According to the Surgeon General, raising the price of tobacco products is one of the most effective strategies for reducing initiation, decreasing consumption and increasing cessation. While excise taxes are a common strategy for increasing tobacco prices, minimum floor price laws are another promising non-tax strategy with the potential to reduce health disparities.
Each day, companies all over the world work on strategies to convince us to purchase their product. Whether we like it or not, all of us are constant targets for marketing, through avenues including the internet, television, sponsorships and more. For the tobacco industry, the point-of-sale remains a favorite marketing focus, due in part to the many restrictions in tobacco advertising through other venues. In 2018, the tobacco industry spent over $7.2 billion to advertise and promote their products in the retail environment. This marketing often disproportionately targets minority and low-income neighborhoods and, unfortunately, these efforts are paying off for the tobacco industry. Despite an overall decline in smoking since 1964, higher rates of smoking remain among individuals of lower socioeconomic status and education level.
Most of us recognize that price plays a huge role in which products we choose to buy, how much we consume, and how often. This concept holds true for tobacco, with research by the Center for Public Health Systems Science suggesting that for every 10% increase in the price of cigarettes, adult smoking rates decrease by up to 5% and youth smoking rates decrease by up to 7%. With this in mind, it’s no surprise that the tobacco industry uses price discounts as one of their top marketing strategies in an effort to keep tobacco cheap and accessible. In fact, price discounts are responsible for over 85% of tobacco industry spending. Once again, we see price-sensitive groups, like youth and low-income communities, as the target for more price discounts and lower-priced tobacco products. On top of targeted marketing efforts, these communities often have the highest density of tobacco retailers.
According to the 2012 Surgeon General’s Report, raising the price of tobacco products is one of the most effective strategies for reducing initiation, decreasing consumption and increasing cessation. While raising excise taxes is the gold standard for raising the price of tobacco products, other non-tax strategies exist for states and communities facing political barriers to excise tax increases.
One of these non-tax strategies with promising evidence is establishing minimum floor price laws (MFPLs). As the name suggests, MFPLs set a price below which products cannot be sold. MFPLs have been implemented in several communities across the country, including New York City. One benefit of MFPLs is the potential to prevent the price discounts offered by the tobacco industry that often make excise taxes less impactful. Establishing minimum prices for all tobacco products may help encourage price sensitive users to quit rather than switch to another product. MFPLs result in the largest price increase for the cheapest products, sometimes even pricing discount brands out of the market. Because of this, minority and low-income communities where cheap tobacco products are more prevalent will likely face the largest price increases from MFPLs. Additionally, strong minimum price laws can prevent price manipulation by geographic area or by brand, thereby reducing targeting of certain products to price-sensitive populations. To be clear, this means low-income smokers will experience a higher financial burden as a result of MFPLs. However, since these communities face the highest tobacco-related morbidity and mortality, MFPLs have the potential to reduce health disparities if accompanied by strong cessation resources.
While there is still much to learn on the long-term impacts of MFPLs, emerging research suggests that MFPLs help reduce health disparities. For example, findings from a simulation of MFPL options in the state of California suggest that as the floor price of cigarettes increased, prevalence of tobacco use and cigarette consumption decreased most significantly among individuals in households below 250% federal poverty level. For more information on this simulation model, and other general information on minimum floor pricing strategies, check out CADCA’s recent Research Into Action webinar. “Tobacco Minimum Floor Price Laws and Adult Smoking Prevalence.”
This post was originally published as a feature article for The Geographic Health Equity Alliance (GHEA), a CADCA initiative. GHEA is a CDC funded National Network dedicated to reducing geographic health disparities related to tobacco and cancer.
