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| • | Welcome, Overview and Charge to the Group |
| • | Tobacco Control in a Global Environment |
 Surveillance |
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| Information
Management |
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| Capacity
Building |
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| • | Framework Convention on Tobacco Control: Progress Update |
| • | Smuggling Issues |
| • | Warning Labels and Packaging Issues - US Perspective |
| • | Warning Labels and Packaging Issues - Canadian Perspective |
| • | Advertising Issues - Economic Perspective |
| • | Advertising Issues - Legal Perspective |
Dr. Satcher opened the meeting by welcoming members of the Interagency Committee on Smoking and Health (ICSH) and other attendees to the Committee’s first meeting of the 21st century. He reviewed the establishment of the Committee under the authority of the Comprehensive Smoking Education Act of 1984 and its charge to coordinate research, educational programs, and other activities related to smoking and health and provide a liaison function to appropriate private organizations and federal, state, and local public health agencies regarding smoking and health activities. The ICSH reports to the Secretary of Health and Human Services (HHS) through the Surgeon General and is staffed by the Center for Disease Control and Prevention (CDC) Office on Smoking and Health.
Although the Committee has not met formally since 1994, the members have been quite active. Highlights from the past 6 years include the following:
Dr. Satcher described progress, on balance, as very positive and expressed his gratitude to those in attendance.
In turning to the topic of this meeting, the Framework Convention on Tobacco Control (FCTC), Dr. Satcher expressed his commitment to this important activity. The FCTC was initiated in May 1999, when the governing body of the World Health Organization (WHO) unanimously approved a resolution calling for governments to negotiate an international treaty to stem the global epidemic of tobacco-related death and disease. The United States and many other countries around the world have pledged financial and political support to the process and are in the process of negotiations.
Dr. Satcher asked everyone present to introduce themselves (see list of participants), invited comments on the agenda (there were none), and introduced the first speaker, Dr. Jeffrey Koplan.
Dr. Koplan began by setting the stage domestically. The United States has not seen major declines in the prevalence of smoking among adults since the early 1990s, but smoking prevalence among youth appears to have peaked in the mid-1990s and may be beginning to decline. In addition, per capita cigarette consumption has declined over the past 15 years.
A comprehensive approach — one that combines educational, clinical, regulatory, economic, and social strategies — has emerged as the guiding principle for future efforts to reduce tobacco use. Evidence shows that multifaceted state tobacco control programs are effective in reducing tobacco use, in part because they bring about a shift in social norms and reduce the broad cultural acceptability of tobacco use. Comprehensive approaches combine community interventions, counter marketing, and program policy and regulation. The overall efficacy of these emerging statewide programs will depend in some ways on public health advances at the national level. A number of states have effectively reduced cigarette smoking through comprehensive tobacco control programming. For example:
A successful comprehensive approach requires the continued collaboration of all the agencies and organizations represented here today.
Dr. Koplan acknowledged that the global public health community has been very successful in working in a coordinated fashion to reduce the harm caused by infectious diseases. However, to date, there has yet to be a concerted effort to reduce the burden caused by noncommunicable diseases or the risk factors that cause these diseases, especially tobacco use.
The consequences of tobacco use have become an issue of global concern far beyond the confines of national boundaries. The global tobacco epidemic will soon become the leading cause of preventable and premature death worldwide. Currently, there are about 1.2 billion smokers over the age of 15 in the world. Approximately 80% of the world’s smokers live in developing countries. According to WHO, more than 4 million people in the world die each year from diseases caused by tobacco use.
Without effective comprehensive tobacco prevention and control efforts, by the year 2030, the death toll will increase to as many as 10 million people each year, with 7 million of the deaths occurring in the developing world. It is estimated that by 2030, tobacco use will exceed HIV/AIDS and diarrheal diseases as the leading cause of disability adjusted life years.
Not only will health effects be devastating and unprecedented, unfettered global tobacco use will result in dire economic consequences and will be a threat to sustainable development, as has been recently pointed out by the World Bank in the book, Curbing the Epidemic.
Although the projections are dire, success in eradicating and controlling other global health menaces as well as the complete preventability of tobacco-caused diseases suggests that a concerted and coordinated effort to control tobacco use will have a profound effect in changing the course of public health globally. The time is right to launch a global and coordinated effort to reduce the burden of tobacco use. CDC has a number of current activities under way and ambitious future plans to advance global tobacco control to try to prevent the burden of tobacco-related death and disease projected for the developing world. These activities can be divided into three main categories: surveillance, information management, and capacity building.
Dr. Koplan described the cornerstone to successful disease prevention and health promotion programs as surveillance. Nowhere is this more true than for tobacco control in the United States, where valid and reliable data, particularly on children, have truly made a difference.
CDC was asked by WHO to support their global surveillance efforts, particularly in relation to their first grant from the United Nations Foundation, which funded seven countries. In response to WHO’s request, CDC modified its Youth Tobacco Survey and created the Global Youth Tobacco Survey (GYTS), a school-based, tobacco-specific survey focusing on adolescents aged 13 to 15. In Fiscal Year 2000-2001, the GYTS will have been conducted in more than 70 countries. Dr. Koplan recognized the National Cancer Institute’s financial support of the GYTS as a good example of the kind of interagency collaboration this committee should be supporting, that will be essential to addressing the problem of tobacco use globally.
Dr. Koplan stated that data have only limited utility if they are not used and made widely available. In this regard, CDC is in the process of developing a global tobacco data warehouse based on its successful STATE System, which will make every country’s tobacco-specific data widely available on the Internet. This will include not only traditional public health measures such as a country’s GYTS results but also their tobacco control laws, tax rates, and other economic data.
The third element of CDC’s strategy, and central to public health programming, is building the capacity of countries to do effective tobacco control work. Similar to the experience in the United States, where progress in tobacco control greatly accelerated when a public health infrastructure was developed, CDC firmly believes we can advance global tobacco control efforts by building capacity in selected countries as well as in the multilateral organizations that support those countries. Currently, CDC supports a person to work exclusively on global tobacco control in the United Nations System in New York, WHO Headquarters in Geneva, and the WHO Regional Office in Zimbabwe; CDC hopes to send a person to the WHO Country Office in Beijing. With future funding, Dr. Koplan hopes to expand this strategy to all WHO Regional Offices, selected countries, and key multilateral organizations.
By way of introduction to the FCTC, Dr. Novotny indicated that it is important to understand the background of this unusual activity. As a treaty process, it involves people in multiple disciplines and not just public health. The FCTC is the first treaty authorized by WHO under its constitution. Ministries of foreign affairs (typically, the treaty negotiating body for a country) for each of the 191 member states are participating in the effort. In the case of the United States, the State Department has delegated the lead to HHS. In turn, HHS insists that health should be the primary focus of the treaty.
A number of components need to be considered in negotiating a multilateral action on tobacco control. As a result, Dr. Novotny indicated, preparations have been complex. Work on the FCTC in the United States is guided by the Domestic Policy Council (DPC) at the White House, which has called for a broad involvement of federal agencies. Participating agencies include the U.S. Department of Treasury, the U.S. Trade Representative’s Office, the U.S. Department of Commerce, the U.S. Department of Agriculture (USDA), the U.S. Environmental Protection Agency, the U.S. Bureau of Alcohol, Tobacco and Firearms (ATF), the U.S. State Department, the U.S. Agency for International Development, several parts of HHS including CDC and the Office on International and Refugee Health, and others. The projected completion date for the negotiation process is 2003.
Work on the FCTC has been extensive and includes public involvement as well as keeping Congress informed. In fact, on five separate occasions, the group working on the FCTC has met with representatives of the House of Representatives and the Senate Foreign Relations Committee to discuss health issues. The Committee appears to be very interested in this effort. A staff member for Senator Jesse Helms (R-NC) attended the first round of Geneva negotiations.
Public comments have been obtained in writing and through a public hearing held March 15, 2000. Attendees at the session included governmental and non governmental organizations (NGOs), professional groups, and the tobacco industry. In addition, WHO held another well-attended public hearing before the negotiations in Geneva. The U.S. delegation has met with the tobacco industry and tobacco growers to obtain their input, although they are not part of the delegation.
In terms of history, WHO-related activities began a year and a half ago through the World Health Assembly (WHA), the governing body of WHO. Through the efforts of WHA staff led by Derek Yach, Neil Colishaw, and others, this FCTC process has moved forward. Two working group meetings were held over the last year. At that time, issues were laid out for further discussion and negotiations. At the first negotiation, member states began to outline their positions and discuss the content of the FCTC.
The Framework Convention is meant to be a broad document that can be signed by many countries. The United States has supported a general document so many countries can sign it. Subsequent protocols should then be more substantive and detailed.
In addition to the various consultations mentioned, the U.S. delegation has met weekly for a year and a half with the DPC group. Everyone’s views have been heard and used to help shape the U.S. position. The negotiating positions of the United States were cleared by all the relevant departments, truly a great accomplishment.
In terms of the negotiations in Geneva, two days were spent trying to decide on the procedural approach. The United States then lobbied successfully to be part of the Bureau, the small management group that will help conduct the negotiations, and will be the Bureau representative for the Americas, one of WHO’s Regions. The Chairman of the three-year process will be Celso Amorim, Ambassador to Geneva from Brazil, who has already provided a steady hand and good leadership. The negotiation participants also discussed direct involvement by NGOs. As is standard for WHO, NGOs will participate through organizations in official relations to WHO. A coalition called the Alliance (led by the Campaign for Tobacco-Free Kids) will work with the officially recognized organizations. The U.S. delegation met with NGOs and others every evening to discuss issues of concern.
The U.S. delegation for the first round of negotiations consisted of Dr. Novotny as the lead delegate, Ripley Forbes from HHS, Larry Green from Office on Smoking and Health, John Sandage and Lynn Lambert from the U.S. State Department, Tami Light from ATF, Gene Philhower from USDA (Geneva), and Linda Vogel from the U.S. Mission (Geneva). The next session will be held starting April 30. At that session there will be three working groups: one will deal with health issues, another with deal with economic issues, and a third will deal with the treaty-making process.
Dr. Satcher, on behalf of the United States has come out strongly supporting a Framework Convention that includes a number of protocols and makes strong points. At the negotiations, each country had an opportunity to state its position relative to a number of issues presented by WHO. The United States, for example, supported restricting sales to minors; reducing exposure to secondhand smoke; regulating tobacco products, contents, and disclosures; and tobacco taxes. The delegation offered additional language on secondhand smoke that would support prevention of exposure to children in particular and in public places in general. The United States also made a strong statement on advertising restrictions, paying attention to messages that appeal to children and not just messages that are directly targeted to children. The United States supported the elimination of smuggling. The delegation also supported sharing scientific and technical information around the globe.
Litigation was discussed at the negotiation sessions. The United States supports domestic court actions. In terms of compliance with the treaty, the United States does support reporting requirements on the activities with which we agree. However, there should not be a compulsory dispute resolution process, arbitration, or litigation for non compliance; instead, there ought to be diplomatic solutions to disagreements based on the treaty.
One final item discussed during the negotiations was the removal of subsidies to farmers and ways to deal with the economic impact on farmers whose livelihood is in jeopardy. Dr. Novotny indicated that a White House Commission is considering the economic impact of reduced tobacco production and public health issues. He also indicated that the United States informally met with Malawi, Zimbabwe, and Brazil to begin to brainstorm this issue.
Dr. Novotny mentioned that a number of negotiating positions are privileged and have not been shared with the public. Between now and April, however, the public will be asked to provide comments on the FCTC. Public hearings will be scheduled on the West Coast and other venues. He encouraged everyone to participate and share their point of view. Finally, he indicated that a Chairman’s report will be issued from the Geneva meeting. It will outline the interests and activities of the various nations. He believes the United States already has a number of agreed-on negotiating positions but mentioned that work remains to be done to agree on issues related to trade and agriculture.
Relative to the farmers’ plight, Dr. Chaloupka, a professor of economics at the University of Illinois, stated that currently there are about 1.2 billion smokers in the world, and in 25 years that estimate will go up to 1.6 billion if no changes are made. Therefore, even if we are successful, current tobacco farmers will not go out of business. The lack of impact on current farmers is particularly true if tobacco control efforts focus on reducing youth smoking because the effects of these efforts on overall demand will not be seen for many years. Dr. Novotny added that the United States has already adopted a policy that guarantees the welfare of farmers in this country (through price supports and other means).
Dr. Satcher told the group that in many countries it is actually the government that profits from tobacco growth. Dr. Novotny added that in a number of countries, like China, the government is the largest consumer and producer of tobacco.
To a question about support for FDA legislation, Dr. Wilkenfeld from the Campaign for Tobacco-Free Kids responded for the NGO community and indicated there is widespread support. Dr. Novotny indicated that the Administration also strongly supports the regulatory approach proposed by the FDA.
A participant asked if the outcome of the Presidential election will have any effect on the U.S. interest in pursuing the WHO negotiations and Dr. Novotny responded that he hoped it would not. Another question related to the treaty’s role in economic measures and taxation schemes and Dr. Novotny said those issues are considered sovereign policy of national governments and out of the purview of this initiative. However, the United States already has established government policy that taxes are an important and effective way to reduce consumption of tobacco.
A participant asked if the delegation has spoken to the International Monetary Fund (IMF) about removing the tobacco industry from their list of industries to be privatized. The rationale is that when industries are privatized there is increased competition leading to increased consumption. Dr. Novotny indicated that they have not spoken to IMF. Dr. Chaloupka added that privatization does not automatically lead to increases in consumption. He cited Poland as an example and said that their government became much more interested in tobacco control once they left the tobacco production business. The World Bank has issued guidelines on privatization.
Ms. Tamara Light described the ATF as a regulatory and criminal enforcement agency responsible for collecting excise taxes imposed on tobacco products manufactured or imported into the United States. They are also responsible for monitoring contraband cigarette trafficking. Under the Contraband Cigarette Trafficking Act, ATF is charged with assisting states in their efforts to collect revenues imposed on cigarette products. In her experience, tobacco trafficking occurs when foreign or state governments impose a higher excise tax on tobacco products than those tax rates in surrounding jurisdictions. She said that ATF is involved in efforts to curtail smuggling and trafficking, because such diversion ultimately defrauds the United States government, states, and other governments of their revenues and also because there have been increased criminal networks over the past 10 years.
The ATF also recognizes that tobacco smuggling is a public health concern. Smuggled cigarettes frequently are sold at low market prices, which undermines increasing prices as a means of curtailing consumption. It also denies governments tax revenues that can be used to support public health efforts. Smuggled cigarettes often do not comply with the various health regulations, including labeling requirements.
Ms. Light then shared with the group examples of smuggling experiences the ATF has recently faced. This year, ATF staff arrested 18 people involved in a cigarette trafficking and money laundering ring that bought products in North Carolina and sold them in Michigan, in part to support militant terrorism in the Middle East. Another case involved a networking scheme between New York and Michigan. The network involved a major U.S. wholesaler, Native American smoke shops, Michigan traffickers, and retail stores. They moved over $70 million worth of cigarettes. Another example involved smuggling cigarettes and alcohol from the United States to Canada. When caught, a subsidiary of RJR Northern Brands International admitted selling over eight billion cigarettes to U.S. companies smuggling cigarettes into Canada. This was the first time a tobacco company was implicated in smuggling. The ATF is also seeing a rise in cigarette hijackings and armed robberies. Eventually, the cigarettes land in the black market in the United States. Ms. Light also spoke about violent crimes related to cigarette smuggling abroad.
Examples like those above have led the United States, and ATF in particular, to commit to support the development of a protocol in the Framework Convention with strong measures to curb smuggling. Proposals to curtail smuggling should include a uniform distribution system regulating interstate commerce of tobacco. This would include a licensing system for tobacco products similar to the one the federal government has effectively used for the past 60 years to regulate alcoholic beverages. A license would be issued based on certain clearly specified criteria, and it could be revoked or suspended for specified violations. ATF also recommends effective marking, branding, and identification of tobacco packages intended for domestic distribution or for export to prevent diversion or smuggling and circumvention of the legitimate channels of distribution. Currently, people are involved in cigarette smuggling partly because the sentencing guidelines and the penalties for it are much less than those for drug trafficking.
Ms. Light mentioned that, during the opening statements at the Framework Convention, many countries mentioned that smuggling is a major problem for them. She had an opportunity to meet with counterparts from several countries to discuss some of the unique challenges the various governments face in detecting and prosecuting cigarette smuggling violations.
Speaking on behalf of her Canadian counterpart who could not attend the ICSH meeting, Ms. Light told the group that for Canada to tackle smuggling problems in the early 1990s, they devised a national action plan. It was a comprehensive plan with health, tobacco tax and enforcement initiatives. Their anti-smuggling initiative increased their enforcement resources, while the health component saw the introduction of a major anti-smoking campaign. Canada has seen success since increasing penalties, instituting export taxes, improving stamping and marking, improving security features on tobacco markings, increasing enforcement and auditing, increasing use of electronic surveillance, and increasing cooperation between domestic and foreign agencies.
Despite developments in the United States’ efforts to combat smuggling, Ms. Light indicated there are still serious concerns. Research conducted by the USDA leads to the conclusion that up to a third of world tobacco exports are diverted to the black market. In a recent meeting, ATF learned that cigarette smuggling is intensifying globally and organized crime is increasingly involved. Cigarette smuggling is linked to secondary criminal activity and increased disrespect for the rule of law. Counterfeit cigarette seizures are on the rise, and cigarette smuggling is highly profitable. Obstacles identified in the fight against organized cigarette smuggling include the inability to trace confiscated cigarette shipments, the lack of cooperation and information sharing between member states, and the inability to effect controlled deliveries in some countries. She concluded her presentation by indicating that each country cannot effectively tackle organized cigarette smuggling in isolation. A successfully negotiated Framework Convention on tobacco control with a comprehensive anti-smuggling component will assist countries in meeting their domestic tobacco control policies and goals by reducing the threat of international tobacco smuggling.
To a question on the current penalty for tobacco smuggling in this country, Ms. Light indicated it is 5 to 10 years in prison and a quarter of a million dollars fine. In Europe, however, most smuggling offenses carry only a 2 to 3 year penalty, with time served hovering somewhere around 1 year. Discussions are under way to harmonize the money laundering laws in an effort to raise the sentencing guidelines, particularly in Europe where smuggling is very profitable. To a question on ATF resources devoted to finding and prosecuting tobacco smugglers, Ms. Light admitted that resources are scarce; ATF seeks partnerships with Customs and others to be more effective in this regard. Dr. Novotny stressed that smuggling is very much a health issue because it depresses cigarette prices and leads to increased access for children and others. If prices remain high as a result of taxation, consumption will decrease.
Ms. Rosso began the session by stating that the presentation reflects her views and not necessarily those of the Federal Trade Commission (FTC) or any individual commissioner. She said the FTC has been involved in tobacco marketing since the late 1930s. Under Section 5 of the FTC Act, the agency has authority to prohibit unfair or deceptive acts or practices, including those for tobacco products. The FTC also has some responsibilities under the Smokeless Tobacco and the Cigarette Acts.
Currently, three types of tobacco products in the United States are legally required to have health warnings: cigarettes, smokeless tobacco, and cigars. Warning requirements differ between the products, primarily as a result of historical evolution. Cigarettes have required health warnings since 1964, shortly after release of the Surgeon General’s Report, when the FTC issued a trade regulation rule requiring health warnings on cigarette packages and in advertising. The trade regulation never went into effect and was superseded in 1965 by the first Cigarette Act. The first Cigarette Act required a single warning on cigarette packages; there was no requirement at that time for warnings in cigarette advertising. The language for the cigarette warning changed several times during the 1960s and early 1970s. In 1981, FTC staff issued a report concluding that the then-existing warning for cigarettes was ineffective. Consumer research conducted for the report showed that the effect of the warning had worn out over time. Consumer research also indicated that the existing warning was too vague and general. The FTC Staff Report recommended that the existing cigarette warning be replaced with shorter, more specific rotational warnings. In 1984 Congress passed amendments to the Cigarette Act requiring four rotational warnings for cigarettes. These continue to be the current warnings required on cigarette packages. The Cigarette Act gives the U.S. Department of Justice the authority to enforce the cigarette warning requirement, and the FTC has the responsibility to review and approve rotational warning plans. All cigarette manufacturers, importers, and distributors are required to file a plan showing how the company intends to comply with the rotational warning requirements.
Health warnings for smokeless tobacco were first required in 1986. There are three rotational warnings for smokeless tobacco. The Smokeless Tobacco Act directs the FTC to issue regulations implementing the format and display requirements in the statute. The FTC regulations govern issues such as the size of the warnings and the color contrast of the warning statement. Enforcement authority for health warnings on smokeless tobacco is shared by the FTC and the Department of Justice.
Cigars represent the most recent addition to the list of tobacco products requiring health warnings. This year the FTC issued consent orders against the seven largest cigar companies, whose products account for 92% of US cigar sales. The FTC closely collaborated with the Office of the Surgeon General and the Office on Smoking and Health in devising the five rotational warnings that the consent orders require to be placed on cigar packages and in advertisements. The public should start to see packages bearing the warnings sometime early in 2001. The FTC has enforcement authority over the consent orders and can obtain monetary civil penalties for violations.
The purpose of the health warnings is to educate the public, including initiating as well as existing tobacco users, about the adverse health effects of tobacco products. The goal is to give health information in order to enhance their decisions about the of these products. Hopefully, the warnings will deter some consumers from beginning to use tobacco and will encourage others to quit or at least reduce the amount of tobacco they use. Health warnings are an excellent tool for reaching consumers. For example, in 1998, the FTC reported that 558 billion cigarettes were distributed in the United States. That means there were 558 billion opportunities for the health warnings to be read and to have an impact on people. Warnings are still needed even though most surveys show that virtually everyone knows in general that tobacco is dangerous. First, those surveys also show important gaps in peoples’ knowledge about the health effects of tobacco use. For example, in the 1998 Monitoring the Future Survey, only 55% of eighth graders indicated that there is a great risk from smoking a pack of cigarettes a day. Second, the surveys indicate that smokers underestimate their own personal health risks from smoking. Third, because science is always evolving, health warnings provide an opportunity to present new information about health risks to consumers. For example, the recent cigar warnings include a warning about the health effects of environmental tobacco smoke.
The FTC has said publicly that the existing system for tobacco warnings needs to be improved. Ms. Rosso noted, for example, that the warning statements for cigarettes and smokeless tobacco have not changed since the mid-1980s. The 1981 FTC staff report demonstrates that warnings lose effect over time. In addition, the scientific understanding about the adverse health effects of tobacco use has evolved since the mid-1980s and the warnings need to be updated. Thus, a reexamination of the warning statements is warranted. Under the preemption provisions of the Cigarette and Smokeless Tobacco Act, any changes to the language of the warnings requires federal legislation. Recently, some have suggested that an administrative or regulatory agency should have some responsibility for deciding the substantive language of the warnings. The suggestion merits consideration. An agency with scientific expertise may be better able to keep up with the changing science and an administrative system might be more flexible. In addition to the actual warning language, other issues merit consideration. For example, the size and prominence of the existing warnings warrant consideration as to their effectiveness. Similarly, the placement, location, and color contrast of the warnings merit attention and discussion.
Last spring the FTC began a regulatory review of the Commission’s regulations for smokeless tobacco. The review sought public comment on the continuing need for the regulations and asked questions about the costs and benefits of the regulations and about their effectiveness in achieving the statutory requirements that the warnings be conspicuous and prominent. The FTC received 35 to 40 comments from a variety of sources, including CDC, the Massachusetts Department of Public Health, other state health agencies, public health organizations, consumers, and a smokeless tobacco trade association and manufacturer. These comments are being reviewed by staff, who will make recommendations to the Commission. If the Commission decides the regulations should be amended, it will begin a rulemaking proceeding. During that proceeding, the public will be asked to comment on any proposed changes.
Beyond improvements to the existing system for warnings, other issues in the area of tobacco packaging warrant discussion and consideration. For example, should the warnings include both text and graphic illustrations? Should companies be required to disclose information about the components of tobacco or tobacco smoke and, if so, what kind of disclosure should be required? Should additional health information be required on tobacco packages or in package inserts and, if so, what information? Some of these and additional issues will likely be debated as part of the Framework Convention process. But in the United States, there are limits to the government’s authority to require companies to disclose information. The First Amendment protects commercial speech. The First Circuit Court recently issued a decision giving Massachusetts a fair amount of discretion under the First Amendment for its tobacco marketing restrictions (even though the court ultimately struck the cigar warning requirements under the U.S. Constitution’s commerce clause). But even with discretion, the government has the burden of showing that any restrictions are necessary to support a substantial purpose and are appropriately tailored. Statutory authority is also an important limit on a government agency’s ability to require the disclosure of information. A federal agency can act only to the extent of its authority. Finally, when one is working with trademarked or copyrighted materials, intellectual property issues need to be considered.
To a question on attempts by the United States to regulate labels on pipe tobacco, Ms. Rosso indicated that the FTC has not undertaken such an attempt. Pipe use is decreasing and has been for many years. In contrast, cigar use dramatically increased, especially among young adults, during the past several years.
Ms. Rosso indicated that if environmental tobacco smoke (ETS) warnings are desired for cigarettes or other tobacco products, new legislation will have to be passed. This is not the case for cigar health warnings, which do carry an ETS warning. It was pointed out that we should put warning labels on all tobacco products and not just the ones that are most often used. Ms. Rosso indicated that the McCain Bill would have required warnings on all tobacco products. Dr. Satcher added that, beyond warning labels, all children should be educated about the dangers of smoking, using the CDC guidelines. He indicated that currently only 5% of schools in the country provide that education.
Mr. Brown began with some background. The Canadian Tobacco Act of 1997 gives the government of Canada the authority to place requirements on the tobacco industry in response to conclusive evidence linking tobacco use to fatal diseases. The new health warning messages and the interior health information messages form an effective combination designed to enhance public awareness of the health hazards of tobacco use and to help smokers find out more information to help them quit.
Mr. Brown indicated that tobacco use is the leading cause of preventable deaths and disease in Canada. In 1999, just over six million people smoked and approximately one-half will die prematurely as a result of their tobacco use. The new health warning messages could prevent more than 30,000 premature deaths over the next 26 years. Ideally, the health warning messages would be the first thing the smoker sees when buying a package and the last thing seen before lighting the cigarette.
Health warning messages in Canada have undergone great changes. Before 1989, they consisted of a single message on the side of the pack. In 1989, manufacturers were required to print one of four messages on the bottom 20% of the package. In 1994, the requirements were changed so that the health warning message was moved to the top 25% of the package. This is what is currently in place voluntarily by the tobacco industry.
Between 1990 and 1999, Health Canada conducted a number of studies on consumers’ knowledge, actions, and behavior toward health warning messages and the impact of size, picture, color, and legibility. Warning messages with pictures were found to be approximately 60 times more encouraging to stop people from smoking or from starting to smoke than messages without pictures. The impact of a message occupying 50% of the principal display surface of the package was significant in stopping youth from smoking. Over two-thirds of adults and 80% of youth thought health warnings showing blackened lungs and text were more effective than a message that used text only. Warnings with color pictures were more effective than black and white ones. The new designs were two times as legible and three and a half times as effective as those in current use.
The new regulations require that manufacturers and importers of tobacco products ensure that every package of cigarettes, tobacco sticks, cigarette tobacco, leaf tobacco, kreteks, bidis, pipe tobacco, cigars, and smokeless tobacco sold in Canada display a health warning. Sixteen different health warnings were developed for cigarettes, four health warnings for pipe tobacco and cigars, and four health warnings for chewing tobacco and bidis. Health warning messages will occupy 50% of the package. Health warning messages include those on disease and children, secondhand smoke, and addiction. With a few exceptions, manufacturers and importers must include one of 16 health information messages in their packaging.
Canada is governed by the federal regulatory policy that provides a primary policy framework for making regulations. In turn, the regulatory process is governed by the Statutory Instruments Act mandating approval of the Cabinet before a regulation becomes a law. As part of the regulatory policy, Health Canada had to first engage in extensive consultations with the tobacco industry and other stakeholders. In January 2000, draft regulations were published as a notice of intent in the Canada Gazette, and stakeholders were invited to comment during a 30-day period. The regulations were redrafted based on comments received and published for the second time in the Canada Gazette. Comments were once again solicited and the regulation was redrafted. The Department held over 40 separate meetings with the tobacco industry and received over 2,000 submissions, of which more than 400 separate recommendations were analyzed. Members of the House of Commons voted unanimously to pass the regulations without amendments. In June 2000 the regulations became law.
During the regulatory process, Health Canada faced internal and external challenges. The time frame was tight and they had to ensure that the health warning messages were scientifically accurate and legally sound. Regulations had to be prepared in both English and French and there could be no discrepancies between the two. A balance had to be found between the health community and the tobacco industry, concerns about cost, and administrative burdens. Trade issues also had to be considered because their regulations would have far-reaching effects on companies overseas who want to export tobacco products into Canada.
During this process, Mr. Brown noted, there were several notable successes. The first was the unanimous Parliamentary consensus. The second was the court decision denying the tobacco industry’s request for an injunction that would have prevented the health warnings from appearing for years. Mr. Brown believes there are many reasons why Canada was successful in this effort. Health Canada’s research team laid the groundwork for the development of the messages. Extensive focus group testing was conducted to ensure that these messages would be effective, and all messages were proven to be scientifically accurate and valid. They had the political support from Minister of Health Allan Rock and the support of senior developmental officials, legal services, and Canadian health groups. They built strong partnerships with the Privy Council office, the central agency responsible for seeing regulations through the Parliamentary process. Publishing a notice of intent at the beginning of the process built good will and gave people an opportunity to comment early in the process.
The new law requires that brands of cigarettes with sales of more than 2% of the Canadian market share display the health warnings by December 23, 2000. All other products have to display messages by June 26, 2001. Although most of the large manufacturers and importers are aware of the laws, several thousand small companies are not fully aware of their responsibilities under the law. Health Canada is working to seek out and inform all affected parties. They are also working with importers and manufacturers to make sure all tobacco products sold in Canada comply with the law.
In addition, the health information messages on the inside of the packages provide a Web address that refers readers to a site that provides smokers with additional information on how to quit smoking. This is an important component of a comprehensive messaging system.
Mr. Brown indicated that approximately 95% of tobacco products sold in Canada are produced and grown in that country. He also indicated that it is a very different product from that grown in the United States. Approximately 44% of tobacco used in American cigarettes is foreign grown.
To a question, Mr. Brown indicated that bidis, pipe tobacco, and smokeless tobacco come in small packages and will not be required to carry graphics. Ms. Rosso stated that the FTC has said that bidis are cigarettes and thus, bidi packages distributed in the United States are required to carry the cigarette warning label.
Mr. Brown told the group that Canada is equally proud of their reporting regulations. They get information on all the ingredients and the recipes and formulas by brand and weight for all the tobacco products. They also get information on research under way by the tobacco industry. Therefore, they are able to monitor trends in product development.
Dr. Chaloupka began his presentation by indicating that cigarettes are one of the most heavily marketed products in the United States and around the world. Cigarette companies are among the leading advertisers in most of the developing world. In 1998, total advertising and promotional advertising for cigarettes in the United States was $6.7 billion. That is up 19% from 1997 and up nearly 32% from 1996. Much of the expenditures are on promotional allowances, the payments that retailers receive for the placement of tobacco products in their stores. This currently accounts for about 43% of total expenditures. The second largest category is retail value added and coupons. Both of these lead to lower cigarette prices. There is a great deal of evidence documenting the relationship between cigarette prices and demand, and these account for nearly one-third of overall advertising and promotional expenditures in the United States. Traditional print, outdoors, transit type of advertising, and traditional image advertising account for about 16% of total market activities. The remaining activities include things such as sponsorship of public events, special items distribution, and other sorts of advertising and promotions.
The nature of cigarette marketing has changed dramatically over time. Between 1978 and 1998, there has been a shift in cigarette companies’ marketing strategies, away from the more traditional image-oriented advertising toward promotional efforts that are often concentrated at the point of sale. Since 1978 and after adjusting for inflation-adjusted spending, image-oriented advertising has been cut almost in half and point of sale advertising has more than doubled. More importantly, overall promotional spending has risen nearly tenfold, with large increases in promotional allowances, in coupons from retail added value, which were almost non existent in 1978, and in sponsorship of public events. Overall, image-oriented advertising has gone from about three-quarters of the total tobacco companies’ marketing effort in 1978 to less than one-sixth by 1998.
Conceptually, tobacco advertising and promotion can have several direct effects on tobacco use. These include attracting new users to the market, especially teens; reducing cessation; stimulating use among current users; and inducing former smokers to resume use. All of these increase the prevalence of tobacco use; the overall demand for tobacco products; and the health, economic and social consequences associated with tobacco use.
There are also several indirect channels by which advertising and promotion can raise tobacco use. These include the discouragement of a full discussion of the health consequences of tobacco use in the print and other media receiving tobacco advertising dollars. There have been several studies that have documented this over the last 10 years. Advertising and promotion can lead to the normalization of tobacco use by contributing to an environment where use is perceived as socially acceptable and less hazardous than it actually is. Advertising and promotion can also have the potential to create political opposition to strong tobacco control policies among the advertisers, retailers and other institutions that are receiving tobacco industry marketing dollars. Finally, the increased brand proliferation and market segmentation that results from advertising can also attract new users to the market and discourage users from leaving the market. All of these will raise smoking prevalence consumption and the consequences of tobacco use.
Numerous studies have looked at the links between advertising and tobacco use. Several have used logical arguments that are based on the size of tobacco company marketing expenditures and the industry’s opposition to advertising restrictions to conclude that there must be a strong link between advertising and demand. Other studies that are largely based on cross-sectional surveys and other data conclude that cigarette ads capture attention and are recalled particularly among young people. The strength of interest in these ads is correlated with current smoking behavior, with intentions to smoke in the future, and with youth smoking initiation.
There have been several longitudinal studies that look at youth ownership of tobacco company promotional items and later smoking initiation. These studies conclude that youth ownership of these promotional items does predict smoking initiation in later years. Similarly, consistent with the observation that 86% of teen smokers use the three most heavily advertised cigarette brands compared with only 30% of adults, there is additional research that finds that youth are three times more receptive to cigarette advertising than are adults.
Econometric literature that tries to relate overall cigarette advertising expenditures to overall cigarette sales shows mixed findings. This literature tends to produce either small or negligible effects of cigarette advertising on cigarette sales, but several recent critical reviews point out the limitations of the econometric methods in trying to look at the relationship between cigarette advertising and demand. Nonetheless, most of these studies do conclude that there is some small positive effect of advertising on consumption.
One area where econometric methods are much better at detecting the impact of advertising on demand is in looking at the effects of advertising restrictions on demand. Recent studies conclude that the most comprehensive restrictions on advertising and promotion can significantly reduce overall cigarette consumption. Estimates from Dr. Chaloupka’s recent study that uses data from Organization for Economic Cooperation and Development (OECD) member nations over the last three decades concludes that comprehensive advertising and promotion bans can reduce cigarette consumption by more than 6%. In general, however, these studies find that partial advertising bans have little or no effect on overall cigarette consumption. This happens because partial bans and bans on advertising in one or two media leads to substitution of resources away from the media that are banned into other types of advertising and promotional activities that are not restricted.
Recent work by Dr. Chaloupka, for example, concludes that the elimination of tobacco company billboard advertising led to moving resources from billboard advertising into more advertising and promotional activity at the point of sale. Similarly, other recent evidence from the Massachusetts tobacco control program found that cigarette advertising in magazines also increased after the MSA, particularly in magazines with high youth readership.
Dr. Chaloupka showed a slide that illustrates the point that comprehensive advertising bans are needed to successfully reduce consumption. Countries that have had comprehensive bans in advertising and promotion have significantly reduced cigarette smoking, whereas countries that have relatively limited bans or no bans on consumption have seen much slower reductions in overall cigarette consumption.
Clearly, tobacco counter marketing efforts lead to significant reductions in overall cigarette smoking as well as in youth smoking. The magnitude of the effects of these reductions depends on the reach of the campaigns, the frequency with which those messages are being broadcast and the duration of the counter marketing campaign. If they are sustained over time at high levels, these do lead to significant reductions in smoking. These campaigns appear to be most effective when they are one element of a broad overall comprehensive tobacco control program that also includes a variety of other approaches to reducing tobacco use, such as tax increases, strong tobacco control policies, and increased access to cessation services.
To summarize, Dr. Chaloupka stressed that tobacco advertising and promotion in the United States and around the world is substantial and is increasing, and it is an issue that transcends national boundaries. This issue requires international action, given the growing evidence that tobacco advertising increases tobacco consumption, particularly among the most vulnerable populations like youth, and among the least educated people in developing countries. Comprehensive bans on tobacco advertising and promotion will lead to significant reductions in overall tobacco use. Limited restrictions, on the other hand, are not likely to have much of an impact given the potential for substitution. Finally, counter marketing is effective in reducing tobacco use and should be considered one component of a comprehensive tobacco control program.
Mr. Thomas Perrelli from the U.S. Department of Justice spoke about the history of restrictions on tobacco advertising and related legal issues. He indicated that a large number of people and processes are involved with tobacco advertising and the law. State and local officials are involved in billboard placement; the FTC has long been involved with issues related to misleading advertising and warning labels; and states are currently involved through the MSA without a clear ultimate impact—perhaps simply to shift advertising dollars from one place to another. With regard to the FCTC, U.S. law must inform the process. International treaties to which we are a party must be consistent with the U.S. Constitution, particularly the First Amendment.
To protect minors, the current Administration has focused on imposing the most restrictive advertising requirements possible under the Constitution. This spurred the FDA to promulgate regulations. Tobacco advertising was considered by the Supreme Court as far back as 1932 in upholding billboard and streetcar restrictions in Utah. The FTC in the 1950s and 1960s did a great deal of work in building our knowledge about tobacco advertising and its impact as well as examining some of the explicit and implicit health claims being made by the tobacco companies in that era. Congress became involved in the 1960s and passed the 1969 Federal Cigarette Labeling and Advertising Act, which requires warning labels on cigarette packages. The Act preempted a number of state and local regulations on advertising. At the same time, Congress also prohibited tobacco advertising on any medium of electronic communications subject to the jurisdiction of the Federal Communications Commission, including television. The statute was eventually upheld by the Supreme Court in 1971.
The renewed momentum for tobacco advertising regulation grew from two different sources: state litigation to recover health care costs and change the way the industry markets to children and the FDA’s effort to make a case for addiction and efforts to address in a comprehensive way marketing and promotion to children. The 1996 FDA rule banned outdoor advertising within a thousand feet of schools and playgrounds and placed restrictions on brand name sponsorship. Note that, although those restrictions were struck down by the Supreme Court and the FDA was ruled not to have jurisdiction on those matters, it was not done on First Amendment grounds. The U.S. Department of Justice believes the restrictions under current law as well as the FDA rules restrictions are fully Constitutional.
While the FDA rule was being litigated, the first state settlement took place in July 1997. It included a series of marketing restrictions that went beyond the FDA rule. That settlement would have come into effect if Congress had enacted legislation giving some level of protection from future liability to the tobacco companies. In 1998, Congressional debate and consideration of the McCain bill took place and eventually a set of restrictions similar to the FDA rule (but including liability protection for tobacco companies that voluntarily restricted their advertising to a greater extent) were introduced. Ultimately, Congress did not enact legislation and the state and tobacco companies went back to the drawing board. Further negotiations between the states and the tobacco companies resulted in the MSA in 1998.
The Agreement allows a number of avenues for tobacco advertising, particularly in the print medium. In addition, although the Agreement has a general provision against targeting youth, it is likely that State Attorneys General and the tobacco companies may have different views on the meaning of the provision. After the failure of federal tobacco legislation, the U.S. Department of Justice began to consider whether there was a viable legal basis on which to sue the tobacco companies under federal law. This effort resulted in the lawsuit that was brought in September 1999. The suit seeks, among other things, additional marketing restrictions on the sale of cigarettes. Other current activities include state and local ordinances related to placement of certain kinds of advertising. Currently, four of five circuit courts have ruled that local governments can regulate the placement.
Mr. Perrelli then provided an overview of legal principles currently at issue under the commercial speech doctrine (as tested under the landmark Central Hudson case—447 US 557). Considering tobacco advertising regulation, we need to consider whether the regulated speech is related to an unlawful activity or is misleading and whether the government interest asserted to regulate the speech is substantial. He believes that years spent building the case that restricting tobacco advertising to protect youth is a compelling government interest. Under the Central Hudson test, a restriction on commercial speech must also directly advance the government interests asserted (states and localities have demonstrated that keeping tobacco advertising away from children will influence smoking initiation and/or continuation). Finally, the Central Hudson test requires that the fit between the ends and the means of a regulation on commercial speech be reasonable. A law that bans substantially more speech than is necessary is less likely to prevail. It is likely that we will have more guidance in this area in the next couple of years because the Supreme Court will be considering one of the cases involving state and local regulation of outdoor cigarette advertising.
Thus far, the courts have found it of great significance that this was not a typical restriction on commercial speech and that it involves regulation of the sale of a product that is banned to children. The courts have expressed concern about children who might be victimized by the highly addictive nature of the product and focused, among other things, on their inability to understand the impact of starting or continuing to smoke. Finally, the courts did not appear to be troubled that a Massachusetts ban on advertisement is very broad, saying that there are other avenues for tobacco advertising.
Mr. Perrelli then stressed three points: legal principles will be more clear in a couple of years; the First Amendment does leave room for a significant number of restrictions in this area, such as those currently in the FDA rule, and the most promising areas are those related to consent and work on the most extensive restrictions on a voluntary basis (whether through the consent orders on which the FTC has worked or through a larger legislation resolution, as was attempted after 12 years).
Mr. Perrelli declined to respond to a question related to cigarette advertising on the Internet and coverage under the Federal Cigarette Labeling and Advertising Act. To a question related to placement issues, Mr. Perrelli indicated he believed that the next set of state and local ordinances will likely litigate whether that is permissible. In the past, the U.S. Department of Justice has taken the position that those restrictions are permissible. Ms. Rosso volunteered that the First Circuit Court’s decision in Massachusetts included generous language giving the state some amount of discretion in limiting in-store displays.
Dr. Koplan asked for data on the percentage of sales of tobacco products sold in pharmacies but Ms. Rosso indicated that there are no national data that would provide information at that level. However, the FDA Web site may include information on a non random sample of stores, looking at what places are more likely to sell to children. Dr. Chaloupka mentioned that, in his experience, pharmacies are the least likely of all types of stores to make use of advertising and promotion. It was pointed out that, under economic (and not speech) regulation, certain products/services cannot be sold in the same place. A brief discussion on freedom of religion and of advertising and speech ensued but Mr. Perrelli indicated this is not an area that has received a great deal of attention.
To a question about the U.S. Department of Justice lawsuit against the tobacco manufacturers, its dependence on Congressional funding, and predictions with the change of administration, Mr. Perrelli indicated that without the appropriate funds the lawsuit will have to be dismissed.
To a question about the FCTC and how strong a Convention the United States could sign on to, Mr. Perrelli indicated that we could go as far as possible to the extent permitted under domestic law. Dr. Novotny stressed that this has not prevented us from taking a strong position and very few countries (mainly third world ones) are advocating for complete bans in advertising. Even if some of the protocols include language with which we cannot agree, that should not prevent us from signing the FCTC, Dr. Novotny told the group. Mr. Perrelli declined to answer a question related to a total ban on advertising and promotion of tobacco products and its ability to meet the Central Hudson test.
At the conclusion of the formal presentations, Dr. Satcher invited public comments. None were made. He thanked the speakers, committee members, and participants for their contributions to the meeting. The meeting was adjourned at 1 p.m.
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