17.4 Economic evaluations of tobacco control interventions

Tobacco control interventions are an excellent investment. A review of economic evaluations of tobacco control programs published in 2009 concluded: 'the existing studies show in almost every case that tobacco control programs and policies are either cost-saving or highly cost-effective'.1 A 2010 Australian report that examined the cost-effectiveness of 150 disease prevention interventions predicted that a tobacco taxation increase (of 30%) would not only be cost-saving, but was the intervention that would have the highest health benefit—270 000 DALYs prevented.2

The following sections summarise studies that have investigated the cost-effectiveness of tobacco control per se, policy interventions, population-based strategies and clinical interventions. The focus is on Australian studies; international research is included for interventions that have been undertaken in Australia but have not been evaluated.

17.4.1The cost-effectiveness of tobacco control per se

The cost-effectiveness of tobacco control per se has been studied in the following four types of analyses:

  • Economic evaluations of programs (actual or proposed) that involved a mix of interventions—for example, the California Tobacco Control program, which included taxation increases, legislation mandating smokefree public places, mass media anti-smoking campaigns and community and school-based prevention programs.
  • Studies that compare different communities in terms of their tobacco control expenditures and the resulting outcomes (smoking rates, health outcomes or economic outcomes). These studies are a type of epidemiological study referred to as 'ecological analyses', because the unit of analysis is a population rather than an individual.
  • Studies of the impact of projected reductions in smoking prevalence on specific health or economic outcomes. Although comprehensive evaluations are informative, analyses that focus on specific outcomes, such as hospitalisations avoided through reduced smoking, can aid stakeholders' understanding of the benefits of tobacco control. Evaluations of comprehensive tobacco control programs

The largest comprehensive tobacco control program in the world to date is the California Tobacco Control Program (CTCP).3 It began in 1989, with an annual budget of about $100 million. In addition to the tobacco tax increase that financed the program, the CTCP involved an anti-tobacco media campaign and community- and school-based interventions.4 As well as directly encouraging people to quit, the CTCP has included vigorous efforts to discourage smoking around others, backed up by some of the most far-reaching legislation seen anywhere in the world mandating smokefree public places. Changing social norms about smoking has also been shown to have contributed to the dramatic decline of smoking in California.5 An economic evaluation investigated the impact of tobacco control on Californian men alive in 1990 over their subsequent life until 2079, when the youngest would turn 90. The value of the net health care savings and years of life saved was about $22 million (in 1990 dollars, discount rate of 3% per annum).6 So the CTCP was cost saving as well as effective.

Several Australian analyses have assessed the economic efficiency of comprehensive tobacco control programs; two evaluated actual programs retrospectively and one analysis assessed a proposed package of interventions. Economists have also estimated the likely social returns of reduced prevalence of smoking in various states and nationally.

The consulting group Applied Economics evaluated the return on investment in Australian public health programs.7 They found that from the late 1960s to late 1990s male smoking rates dropped from 45 to 27% and female rates dropped from 30 to 23%. By 1996, tobacco expenditure per capita had dropped to less than 40% of its 1965 level. Applied Economics estimated that Australian public health programs aimed at reducing tobacco consumption had cost $176 million over that 30-year period, but had saved $8.06 billion (yr 2000 dollars, discounted back to 1971). In other words, Australian tobacco control programs have been cost saving. Furthermore, the analysis found that the government saved $2 for every $1 it spent on public health programs to reduce smoking.

Hurley and Matthews evaluated the Australian National Tobacco Campaign (NTC) initiated by the federal government in 1997.8 The NTC involved intensive television broadcasting of new anti-smoking advertisements and increased funding for support services for smokers attempting to quit. The cost-effectiveness analysis found that the NTC was both cost saving and effective. The campaign cost about $9 million, but predicted health care cost savings exceeded $740 million. About 55 000 deaths were predicted to be prevented and over 400 000 QALYS saved.

The Cancer Council Victoria submitted a report in 2009 to the National Preventative Health Taskforce analysing the potential impact of more intensive tobacco control strategies than the anti-smoking social marketing campaign funded under the National Partnership Agreement on Preventative Health (NPAPH) and scheduled to start that year.9 The report predicted that tobacco taxation increases, combined with additional spending on anti-smoking media, would achieve the Taskforce's goal of a smoking prevalence of 10% or less by 2020 and would avoid 248 200 premature deaths. Such a program was estimated to cost about $276 million, but would save more than $5 billion in health care costs.

In their reports to state governments in Victoria, Western Australia and New South Wales, Collins and Laplsey have not just quantified recent social costs of smoking but have also estimated the social returns that could be expected from future reductions in smoking prevalence.10–12 Ecological analyses of tobacco control

The 1998 Master Settlement Agreement with the tobacco industry in the United States made funding available to states for tobacco control programs. Implementation of such programs has varied between states.13 It is therefore feasible to investigate the correlation, at state level, between tobacco control expenditure and health and health economic outcomes. Such analyses have found that in states that increased tobacco control program funding there were decreases in aggregate cigarette sales,13 lower prevalence of youth smoking,14 more rapid falls in cardiovascular death rates15 and reduced personal health care expenditures.16 Evaluations of the benefit of smoking prevalence reductions


Three Australian analyses have modelled the impact of reduced smoking on specific health economic outcomes. The first analysis was published in 2004,17 in the context of the federal government's Intergenerational Report (IGR) which predicted large increases in the cost of government subsidies of medicines under the Pharmaceutical Benefits Scheme (PBS) consequential to an ageing population.18 The economic analysis predicted that if smoking prevalence were reduced by 5%, savings in PBS subsidies for drugs to treat smoking-related cardiovascular disease would exceed a billion dollars over the 40-year period of the IGR. If the 5% reduction in smoking rate could be achieved at a cost of $45 million, the program would have an internal rate of return of 33% and the initial investment would be recouped in eight years.

The second analysis investigated the impact of reductions in the smoking rate on acute myocardial infarction hospitalisations and costs.19 A model previously used to predict these outcomes for the United States and the United Kingdom was updated and applied to the Australian population.20,21 The analysis predicted that if smoking prevalence dropped by 5%, more than 3000 hospitalisations for myocardial infarction and 1000 hospitalisations for stroke would be avoided over only a seven-year period. Health care costs would be reduced by $61.6 million, almost 3% of the total hospitalisation costs for stroke and heart attack over the period.

Smoking increases the risk of the eye disease, age-related macular degeneration, by 2.5-fold to 4.5-fold. Hurley and Matthews found that smoking cessation is unequivocally cost-effective in terms of its impact on age-related macular degeneration.22 Their model predicted that if 1000 smokers quit, there would be 48 fewer cases of macular degeneration, 12 fewer cases of blindness and the costs of treating and caring for people with macular degeneration would decrease by $2.5 million. If the tobacco control program that facilitated quitting cost less than $1400 per quitter, it would be cost-saving in terms of its impact on macular degeneration alone.

In the United States, Lightwood et al. estimated the impact of a pregnant woman stopping smoking before the end of the first trimester on pregnancy- and birth-related outcomes.23 They predicted that a 1% national drop in smoking prevalence would prevent 1300 low birth weight live births and save $21 million in one year alone (1995 US dollars).

17.4.2Economic evaluations of policy interventions Cigarette taxation and price increases

Governments can increase the price of cigarettes through increased taxation rates, thereby potentially decreasing demand. Wakefield and colleagues analysed the impact of tobacco control policies and programs on Australian smoking prevalence over the period 1995–2006.24 They found that increases in cigarette costliness (defined as the ratio of the average price of a pack of cigarettes to the average weekly earnings) were associated with decreases in smoking rates. An increase of 0.03% in costliness decreased smoking prevalence by 0.3%. This finding is in line with established international estimates of price elasticity of demand25 as well as results of a more recent systematic review which included an estimate of price elasticity from studies that control for non-price related interventions.26 Ranson et al. used standard cost-effectiveness analysis methodology (see Section to evaluate price increases through taxation.27 Although the 'cost' of a cigarette taxation increase would appear to be zero, Ranson and colleagues conservatively assumed that tax increases would involve enforcement costs for collection of the taxes. They found that a 10% price increase would cost on average between US$12 and US$313 per DALY saved, depending on assumptions about enforcement costs and price elasticity (the net impact of a price change on the demand for cigarettes). This analysis therefore indicates that taxation is a very cost-effective tobacco control intervention and the Australian report, mentioned in Section 17.4, that found a tobacco taxation increase (of 30%) to be cost-saving, confirms this finding.2 Smokefree-air laws and policies

Smokefree workplaces reduce cigarette consumption among continuing smokers and lead to increased successful cessation among smokers.28 Strong restrictions significantly reduce both smoking prevalence and average daily cigarette consumption for youth and young adults.32,33

Restrictions on smoking in public and work settings also influence the health and wellbeing of people who do not smoke.

Policies that ban smoking in public places are associated with significant reductions in both the prevalence of exposure to secondhand smoke and the prevalence of smoking. This can be expected to lead to a reduction in smoking-related diseases and therefore in health care costs.28 A US study analysed the effect of a smokefree policy in workplaces and public places on the number of hospital admissions for smoking-related diseases.34 The city of Bowling Green, Ohio, implemented a clean indoor air ordinance in March 2002. Smoking was prohibited in all public places within the city, except for bars and restaurants with bars, provided that the bar area was isolated within a separate smoking room. Following introduction of the ordinance, admissions to the local hospital were significantly reduced. Admissions for coronary heart disease decreased by 39% after one year and by 47% after three years, resulting in significant cost savings. Since this study, several others have also reported dramatic reductions in admissions for myocardial infarction and other diseases following the implementation of such policies.35–37

Another US study examined the effect of making all workplaces smokefree and concluded that the combined impact of increased numbers quitting, reduced smoking by the remaining smokers and reduced exposure to secondhand smoke would result in substantial savings in medical costs in just the first year.38 Advertising restrictions

Cigarette advertising conveys information about the product's physical characteristics and 'personality'. Such advertising is designed primarily to create:

'fantasies of sophistication, pleasure, social successes, independence or ruggedness. This process can induce individuals who are not smokers to try the product, for those are smokers, to smoke more, for those might have quit, to continue and for those who have quit, to start again.' (Saffer and Chaloupka,39 Section 2, para 2).

Advertising can also increase market size by assisting brand proliferation. New brands may induce people to take up smoking thereby increasing total tobacco consumption.

An econometric study prepared for the World Bank compared changes in tobacco consumption in countries that had introduced advertising bans.40 Controlling for price, income and other factors affecting demand, they found that limited bans are minimally effective. Comprehensive bans, however, do reduce tobacco use. Consumer information

In Australia, Applied Economics completed a cost-benefit analysis of new health warnings on cigarette packs prior to their introduction in 2004.41 The new warnings comprised 14 rotating graphic messages covering 50% of the front and back of the cigarette packs Assuming that the new warnings would result in a 3% decrease in smoking rates, the analysts forecast a net benefit of more than $2 billion and a benefit:cost ratio greater than 2:1. Youth access enforcement

In all Australian states and territories, the minimum legal age for purchase of cigarettes is 18 and the distribution of free samples is prohibited.42 The vigour with which such laws are enforced has varied in different jurisdictions over time in Australia.43 Two recent analyses suggest that strengthening of laws banning sales to minors in Australia may have contributed to the dramatic declines in youth smoking observed in recent years.44,45

A cost-effectiveness analysis of programs enforcing the prohibition of tobacco sales to minors has been conducted for the United States.46 Reliable data on the effectiveness of such programs was unavailable,47 but the analysts estimated that if enforcement decreases the prevalence of youth smoking by 5%, the cost per life-year saved would range from $440 to $3100. Enforcement programs are therefore cost-effective, even if their impact on smoking rates is small.

17.4.3Economic evaluations of population-based strategies Mass media campaigns

Media campaigns in Australia have clearly been effective in reducing smoking prevalence.48–53 The time series analysis of Australian smoking prevalence data from 1995 to 2006, referred to in Section, also investigated the impact of televised anti-smoking advertisements24 finding that exposure to advertisements four times a month, on average, decreased smoking prevalence by 0.3%. A Cochrane Collaboration review of 11 trials of mass media designed to promote smoking cessation also found that such programs can be effective.54 A more extensive review of multiple sources of evidence conducted by the US National Cancer Institute found overwhelming evidence that such campaigns can be highly effective, depending on the kinds of advertisements used, and the weight of media advertising.55

Mass media campaigns can also be cost-effective. A study of Scotland's 1992 campaign and an analysis of a four-year media campaign in the United States that targeted adolescents both reported costs per life-year saved below $1000 (2005 US dollars).1,56,57 Quitlines

Telephone quitlines offering counselling and self-help materials operate in all Australian states and territories. A Cochrane review has concluded that telephone counselling can increase success rates in those interested in quitting58 and that multiple call-back counselling sessions improve long-term cessation.59 At least one US study has concluded that offering telephone counselling to quitline callers is cost-effective.60 Callers were randomised to receive mailed self-help booklets or booklets plus telephone counselling. The quit rate 12 months after randomisation was 4.5% higher in the counselled group and the cost for each additional year of maintained smoking cessation was $1300 (US dollars, 2000). A Swedish study assessed the 12-month quit rate for more than 1000 callers to the national quitline.61 More than 30% of callers quit and the cost per life-year saved was estimated at between $311and $401 (US dollars, 2002). Several studies have concluded that providing NRT through quitlines increases cost-effectiveness.62–64

Group counselling sessions are also effective but less popular and much more expensive.65 Internet and mobile phones for smoking cessation may also be effective.66,67 The high reach and low cost of such interventions could greatly increase the cost-effectiveness of smoking cessation services.

17.4.4Economic evaluations of clinical interventions

The main clinical tobacco control interventions are advice to stop smoking and pharmacotherapies. Advice can be brief or more intensive, involving repeated counselling sessions, and can be delivered by a doctor or other health professional, in general practice, specialist or health care settings. A Cochrane Collaboration review concluded that simple advice by a physician to stop smoking does increase quit rates.68 The absolute improvement is small—if the unassisted quit rate is 2 to 3%, a brief advice intervention can increase quitting by 1 to 3%. More intensive interventions further increase the quit rate, to a small extent. Because advice to quit smoking is inexpensive, and because the health and economic benefits of quitting are large, smoking cessation advice has long been recognised as very cost-effective intervention. For example, a review by Brown and Garber found that physician or nurse smoking cessation counselling had cost-effectiveness ratios less than $5000 per life-year saved.69 Table 17.4.1 summarises key cost-effectiveness ratios from their review for smoking cessation advice and other coronary heart disease prevention strategies. Smoking cessation advice was more cost-effective than most of the other prevention strategies considered.

Table 17.4.1
Cost-effectiveness league table of interventions to reduce coronary heart disease morbidity and mortality


Cost/life-year saved


(1994 $US)

Mass-media program to reduce dietary cholesterol

Cost saving

Daily aspirin

Cost saving

5-minute medical advice on smoking cessation

$2 380

Hormone-replacement therapy

$6 890

Coronary artery bypass grafting

$9 190

Propranolol (a beta blocker) for hypertension

$17 660

Regular jogging

$51 699

Exercise electrocardiogram as screening test

$351 310

Source: Adapted from Brown and Garber,69 Table V. Refer to the original publication for details of the risk profiles of the people receiving the intervention

Reviews of studies of smoking cessation counselling by other health professionals suggest that pharmacists in community settings may be effective in increasing quit rates among their patients70 and that more research is required to assess the efficacy of counselling by dentists.71 Cochrane reviews confirm the effectiveness of smoking cessation programs that commence after hospital admission and continue after discharge.72 Advice from nurses in the hospital setting also seems to increase quit rates.73 Little work has been undertaken on the cost-effectiveness of smoking cessation in these settings. Several studies have established the feasibility and accessibility of referral by health professionals to government-run Quitlines.74 This model has potential to increase both the number of patients receiving counselling and quit rates among those who do,75 thereby increasing the cost-effectiveness of clinical interventions,

Smoking cessation guidelines for doctors now recommend that smokers who wish to quit be offered pharmacotherapy.76 Three pharmacotherapies are available: nicotine replacement therapy (NRT), bupropion and varenicline. NRT is available as transdermal (skin) patches, gum, inhaler and lozenges. As mentioned in Section, the Pharmaceutical Benefits Advisory Committee (PBAC) recommends to the Minister for Health which drugs should be subsidised under the Pharmaceutical Benefits Scheme. A medicine must be effective and cost-effective in order to be subsidised.77 The three available smoking cessation pharmacotherapies have each been recommended for subsidy by the PBAC; they are all regarded as 'cost-effective'. At the time of writing this Chapter (September 2010) the government was still considering the PBAC's recommendation to subsidise the transdermal patch form of NRT.78

Three Australian studies have analysed the relative cost-effectiveness of these smoking cessation pharmacotherapies.78–80 Two studies found bupropion more cost-effective than NRT,79,81 and one study found varenicline more cost-effective than both NRT and bupropion.80 However, these comparative cost-effectiveness findings are dependent on the cost of a course of each therapy and the analysts' assumptions about relative effectiveness. A PBS-subsidised course of nicotine patches is now cheaper than a course of bupropion or varenicline. The PBAC regards nicotine patch as safer and cheaper than bupropion and view the two drugs as having comparable efficacy. Compared with varenicline, the PBAC views nicotine patch as being cheaper and safer but regard the comparative efficacy as being uncertain, with nicotine patch being possibly inferior.78 The one head-to-head randomised trial of varenicline and nicotine patch reported a marginally statistically significant higher quit rate in smokers assigned to varenicline therapy.82,83

Reviews have concluded that smoking cessation advice and assistance to quit smoking is one of the most cost-effective disease prevention services available in clinical settings. In the United States, Maciosek and colleagues developed a methodology to prioritise clinical preventive services based on two measures: (i) the clinically preventable burden of disease, defined as the total number of QALYs that could be saved; and (ii) its cost-effectiveness, defined as the average net cost per QALY.84 Both measures assumed the service would be delivered to a US birth cohort over the years necessary for that service. Maciosek et al. found that smoking cessation advice and quit assistance was one of three services with the highest ranking on both measures.85 The other services were childhood immunisation and daily aspirin use for prevention of cardiovascular disease. Their analysis therefore strongly supports the prioritisation of smoking cessation programs, on economic efficiency and burden of disease grounds, over many other preventive services, including breast cancer screening, influenza immunisation for adults and cholesterol screening.

The Australian project, Assessing Cost-effectiveness in Prevention (ACE–Prevention) is similar in concept to this service-ranking framework, but it considered public health as well as clinical prevention strategies.2 To date, ACE–Prevention has analysed tobacco taxation and smoking cessation pharmacotherapies. Evaluations of other tobacco control interventions are underway. Findings in relation to tobacco taxation are detailed in Section 17.4. The three smoking cessation pharmacotherapies were classified by ACE-Prevention as 'very cost-effective preventive interventions'. All three medicines had cost-effectiveness ratios of $10 000 per DALY saved or less.

Relevant news and research

For recent news items and research on this topic, click here. ( Last updated September 2019)


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Recent references

17.4.3 Economic evaluations population tobacco control interventions

Cohen, D., M. Alam, and P. Jarvis, An analysis of the economic impact of smoking cessation in Europe. BMC Public Health, 2013. 13: p. 390.Available from: http://www.biomedcentral.com/1471-2458/13/390

Sanders, A., G. Slade, L. Ranney, L. Jones, and A. Goldstein, Valuation of tobacco control policies by the public in North Carolina: comparing perceived benefit with projected cost of implementation. North Carolina Medical Journal, 2012. 73(6): p. 439-47. Available from: http://www.ncbi.nlm.nih.gov/pubmed/23617155

Laura M Currie, Kenneth Blackman, Luke Clancy, David T Levy. The effect of tobacco control policies on smoking prevalence and  smoking-attributable deaths in Ireland using the IrelandSS simulation model Tob Control 2013; 22 e25-e32 http://tobaccocontrol.bmj.com/cgi/content/abstract/22/e1/e25?etoc