Tobacco Documents Online

THE TOBACCO INSTITUTE 18751 STREET. NORTHWEST SAMUEL D. CHILCOTE, JR. WASHINGTON, DC 20006 President 2021457-4800 0 800/424-9876 MAY 101993 May 7, 1993 l[M[ORA~iDm[ TO: The Members of the Executive Committee FROM: Samuel D. Chilcote, Jr. David Pryor (D-AK), chairman of the Senate Special Committee on Aging yesterday released at a hearing on "Preventive Health: An Ounce of Prevention Saves a Pound of Cure," a new report from the Congressional Office of Technology Assessment (OTA) estimating the 1990 direct and indirect "costs" of smoking at $68 billion, or $2.59 per pack of cigarettes sold in the U.S. Senators Pryor and Harry Reid (D-NV) were present for the entire hearing; Senators William Cohen (R-ME), Larry Craig (R-ID) and Russ Feingold (D-WI) made brief appearances. The hearing was preceded by a private breakfast with Committee members and Hillary Rodham Clinton. Pryor released the OTA report during his opening remarks which, in addition to smoking, touched on immunizations for older Americans, diet and alcohol abuse; he stressed use of alcohol in moderation. Of the $68 billion in direct and indirect "costs" of smoking tallied in the OTA report, $20.8 billion are defined as direct "costs" -- $8.9 billion of that borne by federal, state and local governments. The OTA estimates the federal government share of that $8.9 billion as $6.3 billion, or 24 cents per pack. Indirect morbidity "costs," defined as lost productivity for persons disabled by smoking-attributable disease, total $7 billion. And indirect mortality "costs," which OTA describes as "estimates of forfeited earnings of those dying premature deaths from smoking-attributable diseases," is put at $40 billion. The report cautions that it makes no effort to estimate the "hypothetical effects" of a decrease in smoking prevalence and increase in life expectancy on total medical spending, Medicare program outlays and budgets of Social Security and other government programs. Concluding that reductions in smoking will

Memorandum to the Members of the Executive Committee May 7, 1993 Page Two lead to "marked improvements in health and gains in years of life," the report points to education and cessation programs, higher taxes, enforcement of minor-access laws, public smoking restrictions and restrictions on advertising and promotion as policies to pursue to discourage smoking. Institute staff and consulting economists are reviewing the new OTA document and will develop critiques for use in future testimony and media outreach activity. In other testimony at the hearing, Sen. Cohen in his opening statement noted that "the best health care system in the world will not protect a smoker from the ravages of lung cancer or emphysema." And Sen. Reid's opening statement said that one in four Americans die of causes related to diet, tobacco or alcohol. Of the first panel of witnesses -- Dr. Robert N. Butler of Mt. Sinai Hospital in New York and Dr. Pearl S. German of Johns Hopkins University -- only Butler referenced smoking in his discussion of an action agenda for geriatric preventive health. Although he did not specifically endorse a higher tobacco excise tax, he pointed to the Canadian experience and said that "taxing tobacco does change behavior." From the second panel of witnesses, Mary Edith Rogers of the American Association of Retired Persons (AARP) spoke generally on AARP's position on health care reform. Michael Jacobson of the Center for Science in the Public Interest testified on nutrition and alcohol, calling for an increase in excise taxes on alcohol. And Dr. Dileep C. Bal, California Department of Health, representing the Coalition on Smoking OR Health, endorsed a cigarette tax increase of $2 per pack. A witness list and copies of all testimony are enclosed. SDC: sms Enclosures cc: The Members of the Management Committee TI Senior Staff