3. Value proposition: a smokers’ cost-benefit analysis
1. Keep smoking
Benefit: nicotine effects, ritual, brand-related
Cost: illness, money, stigma, addiction
2. Quit smoking
Benefit: avoid smoking harm
Cost: withdrawal, craving, sustained willpower, lost smoking benefits
3. Switch to e-cigs
Benefit: most smoking benefits*, no/minor smoking harms, personalisation, buzz, cash saving
Cost… addiction?
* Full benefits – subject to continued innovation
“Quit or die”
4. War against the poor
0
5
10
15
20
25
30
35
40
Large
employers &
high
managerial
Higher
professional
Lower
managerial &
professional
Intermediate
Small
employers &
own account
Lower
supervisory &
technical
Semi-routine
Routine
Percentage smokiing age 16+ (GB)
Smoking prevalence 2012 by socio-economic classification (UK ONS)
5. Unintended consequences
Advertising ban or restrictions
Favours incumbents
Reduces appeal – protects cigarettes
Harms innovation
Limits recruitment
6. Unintended consequences
Advertising ban or restrictions
Favours incumbents
Reduces appeal – protects cigarettes
Harms innovation
Limits recruitment
Ban flavours
Reduces appeal – protects cigarettes
Limits full migration from tobacco
Black market, DIY – more risk
7. Unintended consequences
Advertising ban or restrictions
Favours incumbents
Reduces appeal – protects cigarettes
Harms innovation
Limits recruitment
Ban flavours
Reduces appeal – protects cigarettes
Limits full migration from tobacco
Black market, DIY – more risk
Ban vaping indoors
Damages vaping value proposition
Exposes vapers to smoking
Promotes relapse
8. Unintended consequences
Advertising ban or restrictions
Favours incumbents
Reduces appeal – protects cigarettes
Harms innovation
Limits recruitment
Ban flavours
Reduces appeal – protects cigarettes
Limits full migration from tobacco
Black market, DIY – more risk
Ban vaping indoors
Damages vaping value proposition
Exposes vapers to smoking
Promotes relapse
Technical compliance regime
Reduce range of products and firms
Increase cost
Harms innovation
9. Unintended consequences
Advertising ban or restrictions
Favours incumbents
Reduces appeal – protects cigarettes
Harms innovation
Limits recruitment
Ban flavours
Reduces appeal – protects cigarettes
Limits full migration from tobacco
Black market, DIY – more risk
Ban vaping indoors
Damages vaping value proposition
Exposes vapers to smoking
Promotes relapse
Technical compliance regime
Reduce range of products and firms
Increase cost
Harms innovation
Strength
Warnings
Refillables
Bottle size
Internet
Tax
10. Unsurfaced assumptions: How much does marketing really determine substance use?
15.7
23.4
0
5
10
15
20
25
Cigarettes
Marijuana
Percent
Marijuana and cigarettes
US high school prevalence 2013
Source: CDC MMWR Youth Risk Behavior Surveillance — United States, 2013
Current use: used at least once in last 30 days
Approximately age 14-18 – grade 9-12
11. Diminishing and negative returns to regulation
Net
health
Net
harm
Value to society
Regulatory costs, burdens and restrictions
Builds confidence
Destroys viable firms and products
Compromises design & consumer appeal
Sweet Spot
13. Diminishing and negative returns to regulation
Net
health
Net
harm
Value to society
Regulatory costs, burdens and restrictions
Builds confidence
Destroys viable firms and products
Compromises design & consumer appeal
Sweet Spot
Unholy Trinity at work
Implicit collusion between naïve NGOs, risk-averse regulators and predatory majors
14. Morgan Stanley
Ultimately, the proposed regulations will likely
limit product variety and competition among
e-cigarettes. The greater barriers to entry
(slower approval process, higher costs, higher
product standards), will ultimately take a toll on
the number of available products and rationalize
the category.
This could result in the larger tobacco
companies, which have greater financial
resources and legal experience, dominating the category in the future, given the burden it would place on smaller manufacturers.
16. Changing perceptions – for the worse
Birth defects
Lipid pneumonia
Third hand nicotine exposure
Ultrafine particles
Blindness
Anti-freeze
Poisoning
18. Winning hearts and minds?
85%
65%
0%
20%
40%
60%
80%
100%
2010
2013
Believe e-cigs safer than cigarettes?
US adult smokers
Tan ASL, Bigman CA. E-cigarette awareness and perceived harmfulness: prevalence and associations with smoking- cessation outcomes. Am J Prev Med 2014; 47: 141–9.
Perceived e-cig risk in young British smokers
Trends in electronic cigarette use in young people in Great Britain over 2013-2014 Arnott, Britton, Cheeseman, Dockrell, Eastwood, Jarvis, & McNeill ASH, CR-UK, PHE 2014
19. Conclusion
•Regulation can work against health
•Regulations can support for the cigarette business model
•Competition and light regulation will keep Big Tobacco honest (and keep Big Pharma out?)
•Elements of the public health community are doing far more harm than good