As E-Cigarette Popularity Rises, State Legislatures Look to Curb their Appeal with Price Increases

September 20, 2018|4:14 p.m.| ASTHO Staff

Electronic cigarette (e-cigarette) use by youth is a growing concern among state and federal policymakers and a public health issue that FDA claims has “hit epidemic proportions.” On Sept. 12, FDA took historic action against more than 1,300 retailers and five major manufacturers for enabling youth access to e-cigarette products through illegal sales and false marketing.

E-cigarettes are devices that often resemble cigarettes, cigars, pipes, and even USB flash drives that deliver nicotine, flavors, or other substances to users in the form of a vapor or aerosol. Most e-cigarettes contain nicotine, which is highly addictive, toxic to fetuses, harmful to adolescent brain development, and a health danger for pregnant women. E-cigarette aerosol can also contain cancer-causing chemicals, heavy metals like lead, and volatile organic compounds. Evidence shows that even those without nicotine are harmful to the lungs.

Despite the potentially harmful health effects, e-cigarettes have increased in popularity due to claims that they are less harmful, more convenient, and more cost effective than regular cigarettes. They are now the most commonly used tobacco products among youth and young adults, with e-cigarette use growing 900 percent among high school students from 2011 to 2015. In 2016, more than two million U.S. middle and high school students had used e-cigarettes in the past 30 days. Among adult e-cigarette users (aged 45 years and older) in 2015, most were either current or former regular cigarette smokers, and less than two percent had never been cigarette smokers. In contrast, among e-cigarette users aged 18-23 years, 40 percent had never been regular cigarette smokers.

States have taken a wide array of legislative approaches to reduce the negative health effects and costs of e-cigarette use. One such approach is the adjustment of e-cigarette product pricing. Raising the price of e-cigarette products may reduce the demand as it does for other tobacco products, particularly for younger users who are more price sensitive. Legislation intended to increase the price of e-cigarette products fall into three categories: (1) instituting price increases based on the current sales price, (2) pricing e-cigarettes and vapor products at the same rates as regular cigarettes, and (3) imposing a per milliliter (ml) price increase on liquid nicotine or consumable material. Below is an overview of current state law and examples of recent legislative efforts to reduce harmful e-cigarette use via pricing.

Percentage Price Increases

Two states have established percentage price increases for e-cigarettes. Pennsylvania increased the price of e-cigarette products (i.e., the electronic oral device with heating coil, battery, etc., as well as the liquid or substance used in the e-cigarette) by 40 percent. In Minnesota, the price of tobacco products, which includes e-cigarette products, has increased by 95 percent.

In 2017, Hawaii proposed an amendment to increase by an undetermined percent the price of electronic smoking devices or e-liquids. Washington state introduced a bill that would raise the prices of vapor products by 60 percent. In New Mexico, an amendment was introduced to raise the price of e-cigarettes by 76 percent of the product value. This would be an increase from the current 25 percent set out in statute.

Legislators in New York recently introduced two bills (A011338 and S01089) to treat e-liquid cartridges as “tobacco products” and increase the price of cartridges by 75 percent of the wholesale price. A governor’s budget proposal in Rhode Island called for raising the price of e-cigarettes by 80 percent of the wholesale cost. Similarly, Kentucky proposed an amendment to increase the price of e-cigarettes by 15 percent.

Pricing Equalized to Cigarettes

Two other jurisdictions price e-cigarettes and vapor products at rates equal to cigarettes. In California, the State Board of Equalization has been directed to adopt regulations implementing a price increase on e-cigarettes (i.e., devices, components or accessories of the devices, and any liquid or substance containing nicotine) equivalent to the state’s Cigarette Distribution Tax ($0.10 per cigarette). In the District of Columbia, the price of vapor products was increased to a rate equal with the rate imposed on a pack of 20 cigarettes, expressed as a percentage of average wholesale price.

Price Increases Per Fluid Amount

Six states increased prices of vapor products, liquid nicotine, or consumable material per fluid ml. Delaware (vapor products), Kansas (consumable material), Louisiana (vapor products and e-cigarettes), and North Carolina (vapor products) added $0.05 per fluid ml. Louisiana’s law increased the price of consumable nicotine liquid solution or other material containing nicotine that is depleted as a vapor product. In July 2018, New Jersey passed legislation raising the price of nicotine liquid by $0.10 per fluid ml. West Virginia increased the price of e-cigarette liquid by $0.075 per ml or a fraction thereof. In April 2017, the Puerto Rico legislature approved a bill to increase the price of e-cigarettes by $3, nicotine cartridges by $0.05 for every millimeter of nicotine solution or any other substance in each nicotine cartridge, and vaporizers by $6 for every unit.

Legislators in New York and Indiana proposed legislation in 2018 that would have increased the price of e-liquids by $0.25 and $0.10 per fluid ml respectively.

Legislation increasing the price of e-cigarettes, other electronic smoking devices, and e-liquids can encourage users to quit, seek and sustain cessation, prevent youth initiation, and reduce consumption among those who continue to use them. As states and territories continue to explore ways to reduce the harm from e-cigarette use, ASTHO will monitor their efforts and update members on this important public health issue.

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