Search

Ethiopia raised taxes on tobacco products in early 2020, increasing the overall price of the typical pack of cigarettes by about 67%. We quantify the potential impacts of Ethiopia's tobacco tax hike on various outcomes-life years, tax revenues, cigarette expenditures and catastrophic health expenditures (CHE). Using parameters like price elasticity of demand for cigarettes and smoking prevalence in Ethiopia from the existing literature and secondary data sources, we model the potential implications of the reform at the population level and for different wealth quintiles. We focus only on men since a small proportion of Ethiopian women smoke. Results indicate that Ethiopia's tax hike could induce a significant proportion of current smokers to quit smoking and thereby save almost eight million years of life in the current population. The reform is also likely to increase tax revenues by USD26 million in the first year after its introduction. The richest quintile will bear the greatest share of this higher tax burden and the poorest will bear the least. Additionally, deaths due to the main diseases associated with smoking will fall. This is expected to avert up to 173,000 CHE cases due to the out-of-pocket costs that would have been incurred in obtaining medical treatment. This analysis highlights that cigarette tax hikes in countries that have low smoking prevalence can reduce smoking even further, and thereby protect against the future health and financial costs of smoking. Importantly, the effects of these policies can be progressive across the income spectrum.

Summary Background The way in which a government chooses to finance a health intervention can affect the uptake of health interventions and consequently the extent of health gains. In addition to health gains, some policies such as public finance can insure against catastrophic health expenditures. We aimed to evaluate the health and financial risk protection benefits of selected interventions that could be publicly financed by the government of Ethiopia. Methods We used extended cost-effectiveness analysis to assess the health gains (deaths averted) and financial risk protection afforded (cases of poverty averted) by a bundle of nine (among many other) interventions that the Government of Ethiopia aims to make universally available. These nine interventions were measles vaccination, rotavirus vaccination, pneumococcal conjugate vaccination, diarrhoea treatment, malaria treatment, pneumonia treatment, caesarean section surgery, hypertension treatment, and tuberculosis treatment. Findings Our analysis shows that, per dollar spent by the Ethiopian Government, the interventions that avert the most deaths are measles vaccination (367 deaths averted per $100 000 spent), pneumococcal conjugate vaccination (170 deaths averted per $100 000 spent), and caesarean section surgery (141 deaths averted per $100 000 spent). The interventions that avert the most cases of poverty are caesarean section surgery (98 cases averted per $100 000 spent), tuberculosis treatment (96 cases averted per $100 000 spent), and hypertension treatment (84 cases averted per $100 000 spent). Interpretation Our approach incorporates financial risk protection into the economic evaluation of health interventions and therefore provides information about the efficiency of attainment of both major objectives of a health system: improved health and financial risk protection. One intervention might rank higher on one or both metrics than another, which shows how intervention choice—the selection of a pathway to universal health coverage—might involve weighing up of sometimes competing objectives. This understanding can help policy makers to select interventions to target specific policy goals (ie, improved health or financial risk protection). It is especially relevant for the design and sequencing of universal health coverage to meet the needs of poor populations. Funding Bill & Melinda Gates Foundation.