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Evaluation of FDA Benefit-Cost Analysis of Graphic Warning Labels

2014

The Food and Drug Administration (FDA) is required to do a regulatory impact analysis assessing the costs and benefits of its tobacco products and other regulations. This paper provides a critical review of the approach the FDA used in its proposed and final graphic warning label rule, and includes recommendations on how to improve the analysis in ways that account for the differences between tobacco use and consumption of most consumer products.

To date, FDA has issued economic impact analyses of one proposed and one final rule requiring graphic warning labels (GWLs) on cigarette packaging. Given the controversy over the FDA’s approach to assessing net economic benefits in its proposed and final rules on GWLs and the importance of having economic impact analyses prepared in accordance with sound economic analysis, a group of prominent economists met in early 2014 to review that approach and, where indicated, to offer suggestions for an improved analysis. They concluded that the analysis of the impact of GWLs on smoking substantially underestimated the benefits and overestimated the costs, leading the FDA to substantially underestimate the net benefits of the GWLs.

 

Source:

Chaloupka FJ, Warner KE, Acemoğlu D et al. An Evaluation of FDA’s Analysis of the Costs and Benefits of the Graphic Warning Label Regulation. Tobacco Control 2015; 24: 112-119. http://dx.doi.org/10.1136/tobaccocontrol-2014-052022