White House Cozies up to Big Tobacco

White House changes to a recent proposal by the Food and Drug Administration (FDA) have weakened draft health and safety standards related to tobacco products and have more broadly paved the way for watering down consumer protection in other sectors.

Nestled inside the White House is a little-known, small office with extraordinary power over our government agencies. This office, known as the Office of Information and Regulatory Affairs (OIRA), has routinely contributed to the delay and weakening of health, safety and financial protections. Operating quietly with little media attention, OIRA has struck again – this time to weaken a recent FDA proposal to regulate electronic cigarettes, cigars and pipe tobacco.

The FDA’s original draft proposal contained an extensive section on the health benefits from reduced smoking, including the number of lives that would be saved and the value of those additional lives. Following review by OIRA, this section was deleted and edits were made that weakened language about the FDA’s health concerns over e-cigarettes. OIRA also altered language about restriction of non-“face to face” sales, which will prevent the FDA from regulating online sales of tobacco products, a platform that is used by children because of the difficulty in verifying the age of the person making the purchases. Even worse, in a blatant display of White House acquiescence to industry interests, “premium cigars” could be exempt from regulation altogether.

As if this weakened rule wasn’t bad enough, in a preliminary assessment of the benefits of regulating e-cigarettes, OIRA included a 70 percent discount to account for the “lost pleasure” that would result from reductions in tobacco use. In other words, if the health benefits of this new regulation were estimated to be $1 billion, they would be reduced by 70 percent to just $300 million because people will “lose pleasure” from smoking fewer cigarettes.

Cost-benefit analysis has long been a tool used by industry to weaken, delay or prevent the imposition of new regulation by government agencies. U.S. agencies routinely determine the potential costs and benefits of their rules and, in certain instances, are required to prove that the benefits of a proposed rule outweigh the costs of its implementation. While this may seem like a sensible request at face value, its real application has been devastating for public protection: costs of compliance are often overstated by industry, while non-quantifiable societal benefits are undervalued. How do we quantify the value of a saved IQ point in children not exposed to lead, or the value of a measure of increased privacy for online consumers?

Not only will this “lost pleasure” approach make it much more difficult for government agencies to regulate tobacco, but this principle also could be applied to other sectors to weaken protections against trans-fat-loaded fast food, alcohol consumption and even reckless driving. Some people find it fun to drive really fast on the highway, but does that mean we should deduct a measure of “lost pleasure” from the benefits we derive from speeding laws the next time state legislatures propose traffic rules? “It will undermine anything they try to do about anything,” said Dr. Stanton Glantz, a tobacco control expert and professor of medicine at the University of California, San Francisco.

Even more complicating is the fact that tobacco products contain highly addictive nicotine. Consumer surplus, the economic principle for which this “lost pleasure” discount is based, relies on the assumption that consumers will act rationally in determining whether or not to purchase a product. Highly addictive substances and practices make this rational thinking next to impossible – just think back to World War II, when desperate Europeans traded their scarce food rations on the black market for cigarettes!

Jonathan Gruber, a health economist at MIT whose work was cited by the FDA as a source for their 70 percent calculation, thought the choice to account for consumer surplus in this instance was wrong. “I think this is really a misapplication of my work.”
When corporate interests override the public interest and dominate the policymaking process, government agencies can’t do their job to safeguard public health. The U.S. needs a regulatory system that puts American families, children and consumers first. Let the FDA know what you think about its proposal as it accepts public comment through Aug. 8.



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