The Department of Health (DoH) is moving ahead of Congress to further guide the “vaping” industry by putting it practically at par with the cigarettes and tobacco industry. While imposing a tax on electronic cigarettes is still off the table, with Congress adjourning before a bill on this matter was passed, the use of e-cigarettes is being further regulated through executive fiat.
By issuing Administrative Order 2019-0007, the DoH is complementing President Duterte’s Executive Order No. 26 that imposed, beginning 2017, a nationwide ban on cigarette and tobacco smoking in public places. The AO is expanding the coverage of EO 26 to include “vaping,” or the use of electronic cigarettes or electronic nicotine and non-nicotine delivery systems (ENDS).
Under the DoH order, just like cigarettes, e-cigarettes — whether or not they use nicotine — will no longer be allowed in all places where smoking is likewise prohibited. These include public areas like schools, workplaces, government offices and facilities, churches, hospitals, transport terminals, markets, and parks and resorts, among others.
The use of e-cigarettes will be allowed only in designated areas, and in open spaces with proper and sufficient ventilation. Moreover, the DoH is ordering that businesses or entities that manufacture, distribute, import and export, as well as sell or trade online all types of ENDS products must first secure permits from the Food and Drug Administration (FDA).
The sale of nicotine “shots” and nicotine “concentrates” used in vaping devices will also be prohibited. Moreover, adopting the graphic warning regulation covering cigarettes, the DoH wants containers of ENDS products to also contain health warnings. How these should look remains uncertain, however. Also, the DoH AO will take effect only after publication.
With this, I believe the writing is on the wall for the vaping industry in terms of heavy government regulation. The industry should realize that self-regulation is at its end. After the DoH, and with the imprimatur of Congress, the Department of Finance is most likely to step in with taxes. And then perhaps the Department of Trade and Industry with respect to safety standards.
In this line, I think the e-cigarette industry should be ready to own the debate. This early, it should educate the public by clearly communicating the distinction between the benefits and hazards of vaping and cigarette smoking. It seems that in the minds of our policymakers, and perhaps of the public, these products are just one and the same. If the e-cigarette industry believes otherwise, then it should prepare to justify why it should not be regulated like the tobacco industry.
As I had mentioned in previous columns, there are many arguments for and against vaping or the use of e-cigarettes or ENDS products. At this point, more independent scientific studies and research papers published on the topic must be presented to help regulators and policymakers decide on the most suitable approach to regulation.
Frankly, I am in favor of taxing vaping or the use of e-cigarettes, in addition to further raising taxes on regular cigarettes and other tobacco products. Studies indicate that higher cigarette taxes starting in 2012 resulted in lowering smoking prevalence among Filipino adults from 29% in 2012 to 22.7% in 2015. Also, as of 2016, the Philippines had the second highest number of adult smokers in Southeast Asia at 16.5 million, next to Indonesia’s 65.1 million. The studies do not include data on vaping and e-cigarette use.
But while I believe in bringing vaping into the taxation fold, Congress must be clear on why doing so will be necessary. Raising more revenues for the government is just one reason. In the case of cigarettes, higher taxes intend also to deal with so-called negative externalities, or the negative effects of smoking on public health and the economy, among others. Do we have such negative externalities from vaping or the use of e-cigarettes or from non-nicotine devices?
Proven negative externalities of cigarette smoking include harmful passive smoking (second-hand smoke affecting non-smokers); fatal diseases and health disorders affecting non-smokers; government funds spent on healthcare for individuals with smoking-related diseases; and, pollution, among others. Are there studies to prove such negative externalities from the use of ENDS products?
If high taxes are meant to address the high public costs related to negative externalities of smoking, then should e-cigarettes be taxed just as high as regular cigarettes? Are we dealing with similar negative externalities here? Do e-cigarettes or ENDS products also produce harmful second-hand smoke, for instance? To what extent? The same as any other cigarette? If not, then how should we regulate them? How should we tax them?
At this point, with its new AO, the DoH seems to think there is no difference between cigarettes and e-cigarettes or ENDS products. But, is this truly the case? If ENDS products are also seen as an alternative to cigarettes, then it can be argued that they are practically the same. But, if this is the case, why then are ENDS products also considered among available Nicotine Replacement Therapies?
Should we thus lump ENDS products with regular cigarettes, or do we categorize them like we categorize cigarette alternatives like nicotine patches and nicotine gums, inhalers, nasal sprays, and lozenges? Moreover, are nicotine patches and gums also taxed like cigarettes because of their nicotine content? If not, then how should we tax ENDS products? How about non-nicotine electronic delivery systems? Should they be taxed as well?
The objective of regulation is the protection of public health. Regulation, plus taxation, aims to bring down smoking prevalence and promote public health, and to cut down smoking-related illnesses and smoking-related deaths. By doing so, we also bring down health insurance costs and public healthcare costs. Taxes also raise revenues for the government.
But while I support government regulation and taxation of vaping and e-cigarettes, I would like to be further enlightened on their proven negative externalities, particularly of the use of non-nicotine e-cigarettes. This, to me, is a crucial point. In our attempt to curb smoking prevalence, we might also be indirectly curbing suitable and effective alternatives to harmful cigarettes.
Marvin Tort is a former managing editor of Businessworld, and a former chairman of the Philippines Press Council.