Low-income countries could confront the massive health finance crisis they are facing after the withdrawal of most US-based aid through a 50% increase in the price of tobacco, alcohol and sugary drinks – saving 50 million lives and raising some $1 trillion dollars in vital revenue for strapped health systems, says WHO.

The ambitious WHO initiative “3×35 initiative” to increase by at least 50% the price of all three health-harmful products by 2035 was launched at the Fourth International Financing for Development Conference in Seville, Spain, which ends today.

“Health taxes are one of the most efficient tools we have,” said Dr Jeremy Farrar, WHO Assistant Director-General, Health Promotion and Disease Prevention and Control. “They cut the consumption of harmful products and create revenue governments can reinvest in health care, education, and social protection. It’s time to act.”

Noncommunicable Diseases (NCDs), including heart disease, cancer, and diabetes, account for over 75% of all deaths worldwide, with tobacco, sugary drinks and excessive alcohol consumption amongst the key causes.  A recent WHO assessment of experiences so far suggest that a one-time 50% price increase on all three products could prevent 50 million premature deaths by 2050 – as well as raising $1 trillion by 2035, WHO said.

The assessment is based on two decades of experiences with increased tobacco taxation, and more recently, country experiences with alcohol and sugary drinks taxes, WHO said.

Between 2012 and 2022, nearly 140 countries raised tobacco taxes, which resulted in increase of real prices by over 50% on average, showing that large-scale change is possible, said WHO, who launched the initiative along with the World Bank, the Organization for Economic Co-operation and Development (OECD) and about a dozen other civil society partners, including Bloomberg Philanthropies, the NCD Alliance, Vital Strategies and Movendi International, which works to reduce alcohol abuse.

While higher “sin” taxes have been a key component of WHO’s advocacy around NCDs for years, such calls have gained new urgency in the wake of the massive US cuts in global health funding – which have crippled vital health services related to HIV, nutrition, maternal and child health, and reproductive health in many African, Asian and Latin American countries.  See related story here:

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Meanwhile,  75 % of all lower-income countries are spending more on foreign debt payments than on health and education, as countries face even more pressure from forces like the International Monetary Fund (IMF) to make further austerity cuts.

Revenue raising successes in LMICs

The 3×35 Initiative also marks the first time that the global health agency and its partners have rallied around a concrete target for dramatically raising alcohol, tobacco and sugary drink taxes. Not coincidentally, the initiative also coincides with the lead-up to the Fourth UN High Level Meeting on Noncommunicable Diseases, planned for September 2025, when countries will be asked to support a draft declaration that refers to such taxes as a key lever for reducing NCDs.

WHO’s claim that the tax initiative could raise $1 trillion for countries by 2035 is a projection. But by some measures, it is a conservative one, a WHO spokesperson said.  A 2024 Task Force on Fiscal Policy for Health, led by Michael Bloomberg, founder of Bloomberg Philanthropies, found that an excise tax increase sufficient to rise prices by 20% on all three products would mobilize some $2.2 trillion over five years, of which $1.3 trillion would be mobilised in low and middle income countries. Raising health taxes enough to generate a 50% price rise, moreover, would generate some $3.7 trillion, of which $2.1 trillion would be raised in LMICS.

Along with the long experience in tobacco taxation, the projection is based on revenue-raising experiences with other health taxes in countries such as Colombia, Mexico, South Africa and Sri Lanka.

In Sri Lanka, the government exceeded its tax revenue target for the first quarter of 2024 in part thanks to two alcohol tax increases of 20% implemented in 2023, said Movendi. Another Movendi review of experiences in low- and middle-income countries including: Botswana, Estonia, Lithuania, Russia, South Africa, Thailand, and the Philippines, also found positive impacts on health, as well as economic benefits, of the tax increases.

As for the new 3×35 initiative, backing from Bloomberg Philanthropies, the World Bank and the Organization for Economic Co-operation and Development (OECD) also involves support for countries who want to take action.

Debunking industry claims

Industry voices can be expected to push back hard against the initiative, with beverage industry voices, for instance, claiming that sugary drink taxes don’t reduce consumption.

“It’s deeply concerning that the World Health Organization (WHO) continues to disregard over a decade of clear evidence showing that taxing sugar-sweetened beverages has never improved health outcomes or reduced obesity in any country,” said Kate Loatman, executive director of the International Council of Beverages Associations, told Reuters.

However, a growing body of evidence in the United States, Latin America, and beyond and globally suggests otherwise.

When sugary drink taxes, for instance, were adopted, there were generally corresponding reductions in consumption, according to the Obesity Evidence Hub.

Two year’s after Mexico’s first sugary sweetened beverage (SSB) tax was first adopted, for instance, there had been a 37% reduction in total volumes of drinks purchased, one study found.  Reductions in purchases were greatest amongst poorer households and households that were formerly high consumers of SSBs. Based on those findings, the tax would prevent 239,900 cases of obesity over a decade, 39% in children, another 2019 study projected, with health-care cost savings four times greater than the costs of implementing the new regulation.

After South Africa introduced a 10% tax on sugary drinks, excluding fruit juices, there was a 57% drop in grams of sugar consumption from purchases of taxed drinks amongst people in lower socio-economic groups.  Manufacturers, meanwhile, reformulated their drinks with lower sugar levels to avoid the tax and respond to new consumer demands.

Image Credits: Kerry Cullinan, Sarah Johnson, Leo Zhuang/ Unsplash, Task Force on Fiscal Policies for Health 2024, Bloomberg Philanthropies, Bloomberg Philanthropies.