Chapter 35 Economic issues

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"On average, at any given age, smokers incur higher medical costs than nonsmokers.

However, nonsmokers live longer and therefore continue to incur medical costs over

more years... The most recent research is the incidence-based study by Hodgson

(Milbank Quarterly, Vol 70, 1992, pp. 81-125) who found that lifetime medical costs for

male smokers were 32 percent higher than for male neversmokers and lifetime

medical costs for female smokers were 24 percent higher than for female

neversmokers. Hodgson determined that the present value of the lifetime excess

costs were about $9,400 in 1990 dollars... Adjusting by the consumer price index

(CPI) for medical care raises the present value of Hodgson's excess medical cost per

new smoker to $10,590 in 1994 dollars. Thus, those 1,000,000 young people under

the age of 18 who currently become new smokers each year are responsible for

excess lifetime medical costs measured at a present value of $10.6 billion (1,000,000

x $10,590). Since FDA projects that the proposed regulation would prevent 250,000

of these individuals from smoking as adults, the medical cost saving attributable to the

proposed regulation is estimated at $2.6 billion per year."

Federal Register, August 11, 1995, p. 41364

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Monday, July 24, 2000

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