Increasing tobacco taxes:A cheap tool to increase public health

Introduction: Several studies have estimated health effects resulting from tobacco tax increases. However, studies on the cost effectiveness of tobacco taxes are scarce. The aim of this study was to estimate the cost effectiveness of tobacco tax increases from a health care perspective, explicitly considering medical costs in life years gained.Methods: The effects of a tax increase were translated into effects on smoking quit rates. A dynamic population model then projected incidence, prevalence and health care costs of the major chronic diseases conditional on smoking status over time. Comparing to a current practice scenario, the differences in healthcare costs, tax revenues, life years and QALYs from a tobacco tax increase resulting in a price increase of 10% increase were estimated.Results: Including effects on health care costs in life years gained, the tax increase costs about EURO2500 per QALY gained. Only 3% of additional tax revenues are enough to compensate additional health care costs in life years gained.Conclusions: Even if the health care costs in life years gained are taken into account and even if additional tax revenues do not flow to the health care sector a tax increase is a cost-effective intervention to increase public health from a health care perspective. (c) 2006 Elsevier Ireland Ltd. All rights reserved.