Henry Waxman is the original sponsor of HR 1108, Family Smoking Prevention and Tobacco Control Act. This is a bill which would give the FDA regulatory control over tobacco products. On the surface - you would think that there is nothing unusual about a Democrat sponsoring legislation to enhance regulatory control over a "deadly" product. But in this case the nations largest tobacco company supports the legislation and the head of the FDA does not. The Commissioner of Food and Drugs Stated the following during a Congressional hearing on the subject:
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The Agency has three primary categories of concern with the proposed role for FDA.
First, we have concerns that the bill could undermine the public health role of FDA. Second, we have concerns about aspects of the bill that may be extremely difficult for FDA to implement. And third, we have significant concerns about the resources that would be provided under the bill and the expectations it might create. Let me elaborate on each of those areas.
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http://www.fda.gov/ola/2007/tobacco100307.html
Phillip Morris had the following to say:
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One of the bill's more surprising backers: Philip Morris USA, the nation's largest tobacco producer, which controls about half of the U.S. cigarette market, including Marlboro, the nation's bestselling brand.
The company has said it supports legislation as a way of meeting the goal of FDA regulation that was called for in a recent U.S. Institute of Medicine (IOM) report.
"These bills provide the framework for comprehensive FDA regulation of tobacco products and provide important policy solutions to many of the complex issues involving tobacco products," Howard Willard, Philip Morris USA's executive vice president of corporate responsibility, said in a prepared statement. "FDA regulation, as introduced in Congress, would be the most effective way to address the Institute of Medicine's concerns."
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http://www.medicinenet.com/script/ma...ticlekey=84304
There have been topics on TFP concerning regulation, free markets, competition etc. Here we have a clear example of either the potential for unintended consequences or politics at its worse where those pretending to support the health and well being of people are actually in bed with "big business". I think its the latter.
Just to be clear on why Phillip Morris would support this - it is because the restrictions the bill would place on new tobacco products being introduced into the market and advertised or existing products being advertised will give Phillip Morris a virtual lock on their current US market share. No competition. Phillip Morris recently separated its international and domestic tobacco companies. The international company (ticker: PM) is positioned for growth and the domestic company (ticker: MO) currently has a dividend yield of over 5% and they anticipate buying back billions of dollars of stock using cash flow. This legislation will virtually lock in their current US market share giving the company a very measurable and predictable cash flow for decades to come..
You may think the FDA could ban tobacco products all together because of the health risks, right? Well think again, because the bill reserves that authority to Congress regardless of what the FDA thinks.
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Requires the Secretary to establish tobacco product standards to protect the public health, but reserves to Congress the power to ban any tobacco products or reduce the nicotine level to zero.
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http://www.congress.org/congressorg/...8&congress=110
I guess Congress doesn't want to risk the loss of billions in tobacco tax revenues overnight and hey - whats wrong with a little nicotine between friends. the next time you read a post about Bush and oil/defense/Haliburton/etc., think about the 189 Democratic co-sponsors of this bill.
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Original Sponsor:
Henry Waxman (D-CA 30th)
Cosponsor Total: 224
189 Democrats
35 Republicans
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P.s. - I am going to buy a few more shares of MO. I love this country.