FT Health: Why ‘sin taxes’ are good economics

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Non-communicable diseases — covering everything from cancers to diabetes — account for almost three-quarters of global deaths and kill many more people in developing countries than in their richer counterparts. That is the challenge addressed by The Lancet’s task force on NCDs and economics, outlined at a WHO conference this week.

The UN has a target of reducing premature deaths from NCDs by a third by 2030, but this is unlikely to succeed without reforms to financing. Failure could result in a global loss of 5 per cent of GDP, according to Katie Dain of the NCD Alliance, yet work to tackle the diseases receives less than 1.3 per cent of development assistance.

The Lancet says taxes on unhealthy behaviour can lead to “major health gains”, boding well for the UK’s sugar tax which came into force last week. The initiator of the tax — having overcome being labelled a “health fascist” — tells the FT it is time to start treating sugar as nicotine.

And as for smoking itself, a new BMJ report said increasing cigarette prices would save millions from poverty and poor health. A 50 per cent rise would result in 67m men quitting, with the poor benefiting the most.

A common criticism of “sin taxes” is that they are regressive and punish the poor but, argues Larry Summers, former US Treasury secretary and co-chair of the Task Force on Fiscal Policy for Health, this fails to take into account their wider benefits: “An ethical judgment about taxing harmful products cannot rely on the question of tax regressivity alone. It requires consideration of all the effects, including the associated health benefits, externalities, and healthcare costs.”

Three questions

Jim O’Neill, life peer, former chairman of Goldman Sachs Asset Management and joint author of the new book Superbugs: an arms race against bacteria.

Why did you agree to chair the government review on antimicrobial resistance (AMR)?

After 30 years in finance, I wanted a challenge that had to be different. Resistance is a truly global problem which appealed to my sense of global-ness. As I hoped we showed, it was very wise to ask economists to think about the issue, because the solutions lie in economics and finance. It’s probably the most intellectually stimulating thing I’ve ever done.

What has happened since?

There has been some progress on seven of the 10 “commandments” we listed, such as money for early-stage microbiology. Where I’m disappointed is that virtually nothing is happening with fresh approaches to vaccines, on market entry rewards or [with] a bold approach from policymakers to stimulate the introduction of rapid diagnostics. Unless we can find a way for much more rational prescription, we are just pushing the problem on to a future generation.

Why has progress been so slow?

Compared with Ebola or Zika, AMR is slow and creeping, and nobody treats it as seriously as infectious diseases that have come out of nowhere. It’s the classic dilemma in health spending and disease response: like the private sector, governments typically only step up to the plate when there’s a very worrying outbreak. Maybe it needs some of the more scary things to happen before there is change.

Chartwatch

Child deaths Differences in the under-five mortality rate between the poorest and richest households in lower and middle-income countries have narrowed significantly (left) but relative differences are little changed (right). Targeted interventions for the poorest are needed if this gap is to be closed. This interactive map shows the global pattern over 200 years. (The Lancet, Our World in Data)

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News round-up

The WHO and UHC The World Health Organization used World Health Day to trumpet its focus on universal health coverage. UHC can stop the sick suffering financial disasters but is no panacea: it requires political commitment, solid data and a tough stance against corruption. (VOA, Lancet, SciDevNet, Project Syndicate)

Ebola's origins Researchers have suggested that deforestation could be a cause of the epidemic that killed more than 11,000 people across west Africa from 2014-2016. Mining and the felling of trees in previously pristine jungles can reduce natural barriers between humans and animals — such as bats — that carry the virus. (New Internationalist)

China biotech boom The country is emerging as a world leader in cell therapies like Car-T, which aim to treat illnesses by hacking the body’s biology. A flood of investment — $10bn last year — has gone into the country’s biotechs, often founded by Chinese-born scientists returning from overseas who say it is easier to obtain funding domestically than in the US. (FT)

Driving down drug prices Pharma companies justify high prices by significant development spending, but critics say many drugs were developed in university labs funded by the public purse. Campaign groups, government pressure, easier ways to make cheap copies and organisations such as the Drugs for Neglected Diseases Initiative hold hopes for change. (The Guardian)

Pharma frenzy continues Novartis announced it would buy AveXis, a US specialist in spinal muscular atrophy, for $8.7bn. The FT's Lex column said: “Novartis knows the healthcare industry no longer rewards marginal improvements. Instead, the prizes will come from investing in breakthroughs.” (FT)

Patient advocacy US patient groups are growing in influence but their financial ties to pharma companies are unclear. Kaiser’s new “Prescription for Power” database aims to expose these links and shows Big Pharma gave $116m to various groups in a single year. (Kaiser Health News)

“Rementia” “Rewiring the brain” is now a common concept but is not yet applied widely to dementia care, where it has huge potential for occupational therapists to help sufferers regain some of their functions. These scientists want to change how we define Alzheimer’s, the most common cause of dementia, by focusing on changes in the brain. (The Guardian, NPR)

Kids drool over Juul Campaigners who don’t subscribe to the view that ecigarettes are a safer alternative to traditional smoking have a new bête noir: a device called Juul. The tiny vape pen gives a powerful nicotine rush similar to regular cigarettes and has gained a 55 per cent share of the US ecigarette market in just two years, driving fears of an “epidemic”. (WSJ, Forbes)

Café culture Inspired by the format of death cafés — informal spaces where like-minded souls can discuss a taboo subject — a new movement of menopause café s is taking root across the UK. Activities are expanding into workplace events and even a festival. (The Guardian)

Acting Up The French film 120 Beats Per Minute dramatises the story of HIV/Aids activists in Paris in the late 1980s/early 1990s. The Act Up campaign was instrumental in lobbying for legislation, research and treatment for those affected by the disease. In other movie news, how about a Crispr action film starring The Rock? (The Observer, Stat)

Best from the Journals

Politics of global health We need something like a Bretton Woods Conference on global health, says a Lancet editorial bemoaning the fragmentation of interventions, governance and funding. An interview marking the WHO's 70th birthday examines the history of global health and why the WHO failed in its earlier focus on primary healthcare. Another report says US leadership is vital if big epidemics are to be stopped. (The Lancet, WHO, Friends of the Global Fight)

Wealth and health It is already known that poorer people are more likely to die younger, but the first study of “negative wealth shock” shows that a sudden loss of assets is also associated with an increased risk of early death. Causes range from mental ill-health to substance abuse to cardiovascular problems. (JAMA)

Net benefits Bed nets with a coating of piperonyl butoxide combined with pyrethroid insecticide reduced cases of malaria in children by 44 per cent over one year, and 33 per cent over two years, compared with current products. They have been recommended for wider use by the WHO. Read more in the FT’s Combating Malaria special report on April 17. (The Lancet)

Deaths of despair A comprehensive 30-year study shows huge disparities between US counties of deaths from alcohol and drug misuse, self-harm and violence. Hawaii is the state with the longest life expectancy and Mississippi the shortest. (JAMA)

Booze warning The most comprehensive study yet of the health effects of alcohol says more than 100g of alcohol (five-six glasses of wine or pints of beer) a week are enough to increase the chances of an early death. The amount is lower than the current recommended limit in several countries. (The Lancet)

Are you a night owl or a lark? People who prefer staying up and sleeping late have a higher risk of dying sooner than morning people and more likely to suffer from ill health. The findings suggest the need for interventions to modify the circadian rhythms of “owls” or allow them more flexibility over working hours. (Chronobiology International)

Podcast of the week

WHO reform Dr Peter Salama, deputy director-general of emergency preparedness and response at the World Health Organization, discusses changes at the organisation after criticism of its response to the west African Ebola epidemic. (CSIS Take as Directed, 31m)

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Final thought

Arts on prescription We wrote recently about the beneficial effect of music on dementia sufferers but there is evidence that different arts can have a positive effect on health conditions. Is it time arts became a core part of “social prescribing”? (The Conversation)