Philip Morris USA Supports Institute of Medicine’s Call for FDA Regulation of Tobacco Products

The Institute of Medicine’s (IOM) latest report on tobacco use in the United States demonstrates the critical importance of effective regulation of tobacco products by the Food and Drug Administration. Legislation introduced by Senators Edward Kennedy (D-MA) and John Cornyn (R-TX) and Representatives Henry Waxman (D-CA) and Tom Davis (R-VA) would address many of the issues the report raises, without the unintended consequences that some of the report’s other recommendations may create.

“These bills provide the framework for comprehensive FDA regulation of tobacco products and provide important policy solutions to many of the complex issues involving tobacco products,” said Howard Willard, Philip Morris USA’s executive vice president of Corporate Responsibility. “FDA regulation, as introduced in Congress, would be the most effective way to address the Institute of Medicine’s concerns.”

Philip Morris USA (PM USA) believes regulation of tobacco products by the FDA could potentially create a new framework within which manufacturers can refocus their efforts to pursue reduced harm products. The company believes regulation should also bring predictability and clear standards to the tobacco industry in the United States.

In addition to our shared support of FDA regulation of tobacco products, we also agree states should devote more resources to smoking cessation and youth smoking prevention initiatives. PM USA has paid more than $38 billion to the states through the tobacco settlement agreements and over $836 million to the American Legacy Foundation since 1997. According to the Government Accountability Office, in fiscal years 2000-2005, about three percent of the money states received from the master settlement agreement from all participating manufacturers was spent on tobacco control programs - such as youth smoking prevention. This represents less than two billion dollars.

“We believe the tobacco settlement agreements represent a massive funding source that states could better use to help achieve youth smoking prevention goals. The IOMs recommended actions to combat youth smoking could more quickly be addressed by tapping into this existing funding source - rather than attempting to create a new one,” said Willard. “Philip Morris USA continues to encourage the states to fund smoking cessation and youth smoking prevention initiatives.”

We do not believe a federal excise tax increase or excessive excise tax increases at the state level are the best approach. We believe cigarette excise tax increases can cause more problems than they solve because they often yield lower than expected revenue and create an additional incentive for tobacco users to seek alternative avenues to purchase tobacco products - such as the Internet - and create increased incentives for smuggling. Since 2000, federal and state governments have increased their cigarette excise tax rates 73 times. In fiscal year 2006, federal and state governments received $21.5 billion in cigarette excise tax revenues.