Should we use regulation to demand improved public health outcomes from industry? Yes

doi:10.1136/bmj.a1750

Published 2 October 2008, doi:10.1136/bmj.a1750
Cite this as: BMJ 2008;337:a1750

Head to Head

Should we use regulation to demand improved public health outcomes from industry? Yes

Stephen D Sugarman, Roger J Traynor professor of law

¹ School of Law, Berkeley, CA 94720-7200, USA

sugarman{at}law.berkeley.edu

Preventable chronic diseases are a major threat to health worldwide.Stephen Sugarman argues that setting targets for companies willproduce innovative solutions, but Stig Pramming (doi:10.1136/bmj.a1761)believes collaboration is the best way to improve health

Current approaches to some of our most pressing public healthproblems—voluntary cooperation with business and requiringcompanies to change how they operate—are not moving useffectively or efficiently in the socially desired direction.Let’s instead call for businesses themselves to figureout how to improve public health outcomes through a promisingnew regulatory approach: performance based regulation. Thiswill enable the most innovative and nimble aspects of privateenterprises to be called in. Through performance based regulation,the government tells businesses what outcomes it wants fromthem and leaves them to work out the best ways of attainingthose regulatory targets.

Fresh thinking

Old fashioned public health regulation of business orders companiesto do things like put graphic pictures of illness on cigarettepacks, include calorie counts on fast food menus, install airbags in cars, and train pub workers not to sell drinks to peoplewho are likely to drink and drive. All of these measures areinput controls designed to achieve improved public health outcomes.Although they might be good ideas, they may not be the bestways to bring about the social objective.

Performance based regulation focuses directly on outcomes. Forexample, government would tell junk food sellers that they mustensure that fewer schoolchildren become obese, car manufacturesthat they must reduce the number of fatal road crashes, andtobacco companies that they must reduce society’s smokingprevalence. Sellers of products that in many countries are responsiblefor a huge share of deaths, illness, and injury will be facedwith legal obligations that will align their profit motive withpublic health. If they do not achieve their public health goals,they will have substantial charges imposed on them. Those chargesare perhaps best understood as taxes that internalise the publichealth costs of non-compliant producers into the price of theirproducts.

Businesses might decide to use the methods described earlierto achieve their harm reduction goals. But they might use othermeans instead. Perhaps car companies will install breathalysersin all new vehicles. Tobacco companies might choose to subsidisesmoking cessation programmes or simply raise the price of cigarettes.Junk food companies may embark on campaigns to assure that preschoolsprovide healthy food and vigorous exercise for 3 and 4 yearolds. They are also likely to invent new interventions thatare currently undreamt of.

Compulsion is necessary

Voluntary agreements with industry are insufficient. Firms arenot going to sacrifice profits if they are not required to doso. They are not going to promise and deliver substantial publichealth gains that they don’t already provide in responseto market demands. For example, a recent agreement in the UnitedStates with the leading sweetened beverage makers, touted inthe press as a voluntary decision to remove unhealthy productsfrom school cafeterias and vending machines,¹ turns out to bemuch less promising on careful study. For schools serving teenagers,firms can substitute high energy "sports" drink for colas, andthey can introduce new "light juices" that have nearly as manycalories as those products they promise to remove.²

To be sure, it might be possible to achieve tougher "voluntary"agreements when firms realise that they risk stringent governmentalcontrols unless they agree to change their ways. But even then,agreements that order specific changes in business practicesmay fail to achieve their goals given the skill of corporateleaders and their lawyers. Consider, for example, the so calledmaster settlement agreement entered into between US state attorneysgeneral and the cigarette companies. Lawsuits had sought changesin tobacco advertising as well as reimbursement for the costsof tobacco related disease borne by state healthcare systems.The litigation settlement did force tobacco firms to abandonpractices such as billboard advertising and advertising in magazinesaimed at children.³ But this merely shifted the industry’smarketing budget to other strategies such as point of sale promotionsin retail establishments and high tech advertising through theinternet.⁴

It is like the fight against global warming. Some firms willreduce carbon emissions because they have figured out a wayto make "green" pay. Others will put all of their investmentin research on new technologies. Yet the firms most responsiblefor the problem will continue to pump greenhouse gases intothe environment until they are required to do otherwise.

Many nations are moving towards dealing with global warmingthrough performance based regulation. Governments are beginningto tell power plants, car manufacturers, and the like that theiractivities and products must have reduced carbon footprints,and the regulated companies will figure out the best way todo that. This seems an effective way to harness business creativityin pursuit of the public good.

Public health leaders who now distrust industry should acceptthat public health needs business as an ally. But public healthleaders who promote self regulation by business should acceptthat voluntary cooperation will never achieve enough. Performancebased regulation occupies the middle ground—a third way.Let society set legally enforceable goals and then let enterprisesloose to accomplish them.

Cite this as: BMJ 2008;337:a1750

Competing interests: SDS is a senior programme consultant andproposal reviewer for the Robert Wood Johnson Foundation anda paid consultant to Public Health Law and Policy which receivesgrants from both the Robert Wood Johnson Foundation and CaliforniaTobacco Control Program.

References

Beverage industry agrees to halt all sales of sugary beverages to US schools. Food and Drink Weekly 2006 May 8. http://findarticles.com/p/articles/mi_m0EUY/is_19_12/ai_n16362144.
Simon M. Soda deal with Clinton Foundation latest PR stunt. 5 May 2006. www.commondreams.org/views06/0505-32.htm.
Office of the Attorney General. Master settlement agreement. http://ag.ca.gov/tobacco/msa.php.
Ruel E, Mani N, Sandoval A, Terry-McElrath Y, Stater S, Tworek C, et al. After the master settlement agreement: trends in the American tobacco retail environment from 1999-2002. Health Promot Pract 2004;5(suppl 3):99-110S.