Taxpayers Benefit from FDA's Decision on Alternative Product for Smokers

Today National Taxpayers Union (NTU) applauded the Food and Drug Administration's (FDA) approval of the IQOS system for initial marketing and sales in the U.S. as a fiscally sound decision long overdue. IQOS utilizes tobacco “heatsticks” that are heated rather than burned, thereby avoiding the toxic, unhealthy chemicals normally created by combustible tobacco products like traditional cigarettes. After nearly two years of exhaustive deliberations, FDA has just given the nod to what is known in bureaucratic parlance as the "premarket tobacco product application pathway." This clears the IQOS heating device and three types of tobacco heatsticks for sale in the United States, all of which have long been in use abroad. Yet other bureaucratic hurdles remain in getting government certification to market the products with claims that they reduce harm.

The approval of alternatives to conventional smoking (such as e-cigarettes and heat-not-burn systems) could have the potential to deliver fiscal benefits far more effectively than additional tax increases on tobacco, which previous NTU studies have shown to be unreliable revenue sources subject to political manipulation. As we noted in past comments to FDA:

Rather than use heavy-handed government policy to direct consumer behavior, FDA should embark on regulatory reforms to empower consumers to choose non-combustible, lower-risk nicotine alternatives. As it stands, regulatory burdens and roadblocks put up by the FDA are preventing innovative new products  from reaching millions of consumers. FDA should reduce costs and unnecessary paperwork burdens of new product applications, clarify and simplify requirements for pre-market approval of new products, and pursue other effective regulatory reductions.

Although constant refinements in research are necessary, recent analysis has shown that taxpayer-funded health programs such as Medicaid and Medicare bear roughly 60 percent of the costs associated with smoking-related diseases, amounting to tens of billions of dollars per year. Any and every market-developed product that has a chance of helping current smokers switch to less dangerous alternatives could pay long-term dividends in lowering the fiscal pressure on these unsustainable programs. Other research has shown considerable effectiveness of the latest harm-reduction products (such as vaping devices) in persuading smokers to quit, even as politicians across the country seek to smother their appeal with massive tax hikes.

“The FDA’s decision provides hope not only for current smokers and the families concerned about their health, but for taxpayers concerned about the future of federal, state, and local finances,” NTU President Pete Sepp said. “Smart policies that encourage the adoption of risk-reducing products among adults will pay off for everyone in many different ways.”