How to turn tobacco, a public health catastrophe, into a business opportunity.
By David T Sweanor
Over 300 million people in India regularly use tobacco products, with a third using cigarette-type products and twice as many using oral tobacco. The use of these products causes over 1 million premature deaths annually in the country, and as the population and disposable income increases, this toll can be expected to worsen significantly.
It’s is a public health catastrophe, and for many people the story ends there. But within this ongoing tragedy lies a solution, one that could cause a public health breakthrough of historic proportions, both in India and globally. It is a solution tied to a business opportunity on a scale seldom seen.
It has been established scientifically that people primarily use tobacco products to obtain nicotine, but nicotine itself is not a significant health risk. Rather, it is the way it is delivered that has caused global epidemic. Inhalation of smoke is the overwhelming cause of harm from combustible products, and the presence of toxins in oral products explains the high rate of diseases like head and neck cancers among users.
Nicotine delivery need not be anywhere near as hazardous. Vaping products (electronic cigarettes) have been identified as ‘likely at least 95% less hazardous as smoking’ by leading UK health authorities such as Public Health England and the Royal College of Physicians. As we are witnessing in the UK, the US and elsewhere, cigarettes can be displaced. Sweden, with an oral tobacco product (snus) that has been used widely for decades, shows such products can be manufactured to standards that largely eliminate risks.
The problem we face with the current market for nicotine products in India is the presence of toxic delivery systems. It would be the same if people got caffeine from smoking tea leaves or adding them into a toxic mixture rather than brewing tea. Simply put, the health catastrophe is a failure of engineering. We have seen technology radically transform an array of other products and services to reduce risks. Yet with nicotine delivery we have a huge cause of premature death, one where risks can be reduced to a phenomenal degree through innovative technology, but a market that stays stubbornly fixated on unnecessarily deadly products.
We can do better.
The current Indian tobacco market is indescribably huge. But growing discretionary income places ever more consumers in a position to substitute safer products in place of the highly toxic ones. Also, as happened with mobile phones, the market is large enough to provide economies of scale, allowing new technologies to become ever more accessible to ever more consumers.
The business opportunity lies in bringing forward technological advancements that allow the market to transition to alternative products. With effective regulatory encouragement and appropriate policies on taxation and marketing, the transition would be akin to the US transformations to sanitary food manufacturing and science-based pharmaceutical products in, respectively, 1906 and 1938. As happened then in the US, the domestic market in India is ideal to build scale, underwrite R&D costs, and build companies that can then transition into successful global corporations.
The global market for cigarettes alone is roughly 1.1 billion consumers spending $800 billion annually, with a built-in marketplace advantage for low-risk alternatives given the high excise taxes on cigarettes. Getting even 10% of that market is likely to create a company that would rank as one of the most valuable on the planet. Getting much more than 10% should not be hard with an appropriate range of alternatives and consumer information.
India can solve this puzzle, preventing millions of premature domestic deaths while creating high-value employment, world-class companies, significant profits and government revenue. It would be an example to the world, while creating the technological expertise and business acumen that could take this breakthrough to the rest of the world. The country could be a catalyst for one of the greatest improvements in global health we have ever seen. Seldom has there been such an opportunity to ‘do well by doing good’.
The author is Chair of Advisory Board, Centre for Health Law, Policy & Ethics, University of Ottawa, Canada. Views are personal