The economic effects of smoking

Every year smoking kills some 700,000 people in the European Union, being one of the most serious issues facing Member States.

Christine Leșcu, 19.11.2014, 14:04

In Romania smoking is one of the main causes for illness and death. Over 42,000 people die every year because of smoking, of which two thirds are aged between 35 and 69. In 2011, the proportion of smokers accounted for 27%. Diseases associated with smoking are also very serious, ranging from cardio-vascular and brain disorders, TB, cancer and other respiratory disorders. Health is not the only factor affected by smoking, but also the economy.

A recent study looking at the economic impact of smoking and tobacco consumption on the Romanian healthcare system tried to assess the amount of state spending required for the treatment of people suffering from smoking-related illnesses. The cost is covered by the national healthcare system and includes the new treatments applied for these diseases. Doctor Magdalena Ciobanu, an expert with the Health Ministry, told us more about the results of the study:

“Subsidised medication, consultations with a specialist or a family doctor, as well as all in-hospital investigations required to diagnose these diseases have not been taken into account. For this reason, the costs proposed by the study are lower than the real spending. Even so, expenditures surpass the revenues from the so-called ‘vice tax’ levied on tobacco products. Therefore, the state spent nearly 1 billion euros on treating illnesses stipulated in the healthcare plan, of which 250 million euros was used to treat smoking-associated disorders. This led to a deficit of 25 million euros in 2012. In reality, this deficit is much bigger, its exact value being too difficult to ascertain due to the lack of data”.

Accordingly, 28% of state funds allotted to treating diseases are spent to treat smoking-related illnesses. Dr. Magdalena Ciobanu told us more:

“When saying that smoking causes lung cancer, for instance, or leads to heart attack, the extent to which smoking is to blame varies from one disease to another. Not all cases of lung cancer or heart attack are caused by smoking. In the case of lung cancer, 86% of the cases are caused by smoking. For this reason, the study comprises two categories of expenses: the total and the sums spent on smoking-related illnesses”.

Founded in 2006 with the purpose of combating the excessive use of tobacco and alcohol, other than beer and wine, the “vice tax” turned out to be both inefficient and deficient. A number of recommendations issued by the World Health Organisation must be implemented as well, such as: monitoring tobacco consumption, protecting the population against the effects of smoking, providing support to people who wish to quit smoking, advertising the dangers associated with smoking, banning the promotion of tobacco consumption and increasing taxes levied on tobacco. But are these measures truly applied in Romania? Magdalena Ciobanu explains:

“All these six measures are indeed applied, although not to their full extent. Important steps were taken in 2007 and 2008, following Romania’s EU accession. Progress was made in 2008 in two key fields — increasing taxes on tobacco products and providing support to people who wish to quit smoking. The other fields saw no spectacular progress, although these are strictly legislative measures we’re talking about. They don’t require any clear-cut investment from the state, but merely a sign of goodwill from Parliament. The best example in this respect is the law forbidding smoking in public places. The draft law has been on Parliament’s agenda ever since 2011, and the Chamber of Deputies has failed to vote on it to this day”.

European institutions might provide additional support for combating smoking. In April this year the Commission issued a Directive on Smoking. MEP Cristian Busoi is a member in the EU Committee on Environment, Public Health and Food Safety:

“The revised tobacco directive tackled a sensitive and heated subject in the European Parliament. In December last year the Parliament and the Council managed to reach a compromise on this matter, so the revised directive was published in the Official Journal this year. Member States have two years to implement this directive, which requires public health warnings to cover 65% of the front and back of cigarette packs. Any flavoured tobacco products are henceforth banned, in addition to certain additives, such as caffeine, vitamins, colouring agents and other substances facilitating the aspiration or absorption of nicotine. In addition, the directive has additional requirements regarding the shape and content of cigarette packs, forbidding the use of visual elements that might mislead consumers”.

European Institutions hope these measures would result in a decrease in the number of smokers and diminish the appeal of smoking among young people.