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Copyright 1993 American Broadcasting Companies, Inc., All rights reserved. ABC NEWS SHOW: BUSINESS WORLD Januarv 24„1993 LENGTH: 3899 words BODY: STEPH'EN' AUG, ABC News: Welcome to Business World. I'm Stephen Aug, and here's what's on this week's agenda. [voice-over] Congressional Democrats get ready to take on the Federal Reserve only days after Bill Clinton was inaugurated. Do they fear the Fed will do to Clinton what some claim it did to Bush? From Baltimore, this week's Business World guest, Maryland senator Paul Sarbanes. Also, new media, television over your phone line, cable with 500 channels, a new era in home shopping. Once you believe it, will you still want to see it? And cashing in on an unpopular habit- companies are capitalizing now that smoking is out of fashion. ANNOUNCER: From~ ABC News; this is Business World. Now from New York, here's Stephen Aug. AUG: Smoking was once considered a fashionable habit. Not anymore. Two recent studies have pointed out how widespread the effects of second-hand smoke can be, one of them~released just this past week. And it's getting expensive, too. New York State has proposed adding another 21-cent tax to the price of a pack, bringing the tax on butts to 60 cents. And while a generation ago cigarette companies used television ads to entice you to smoke, today's advertising is aimed at helping you kick the habit. [voice-over] In the old days, when smoking was socially acceptable, tobacco companies thrived. Even though smoking is no longer acceptable, cigarette sales still total about $45 billion a year. But now there's a new billion-dollar business aimed at those 48 million Americans who still light up - the business of helping them quit. SAMUEL ISALY, Pharmaceutical Analyst: This is the first time that it is profitable for smoking cessation, because you have companies that, in effect,, are counteradvertising and not in the public interest, in their'profit interest. AUG: [voice-over] The lion's share of those profits are made by the four prescription nicotine patches. Last year, five million smokers paid about $300 for three months"therapy, making these patches the most widely accepted new pharmaceutical ever. Roger Zimmerman, who quit with the Prostep patch eight months ago, is glad he gave it a try. ROGER ZIMMERMAN, former Smoker: The best decision I've made in my life, for my family and for myself. It's great, I'm alive again. It's like being reborn. AUG: [voice-over] It doesn't work for everyone, but it does roughly double the normal 8 percent success rate. And patches work best when used with psychological support. That!s good news for behavior modification groups like

Smokenders. SMOKENDERS GR:OUP LEADER: So you have to be careful of stopping for somebody efse. We want very personal reasons. AUG: [voice-over] Unlike its early days, more than 90 percent of Smokenders' business is now with corporations. - TOMMY THOMPSO , CEO, Smokenders: The attitude in corporations in the last 10 years has become more open, as you can show that the investment made in smoking cessation is recapturable through lower healffpremiums, as you can show the avoidance of liability issues. AUG: [voice-over] Showtime Networks brought in Smokenders in 1990, when it went smokefree on popular demandL KEN KAHRS, Senior Vice President, Showtime Networks: As the evidence has grown about secondhand smoke and the impact it has on people, we've heard more and more from employees who feel'they have a right to a smokefree environment at work. AUG: [voice-over] Showtime pays most of the $250 cost of six sessions on company time. About two-thirds of the smokers have kicked the habit. DORI FREIBAUM, former Smoker: They deal with a pretty serious psychological and physical addiction, and I think that time frame allows you the time to transition. AUG: [voice-over] The makers of Cigarrest, a $20 motivational program that comes with a mild over-the-counter drug, say their strategy is to be easily accessible to smokers. DON DANKS, Advantage Life Program: They tend to be more blue-collar. A lot of them don't have health insurance, and they don't have the ability to have reimbursement for the nicotine patches. AUG: [voice-over] But the company admits patches have hurt its sales, and it's now turning to other behavior-modification products. You can also try this $40 motivational program designed to work with patches, or you can try nicotine gum. Even the travel industry is jumping on the smokefree bandwagon. A decade ago, only five percent of the Burbank Hilton's rooms were smokefree. Today, 70 percent are. TOM ELLIS, General Manager, Burbank Hilton: What we've found before, when we had a lower percentage, the people were writing on their comment cards, "We don't like the smell of smoke in our room." So we increased the number accordingly. AUG: [voice- over] Since it's a drag to stop smoking, analysts say there's little change the cessation business will self-destruct in the near future, and there's always the dream of faraway smoke-filled lands. Mr. THOMPSON: One day, someone will stand up in Japan, and it will be one of the hundred largest industrialists, and they will know that the right thing for their employees is to stop them from smoking cigarettes.

AUG: We'll be right back.