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June 24th, 2016:

Industry-funded International Tax and Investment Center responds to criticism by attempting to muddy the waters

The tobacco industry is under attack. In just two weeks, in May 2016, its tactic of challenging any law that threatens its profits, took a big hit. The arbitration panel, that tobacco giant Philip Morris International (PMI) had hoped would overturn standardised packaging legislation in Australia, published its full ruling that the company’s self-serving claims were inadmissible. Just days later, all four major tobacco companies lost their challenges against both the European Union’s Tobacco Products Directive and standardised packaging legislation in the UK.

This means that from 20 May 2017 EU member states must ensure that health warnings cover 65% of the tobacco pack and are free to introduce standardised packaging for tobacco products. The UK, France and Ireland, which have already enacted standardised packaging legislation, will now go ahead with this brand removal. Further afield Canada, New Zealand, Hungary and Norway are due to follow suit and other countries which have expressed an interest will be buoyed by the way the industry’s legal and trade challenges to plain packs are being soundly rejected. The World Health Organization’s (WHO) slogan for World No Tobacco Day 2016 was “Get Ready for Plain Packaging” recognising that the removal of branded tobacco packaging is “going global.”

Each jurisdiction to consider standardised packaging legislation has received sustained attacks from tobacco companies, using both their own voices and those of third parties which they fund. By commissioning and publicising research reports and opinions from seemingly independent experts, tobacco companies have created not only the impression of a large network of opposition but of an illusory body of evidence, particularly in relation to the industry argument that standardised packaging will increase the illicit tobacco trade.

PMI private documents, leaked to Action on Smoking and Health (UK), revealed that “broad third-party media engagement” and “high profile opinion pieces” would be used to raise awareness of such arguments among “decision makers and the general public” as part of its attempt to prevent standardised packaging in the UK. These documents also revealed that PMI intended to use the International Tax and Investment Centre (ITIC) as one of its key “media messengers”. Since 2012, PMI has paid ITIC (in collaboration with global advisory firm, Oxford Economics) to produce annual reports on the illicit trade in Asia. These claimed that illicit trade is increasing in the region but have been accused of being methodologically flawed. When publicly available routine data was used in an attempt to replicate ITIC’s findings in Hong Kong, illicit levels were found to be under half of what ITIC had estimated.

Key to the industry’s use of third parties is its attempt to shift the paradigm by presenting third parties as ‘independent experts’ and their research as ‘trustworthy and rigorous’ while simultaneously positioning public health academics as ‘advocates’ and ‘zealots’ and their research as ‘advocacy’. This presentation of corporate pawns as informed moderates producing quality work and public health researchers as misguided fundamentalists producing poor quality work is a public relations tactic employed for decades by corporations in relation to environmental and health issues.

Over the last few weeks this tactic has been adopted by the tobacco industry third party, ITIC, in a series of letters sent to Non-Governmental Organisations (South East Asia Tobacco Control Alliance (SEATCA), ASH (UK), EU SmokeFree Partnership), the University of Bath in the UK, and the Editors of Tobacco Control, all of whom had criticised ITIC’s activities, some in letters, reports and webpages. ITIC’s letters made three inter-related claims, each of which we explore in the paragraphs below.

First, that public health research should be seen as advocacy while, by contrast, ITIC’s research (none of which appears to be peer-reviewed) should be seen as high quality. For example, in his letter to the University of Bath the President of ITIC, Daniel Witt, claimed: “We have become increasingly concerned about how the integrity of reputable institutions and individuals is maligned by overzealous advocacy ….. and ….by what passes for academic research when it is clearly constructed to fulfil an advocacy agenda”.

This denigration of public health research has been strongly criticised by independent experts. In her 2006 verdict in an extortion case against the tobacco industry in the United States Judge Gladys Kessler noted: “Much of the Defendants’ [i.e. the tobacco industry’s] criticisms of Government witnesses focused on the fact that these witnesses had been long-time, devoted members of “the public health community.” To suggest that they were presenting inaccurate, untruthful, or unreliable testimony because they had spent their professional lives trying to improve the public health of this country is patently absurd”.

The recent high court ruling on the challenges made by British American Tobacco, PMI, Japan Tobacco International and Imperial Tobacco to UK standardised packaging legislation made a similar point, citing Sir Cyril Chantler’s 2015 review of the evidence: “Chantler … rejected the criticism made by the tobacco companies that those that advised the Government were biased against the industry. Conversely, he articulated scepticism about the methodological efficacy of research results generated by the tobacco companies. He also criticised the tobacco companies for adopting unrealistic criticisms of the output of existing researchers…”

This ruling drew upon two peer-reviewed papers, one confirming the poor quality of industry evidence in comparison to public health evidence on standardised packaging and the other paper showing how BAT and JTI went about distorting and misrepresenting public health evidence.

ITIC’s second claim is that it is not a lobby group. Yet based on widely accepted definitions of lobbying, ITIC’s own descriptions of its activities, and the global health communities’ observations of its behaviour, ITIC clearly acts as a lobbying organisation.

Indeed, it has persistently boasted of its lobbying success. in 1995, ITIC produced a document which outlined how “ITIC has developed trusted, advisory relationships with key, senior-level policy makers…..[which]…provide channels for private sector expertise to reach the Government before, during and after the official policy-making process. This combination…… provides ITIC and its sponsors a ‘seat at the policy-making table’”. And in 2004, Daniel Witt, ITIC’s President noted: “ITIC is a public policy organization actively work ing to change public policy in a pro-investment direction.” Although ITIC claims to be an “independent, non-profit research and educational organization” it receives tobacco company funding and has industry representatives on its Board of Directors. Outputs such as the Asia-11 and Asia-14 illicit trade indicator studies, commissioned by PMI and published by ITIC along with global advisory firm Oxford Economics, have been critiqued by Dr Hana Ross (on behalf of SEATCA) for opaque methodology and “unverifiable” results that were “inconsistent with results from other studies” in the region (for more on this issue, read here). In 2014, ITIC was blasted by the WHO for its underhand attempt to destabilise the proposed guidelines on tobacco tax and price policy by convening a meeting with Parties and Observers to the Framework Convention on Tobacco Control (FCTC) immediately prior to the sixth Conference of the Parties (COP6).

Finally, in each letter, ITIC’s President, Daniel Witt argues that public health organisations ought to engage with ITIC given its tax expertise. This position displays a fundamental misunderstanding of the FCTC’s Article 5.3 which aims to protect policy making from the vested interests of the tobacco industry. It also displays a fundamental lack of understanding of public attitudes to ITIC. For example, the World Bank withdrew from an ITIC event in India, following a letter from the Institute of Public Health in the country, similarly, following a letter from ASH (UK), the UK Department for International Development (DfiD) asked ITIC to remove its name, from its list of sponsors on ITIC’s website as DfiD has never been a sponsor, and the WHO has urged all governments not to engage with ITIC.

SEATCA and the University of Bath have respectively published and sent to ITIC detailed rebuttals of ITIC’s letters to them. These rebuttals and the aforementioned high court rulings are unlikely to deter ITIC from trying to influence tobacco control policies such as standardised packaging across the globe and undermining Article 5.3 of the FCTC. But the more people who reject engagement with ITIC, the harder it will be for ITIC to boast that it can get its tobacco industry clients a “seat at the policy making table”.

The Importance of High-speed Track and Trace Solutions for the Tobacco Industry

The tobacco industry is a demanding one, and with production lines operating almost continuously, coding and marking systems need to be able to operate reliably at speeds of up to 1,000 packs per minute.

It is also a highly regulated industry, and demand for coding and marking solutions that can also help manufacturers to achieve compliance is increasing. At present there are two major initiatives in the industry – the Tobacco Product Directive 2 (TPD2) from the European Union, and the Framework Convention of Tobacco Control (FCTC) from the World Health Organisation, both of which require tobacco companies to track and trace products throughout the supply chain in order to try and avoid illicit products entering the market.

A challenging environment

In order to comply with track and trace requirements, manufacturers have to ensure that every single product they supply to the market carries a unique code or number.

There are two ways in which the industry can achieve this. One is by utilising serialized tax stamps, provided by approved authorities. The other is to perform direct serialization marking on the product. Some direct serialization marking can offer authorities features similar to tax stamps (digital fiscal marking).

Aggregation is a key technical step to implement effective tracking and tracing of products throughout the supply chain. To date, aggregation based on tax stamps has failed to be successfully demonstrated on all manufacturing equipment. On the contrary, aggregation has been implemented based on direct marking on all type of machines.

Tax stamps are also causing manufacturers some difficulties, as they can cause significant decreases in production efficiency. This is an unwelcome issue for any manufacturing business to deal with, and many believe that if they move to online coding (with digital fiscal marking), which can ensure the same level of security as a typical tax stamp, then line speeds would not be affected. Tax stamps, although sophisticated in terms of the information they carry, are also becoming more widely counterfeited. The industry believe that these counterfeited tax stamps are not only causing problems for the producers, but also for the security element that they are obliged to provide.

Countries in the EU, for example, have to develop a system which complies with TPD2 – which requires a track and trace system to be in place that gives each individual package a unique identifier containing machine, date and time references. Serialized tax stamps are not able to comply with this requirement. In addition, the unique identifier must be non-removable and must be clearly visible on the pack, so whenever a customs authority scans the product they can ensure the product is intended for that specific market. The number should be visible at pack level as it is the lowest unit size sold on the market. The issue is that tax stamps can be removed, and therefore the track record of a pack can be lost entirely. This creates a big problem, as governments are looking to have a clear understanding of how many products are being entered into the market, as every product will generate a specific amount of tax income for that government. If they can’t track the products they will see the widespread problem of illicitly traded products being shipped into markets where they were not intended to be used.

The price variations across Europe are significant, and are a main driver of illicit trade. If a truck full of illicit cigarettes is diverted to the UK from a nation where that product is far cheaper, the government will not see any tax revenue and the supplier company will not see any kind of revenue if they are successfully smuggled in – as they could theoretically sell these products at a much higher price. This is why the industry is fighting hard to stamp out illicitly traded and counterfeit tobacco products.

Counterfeiting and illicit trade will cost approximately 60bn dollars in losses this year alone and there are several reports from KPMG, PWC and many official authorities who are highlighting this subject. This is why the EU and the World Health Organisation (WHO) have introduced the requirement for end to end track and tracing of tobacco products, as it allows them to ensure that individual packs, bundles and cases can be fully aggregated and synchronised with what is expected to be available on the market.

How can Videojet technologies help manufacturers to remain compliant?

Track and trace is a challenging requirement for the tobacco industry. Today the tobacco industry is responding to this challenge by promoting direct marking solutions such as Codentify. To date, the tobacco industry has tracked millions of packs around the world over a period of more than 10 years. Videojet has successfully demonstrated its commitment with the tobacco industry and has developed an interface to the tobacco solution that not only provides integration flexibility into multiple points on the line, but is also flexible enough to be used with the majority of coding equipment (Continuous Inkjet (CIJ), laser, Thermal Inkjet (TIJ) or label applicator) and track and trace software. This allows manufacturers to remain compliant.

For example, in the case of digital fiscal marking, individual packs are marked with unique identifiers that have been authorised and accounted for by the government of the country in which the products are intended for sale. In addition, by employing serialization on the higher packaging levels, aggregation can be recorded.

Tracking of the product through the supply chain can then be recorded by scanning the higher packaging level and information can be retrieved by all relevant stakeholders.

Now, when products that have undergone this process reach the border of the country they are shipped to, customs at that point can read the code and can tell immediately if the products present are entitled to be allowed into the country. If the codes present are not within the acceptable range issued by the government, they will either be shipped back to point of origin, or destroyed at the manufacturer’s expense. At the same time, any products that arrive without a code are instantly recognized to be out of place and will receive the same treatment.

This comprehensive approach also allows governments and manufacturers to tackle diversion, as if a shipment goes missing it will be evident at which point in the process the products disappeared – allowing investigative action to be taken in order to prevent further occurrences.

Videojet coding and marking technologies offer a solution to manufacturers with regard to traceability and digital fiscal marking, helping manufacturers to meet regulations while keeping production efficiency at maximum levels. Products can be coded at speeds of up to 1,000 packs per minute, meaning production schedules are not affected.

Looking to the future

Serialization and track and trace initiatives can be successfully implemented through the use of coding and marking systems. Their ability to operate in conjunction with serialization enables manufacturers to remain compliant, at the same time protecting profit margins as well as brand reputation.

Videojet, thanks to its successful partnerships with a number of specialist suppliers, is able to deliver turnkey solutions to manufacturers for track and trace, providing aggregation and line management solutions and ultimately helping to stamp out counterfeiting and illicit trade.

Study: State could save $1.7B in health-care costs by cutting smoking rate

If Kentucky could cut its smoking rate to the national average, it would save an estimated $1.7 billion on healthcare the following year, a study reports.

Kentucky’s smoking rate is 26 percent, and the national average is 18 percent.

The study at the University of California-San Francisco estimates that a 10 percent decline in the national rate would save $63 billion the next year in health-care costs.

“What it adds to our knowledge is that we can save money quickly,” Ellen Hahn, University of Kentucky nursing professor and director of its smoke-free policy center, told Kentucky Health News. “We are not talking 18 to 20 years down the road. … If we reduced our smoking rate at least 10 percent, we would see dramatic reductions in health-care cost in just one year.”

The study also found that smoking makes Kentucky spend $399 more per person, per year, on health care than it would if the state’s rate equaled the national rate. That was the highest figure of any state.

Conversely, low rates of smoking save Utah and California, respectively, $465 and $416 per person per year compared to what they would spend if their smoking rates were the national rate.

“Regions that have implemented public policies to reduce smoking have substantially lower medical costs,” the study’s authors said in a news release. “Likewise, those that have failed to implement tobacco control policies have higher medical costs.”

Lexington’s smoking rates dropped 32 percent in just one year after it enacted its smoking ban, which amounted to an estimated $21 million in smoking-related healthcare costs savings, according to a University of Kentucky study led by Hahn and published in the journal Preventive Medicine.

The UCSF study, published in PLOS Medicine, looked at health-care spending in each state and the District of Columbia from 1992 to 2009, and measured the year-to-year relationship between changes in smoking behavior and changes in medical costs.

Many studies have shown that smoking bans and other smoke-free policies decrease smoking rates, reduce smoking prevalence among workers and the general population, and keep youth from starting to smoke.

These have been some of the arguments for a statewide smoking ban, but efforts to pass one have stalled because new Republican Gov. Matt Bevin opposes a statewide ban and says smoke-free policies should be a local decision.

Bevin won big budget cuts from the legislature to set aside hundreds of millions of dollars for shoring up the state’s pension systems, but the study hasn’t made the administration look at a smoking ban as a source of savings. A ban passed the House last year but died in the Senate.

Asked how this study might affect the administration’s position on a statewide smoking ban, Doug Hogan, acting communications director for the Cabinet for Health and Family Services, said in an email, “Smoking bans are a local issue, rather than a one-size-fits-all solution.” Bevin’s office and Senate President Robert Stivers did not respond to requests for comment.

Hogan said the cabinet is committed to helping people quit smoking: “Education and proper policy incentives are critical tools that the state can use and as our commonwealth crafts its Medicaid wavier, it is looking very closely at ways to best incentivize smoking cessation to improve health and decrease cost to the commonwealth.”

Hahn said, “Kentucky has the dubious honor of leading the nation in cigarette smoking, and we have for many years. … it is a major driver of health-care cost. And in a climate where we are trying to save every dollar … I think that we should pay attention to this study because what it really says is that we can save a boatload of money if we help people quit and we can save it quickly.”

Other possible tobacco-control measures include raising cigarette taxes, anti-smoking advertising campaigns and better access to smoking-cessation programs. Hahn said the state gets some money from the federal Centers for Disease Control and Prevention and the tobacco master settlement agreement for prevention and cessation efforts, but the state needs to do more.

“We spend very little on the things that we know work, like helping people quit smoking, like doing widespread media campaigns on television, radio and print,” she said. “We just don’t do that in our state. We never have. In fact, we spend very little, about 8 percent of what the CDC say we should.”

The study shows significant health-care savings could occur so quickly because the risks for smoke-related diseases decreases rapidly once a smoker quits.

“For example, the risk of heart attack and stroke drop by approximately half in the first year after the smoker quits, and the risk of having a low-birth-weight infant due to smoking almost entirely disappears if a pregnant woman quits smoking during the first trimester,” says the report.

“These findings show that state and national policies that reduce smoking not only will improve health, but can be a key part of health care cost containment even in the short run,” co-author Stanton Glantz, director of the UCSF Center for Tobacco Control Research and Education, said in the release.

Hahn said, “People don’t realize how effective quitting smoking really is, how much money it really saves. So that is the value of this paper. It is a wake-up call for those of us doing this tobacco control work and for elected officials who are trying to save money and redirect funds and shore up the economic health of Kentucky. … Doing all we can to reduce smoking saves lives and money. What’s better than that?”

Kentucky Health News is an independent news service of the Institute for Rural Journalism and Community Issues, based in the School of Journalism and Media at the University of Kentucky, with support from the Foundation for a Healthy Kentucky.

Farmers reject FCTC ratification

Tobacco farmers in Sumber Pinang village, Pakusari district, Jember, East Java, have expressed their opposition to the government’s plan to ratify the UN Framework Convention on Tobacco Control (FCTC), saying they lacked options if forced to transition to other crops.

After years of resisting ratification of the UN convention, the Health Ministry recently announced that the government would formally adopt the convention after Idul Fitri.

A farmer, Abdurahman, said he was worried about the enforcement of the plan, as demand for the Kasturi variety of tobacco in Jember had dropped dramatically from last year.

While tobacco fields in the region covered a total area of 6,400 hectares in 2015, the planting area this year, according to estimates, has shrunk to only 4,700 ha. Reduced planting activity is also attributed to declining interest of farmers in growing tobacco.

“This is because of the continued intense interference of foreign NGOs on tobacco issues and in the tobacco industry in Indonesia,” said the leader of the Jember Kasturi Tobacco Growers Association.

He was referring to a report by Human Rights Watch (HRW), which revealed that thousands of children in Indonesia were exposed to hazardous conditions on tobacco farms where they work as laborers.

According to Abdurahman, various tobacco-related regulations adopted in line with global norms are not suitable to conditions on tobacco plantations in the country. He cited the ban against children employed in tobacco growing activities as an alien concept in Indonesia. He said tobacco farming in Indonesia would slowly die due to such regulations, because the younger generation would no longer be interested in planting tobacco, and domestic tobacco demand would be met by imports.

Suwarno, another Kasturi tobacco farmer from the village of Nogosari in Balung district, Jember, expressed similar concerns.

Various strict rules had been applied by companies wishing to buy tobacco from farmers. The farmers had to abide by the rules if they wanted their tobacco to be bought.

“I totally agree with East Java Governor Soekarwo’s stance to firmly reject intervention by foreign NGOs that are making efforts to regulate the marketing of tobacco in Indonesia,” said Suwarno.

Last week in Surabaya, Soekarwo strongly rejected efforts by NGOs lobbying the government to ratify the FCTC. He asked the foreign NGOs not to interfere in tobacco issues in Indonesia, especially in East Java.

“No, no. They don’t have any business here. Tobacco is the life of the people of East Java. Why should we be regulated by foreign NGOs. Let foreign NGOs take care of their own matters,” said Soekarwo.

Indonesian Tobacco Farmers Association (APTI) head Soeseno has also expressed support for Soekarwo. According to him, within the guidelines of the FCTC, there were some excessive provisions that could shut down the entire tobacco industry in Indonesia.

“If Indonesia ratifies the FCTC, we have to switch from planting tobacco. The wellbeing of around 2 million tobacco farmers and millions of tobacco workers across Indonesia will be threatened. Up until now, there is no other commodity with profits like tobacco, and generally, only tobacco can be grown on dry land during the dry season,” said Soeseno.

He deemed FCTC a hidden agenda by foreign parties to kill off the tobacco industry relied upon by more than 6 million people in Indonesia. The tobacco industry was the third largest contributor to taxes in 2015 at Rp 173.9 trillion (US$13.2 billion).

E-cigarette use can alter hundreds of genes needed for immune defence, study says

Vaping may affect many more genes than smoking regular cigarettes; in other health news, the improved memory recall of runners may be due to a specific protein, and more fibre could reduce the severity of food allergies

Vaping affects genes involved in upper airway immune defence – hundreds more than smoking regular cigarettes – according to a new study from the University of North Carolina’s School of Medicine.

Several of these changes in the epithelial cells that line the respiratory tract are likely to increase the risk of bacterial infections, viruses and inflammation, according to the report in the American Journal of Physiology.

The study involved 13 non-smokers, 14 smokers and 12 e-cigarette users. Each participant kept a journal documenting their cigarette or e-cigarette use, and their urine and blood samples were analysed. After about three weeks, researchers took samples from the nasal passages of each participant to analyse the expression of genes important for immune responses.

The researchers found smoking cigarettes decreased the gene expression of 53 genes important for the immune response of epithelial cells compared to non-smokers.

Using e-cigarettes decreased the gene expression of 358 genes important for immune defence – including all 53 genes implicated in the smoking group.

Lead researcher Ilona Jaspers says the findings cannot yet be linked to long-term health effects of e-cigarette use or the risk of diseases usually associated with long-term cigarette smoking.

“We know that diseases like COPD [chronic obstructive pulmonary disease], cancer and emphysema usually take many years to develop in smokers,” Jaspers says. “But people have not been using e-cigarettes for very long. So we don’t know yet how the effects of e-cigarette use might manifest in 10 or 15 years.”

Running releases protein associated with improved memory in mice

Studies have shown that running boosts memory recall – but why? New research in the US and Germany points to a particular protein called cathepsin B.

In the study published in the journal Cell Metabolism, normal mice and mice unable to make the protein ran on a wheel before taking a memory test. Normal mice showed better recall ability for new information, while mice unable to make cathepsin B could not recall the information at all.

“Nobody has shown before cathepsin B’s effect on spatial learning,” says senior author Henriette van Praag, a neuroscientist at the US National Institute on Ageing. “We also have converging evidence from our study that cathepsin B is upregulated in blood by exercise for three species – mice, Rhesus monkeys and humans. Moreover, in humans who exercise consistently for four months, better performance on complex recall tasks, such as drawing from memory, is correlated with increased cathepsin B levels.”

She adds: “People often ask us, how long do you have to exercise, how many hours? The study supports that the more substantial changes occur with the maintenance of a long-term exercise regimen.”

Mice fed more fibre have less severe food allergies

Having more fibre could reduce one’s risk of food allergies and their severity, according to a new study by Australian researchers.

Monash University scientists have found the development of food allergies in mice linked to what their gut bacteria are being fed. Rodents that received a diet of average calorie, sugar and fibre content from birth were shown to have more severe peanut allergies than those that received a high-fibre diet. The researchers show that gut bacteria release a specific fatty acid in response to fibre intake, which eventually impacts allergic responses via changes to the immune system.

“We felt that the increased incidence of food allergies in the past 10 years had to relate back to our diet and our own microbiome rather than a lack of exposure to environmental microbes – the so-called ‘hygiene hypothesis’,” says the study’s co-senior author and immunologist Laurence Macia.

The researchers express cautious optimism that their results can be effective in humans, and further preclinical trials would be required before studying the fibre-allergy relationship in people.

“It’s likely that compared to our ancestors, we’re eating unbelievable amounts of fat and sugar, and just not enough fibre,” says co-senior author Charles Mackay. “And these findings may be telling us that we need that high-fibre intake, not just to prevent food allergy, but possibly other inflammatory conditions as well.”
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