Illicit Trade Poses No Threat to an FDA Rule to Minimize Nicotine in Smoked Tobacco Products

A US Food and Drug Administration (FDA) rule setting nicotine limits for cigarettes and similarly smoked tobacco products at the lowest technically achievable levels would produce extraordinarily large and rapid smoking declines. Smokers could not satisfy or sustain their nicotine addiction by smoking legal products. Minors experimenting with smoking could not become physically addicted, and any gateway from youth e-cigarette use into smoking would be closed. Even with pessimistic assumptions, tens of millions of smokers would quit, switch to nonsmoked products, reduce their smoking, or never start, saving millions of lives.¹ No other FDA action could do as much to reduce tobacco harms and costs more quickly.

This issue’s article by Ribisl et al. (p. 1007) provides additional support for a strong FDA nicotine rule. It considers the possibility that some smokers might respond by seeking out illegal full-nicotine cigarettes and suggests ways to reduce any such illicit trade. That is important because the tobacco industry always raises the specter of a large new illicit trade in its opposition to nicotine reduction. The article by Ribisl et al. frames the issue well and provides useful initial analysis. But it omits some key points that show that any new illicit trade that might emerge would inevitably be too small to interfere seriously with the nicotine rule’s public health gains.

Most fundamentally, an illicit market in full-nicotine cigarettes would be harder to establish or maintain than the existing illicit trade in tax-evading cigarettes, which smokers and smugglers can readily buy from legal sellers in low-tax jurisdictions. By contrast, any illicit trade in full-nicotine cigarettes would have to smuggle them over international borders or develop new illegal domestic manufacturing, which would be highly visible to enforcement officials if done in the volumes necessary to supply a significant portion of current smokers.

Ribisl et al. suggest that illegally reimporting legally exported full-nicotine cigarettes might supply the illicit market. But Congress implemented strong measures to prevent any such “gray market” in the Imported Cigarette Compliance Act of 2000 (26 USC § 5754). Moreover, US cigarette exports are so small that any increase to supply illicit trade would alert enforcement officials of the brands and firms involved. And most US cigarette companies would not want to be caught exporting their brands to enable illegal smuggling.

Even if a large, reliable supply of illicit full-nicotine cigarettes could somehow be developed, creating a network of illicit sellers large enough to serve a significant fraction of today’s smokers would still be impractical if not impossible. It requires hundreds of thousands of highly visible legal retailers conveniently offering cigarettes for sale even in the most rural areas, with related advertising and promotions, to maintain and serve the existing demand. A clandestine, illicit network of sellers could not possibly be as large, visible, or convenient, or encourage smoking as actively.

Sales outlets for illicit full-nicotine cigarettes could not even be as numerous, visible, and accessible as the current system for selling illicit tax-evading cigarettes, which Ribisl et al. say accounts for about 8.5% to 21% of the total cigarette market. Tax-evasion sales occur primarily from legal retailers in low-tax jurisdictions legally selling cigarettes to customers from high-tax jurisdictions and from otherwise-legal retailers in high-tax jurisdictions selling illicit cigarettes alongside fully legal cigarettes to unsuspecting customers.² To obtain illicit full-nicotine cigarettes, however, smokers would have to be willing to buy illegally and be able to find illegal sellers. And the sellers would have to identify their illegal full-nicotine cigarettes explicitly as such and somehow let smokers know when and where they would be available without also alerting enforcement officials. While pop-up street sales might be able to largely evade enforcement, that could work only in highly trafficked urban areas—and the more convenient and predictable such sales were, the easier it would be to enforce against them.

Illicit Internet sales might be more readily available. But any deliveries via the mails or common carriers frequent and large enough to supply even a modest portion of today’s smokers would be highly visible and easy to stop. Also, as Ribisl et al. note, the Prevent All Cigarette Trafficking Act of 2009 (Pub L No. 111-154) has made illicit Internet cigarette sales and deliveries more difficult, and extending it to reach other smoked tobacco products would shut the door even more firmly on any postrule illicit online sales.

Even when available, many smokers would not resort to illicit Internet sales because they are not comfortable with online buying, have limited capacities to do so, or do not want to engage in illegal activity, smoke unfamiliar brands, or buy in large quantities. Because of greater convenience and smaller cash outlays—and perhaps because buying by the carton conflicts with many smokers’ intent to quit—purchases by the pack remain the major way smokers buy cigarettes (despite the higher costs).³

Beyond the Internet, the maximum potential demand for illicit cigarettes after a nicotine rule will likely be too small to make any organized-crime investments to try to establish a large illicit sales network either practical or profitable.

Once full-nicotine cigarettes are no longer legally available, the first thing the vast majority of smokers would likely do is try to quit. More than two thirds of all smokers want to quit and, even with full-nicotine cigarettes readily available, more than half try to quit each year and about 7% succeed.⁴ With a nicotine rule—where neither their favorite brand nor any other legally available smoked tobacco product could satisfy their cravings—even more smokers would try to quit and even more would succeed. No addiction-feeding cigarettes would be readily available to trigger or facilitate relapse, and the pharmaceutical companies would take advantage of the situation by much more actively encouraging smokers to quit by using their nicotine patches and gum and cessation drugs.

At the same time, the tobacco industry would be working hard to encourage smokers to switch to legal full-nicotine products instead of quitting all use or seeking out illicit cigarettes, and many smokers would accept legal e-cigarettes as an alternative way to inhale nicotine into their lungs.

Of the remaining smokers who might try to find illicit cigarettes, many would likely give up because of the inherent difficulties and inconveniences. Ribisl et al. suggest that some would still smoke the legal, minimum-nicotine cigarettes, feeding their addiction by adding nicotine to them or by also using a legal full-nicotine product. Because of the extra cost and inconvenience, few smokers would likely do that for long. But any such smoking of legal cigarettes would also reduce the demand for illicit ones.

The many practical constraints from both the demand and supply side make any possible illicit trade in noncomplying cigarettes after an FDA nicotine-minimization rule too small to reduce its public health gains substantially or cause other major problems. But reducing any postrule smoking of illicit cigarettes would still increase the rule’s public health benefits. Ribisl et al. mention several measures that could help do that, and FDA or Congress should implement those that are clearly cost-effective. But establishing a track-and-trace system for legally manufactured cigarettes would be expensive and complicated and do little to prevent illicit Internet sales, illegal domestic manufacturing, or the smuggling of full-nicotine cigarettes into the United States. A better way to help enforcement officials quickly identify illicit full-nicotine cigarettes would be to restrict the sale of the legal minimal-nicotine smoked tobacco products to adult-only stores, making any found offered for sale anywhere else clearly illegal.

Even without such measures, however, illicit trade risks are too small and weak to justify any further delay in FDA’s implementation of a strong nicotine-minimizing rule.