely to be at least 95% safer

than smoking cigarettes

Promotion Price

Place Product

Marketing

Thousands of micro-decisionsPromotion Price

Place Product

Marketing

1. A bar wants to have a vape night every Thursday

2. A bar wants to dedicate one room where vaping is permitted

3. In a town with three bars, one decides it will cater for vapers, two decide they will not allow vaping

4. A bar manager decides on balance that his vaping customers prefer it and his other clientele are not that bothered – he’d do better allowing it

5. A hotel wants to allow vaping in its rooms and in its bar, but not in its restaurant, spa, and lobby

6. An office workplace decides to allow vaping breaks near the coffee machine to save on wasted smoking break time and encourage smokers to quit by switching

7. A care home wants to allow an indoor vaping area to encourage its smoking elderly residents to switch during the coming winter instead of going out in the cold

8. A vape shop is trying to help people switch from smoking and wants to demo products in the shop…

9. A shelter for homeless people allows it to make its clients welcome

10.A day centre for refugees allows it instead of smoking

Promotion Price

Place Product

Marketing

Exploring the underlying ethics

The only purpose for which power

can be rightfully exercised over any

member of a civilized community,

against his will, is to prevent harm

to others.

His own good, either physical or

moral, is not sufficient warrant.

John Stuart Mill On Liberty, 1859

Promotion Price

Place Product

Marketing

Promotion Price

Place Product

Marketing

Ensure your ads are socially responsible

Don’t target or feature children, or include content which is likely to appeal particularly to children

Don’t confuse e-cigarettes with tobacco products

Don’t make health or safety claims

Don’t make smoking cessation claims

Ensure you don’t mislead about product ingredients

Don’t mislead about where products may be used

Promotion Price

Place Product

Marketing

Unjustified EU advertising banPromotion Price

Place Product

Marketing

What would good e-cigarette regulation look like

• “Do nothing” is superior to every regulatory scheme so far

• Regulation is there to benefit consumers not to please activists

• Regulators should be haunted by unintended consequences

• Regulation should focus on disease risk not ideological objectives

• Regulation should promote informed choice and innovation

• Proportionate and justifiable standards can help shape the market

• Regulators should mostly get out of the way – the market is working

www.clivebates.com@clive_bates

Thank you… questions…