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Clive Bates 
Director of Counterfactual 
& Public Health Commentator
Counterfactual 
The Unholy Trinity 
www.clivebates.com 
@clive_bates
Value proposition: a smokers’ cost-benefit analysis 
1. Keep smoking 
Benefit: nicotine effects, ritual, brand-related 
Co...
War against the poor 
0 
5 
10 
15 
20 
25 
30 
35 
40 
Large 
employers & 
high 
managerial 
Higher 
professional 
Lower ...
Unintended consequences 
Advertising ban or restrictions 
Favours incumbents 
Reduces appeal – protects cigarettes 
Harms ...
Unintended consequences 
Advertising ban or restrictions 
Favours incumbents 
Reduces appeal – protects cigarettes 
Harms ...
Unintended consequences 
Advertising ban or restrictions 
Favours incumbents 
Reduces appeal – protects cigarettes 
Harms ...
Unintended consequences 
Advertising ban or restrictions 
Favours incumbents 
Reduces appeal – protects cigarettes 
Harms ...
Unintended consequences 
Advertising ban or restrictions 
Favours incumbents 
Reduces appeal – protects cigarettes 
Harms ...
Unsurfaced assumptions: How much does marketing really determine substance use? 
15.7 
23.4 
0 
5 
10 
15 
20 
25 
Cigaret...
Diminishing and negative returns to regulation 
Net 
health 
Net 
harm 
Value to society 
Regulatory costs, burdens and re...
Bureaucratic 
regulators 
Predatory companies 
Public health’s “useful idiots” 
The Unholy Trinity
Diminishing and negative returns to regulation 
Net 
health 
Net 
harm 
Value to society 
Regulatory costs, burdens and re...
Morgan Stanley 
Ultimately, the proposed regulations will likely 
limit product variety and competition among 
e-cigarette...
Good regulation 
•Liquids 
•Devices 
•Testing 
•Packaging 
•Labelling 
•Marketing 
•Quality control
Changing perceptions – for the worse 
Birth defects 
Lipid pneumonia 
Third hand nicotine exposure 
Ultrafine particles 
B...
WE JUST DON’T KNOW!!!
Winning hearts and minds? 
85% 
65% 
0% 
20% 
40% 
60% 
80% 
100% 
2010 
2013 
Believe e-cigs safer than cigarettes? 
US a...
Conclusion 
•Regulation can work against health 
•Regulations can support for the cigarette business model 
•Competition a...
www.clivebates.com 
@clive_bates 
Thank you… questions…
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Clive Bates presentation from E-Cigarette Summit 2014

Clive Bates presentation from E-Cigarette Summit 2014

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Clive Bates presentation from E-Cigarette Summit 2014

  1. 1. Clive Bates Director of Counterfactual & Public Health Commentator
  2. 2. Counterfactual The Unholy Trinity www.clivebates.com @clive_bates
  3. 3. Value proposition: a smokers’ cost-benefit analysis 1. Keep smoking Benefit: nicotine effects, ritual, brand-related Cost: illness, money, stigma, addiction 2. Quit smoking Benefit: avoid smoking harm Cost: withdrawal, craving, sustained willpower, lost smoking benefits 3. Switch to e-cigs Benefit: most smoking benefits*, no/minor smoking harms, personalisation, buzz, cash saving Cost… addiction? * Full benefits – subject to continued innovation “Quit or die”
  4. 4. War against the poor 0 5 10 15 20 25 30 35 40 Large employers & high managerial Higher professional Lower managerial & professional Intermediate Small employers & own account Lower supervisory & technical Semi-routine Routine Percentage smokiing age 16+ (GB) Smoking prevalence 2012 by socio-economic classification (UK ONS)
  5. 5. Unintended consequences Advertising ban or restrictions Favours incumbents Reduces appeal – protects cigarettes Harms innovation Limits recruitment
  6. 6. Unintended consequences Advertising ban or restrictions Favours incumbents Reduces appeal – protects cigarettes Harms innovation Limits recruitment Ban flavours Reduces appeal – protects cigarettes Limits full migration from tobacco Black market, DIY – more risk
  7. 7. Unintended consequences Advertising ban or restrictions Favours incumbents Reduces appeal – protects cigarettes Harms innovation Limits recruitment Ban flavours Reduces appeal – protects cigarettes Limits full migration from tobacco Black market, DIY – more risk Ban vaping indoors Damages vaping value proposition Exposes vapers to smoking Promotes relapse
  8. 8. Unintended consequences Advertising ban or restrictions Favours incumbents Reduces appeal – protects cigarettes Harms innovation Limits recruitment Ban flavours Reduces appeal – protects cigarettes Limits full migration from tobacco Black market, DIY – more risk Ban vaping indoors Damages vaping value proposition Exposes vapers to smoking Promotes relapse Technical compliance regime Reduce range of products and firms Increase cost Harms innovation
  9. 9. Unintended consequences Advertising ban or restrictions Favours incumbents Reduces appeal – protects cigarettes Harms innovation Limits recruitment Ban flavours Reduces appeal – protects cigarettes Limits full migration from tobacco Black market, DIY – more risk Ban vaping indoors Damages vaping value proposition Exposes vapers to smoking Promotes relapse Technical compliance regime Reduce range of products and firms Increase cost Harms innovation Strength Warnings Refillables Bottle size Internet Tax
  10. 10. Unsurfaced assumptions: How much does marketing really determine substance use? 15.7 23.4 0 5 10 15 20 25 Cigarettes Marijuana Percent Marijuana and cigarettes US high school prevalence 2013 Source: CDC MMWR Youth Risk Behavior Surveillance — United States, 2013 Current use: used at least once in last 30 days Approximately age 14-18 – grade 9-12
  11. 11. Diminishing and negative returns to regulation Net health Net harm Value to society Regulatory costs, burdens and restrictions Builds confidence Destroys viable firms and products Compromises design & consumer appeal Sweet Spot
  12. 12. Bureaucratic regulators Predatory companies Public health’s “useful idiots” The Unholy Trinity
  13. 13. Diminishing and negative returns to regulation Net health Net harm Value to society Regulatory costs, burdens and restrictions Builds confidence Destroys viable firms and products Compromises design & consumer appeal Sweet Spot Unholy Trinity at work Implicit collusion between naïve NGOs, risk-averse regulators and predatory majors
  14. 14. Morgan Stanley Ultimately, the proposed regulations will likely limit product variety and competition among e-cigarettes. The greater barriers to entry (slower approval process, higher costs, higher product standards), will ultimately take a toll on the number of available products and rationalize the category. This could result in the larger tobacco companies, which have greater financial resources and legal experience, dominating the category in the future, given the burden it would place on smaller manufacturers.
  15. 15. Good regulation •Liquids •Devices •Testing •Packaging •Labelling •Marketing •Quality control
  16. 16. Changing perceptions – for the worse Birth defects Lipid pneumonia Third hand nicotine exposure Ultrafine particles Blindness Anti-freeze Poisoning
  17. 17. WE JUST DON’T KNOW!!!
  18. 18. Winning hearts and minds? 85% 65% 0% 20% 40% 60% 80% 100% 2010 2013 Believe e-cigs safer than cigarettes? US adult smokers Tan ASL, Bigman CA. E-cigarette awareness and perceived harmfulness: prevalence and associations with smoking- cessation outcomes. Am J Prev Med 2014; 47: 141–9. Perceived e-cig risk in young British smokers Trends in electronic cigarette use in young people in Great Britain over 2013-2014 Arnott, Britton, Cheeseman, Dockrell, Eastwood, Jarvis, & McNeill ASH, CR-UK, PHE 2014
  19. 19. Conclusion •Regulation can work against health •Regulations can support for the cigarette business model •Competition and light regulation will keep Big Tobacco honest (and keep Big Pharma out?) •Elements of the public health community are doing far more harm than good
  20. 20. www.clivebates.com @clive_bates Thank you… questions…

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