Elsevier

Public Health

Volume 123, Issue 3, March 2009, Pages 275-279
Public Health

Special Issue
No more business as usual: enticing companies to sharply lower the public health costs of the products they sell

https://doi.org/10.1016/j.puhe.2008.12.020Get rights and content

Summary

Cigarettes, alcohol, junk food and motor vehicles cause a staggeringly high level of death, injury and disease. Business leaders from the industries that make these products currently try to frame these negative outcomes as ‘collateral damage’ that is someone else's problem. That framing is not only morally objectionable, but also overlooks the possibility that, with proper prodding, industry could substantially mitigate these public health disasters. A promising regulatory tool called ‘performance-based regulation’ is a new approach to combating the problem. Simply put, performance-based regulation would impose a legal obligation on manufacturers to reduce their negative social costs. Rather than suing the firms for damages, or telling them how they should run their businesses differently (as typical ‘command and control’ regimes do), performance-based regulation allows the firms to determine how best to decrease today's negative public health consequences. Like other public health strategies, performance-based regulation shifts the focus away from individual consumers on to those who are far more likely to achieve real public health gains. Analogous to a tax on causing harm that exceeds a threshold level, performance-based regulation seeks to harness private initiative in pursuit of the public good.

Introduction

This article discusses a new way for the public to engage industry in promoting public health. At present, throughout the economically developed world, four consumer products are responsible for an enormous amount of illness, injury and early death. These key products – cigarettes, alcohol, junk food and motor vehicles – now cause approximately one-quarter of all deaths in many wealthy countries.1, 2, 3, 4 If the makers of these products could be enticed to sharply reduce the negative consequences of the products they sell, this would yield a huge public health gain. A promising new way to do this is by ‘performance-based’ regulation. Before turning to just what this type of regulation might be like, the following section describes the contrasting ways in which public health leaders currently view industry.

Many public health leaders distrust the business community. This is clearly the case with respect to the tobacco industry, but it is importantly true for the junk food, motor and alcohol industries as well. Many of these leaders see these industries as irresponsible in the way they formulate and market their products. They would ask: ‘How can society count on any assistance from profit-seeking companies to solve public health problems when these businesses ignore the vast social costs of what they sell?

For these business critics, it does not help that industry now blames consumers for these negative outcomes. Industry leaders typically frame obesity, smoking, road accidents (including those caused by drunk driving) and alcohol-related diseases as the responsibility of product users. These companies insist that they are just responding to demand, and providing a product that can be used responsibly (cigarettes aside). Industry says that user abuse is the problem. Put differently, industry uses the frame of ‘personal responsibility’ to exempt itself from responsibility for the public health costs of its products. This attitude makes some public health leaders even more sceptical about the trustworthiness of industry.

On the other hand, some public health leaders, perhaps many fewer in number than those that distrust industry, believe in cooperating with the business community and regularly turn to industry for help. They generally see ‘voluntary agreements’ as the right way to work with business. In the same vein, when pressed to help solve public health problems, businesses themselves also often suggest such cooperative arrangements as part of a self-regulation solution.5

While, of course, sometimes both industry and the public can benefit from the same action, in the end it is difficult to see how companies will freely increase costs and reduce profits in order to promote public health. Perhaps enterprises would more dramatically change their behaviour for fear of even stronger legal requirements,6, 7 but truly voluntary agreements are generally not going to accomplish a great deal. This is well illustrated by recent promises made by the sweetened beverage industry (in cooperation with a foundation associated with former US President Bill Clinton) regarding which products they will sell in US schools.8, 9 While soft drink sellers will remove some high-calorie beverages from school vending machines, they will continue to offer high-calorie ‘sports drinks’ and will introduce new products containing nearly as much sugar as in those taken away.10

Between these two polarized views – distrust of industry and faith in voluntary agreements – lies a third approach. Rather than shunning public involvement with industry or pleading with industry to help, society can regulate industry in a way that persuades business to pursue the public good. This approach is performance-based regulation.

Section snippets

Performance-based regulation

Industry, of course, usually dislikes regulation, especially regulation of the conventional ‘command and control’ sort that mandates precisely what to do and fines businesses for non-compliance. Industry witnesses before legislative and administrative bodies are often quick to challenge proposed legal mandates as unlikely to have the public health gains imagined by its sponsors. It is possible, however, to press industry to take responsibility for lessening the harmful consequences of its

Application to key consumer products

How might performance-based regulation be applied to the four key consumer products? Let us first consider motor vehicles. Just for purposes of illustration, assume that the focus is on reducing the number of vehicle-related deaths, although an actual plan would probably set targets for both serious injury and death. If the annual road death total is now X, imagine that the target total is set at 0.5X, a reduction of one half, by 8 years in the future. Appropriate intermediate goals of, say,

Challenges

All of these performance-based regulatory schemes would face a set of specific challenges. For example, we do not want obese children to be replaced with anorexics, or cigarette smokers replaced with cigar smokers or cocaine users. Hence, businesses would have to disclose their plans to achieve their public health targets, and agencies would have to be able to veto plans that seriously risked socially unacceptable consequences. So, too, it would be critical that the agencies could reliably

Regulatory alternatives

In a world in which other regulatory strategies have their own substantial short-comings, performance-based regulation as applied to public health is surely worth serious consideration and experimentation. What are these other alternatives? Relying on the market and the felt ‘social responsibility’ of businesses has brought us to the sad state of affairs we now face. Imposing even more ‘command and control’ requirements suffers from the objection that, in many areas, regulators just do not know

Conclusion

Performance-based regulation offers an opportunity to engage business in a new way, a way that promotes the public health by pushing companies to dramatically reduce the high morbidity and mortality rates that societies now face from key consumer products such as tobacco, alcohol, junk food and motor vehicles. To pave the way politically for performance-based regulation, public health leaders will probably first have to reframe the negative consequences of these consumer products as industry's

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