The war against tobacco A progress report from the Indian frontgraphics.eiu.com/upload/ThewarontobaccoMarch42009.pdfThe war against tobacco A progress report from the Indian front

A report from the Economist Intelligence UnitSponsored by Pfizer

Paper size: 210mm x 270mm

The war against tobaccoA progress report from the Indian front

LONDON26 Red Lion SquareLondonWC1R 4HQUnited KingdomTel: (44.20) 7576 8000Fax: (44.20) 7576 8500E-mail: [email protected]

NEW YORK111 West 57th StreetNew YorkNY 10019United StatesTel: (1.212) 554 0600Fax: (1.212) 586 1181/2E-mail: [email protected]

HONG KONG6001, Central Plaza18 Harbour RoadWanchaiHong KongTel: (852) 2585 3888Fax: (852) 2802 7638E-mail: [email protected]


© The Economist Intelligence Unit 2009 1

Contents

Preface 3

A global battle 5

On the Indian front... 7

Outlook: Continued scattered gunfire 13


2 © The Economist Intelligence Unit 2009

© 2009 The Economist Intelligence Unit. All rights reserved. All information in this report is verified to the best of the author’s and the publisher’s ability. However, the Economist Intelligence Unit does not accept responsibility for any loss arising from reliance on it.

Neither this publication nor any part of it may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of the Economist Intelligence Unit.



Preface

The war against tobacco: A progress report from the Indian front is an Economist Intelligence Unit report, sponsored by Pfizer. The Economist Intelligence Unit bears sole responsibility for this report. The Economist Intelligence Unit’s editorial team conducted the research, carried out in-depth interviews with relevant experts and wrote the report. The findings and views expressed here do not necessarily reflect the views of the sponsor.

The editor of the report was Manoj Vohra, and Gaddi Tam was responsible for design and layout. Our sincere thanks go to the executives who participated in interviews for sharing their time and insights.

March 2009





A global battle

According to the World Health Organisation (WHO), an estimated 100m people died prematurely during the 20th century as a result of tobacco use, making it the leading preventable cause of death

and one of the top killers overall. Another 1bn more may die from tobacco use this century if current trends continue unchecked. Many countries have clamped down on smoking in public places, increased tax rates on tobacco and implemented other measures designed to curb smoking. Over 150 countries have already ratified the Framework Convention on Tobacco Control (FCTC), which requires countries to take a range of anti-smoking measures.

India, the world’s second-largest consumer and third-largest producer of tobacco, is among those taking action. There are currently about 240m tobacco users aged 15 years and above (195m male and 45m female) in the country. In all, 57% of men and nearly 11% of women use tobacco in some form, according to a recent government survey.

About 120m Indians smoke cigarettes and a leaf-rolled local mini cigarette—the bidi (the remaining tobacco users are chewers). More than 800bn bidis and 100bn cigarettes are sold in India each year. The WHO predicts that India will witness the fastest rate of rise in deaths attributable to tobacco in the first two decades of the 21st century. A recent study by the New England Journal of Medicine makes equally horrifying predictions. It estimates that 1m people will die prematurely in India each year during the next decade because of tobacco use.

India’s tobacco problem has serious implications for the country’s fragile healthcare system. The total cost of just three tobacco-related diseases—coronary artery disease (CAD), chronic obstructive pulmonary disease (COPD), and tobacco-related cancers—is estimated to be over Rs308bn (US$7.2bn)1 per year. This is ironic and shocking for a country which is struggling to provide basic healthcare infrastructure and services to its billion-strong population.

While India’s central government has implemented several measures to control tobacco use over the past decade, these have been mostly piecemeal and ineffective. “Despite the plethora of laws and regulations, it is only since 2007 that more effective anti-tobacco measures such as smoke-free rules have been instituted and implemented,” according to a senior official from India’s Ministry of Health. Even now, according to experts, India’s roadmap for tobacco control seems convincing only on paper. “While several tobacco control laws exist in the country, implementation and enforcement remain a challenge,” says Hemant Goswami of the Burning Brain Society, a voluntary civil-society organisation in India with a focus on tobacco policy.

Prevalence of tobacco use in India

Males (%) (age group: 15-54)

Females (%) (age group: 15-49)

Tobacco users: 57.0 10.8

Smokers 32.7 1.4

Chewers 36.5 8.4

1 Based on 1999-2000 costs; Report on Tobacco Control in India, Ministry of Health and Family Welfare, Government of India, 2004



History of tobacco control in India

1975: Cigarettes (regulation of production, supply and distribution) Act.

1980: Central and state governments imposed restrictions on tobacco trade and initiated efforts for comprehensive legislation for tobacco control.

1990: Central government issued directive prohibiting smoking in public places, banned tobacco advertisements on national radio and TV channels, advised state governments to discourage sale of tobacco around educational institutions and extended the display of statutory health warning to all chewing tobacco products.

1999: High Court of Kerala announced ban on smoking in public places.

1999: Ministry of Railways banned sale of cigarettes and bidis on railway platforms and in trains.

2000: Central government banned tobacco advertisements on cable television.

2001: Supreme Court of India mandated a ban on smoking in public places.

2001: Ministry of Railways imposed ban on sale of gutkha (a packaged chewing tobacco) in railway stations, inside trains and on railway premises.

2001-2003: Production and sale of chewing tobacco products banned in states of Tamil Nadu, Andhra Pradesh, Maharashtra, Madhya Pradesh, Bihar and Goa using the provision of the Prevention of Food Adulteration Act.

2003: The Cigarettes and Other Tobacco Products (Prohibition of Advertisement and Regulation of Trade and Commerce, Production, Supply and Distribution) Act (COTPA), 2003 was introduced.

2004: India became a signatory to Framework Convention on Tobacco Control (FCTC)—one of the first ten countries in the world to do so.

2007: India defers pictorial health warning issue repeatedly. It is now expected to be implemented from May 31st 2009.

2008: Revised smoke-free rules implemented that defined public places and identified people responsible for maintaining smoke-free work places. The government announced that all public places across the entire country would go smoke-free.



On the Indian front…

The strategies adopted by India are all tried and tested in the developed world. In India, however, some initiatives are easier to implement than others. Measures like a comprehensive, nationwide ban

on smoking in public places and a ban on direct tobacco advertising are showing encouraging results. For instance, many public places (restaurants, offices, shopping malls, etc) have gone smoke-free after the government’s comprehensive smoke-free policy announcement in October 2008. Taxation policy, however, has not yielded the desired results because it has not been evenly applied across different tobacco products, leaving users with cheaper alternatives to their usual fix (in some countries like Canada and South Africa, higher taxes on tobacco have led to a significant decline in the number of tobacco users). On other counts such as mandatory use of pictorial healthcare warnings on tobacco products, public awareness and structured cessation programmes, India seems to be lagging behind other countries—and this undermines the holistic approach that appears to have been the key to the effectiveness of other countries’ anti-tobacco crusades.

Despite a broader commitment to curbing tobacco use, concrete actions aimed at doing so remain hampered by politics and weak enforcement capabilities. A prime example is the introduction of mandatory pictorial warnings on tobacco packaging. India made a binding commitment to have pictorial health warnings on all tobacco products by ratifying the FCTC in 2004. However, according to Mr Goswami of Burning Brain Society, a strong political lobby protecting the interests of the tobacco industry has prevented the necessary legislation from being introduced. Despite the FCTC ratification, pictorial warnings were included on the government’s agenda only after a writ was filed by an advocate in the Simla High Court.

Originally pictorial warnings were to be implemented in February 2007, but the government has since then deferred the move six times. The government now aims to implement the measure by May 2009. The type of warnings to be used has also been toned down—instead of photos of cancer sufferers and gangrened feet, there will be a lung X-ray and a scorpion. Public health activists argue that pictorial warnings are effective in educating young children who may take up the habit and millions of illiterate people in India who consume tobacco without knowing its ill effects. India’s government, rather surprisingly, believes that graphic images will hurt Indian sensibilities, and hence the scorpion and X-ray will mildly remind people of the dangers of tobacco.

Taxation policy has also proven difficult to get right. Non-cigarette tobacco products account for 85% of the tobacco consumption in India, but contribute only 15% to tobacco taxes. About 53% of all tobacco consumed in India is in the form of bidis. Between half and three-quarters of all bidis are currently out of the tax net, either because of exemptions or tax evasion. A report2 by a former IMF economist, Emil Sunley, recommends an increase in the excise rate on bidis from Rs14 to at least Rs168 per 1,000 sticks. Chewing tobacco, the fastest growing tobacco segment, is largely unregulated (as much as 70% of the production comes from factories that are not registered or do not have a fixed address) and was added to the tax list only last year.

2 India: The Tax Treatment of Bidis, Emil M. Sunley, 2008



Where does India stand on World Health Organisation’s MPOWER criteria?

Mpower criteria Efforts made so far/limitations Programmes and future plans

Monitor the tobacco • Government of India's National Family Health Survey (NFHS) provides data on the prevalence of tobacco use.

• Civil society (Advocacy for Tobacco Control)—monitors tobacco control legislation and tobacco industry activities nationally.

• No authoritative data on smuggling and crossborder trade.

• Limited good baseline data on tobacco products, their production and consumption.

• Industry and trade data are inconsistent and poor.

• WHO and Centers for Disease Control and Prevention (CDC) implementing Global Adult Tobacco Survey (GATS) to be completed by mid 2009.

• Several states are tracking receipt of fines levied as penalty for violating the smoke-free rules.

Protect people from tobacco smoke

• All public places (including work places) declared smoke-free in October 2008.

• 24-hour national toll-free help-line established to help public with information and to report violations.

• Public remains unaware about smoke-free laws, par-ticularly in smaller cities and towns.

• Capacity of enforcers (as those notified by law) is weak.

• Smoke-free cities planned—Delhi (leading towards a smoke-free 2010 Commonwealth Games in the city), Mumbai, Chennai and Ahmedabad among others.

• Opinion polls and compliance studies planned to support smoke-free rules.

• Air monitoring studies will take place in many cities to show benefits of smoke-free policy.

Offer help to quit tobacco use • The government established 13 tobacco-cessation centres (TCCs) in 2002. In 2005, the network was expanded to about 20 TCCs. The focus, however, is on offering behavioural counselling, with limited medi-cal treatment capability.

• Low quit rates due to limited options available.

• Cessation services currently limited to only 20 cen-tres. These are situated within cancer hospitals and a few major hospitals.

• The health ministry has proposed to expand cessa-tion services to every district by 2012. In addition, 100 other centres and 275 medical colleges will start cessation clinics over the next two years.

Warn about the dangers of tobacco

• Decision for the adoption of mandatory pictorial health warnings, which will cover 40% of the front and back of cigarette packages, have been deferred to May 2009.

• Civil society and the government’s social advertising campaigns are sporadic and untested for reach and effectiveness.

• Awareness campaigns, school-based programmes will be the main focus of the government and civil society.

Enforce bans on tobacco advertising, promotion and sponsorship

• Existing law has banned advertising, sales promotion and sponsorship, although ‘point of sale’ advertising is not banned.

• A recent court verdict has set aside the law prohibit-ing smoking in films.

• Advertising, sales and promotions, especially sur-rogate or indirect advertising through brand place-ment, are rampant, as laws are not clear.

• Unlike state-run channels, private operators do not have codes of conduct. Cable television channels and private media are, therefore, difficult to regulate under the current arrangement.

• Government currently has no clear strategy on indi-rect advertising. It has challenged court verdict on smoking in films.

Raise taxes • Cigarettes are taxed heavily, compared to other tobacco products.

• Most bidis are untaxed (only machine-made bidis are taxed).

• Most taxation is arbitrary – cigarettes are taxed based on length and whether they are filter or non-filter, bidis whether they are hand made or machine made.

• Taxes are negated by parallel concessions made elsewhere or by inflation which depress real price increases.

• No significant increase in tax rates expected, due to the lack of political will.



With almost no tax on bidis and chewing tobacco, existing taxation policy is ineffective for reining in tobacco consumption, though such policies have been proven effective in several countries like South Africa and Spain3.

Meanwhile, attempts to ban smoking in public places have had mixed results. Though the momentum towards implementing such a ban has gathered force, sustained enforcement will remain a huge challenge. Indeed, India has been trying to introduce such policies since 1990, but it never had a leader with a strong political will to champion the cause. Tobacco control has a strong advocate in the current Health Minister, Mr Ambumani Ramadoss, a doctor from Tamil Nadu. A host of tobacco-control measures, including a nationwide ban on smoking in public places, crackdown on surrogate advertising and widespread public-awareness programmes, have been initiated under his watch.

Interestingly, some cities in India like Chandigarh and Jhunjhunu went smoke-free months before the government announcement. Some other cities and towns like Kottayam, Musoorie and Ranchi also have made impressive progress towards creating a smoke-free environment. More cities are expected to join the movement by implementing the central government’s smoke-free policy. As in the West, restaurants and hotels protested against the new rules, but opinion polls conducted across the four major cities have shown overwhelming support for smoke-free initiatives and the possibility of policy reversal has, therefore, been diminished.

There has, until now, been little assessment of how successful a city or town has been in its smoke-free initiatives. There is limited evidence from opinion polls, scientific air-quality data or behavioural studies to assess the efficacy of smoke-free initiatives. Recently, however, according to a senior official from India’s Ministry of Health, four studies are being commissioned based on which advocacy efforts will be designed.

Also considered critical in the war on tobacco is a ban on promoting its sale, and here, too, Indian policy needs refinement. India has a comprehensive law to prohibit tobacco advertising, sales and promotion, although it does not apply to “point of sale” advertising. Regulation and enforcement of the law, however, are complex, and monitoring is weak. Most tobacco companies blatantly exploit surrogate advertising and promotions—for example, they are still allowed to promote fashion shows, awards functions like bravery awards for women and so on.

Strengthening the front lineIt is now well-established that tobacco use causes an enormous economic burden on account of its widespread adverse effects and resulting direct and indirect healthcare costs. According to an independent study conducted in 20044, the total economic cost of tobacco in India amounted to US$1.7bn annually—about 16% more than the total tax revenue collected from tobacco and many times more than the total expenditure on tobacco control by the government of India. The study looked at the tobacco-attributable fraction of costs associated with four major categories of disease caused by tobacco use: tuberculosis, respiratory diseases, cardiovascular diseases and neoplasms. It estimated the direct medical cost of treating tobacco-related diseases at US$907m for smoked tobacco and US$285m for smokeless tobacco. Indirect costs, which include the cost of caregivers, productivity loss on account of treatment, etc, were estimated at US$398m for smoked tobacco and US$104m for smokeless tobacco.

3 WHO’s MPOWER report, 2008

4 RM John, HY Sung, WB Max, Economic Cost of Tobacco Use in India, 2004; it estimates only the tobacco-attributable fraction of costs.



The tobacco-attributable cost of tuberculosis alone was three times higher than the expenditure on tuberculosis control in India. Many believe that the comprehensive economic burden of tobacco use in India could be much higher because of its adverse effects on society at large.

While this impact is of concern to the government, it should also be of concern to employers. Most companies still look at the smoke-free policy as a mere regulatory obligation. But some, particularly in the IT, ITES and manufacturing sectors, are beginning to realise the economic burden of tobacco. However, only a few have formally documented the benefits of smoke-free initiatives or have written policies. Anecdotal evidence suggests that companies which follow smoke-free initiatives witness less absenteeism at work, fewer breaks from workstations, improved performance and morale, cleaner air which protects employees who do not smoke, lower healthcare-insurance costs (companies need to pay higher medical insurance for employees who smoke), and an improved organisational image. But there are few benchmarks for best practices and very few companies offer counselling or structured tobacco-cessation services in India. Although industry associations have been contemplating organising counselling and cessation services for industry clusters, very few have actually done anything about it. Some experts blame the inadequacy of counselling and cessation infrastructure in the country for this deficiency.

Overall, structured tobacco-cessation programmes are a relatively new area in tobacco control in India and establishment of cessation services (with only 20 tobacco-cessation centres, TCCs) is in its infancy. The government aims to establish one cessation centre in each district of the country by 2012—this, most experts believe, is going be a tall order, given India’s competing health priorities. While the government is working with professional bodies like the Indian Medical Association (IMA) and Indian Dental Association (IDA) to train manpower for TCCs, it faces a daunting task of developing skilled human resources at the district level. More importantly, cessation is still not linked to the proper treatment of tobacco addiction at most TCCs. The focus and capability of existing TCCs continue to be limited to providing counselling services only. Low quitting rates, long counselling and treatment duration, absence of suitable quitting options and lack of documented successes are some of the other challenges to improving access to cessation services in India.

Beyond government efforts, a few companies in India have gone ahead and started providing counselling and cessation services to employees. According to Harsh Chopra, CEO, InterTECH, a leading electronic-security-and-safety-systems company, “cessation and counselling services provide valuable opportunity for companies to extend corporate social responsiblity to their employees.” But such initiatives are far too few and yet to be incorporated into the corporate agenda formally.

According to Dr Nalini Krishnan, Director, Kasturi and Sons, publishers of The Hindu, India’s third-largest circulated English newspaper, “smoking-cessation programme in the company was initiated way back in 1999. Counselling and workshops on smoking cessation were held and, among other things, tips to quit smoking were provided. The company also distributed pamphlets on health hazards and financial loss due to smoking along with the monthly pay cheque.” The company has an ongoing programme, offered by the counselling department of the Hindu Health Centre, to help employees quit smoking.

Another Indian company, US$150m TGV group with diversified business interests, has formulated an innovative counselling and tobacco-cessation programme. The company encourages its employees to quit



smoking and drinking alcohol by offering a monthly incentive. The allowance is paid to the employees’ spouses or parents.

Globally, several leading companies such as AT&T, General Mills, Johnson & Johnson, Prudential Financial, Texas Instruments, etc, have successfully enacted and implemented corporate smoke-free policies. Indian companies, evidently, are beginning to mimic their global peers.

• Low awareness about ill effects of nicotine addiction; most do not believe that smoking is an addiction that requires therapy.

• Few models to show success that counselling and pharmacological approaches work in diverse Indian settings.

• Quitting rates are very low and relapses common; most smokers rely on will power alone.

• Most quitters switch to using another form of tobacco.

• Pharmacological limitation – despite being effective, therapy and counselling together may be of a long duration and costs can be high.

• Indians attach stigma to seeking counselling.

• Few documented successes within existing cessation clinics.

Challenges to structured tobacco-cessation programmes in India





Outlook: Continued scattered gunfire

Several prescriptions are being talked about to achieve more tangible results from tobacco-control efforts in India. Rationalisation of tax regimes for all tobacco products is among the first such steps.

But this, along with implementing mandatory pictorial warnings, is also the most difficult, because the government seems convinced that both measures will hurt employment.

Civil society has played an active role in the enforcement of anti-tobacco laws. However, pressure from civil society at various levels is uneven, and in many states, completely absent. In many vital areas like taxation, there is very little understanding and no concerted push for change. While corporate India is beginning to take up the cause, it can, and should, do a lot more.

Underlying all of these difficulties are the weakness of enforcement infrastructure, an improved access to structured tobacco-cessation programmes and many competing challenges facing the government. In India, health policy is a state matter (though the tobacco law is a federal act), and states have uneven capacity to enforce the law or introduce effective policies. Some states are still struggling to deal with more immediate health needs like controlling communicable diseases, and therefore, tobacco control remains low on their priority list.



A report from the Economist Intelligence UnitSponsored by Pfizer

Paper size: 210mm x 270mm


LONDON26 Red Lion SquareLondonWC1R 4HQUnited KingdomTel: (44.20) 7576 8000Fax: (44.20) 7576 8500E-mail: [email protected]

NEW YORK111 West 57th StreetNew YorkNY 10019United StatesTel: (1.212) 554 0600Fax: (1.212) 586 1181/2E-mail: [email protected]

HONG KONG6001, Central Plaza18 Harbour RoadWanchaiHong KongTel: (852) 2585 3888Fax: (852) 2802 7638E-mail: [email protected]

Documents

The war against tobacco A progress report from the Indian frontgraphics.eiu.com/upload/ThewarontobaccoMarch42009.pdfThe war against tobacco A progress report from the Indian front