Should Cigarettes Cost More?

A recent article in the Harvard Business Review posited that a pack of cigarettes should cost $25 to make up for the resulting healthcare costs caused by smoking. What do you think?

A recent article on the Harvard Business Review's blog surmised that one way to control rising healthcare costs would be to shift the burden to some of the root causes of sickness – in this particular case cigarettes and sugar. 

The article was penned by a Dartmouth business professor and a consultant from an analytics firm who note that the Center for Disease Control and Prevention (CDC) estimated the resulting costs from smoking-related medical expenses and productivity loss work out to about $167 billion a year. That works out to 50 cents a cigarette, or about $10 a pack according to the authors. They also note the CDC puts the cost of diabetes-related medical costs and loss of work at about $174 billion a year, which they work out to about $8 per pound of sugar consumed by Americans every year. (The current wholesale sugar price is about 40 cents a pound.)

The authors suggest that rather than subsidizing these products, we pass those resulting costs on to the consumers. They suggest that $25-a-pack for cigarettes and $10-a-pound for sugar would cover not just healthcare costs, but also costs for re-training folks who work in those industries and programming for users who would like to curb their habits.

The authors suggest that creating disincentives for bad habits and encouraging healthy lifestyles will remold the healthcare industry into something not only more affordable, but healthier for all of us.

What do you think? I'm sure there are plenty of smokers out there who would rather not see the price of a pack of smokes go up any more than it already has and soda junkies that would prefer to not pay Starbucks-like prices for a can of coke. But if we can look past our own pockets for a moment and consider the greater good – should we all bear the costs of our own bad habits? 

I realize these are just two examples and there are plenty more vices that this math could apply to – alcohol, processed foods, trans fats, etc. It would be unfair to penalize one vice and leave the others unshackled. What's the answer?

Tell us what you think in the comments. You can read more about the issue here.

Jane November 27, 2012 at 04:05 PM
There still remains only a 15% survival rate for lung cancer victims. The already existing tobacco settelment monies have not helped lung cancer victims in that the monies have not been used for promoting lung cancer research. Had the monies been spent on research for lung cancer over the past ten years since 9-11 we would be better positioned to improve the outcome for those affected by the contaminents of exposure on 9-11. Increasing the taxes on cigarettes to cover medical expenses sounds like it would help to cover the costs. It loses its appeal however when you realize that the monies from the tobacco settlement designated by a court of law to address this issue have not been used for this to the extent that it was proposed. In conclusion those who feel that lung cancer victims are costing the taxpayers money should keep the statistics in mind. Thay should realize that the 85% of victims who continue to die within 2 to 5 years do so at a minimal cost to taxpayers. What is truly tragic are those who die needlessly due to our lack of justice to use the monies allocated and for the loss of increased knowledge which would be gained by this research for the many lung diseases which exist which are also life debilitating and life threatening.
andthatsthetruth November 27, 2012 at 04:07 PM
Did Harvard ever do a study on health care costs involving the Doctors & Specialists charges to see why the cost has risen so high? Probably not. You can't leave out Pharmaceuticals but they at least are giving back to the uninsured in some cases. (Lowering cost) They should start with the source of the heath care costs and eliminate those rising costs first. Leave everyone else alone. They tried already to abolish liquor & we know how that all went. You mention in your article relating soda to diabetes, that isn't always the reason. I know of a few people in my life that smoked tobacco and made it till 100 or darn near close to it. Tobacco isn't the reason for rising heath costs either. We all walk outside and breath the rotten air don't we?
Jane November 27, 2012 at 04:07 PM
Thanks for the oppportunity to comment.
Curmudgeon November 27, 2012 at 11:26 PM
@$25/pack, you think bootlegging was a problem in the '20's. I guess I'll switch to pot!! Let's make wine, beer and liquor $25 a bottle. This would only be a money grab by the insatiable politicians!!
danny roturra November 28, 2012 at 05:07 AM
the article cites ivy league dribble that seems to always have solutions. what do i think?? i think that 'they' don't think and the legions of liberal morons that adopt their pontifications are ruining every aspect of american civilization. you can back into a proof of anything you desire with proper preparation and construct. why not $250 mc donald's or $1500 pizza's or...anything. however, a BETTER idea would be to tax liberals and their minions that profess to CARE when they only want to CONTROL. leave me/us alone let me/us do what i/we want just like they SAY they want....for me/us.


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