Graphic Warning Labels and the Cost Savings from Reduced Smoking among Pregnant Women

Introduction: The U.S. Food and Drug Administration (FDA) has estimated the economic impact of Graphic Warning Labels (GWLs). By omitting the impact on tobacco consumption by pregnant women, the FDA analysis underestimates the economic benefits that would occur from the proposed regulations. There is a strong link between the occurrence of low birth weight babies and smoking while pregnant. Low birth weight babies in turn generate much higher hospital costs than normal birth weight babies. This study aims to fill the gap by quantifying the national hospital cost savings from the reductions in prenatal smoking that will arise if GWLs are implemented in the U.S. Data and Methods: This study uses several data sources. It uses Natality Data from the National Vital Statistics System of the National Center for Health Statistics (NCHS) in 2013 to estimate the impact of prenatal smoking on the likelihood of having a low-birth-weight baby, controlling for socio-economic and demographic characteristics as well as medical and non-medical risk factors. Using these estimates, along with the estimates of Huang et al. (2014) regarding the effect of GWLs on smoking, we calculate the change in the number of LBW (low birth weight) babies resulting from decreased prenatal smoking due to GWLs. Using this estimated change and the estimates from Russell et al. (2007) and AHRQ (2013) on the excess hospital costs of LBW babies, we calculate cost saving that arises from reduced prenatal smoking in response of GWLs. Results and Conclusions: Our results indicated that GWLs for this population could lead to hospital cost savings of 1.2 billion to 2.0 billion dollars over a 30 year horizon.