New Study Finds That Smoking Costs Indiana $7.7 billion Annually

In State News on September 15, 2010 at 12:02 pm

 Here is a news release from the American Lung Association about recently-released study data.

New Study Finds That Smoking Costs Indiana $7.7 billion Annually

For every pack of cigerettes purchased at $5.13 it costs Indiana $15.90.

INDIANAPOLIS, IN — A new study released today by the American Lung Association, and conducted by researchers at Penn State University, finds that helping smokers quit not only saves lives but also offers favorable economic benefits to states.  The study, titled Smoking Cessation: the Economic Benefits, provides a nationwide cost-benefit analysis that compares the costs to society of smoking with the economic benefits of states providing cessation (quit-smoking) coverage.  The study comes at an important time, as important cessation benefit provisions are being implemented at the federal and state levels as a result of healthcare reform legislation.

Each year, tobacco use kills 9,700 people in Indiana, and this new study identifies significant and staggering costs directly attributable to death and disease caused by smoking.  For example, the study finds that smoking results in costs to the Indiana economy of more than $7.7 billion. This includes workplace productivity losses of $2 billion, costs of premature death at $3 billion, and direct medical expenditures of $2.6 billion.

The study also calculates the combined medical and premature death costs and workplace productivity losses per pack of cigarettes.  In Indiana, the retail pack of cigarettes is $5.13.  The costs and workplace productivity losses nationwide equal $15.90.

Smoking is the number one preventable cause of illness and death in Indiana and surveys show that 80 percent of tobacco users want to quit.  Quitting can often take several attempts before a smoker is successful.  Using evidence-based treatments increases smokers’ chances of quitting – but many smokers don’t have access to or don’t know about what kind of treatments are available to them.

“Given this demand, the ALA is redoubling its efforts to work closely with state leaders, health care organizations, educational institutions, and other partners in developing policies and programs to help smokers quit.” Says Bill Stephan, Chairman of the Board for The American Lung Association in Indiana.

In addition to identifying the staggering costs of smoking to the U.S. economy, this new study now provides state governments with compelling economic reasons to help smokers quit.  For example, the study finds that if Indiana were to invest in comprehensive smoking cessation benefits, each would receive, on average, a 19 percent return on investment.  In other words, for every dollar spent on helping smokers quit, states will see on average a return of $1.19. 

“The results of this study are staggering.  Smoking imposes a heavy financial burden on Indiana and in this time of economic crisis, we can no longer afford to supplement this dangerous habit. As a state we need to do better to help our citizens quit smoking,” State Representative Peggy Welch.  Welch is a member of the House Ways and Means Committee and the State Budget Committee.  She is also a practicing cancer nurse at Bloomington Hospital.

About the Study

Researchers at Penn State University with expertise in health economics and administration performed this cost-benefit analysis using government and other published data.  The analysis compares the costs of providing smoking cessation treatments (including price of medications and counseling and lost tax revenue) to the savings possible if smokers quit (including savings in health care expenditures, premature death costs, and productivity losses).

Funding for the study was provided through an unrestricted research grant from Pfizer Inc.

About the American Lung Association
Now in its second century, the American Lung Association is the leading organization working to save lives by improving lung health and preventing lung disease. With your generous support, the American Lung Association is “Fighting for Air” through research, education and advocacy. For more information about the American Lung Association or to support the work it does, call 1-800-LUNG-USA (1-800-586-4872) or visit


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