Tim Worstall

Smoking and Government Money

I have to admit that I’m not all that certain I agree with Dr. Eamonn Butler here (despite the fact that he’s one of my employers as a freelance):

Champix costs £1.95 per patient per day. Anti-smoking campaigners
welcomed Nice’s provisional ruling, saying the £163.80 cost to the NHS
for each 12-week course would be more than recouped from the NHS’s £1.5
billion annual bill for treating diseases caused by smoking.
…

Dr Eamonn Butler, the director of the Adam Smith
Institute, said: "There are a million and one people with serious
ailments who can’t get treatment on the NHS.

"It
seems odd that smokers should get this when people with really
life-threatening conditions can’t get the medicines they need.

"However,
I would reckon that in this case it should be funded by the NHS because
it will save taxpayers money in the long run, so it would seem to be a
good investment."

I rather think it depends upon which budget you’re talking about as to whether money is saved or not. Of course, if people stop smoking then the budget required to treat the diseases caused by smoking will fall. But people who live longer do still require medical treatment for whatever else it is that they’ll get which then kills them. So whether it saves money in the long term is a more complex question.

When you look at the totality of the government budget I think it’s pretty clear that smoking actually saves the taxpayer money in the long term. There’s the tax paid by the smoker of course, a hefty sum (some £ 8 billion a year, which more than pays for the NHS costs above) but over and above this there’s one even larger.

As we know, smokers die on average 7 years earlier than non-smokers. Again, on average, given current lifespans, those 7 years would all be on the pension. So smoking saves 7 years of pension payments to that (what is it, 20%? 30%?) portion of the population that smokes.

Don’t get me wrong, I think the drug should indeed be available, addiction is a disease worth treating, there are all sorts of justifications for weaning people off smoking. But saving the taxpayers’ money just doesn’t seem to stack up as one of them.

In

7 responses

  1. Philip Thomas Avatar
    Philip Thomas

    Interesting question and again it depends on whether saving life or money is the important thing. The dilemma being that money can be used to save life. Personally, I reckon they should just make it available without a prescription (but then I feel that about all drugs) and have people buy it themselves if they want it in, say, weekly course packs. The cost of the daily drug pales in comparison to the daily cost of heavy smoking so there isn’t an economic wall to giving up.

    Reply
  2. Jim Avatar
    Jim

    Eamonn Butler: “It seems odd that smokers should get this when people with really life-threatening conditions can’t get the medicines they need”.
    Funnily enough, I was just reading the other day how that astroturf organisation ‘Africa Fighting Malaria’ was set up at the behest of Philip Morris in order to try to make the WHO stop worrying about death and illness caused by tobacco. I wonder if the ASI’s concern on this issue is also connected to that noble crusade?
    Tim adds: I’ve no idea.

    Reply
  3. Eamonn Butler Avatar
    Eamonn Butler

    I’m not sure that I agree with Eamonn Butler either – at least as quoted. I might have said that I could see the NHS’s thinking, that a few £1.95 a days now might save them £1.5bn a year in the future, but I didn’t actually endorse it.
    The financial issues are indeed complicated – tobacco taxes, NHS costs, pensions – it’s an impossible sum.
    Fundamentally, I think that smokers are making a lifestyle choice and I don’t see why we should subsidize them to quit, when plenty of people quit of their own volition. The number of UK smokers is in fact dropping steadily. But if you have bone marrow cancer or altzheimer’s or multiple sclerosis, you cannot just quite. you’re stuck with it. That seems to me to be a greater priority.
    As long as healthcare is run by politicians, you will always get this kind of thing. How interesting that the NHS only licensed the breast-cancer drug Herceptin after a court case brought by sufferers. So did it decide on clinical need or political expendiency?
    And, Philip – why does everyone assume that people who comment on an issue – and mine was actually a very even-handed comment, because I don’t think I’ve fully made up my mind on it – have some financial axe to grind. My institute does not get a penny from the pharmaceutical industry. Such suggestions demean what is in fact a very interesting argument about practical policy.

    Reply
  4. HJHJ Avatar
    HJHJ

    It’s a difficult financial calculation.
    Contrary to what many people expect, people who live healthier lifestyles (which includes not smoking) not only tend to live longer but they also consume less medical care over their lifetime. Quite simply, much of the NHS budget is spent on treating long term chronic conditions, most of which are lifestyle-related.
    Smoking may save on pensions, but as it also kills and debilitates people before retirement age, it probably increases other social security costs.
    So unless Tim can produce some figures that demonstrate that “it’s pretty clear that smoking actually saves the taxpayer money in the long term” I think this should be treated as an unsubstantiated assertion.
    Tim adds: Well, the people who actually did the study were Phillip Morris for the Czech Government. But then we’re not supposedto believe what they say, are we?

    Reply
  5. Jim Avatar
    Jim

    Eamonn, people are suspicious that the Adam Smith Institute may have “some financial axe to grind” in these kinds of issues because it frequently does: didn’t the ASI get money from cigarette manufacturers in the early 1990s to publish tracts bewailing anti-tobacco proposals from the EC? Of course, a good way to remove such suspicions would be to publish details of your funding. Interesting that you’ve never bothered.

    Reply
  6. Philip Thomas Avatar
    Philip Thomas

    Eamonn, I think you meant to say Jim rather than Philip. I don’t think you’ve a financial axe to grind, only a political one. Seeing as I tend to agree with your politics you’ll hear no complaint here.

    Reply
  7. HJHJ Avatar
    HJHJ

    Tim,
    I’ve read the Philip Morris study. It is absolute rubbish and easy to demolish (as many have). Full of holes and ludicrously biased arguments.
    Incidentally, the didn’t do the report for the Czech government. They produced it and presented it to the Czech government (i.e the Czech government didn’t request it) in order to try to disuade them from higher taxes on cigarettes.
    Philip Morris have withdrawn it and apologised.

    Reply

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