The Bangladesh Cancer Society has recently published the full report “The Economic Cost of Tobacco Use in Bangladesh: A Health Cost Approach,” based on a comprehensive national-level study completed in collaboration with the University of Dhaka, and with financial and technical assistance from the American Cancer Society’s Global Cancer Control and Economic and Health Policy Research units and Cancer Research UK.
The study estimates that tobacco use caused nearly 126,000 deaths accounting for 13.5% of deaths from any cause in Bangladesh in 2018. Approximately 1.5 million adults were suffering from diseases attributable to tobacco use and nearly 61,000 children were suffering from diseases due to exposure to secondhand smoke. The estimate of the direct healthcare costs attributable to tobacco use amounted to BDT 83.9 billion annually, 76% of which was paid by tobacco users’ households and 24% was financed through the public health sector budget, representing nearly 9% of total government health expenditure in the fiscal year 2018-19. The annual productivity loss, due to morbidity and premature mortality from tobacco-related diseases, was estimated to be BDT 221.7 billion. The total annual economic cost thus amounted to BDT 305.6 billion ($3.61 billion), equivalent to 1.4 % of the GDP of Bangladesh in 2017-18.
The total economic contribution of the tobacco sector (in terms of household final consumption expenditure, private and public domestic investment and net export) to the GDP in Bangladesh was estimated at BDT 229.1 in 2016-17 fiscal year in 2018 prices. This is BDT 76.5 billion short of the estimated total cost of tobacco, BDT 305.6 billion. Tobacco thus appears to be causing significant net economic loss to Bangladesh.
The annual estimate of total economic cost of tobacco in Bangladesh more than doubled since 2004 (the last time such an analysis was undertaken). Productivity loss accounted for 83% of the increase in tobacco-attributable costs, and increased health care expenditures explain the rest. For a rapidly growing economy such as Bangladesh’s, this cost is expected to get larger over time and undermine the growth potential of households who fall prey to the tobacco epidemic. It is urgent that the government act on curbing the tobacco epidemic for sustaining the momentum of rapid economic growth with equity.
The study further demonstrates that 14% of the total tobacco-attributable cost was caused by exposure to secondhand smoke. It reveals the enormity of the “negative externality” imposed by smokers on nonsmokers (largely children) by exposing them to secondhand smoke and an obvious case for government intervention to reduce smoking.
The costs of publicly-funded health care are financed from tax revenue and are collectively borne by the taxpayers of the country irrespective of their tobacco use status. The fact that 9% of total government health expenditure was spent for treating tobacco-attributable diseases is a clear case of “market failure” over and above the “negative externality” caused by exposure to secondhand smoke. It calls for immediate government intervention to correct market prices by imposing higher taxes on tobacco products.
The study is remarkable in accounting for the lost time of non-employed individuals (e.g., homemakers, unemployed, students, retired, disabled) suffering or dying premature deaths from tobacco-related diseases by imputing value to their potential contribution to household productivity. This is an enhancement of the conventional human capital approach to the measurement of the indirect costs of tobacco-attributable morbidity and mortality that accounts for only the loss of market productivity of the employed population. Second, it is often argued that in the presence of unemployment in the economy, the loss of market productivity from work-related disability or premature mortality of working individuals caused by a disease can be readily recovered by the employers through replacement of those employees with new employees of equal productivity. It may involve transitory frictional costs for employee search and recruitment with no significant repercussion on the long-run profitability of the business. The full economic loss approach taken in this study, in contrast, poses that the economic loss associated with the morbidity or mortality of a family member is permanent and irrecoverable from the perspective of a household. Hence it should be reflected in the measurement of economic costs of illness. Third, the study attributes the difference of expected income between people suffering from tobacco-attributable diseases and people without diseases to the diseases in measuring the economic loss due to morbidity. The underlying principle is that work-related disability caused by certain disease can not only reduce the average productivity, it can also lower the employment probability of an individual.
Though this study is comprehensive insofar as it includes direct costs and indirect productivity costs, it still misses a significant number of additional costs, such as the costs of the environmental and health damages from tobacco cultivation, loss of food security due to use of scarce land resources for tobacco growing, smoking-related fire hazards, environmental pollution from tobacco manufacturing and the littering of cigarette butts, and so on. Had these costs been estimated, the net loss from tobacco would have been even larger.
The progress in tobacco control policies in Bangladesh since the ratification of the WHO Framework Convention on Tobacco Control (FCTC) in 2004, followed by the passage of the Tobacco Control Act in 2005 and the Amendment in the Tobacco Control Act in 2013, has been limited. Despite the reduction in prevalence of tobacco use, Bangladesh is not going to meet the target of a Tobacco-Free Bangladesh by 2040 envisioned by the prime minister. It will take much stronger tobacco control measures fortified with “best practices” and stricter compliance with the guidelines of the articles under the FCTC, especially targeted to the youth who make up the generation of potential future smokers.
The goals of tobacco control are intertwined with the United Nations 2030 Sustainable Development Goals (SDGs) to eradicate extreme income poverty, reduce deaths from NCDs by one-third, and achieve universal health coverage ensuring provision of financial risk protection against impoverishment caused by illnesses. Elimination of tobacco use can prevent the deaths and diseases attributable to tobacco use and secondhand smoke exposure altogether, thereby contributing significantly to the SDGs in Bangladesh by 2030.