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April 7th, 2008:

Early Life Second-Hand Smoke Exposure

Early life second-hand smoke exposure and serious infectious morbidity during the first 8 years: evidence from Hong Kong’s ‘‘Children of 1997’’ birth cohort


Background: Second-hand smoke (SHS) exposure is a modifiable cause of ill health. Despite the smoking ban in public places introduced in Hong Kong in 2007, infants and children continue to be exposed within the home.

Aims: To determine the critical windows of SHS exposure and the duration of its impact on serious infectious morbidity in the first 8 years of life.

Methods: The Hong Kong ‘‘Children of 1997’’ birth cohort is a prospective, population-based study of 8327 children comprising 88% of all births in April and May 1997, of whom 7402 (89%) were followed up until their eighth birthday in 2005. We used multivariable Cox regression to assess the relation between postnatal SHS exposure and risk of first admission to public hospitals (together accounting for .95% total bed-days overall) for respiratory, other and all infections from birth to 8 years of age, for all individuals and for vulnerable subgroups.

Results: Overall, household SHS exposure within 3 metres in early life was associated with a higher risk of admission for infectious illness up until 8 years of age (hazard ratio 1.14, 95% CI 1.00 to 1.31), after adjustment for sex, birthweight, gestational age, feeding method, maternal age, highest parental education and proxies of preferred service sector. The association was strongest in the first 6 months of life (HR 1.45, 95% CI 1.15 to 1.83). In vulnerable subgroups such as premature babies, the association held through to 8 years of age (HR 2.00, 95% CI 1.08 to 3.72). Infants exposed to SHS in the first 3 months of life were most vulnerable to infectious causes of hospitalisation.

Conclusion: Household SHS exposure in early infancy increases severe infectious morbidity requiring hospital admission. Reducing SHS exposure in infants and particularly in more vulnerable infants will lower the beddays burden due to infectious causes.

View the full study on Early life second-hand smoke exposure.

Tobacco Profits Going Up in Smoke?

Tobacco Profits Going Up in Smoke? (PM, CG, RAI)

07 April, 2008 12:06:00 Thom Buschman – Investerms

Tobacco companies may face an uphill battle against regulators after new legislation was proposed that would give the U.S. Food and Drug Administration (FDA) authority of tobacco products. The House Energy and Commerce Committee voted 38-12 in favor of the proposal that is now ready to be passed on to the U.S. Senate before becoming effective. Shareholders of tobacco companies are divided as the legislation may benefit some while hurting others.

The new legislation is expected to impose significant restrictions on marketing as well as require larger warning labels. These are developments that are more likely to hurt smaller tobacco companies rather than the nationally-recognized and established brand names. This means that big companies like Philip Morris International (NYSE: PM), which recently spun off from Altria Group (NYSE: MO), stand to benefit at the expense of other smaller players like Carolina Group (NYSE: CG) and Reynolds American (NYSE: RAI).

This may sound great for larger companies, but there is a big downside. The FDA will also likely require manufacturers and importers of tobacco to pay user fees to fund the new regulatory responsibilities under the bill. These fees are expected to net $90 million this year, but increase to $755 million by 2018. These fees would be assessed based on market share, which means that the lion’s share of the fees will be levied on companies like Philip Morris.

The best options for shareholders may be those tobacco companies with greater international exposure. Companies like Imperial Tobacco Group (NYSE: ITY) with particular strengths in the United Kingdom, Germany, The Netherlands, Belgium, the Republic of Ireland, France, Spain, Greece, Poland, Ukraine, Russia, Australia, Taiwan and sub-Saharan Africa are of particular interest. Strong international brands may become more important than strong domestic brands if the measures pass.

In the end, tobacco companies are likely to suffer from these new measures. Reduced marketing will put pressure on top-line growth by limiting their ability to attract new customers. Meanwhile, the fees associated with the new regulation will put pressure on margins and negatively impact the bottom-line. Combined, this is bad news for tobacco companies if the bill is passed in its current state.