Harm reduction policies can result in RM1.1bil annual savings, says think tank

The Center for Market Education says switching just 1% of the smoking population to alternative products could potentially result in a yearly saving equivalent to 0.16% of Malaysia’s GDP.

PETALING JAYA: A think tank estimates that over RM1.1 billion in government spending can be saved annually if harm reduction policies in public health and transportation are adopted.

The Center for Market Education (CME) also said switching just 1% of the smoking population to alternative products could potentially result in a RM2.61 billion gain in productivity, or 0.16% of Malaysia’s GDP.

The research findings were among those outlined in a policy paper titled “Harm Reduction, Healthcare Savings and Economic Growth: A Strategy for Malaysia” authored by CME CEO Carmelo Ferlito and research assistant Imran Shamsunahar.

The paper introduces the concept of harm reduction, defining it as a public policy strategy designed to limit the negative social and physical consequences associated with various human behaviours, both legal and illegal.

In a statement, CME said harm reduction approaches reject the use of restrictions or bans to combat the consumption of harmful goods such as tobacco, sugar, salt, and alcohol, or engaging in activities that emit carbon, such as driving vehicles using internal combustion engines.

Instead, CME said, harm reduction approaches embrace policies that provide more choices for less harmful alternatives.

The paper outlines three key findings, the first of which is estimating the healthcare savings brought by the adoption of harm reduction policies.

It also estimates the positive spillovers on the economy brought by the adoption of harm reduction policies in terms of investments and job creation, and lists the pillars for a comprehensive policy strategy inspired by harm reduction.

“Starting with the impact of harm reduction applied to the consumption of nicotine products such as e-cigarettes and heated tobacco products, we estimate healthcare savings of up to RM787.78 million in 10 years, deriving from declines in adult smoking due to switching to less harmful alternatives,” said Imran in the statement.

“Furthermore, switching just 1% of the smoking population to alternative products could potentially result in a RM2.61 billion gain in productivity. In other words, this represents a yearly saving equivalent to 0.16% of Malaysia’s GDP.”

Based on the government’s targets of having 15% of the total industry volume (TIV) made up of EVs and hybrids by 2030, and to 38% by 2040, the paper projected that healthcare savings would be between 6.43% and 24.93% of the current pollution-related costs, or between RM9.1 billion and RM13.8 billion.

Looking at the implementation of differential taxation on sugar, it was estimated that a 10% drop in sugary drink consumption will potentially turn into a 0.7% healthcare cost saving with regards to diabetes-related healthcare costs, or RM105million.

The paper concluded with a set of policy guidelines inspired by harm reduction to be applied in Malaysia, such as to avoid prohibition and uniform taxation.

“Such policies only favour the growth of illicit trade, and Malaysia has one of the highest levels of illicit cigarette trade globally,” it said.

Among the other policy guidelines include a push to nurture innovation and fiscal action centred on differentiated taxation, whereby taxation is proportional to the harm level. - FMT