Cost per year of potential life lost: a proposal to estimate tobacco taxation

Objectives Taxes are the most effective measure to reduce tobacco consumption, although this remains a controversial matter. This study presents a method to determine and justify taxation based on the monetary value of the years of potential life lost due to tobacco consumption. Methods A literature review allowed estimating the average reduction of life expectancy in smokers. The value used in cost-effectiveness studies —three times the GDP per capita (COP 16 613 951 for 2015, equivalent to USD 6 056, applying an exchange rate of USD 1=COP 2743) — was applied to each year lost. Considering the average years of tobacco consumption and the number of packs consumed during that period, the tax that each pack should have was estimated in such a way that, by the time the smoker dies, he or she will have paid for the years lost with an annual interest rate of 3 %. Results Given an average reduction of life expectancy of 6 years, each smoker should contribute to the health system with COP 299 051 115 (USD 109 008). With an annual average consumption of 166 cigarette packs for 50 years, a smoker should pay each year COP 2 659 648 (USD 969), which means that each cigarette pack should have a tax of COP 16 022 (USD 5.84). Conclusions If it is accepted that the health system has to pay up to three times the GDP per capita for each year of life in health interventions that add years, it is reasonable to think that those interventions that take away years of life should also make an equivalent contribution.