The War Against Tobacco a Progress Report from the Indian Front a Report from the Economist Intelligence Unit Sponsored by Pfizer

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The war against tobacco A progress report from the Indian front A report from the Economist Intelligence Unit Sponsored by Pfizer

LONDON NEW YORK HONG KONG 26 Red Lion Square 111 West 57th Street 6001, Central Plaza London New York 18 Harbour Road WC1R 4HQ NY 10019 Wanchai United Kingdom United States Hong Kong Tel: (44.20) 7576 8000 Tel: (1.212) 554 0600 Tel: (852) 2585 3888 Fax: (44.20) 7576 8500 Fax: (1.212) 586 1181/2 Fax: (852) 2802 7638 E-mail: [email protected] E-mail: [email protected] E-mail: [email protected] The war against tobacco A progress report from the Indian front

Contents

Preface 3

A global battle 5

On the Indian front... 7

Outlook: Continued scattered gunfire 13

© 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.

2 © The Economist Intelligence Unit 2009 The war against tobacco A progress report from the Indian front

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

4 © The Economist Intelligence Unit 2009 The war against tobacco A progress report from the Indian front

A global battle

ccording to the World Health Organisation (WHO), an estimated 100m people died prematurely Aduring 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 1 Based on 1999-2000 costs; Report on Tobacco Control in per year. This is ironic and shocking for a country which is struggling to provide basic healthcare India, Ministry of Health and infrastructure and services to its billion-strong population. Family Welfare, Government of India, 2004 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 (%) Females (%) (age group: 15-54) (age group: 15-49) Tobacco users: 57.0 10.8 Smokers 32.7 1.4 Chewers 36.5 8.4

History of tobacco control in India 2001: Ministry of Railways imposed ban on sale of gutkha (a packaged chewing tobacco) in railway stations, inside trains and on railway premises. 1975: Cigarettes (regulation of production, supply and distribution) Act. 2001-2003: Production and sale of chewing tobacco products banned in states of Tamil Nadu, Andhra 1980: Central and state governments imposed Pradesh, Maharashtra, Madhya Pradesh, Bihar and restrictions on tobacco trade and initiated efforts for Goa using the provision of the Prevention of Food comprehensive legislation for tobacco control. Adulteration Act.

1990: Central government issued directive 2003: The Cigarettes and Other Tobacco Products prohibiting smoking in public places, banned tobacco (Prohibition of Advertisement and Regulation of Trade advertisements on national radio and TV channels, and Commerce, Production, Supply and Distribution) advised state governments to discourage sale of Act (COTPA), 2003 was introduced. tobacco around educational institutions and extended the display of statutory health warning to all chewing 2004: India became a signatory to Framework tobacco products. Convention on Tobacco Control (FCTC)—one of the first ten countries in the world to do so. 1999: High Court of Kerala announced ban on smoking in public places. 2007: India defers pictorial health warning issue repeatedly. It is now expected to be implemented from 1999: Ministry of Railways banned sale of cigarettes May 31st 2009. and bidis on railway platforms and in trains. 2008: Revised smoke-free rules implemented that 2000: Central government banned tobacco defined public places and identified people responsible advertisements on cable television. for maintaining smoke-free work places. The government announced that all public places across 2001: Supreme Court of India mandated a ban on the entire country would go smoke-free. smoking in public places.

6 © The Economist Intelligence Unit 2009 The war against tobacco A progress report from the Indian front

On the Indian front…

he strategies adopted by India are all tried and tested in the developed world. In India, however, Tsome 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 2 India: The Tax Treatment of Sunley, recommends an increase in the excise rate on bidis from Rs14 to at least Rs168 per 1,000 sticks. Bidis, Emil M. Sunley, 2008 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.

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 • WHO and Centers for Disease Control and Prevention Survey (NFHS) provides data on the prevalence of (CDC) implementing Global Adult Tobacco Survey tobacco use. (GATS) to be completed by mid 2009. • Civil society (Advocacy for Tobacco Control)— • Several states are tracking receipt of fines levied as monitors tobacco control legislation and tobacco penalty for violating the smoke-free rules. 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.

Protect people from tobacco • All public places (including work places) declared • Smoke-free cities planned—Delhi (leading towards a smoke smoke-free in October 2008. smoke-free 2010 Commonwealth Games in the city), • 24-hour national toll-free help-line established to Mumbai, Chennai and Ahmedabad among others. help public with information and to report violations. • Opinion polls and compliance studies planned to support smoke-free rules. • Public remains unaware about smoke-free laws, particularly in smaller cities and towns. • Air monitoring studies will take place in many cities to show benefits of smoke-free policy. • Capacity of enforcers (as those notified by law) is weak.

Offer help to quit tobacco use • The government established 13 tobacco-cessation • The health ministry has proposed to expand cessa- centres (TCCs) in 2002. In 2005, the network was tion services to every district by 2012. In addition, expanded to about 20 TCCs. The focus, however, is on 100 other centres and 275 medical colleges will start offering behavioural counselling, with limited medi- cessation clinics over the next two years. cal treatment capability. • Low quit rates due to limited options available. • Cessation services currently limited to only 20 centres. These are situated within cancer hospitals and a few major hospitals.

Warn about the dangers of • Decision for the adoption of mandatory pictorial • Awareness campaigns, school-based programmes tobacco health warnings, which will cover 40% of the front will be the main focus of the government and civil and back of cigarette packages, have been deferred to society. May 2009. • Civil society and the government’s social advertising campaigns are sporadic and untested for reach and effectiveness.

Enforce bans on tobacco • Existing law has banned advertising, sales promotion • Government currently has no clear strategy on indi- advertising, promotion and and sponsorship, although ‘point of sale’ advertising rect advertising. It has challenged court verdict on sponsorship is not banned. smoking in films. • A recent court verdict has set aside the law prohibiting smoking in films. • Advertising, sales and promotions, especially surrogate 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.

Raise taxes • Cigarettes are taxed heavily, compared to other • No significant increase in tax rates expected, due to tobacco products. the lack of political will. • 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.

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 3 WHO’s MPOWER report, 2008 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 line It 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 4 RM John, HY Sung, WB Max, independent study conducted in 20044, the total economic cost of tobacco in India amounted to Economic Cost of Tobacco Use in India, 2004; it estimates US$1.7bn annually—about 16% more than the total tax revenue collected from tobacco and many times only the tobacco-attributable more than the total expenditure on tobacco control by the government of India. The study looked at the fraction of costs. 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.

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.

Challenges to structured tobacco-cessation programmes in India

• Low awareness about ill effects of nicotine • Most quitters switch to using another form of addiction; most do not believe that smoking is an tobacco. addiction that requires therapy. • Pharmacological limitation – despite being • Few models to show success that counselling and effective, therapy and counselling together may be of a pharmacological approaches work in diverse Indian long duration and costs can be high. settings. • Indians attach stigma to seeking counselling. • Quitting rates are very low and relapses common; most smokers rely on will power alone. • Few documented successes within existing cessation clinics.

Outlook: Continued scattered gunfire

everal prescriptions are being talked about to achieve more tangible results from tobacco-control Sefforts 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.

The war against tobacco A progress report from the Indian front A report from the Economist Intelligence Unit Sponsored by Pfizer