July 26, 2018 03:59 pm News Staff – Missouri's tourism board doesn't trumpet this fact in its pamphlets, but there's one thing 22.1 percent of residents value about living there, according to anti-tobacco advocate Truth Initiative: No state levies a lower tax on cigarettes. Not coincidentally, only five states boast a higher percentage of smokers.
What's more, that excise tax rate -- just 17 cents a pack -- hasn't gone up in 25 years. And voters in the Show-Me State have proved difficult to sway. A 2016 ballot initiative to push the state's cigarette tax to 40 cents a pack (to fund transportation infrastructure) failed by more than 10 percentage points. A competing measure on the same ballot, raising taxes on cigarettes over four years to add money to the state's Early Childhood Health and Education Trust Fund, was defeated by almost 20 points.
All of which makes Missouri ideal for a unique class of cigarette enthusiasts: smugglers.
Data reported in 2014 by the nonpartisan think tank Mackinac Center for Public Policy indicated that Missouri's rate of bootlegged cigarettes consumed was -13.3 percent. That is, some 13 percent of cigarettes sold in the state end up being consumed in other states, all of which tax tobacco products at a higher rate.
Unfortunately, Missouri's rock-bottom cigarette tax also has made it a haven for another class of smokers: youth. In 2017, according to the CDC, 9.2 percent of high school students smoked at least one day out of the previous 30, versus a national rate of 8.8 percent.
How the FDA addresses the black market for legally manufactured cigarettes, including underage consumption of them, is central to a July 16 letter(21 page PDF) the AAFP and other health organizations sent the agency.
The joint letter was sent in response to an FDA call for comments on a draft paper titled "Illicit Trade in Tobacco Products After Implementation of an FDA Product Standard" and echoes the Academy's own recent letters to the agency, which called for strong regulation of flavored tobacco products, premium cigars and nicotine levels in cigarettes.
Adopting such measures, the AAFP stated, could decrease youth tobacco use and help prevent long-term addiction to tobacco products.
Citing the Academy's comprehensive position paper on preventing and treating nicotine dependence and tobacco use, those three letters -- addressed to FDA Associate Commissioner for Policy Leslie Kux and signed by AAFP Board Chair John Meigs, M.D., of Centreville, Ala. -- stated: "The AAFP believes the FDA should have the authority to regulate the manufacture, sale, labeling, distribution and marketing of all tobacco products, including cigars of all sizes and flavors, as well as electronic nicotine delivery systems."
The impact of such regulatory overhauls could change the nature and scale of the illicit tobacco market and further affect youth smoking rates, said the July 16 joint letter.
"Product standards of the nature under consideration by the FDA would affect both the demand for and the supply of tobacco products in ways that would make the development of illicit markets very different from those observed to date," the letter said. "It would be more difficult to sell tobacco products in illicit markets to evade product standards than it has been to sell tobacco products in illicit transactions to evade taxation."
Still, research cited in the letter points to the likelihood that the tobacco industry will oppose new flavor, nicotine and premium cigar regulations on the grounds that illicit sales would spike as a result.
"For decades, and on a worldwide basis, tobacco companies have consistently overestimated the size and significance of illicit markets in order to discourage governments from implementing tobacco control measures by arguing that the effectiveness of these measures would be diminished by implausibly large increases in illicit sales," the letter said.
In fact, the letter points out that the illicit cigarette market does not ultimately dampen tobacco company profits.
"Most of the cigarettes bearing the tax stamps of low-tax states, such as Virginia, that are bootlegged for sale in high-tax states, such as New York, are manufactured by the major tobacco companies. When these cigarettes are sold in New York at prices that do not reflect the New York tax rate, the major tobacco companies benefit because the sale of their products -- and their profits -- increase as a result. The major tobacco companies have no interest in eliminating these illicit markets."
In fact, the letter added, "The argument that product standards should not be imposed at all because illicit markets might arise ignores the fact that an illicit market has existed for decades -- that is, illegal sales to buyers too young to purchase them legally. Yet no one could credibly argue that the ban on sales to youth should be repealed because it has led to illegal sales.
"In reality, given that virtually all smokers start in their youth, today's tobacco epidemic is in large measure the product of an existing illicit market that makes combusted tobacco products available to consumers too young to buy them legally."
If the FDA follows through with the new product standards for which the Academy and its peers have advocated, "the demand effects on nonsmokers, principally youth, can be expected to be substantial," the July 16 letter said. "Absent finding an addicting level of nicotine in cigarettes, they are very unlikely to find smoking pleasurable and they are unlikely to become smokers. Most important, even if they do experiment with cigarettes they will not inadvertently become addicted to nicotine as a result.
"The most significant consequence of the product standards currently under consideration by FDA is likely to be to a substantial reduction in the most important illicit market in the United States: the illicit sale of combusted tobacco products to customers too young to buy them legally," the letter said.
To encourage this reduction and boost the effectiveness of any new product standards, the letter called on the FDA "to develop enforcement policies to prevent illicit transactions independently and without the participation of tobacco companies."
The letter went on to note that the World Health Organization's Framework Convention on Tobacco Control "identifies measures governments can adopt for reducing illicit trade in tobacco products." Additionally, the letter said that the FDA "should develop policies for policing compliance at every level of manufacture, distribution and sale" of tobacco products, and implement a track-and-trace system for such products (as outlined in the Family Smoking Prevention and Tobacco Control Act).
Related AAFP News Coverage
MMWR Report: Fewer Youth Say They Use Tobacco Products
(7/3/2018)