Key Points
- New Policy Lens: The report shifts the harm-reduction debate from product regulation alone to tax policy, insurance pricing and financial incentives.
- Tax as Switching Tool: Its key tax argument is not simply lower taxes for lower-risk products, but using price signals to encourage adult smokers to move away from combustion.
- Insurance as Incentive: The report raises whether insurers may one day price policies differently based on the type of nicotine product an applicant uses.
- Evidence and Verification: Biomarkers could give regulators and insurers a more objective way to distinguish smoking from other nicotine-use patterns.
- Regulatory Adaptation: As nicotine products and consumer behavior change, tobacco control may need new frameworks rather than applying old rules to a changed market.
2Firsts
June 8, 2026
A policy report on smoke-free nicotine argues that global regulation should move beyond product bans, health warnings and market authorization to include risk-based taxation, insurance underwriting and financial incentives.
The report, titled Nicotine 2030: An Outlook on Smoke-Free Nicotine, Global Health, and Regulatory Innovation (the “Report”), is intended for public-health and regulatory-policy stakeholders. It was compiled by Derek Yach of Global Health Strategies LLC. Yach is a public-health expert who has long been involved in global tobacco-control issues and previously contributed to the development of the WHO Framework Convention on Tobacco Control (FCTC). The Report was supported by Zanoprima Lifesciences, a U.K.-based life-sciences company focused on the development of high-purity, tobacco-free synthetic nicotine products and related production processes.
Some of the report’s long-term projections and policy conclusions may remain open to debate and require further verification. Even so, some of the ideas and perspectives it raises may offer new insights for global tobacco control and tobacco harm-reduction discussions.
Tax as a Switching Tool, Not Only a Tobacco-Control Tool
One of the report’s more notable points is that it moves tobacco harm reduction from the public-health arena into fiscal policy. Citing analysis from the International Monetary Fund (IMF), the report says nicotine excise taxes should reflect differences in product risk, rather than treating all nicotine products as equivalent.
Under the framework discussed in the report, combustible cigarettes would remain at the top of the tax scale, while heated tobacco products, vaping liquids, oral nicotine pouches and nicotine-replacement therapies (NRT) would carry lower tax burdens based on relative risk.
The point is not only that lower-risk products should be taxed less. It is that taxation can serve as a price signal for smokers to switch. Traditional tobacco-control taxation mainly seeks to reduce consumption by raising cigarette prices. The report argues that when lower-risk alternatives exist, fiscal policy should not weaken the economic incentive for adult smokers to move away from combustion.
This discussion also echoes a view previously published by 2Firsts. Indian nicotine-policy expert Samrat Chowdhery argued in a contributed article that Tobacco Price Elasticity (TPE) is often oversimplified. Without viable alternatives and cessation support, high tobacco taxes may place a heavier burden on vulnerable smokers and stimulate illicit markets, without delivering proportional public-health gains.
The report does not treat taxation as a stand-alone solution. In India, it says lifting the e-cigarette ban is a key condition in the relevant policy scenario. In Indonesia, where cigarette taxes are already high, the report says further gains would come mainly from improving access to tobacco harm-reduction products, rather than simply raising cigarette taxes further.
The section therefore raises a sharper question: if the policy goal is to reduce the harm caused by combustible tobacco, should taxation focus only on making cigarettes more expensive, or should it also use risk tiers and price differences to create clearer economic incentives for adult smokers to switch to lower-risk products?
Should Different Tobacco and Nicotine Users Face Different Insurance Pricing?
Another point raised by the report is that the insurance industry may become a new factor in tobacco harm-reduction policy. Citing work by Swiss Re on smoker risk classification, the report says life insurers may eventually need to move beyond treating all nicotine users as “smokers.”
The issue matters because it affects premiums. If cigarette smokers, former smokers and users of non-combustible nicotine products face different health risks, insurers may consider more detailed categories when assessing applicants and setting prices.
The report says biomarker research could provide part of the technical basis for that shift. It cites recent studies using untargeted omics methods, which found that a small set of biomarkers can reliably distinguish between cigarette smokers, heated tobacco users, e-cigarette users, oral nicotine-product users and nicotine-replacement therapy (NRT) users.
If such testing methods become standardized and accepted by regulators and insurers, companies may have stronger grounds to classify nicotine users by different levels of risk. The report estimates that global adoption of risk-based life-insurance underwriting could lead to about US$71 billion in annual premium adjustments. That remains a modelled estimate, dependent on testing, industry adoption and regulatory acceptance.
The broader implication is that tobacco harm reduction may no longer be only about whether products can be sold. It may also enter insurance pricing and health-risk assessment. Whether insurers will price policies differently based on the type of nicotine product an applicant uses — and whether those price differences could influence consumers’ choices or switching between nicotine products — deserves further attention.
The Risk of Marking a Moving Boat
When markets, products and consumer behavior have changed, static regulatory ideas, frameworks and methods may drift away from the original goals of tobacco control and tobacco harm reduction.
The Chinese idiom ke zhou qiu jian captures that risk: carving a mark on a moving boat to find a sword dropped in the water. For nicotine regulation, product formats, technology pathways and consumer behavior have changed profoundly over the past decade. Regulation, taxation and public-health management should evolve accordingly, with a more open mindset and more creative thinking, adopting new policies, methods and technologies to better achieve the goals of tobacco control and harm reduction.
2Firsts welcomes more submissions from experts and researchers. Please contact: alan@2firsts.com
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