American Journal of Public Health
Higher prices reduce consumption and initiation of tobacco products. A minimum price law that establishes a high statutory minimum price and prohibits the industry’s discounting tactics for tobacco products is a promising pricing strategy as an alternative to excise tax increases.
Although some states have adopted minimum price laws on the basis of statutorily defined price “markups” over the invoice price, existing state laws have been largely ineffective at increasing the retail price.
We analyzed 3 new variations of minimum price laws that hold great potential for raising tobacco prices and reducing consumption: (1) a flat rate minimum price law similar to a recent enactment in New York City, (2) an enhanced markup law, and (3) a law that incorporates both elements.