Tuesday, September 4, 2012

Loopholes allow drug industries to market to youth

Much of the current debate around drug policy includes the notion that regulations keep legal drugs -- alcohol, tobacco, prescription drugs -- out of the hands of teenagers.  While regulations certainly can keep drugs out of the hands of youth, they often fall short -- sometimes because the drug industries finds loopholes in regulations.  The tobacco industry provides a perfect example.  From Sunday's New York Times:

Give the tobacco industry credit for ingenuity. Just when it looked as if federal regulators could block their ability to addict children and young adults, several companies that make cigars and pipe tobacco have sidestepped the barriers by taking advantage of loopholes in federal law.

One loophole involves a law enacted in 2009 that raised the federal tax on cigarettes, small cigars and roll-your-own tobacco, partly to deter smoking among young people and partly to help pay for a children’s health insurance program. Larger cigars and pipe tobacco, however, were taxed at a much lower rate.

Some manufacturers then relabeled “roll-your-own tobacco” as “pipe tobacco” to qualify for lower taxes. Similarly, some cigar makers made their small cigars slightly heavier to qualify for the lower rate. With just a small increase in weight, a small cigar can qualify as a large cigar, for tax purposes, even though it more nearly resembles a typical cigarette and can cost as little as seven cents a cigar.

It seems clear that the regulatory steps designed to keep tobacco products out of the hands of young people are not working as well as they could. This is no accident. A report issued on Aug. 27 by Representative Henry Waxman . . . cited internal documents from several manufacturers that revealed deliberate plans to manipulate existing products and create new ones to evade taxes and flavor bans.

As we continue our conversation about marijuana legalization, the role of regulations should be considered.  Not the theory of regulations, but the pragmatic realities of how regulations are implemented and enforced.

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