Sunday, December 17, 2006

Pharmaceutical nicotine's interest in funding smoking ban efforts and increasing cigarette taxes

From Forces comes this article:

Excerpt below:

According to Yahoo Finance the Robert Wood Johnson Foundation is among the top 5 institutional shareholders of pharmaceutical giant Johnson & Johnson (Stock symbol JNJ). When marked-to-market as of November 20, 2006 the foundation’s holdings of 66,440,108 shares of JNJ common stock are worth $4.4 billion. The company’s subsidiary ALZA Corp. manufacturers NicoDerm CQ nicotine patches for GlaxoSmithKline. Johnson & Johnson also purchased Pfizer Consumer Healthcare for $16.6 billion in June 2006, which included Nicorette nicotine gum.

As tobacco control advocates – such as RWJ foundation grant recipients the American Cancer Society, the American Lung Association, and the Campaign for Tobacco Free-Kids – artificially inflate the cost of cigarettes through tobacco tax advocacy GlaxoSmithKline often increases the cost of Nicotine Replacement Therapy (NRT) products by like amount. For example, from 2001 to 2005 Washington tobacco taxes increased by $12.00 per carton and on a per unit basis the cost of a box of Nicorette increased by $12.06. Increasing the price of one product based on the increased cost of a similar product is referred to as “Parity Pricing.” Cigarette tax increases directly benefit the Robert Wood Johnson Foundation because they create the basis for artificially inflating the price of Nicorette and NicoDerm CQ. As prices for those consumer products are artificially inflated the profits to manufacturers such as Johnson & Johnson and distributor GlaxoSmithKline increase accordingly. With Proposition 86 we observe the direct and undeniable phenomenon of a private foundation with a $4.4 billion vested interest in the successful distribution of Nicorette and NicoDerm CQ applying its multi-billion-dollar clout to directly influence state taxes that create artificial profits to its own benefit. When distribution of Nicorette and NicoDerm CQ expands through passing smoking bans corporate sales increase. When Parity Pricing of NRT products occurs increased sales add artificially inflated profits to corporate bottom lines of Johnson & Johnson and GlaxoSmithKline. Added profits from NRT sales support the stock price of the Robert Wood Johnson Foundation’s stock holdings in JNJ. the more profitable the stock holdings are the more grant money available to finance tax and ban advocacy. The preceding observations were included in my article about Proposition 86 that was published by the Los Angeles Daily Journal on November 2, 2006.

Further proof of Robert Wood Johnson Foundation's ties to the pharmaceutical nicotine giant Johnson & Johnson Company can be found here.

The only thing I could add is to this article is that sales of nicotine replacement therapy products is big business indeed, in fact in excess of $500,000,000.00 per year. Which certainly explains why the Robert Wood Johnson Foundation continues to be the driving force behind smoking bans, but it doesn't explain lawmakers' interests in serving as pawns to pharmaceutical nicotine company demands.

More background on secondhand smoke found here.

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