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Cost-Effectiveness Analysis of The Real Cost
Campaign’s Effect on Smoking Prevention
Anna J. MacMonegle, MA, 1James Nonnemaker, P ...
Cost-Effectiveness Analysis of The Real Cost
Campaign’s Effect on Smoking Prevention
Anna J. MacMonegle, MA, 1James Nonnemaker, PhD, 1Jennifer C. Duke, PhD, 1
Matthew C. Farrelly, PhD, 1Xiaoquan Zhao, PhD, 2,3 Janine C. Delahanty, PhD, 2
Alexandria A. Smith, MSPH, 2Pamela Rao, PhD, 2,4 Jane A. Allen, MA 1
Introduction: A previous study found that the Food and Drug Administration’s The Real Cost
national tobacco education campaign was associated with preventing approximately 350,000 U.S.
youth from initiating smoking between 2014 and 2016. This study translates the reduction in smok-
ing initiation into monetary terms by examining the cost effectiveness of the campaign.
Methods: The cost effectiveness of The Real Cost was assessed by measuring efﬁciency in two
ways: (1) estimating the cost per quality-adjusted life year saved and (2) estimating the total mone-
tary return on investment by comparing the cost savings associated with the campaign to campaign
expenditures. Analyses were conducted in 2017.
Results: The Real Cost averted an estimated 175,941 youth from becoming established smokers
between 2014 and 2016. Campaign expenditures totaled $246,915,233. The cost per quality-
adjusted life year saved of the campaign was $1,337. When considering the costs of smoking, the
averted established smokers represent>$31 billion in cost savings ($1.3 billion when only external
costs considered). The overall return on investment of the campaign was $128 in cost savings for
every $1 spent ($4 for every $1 spent when only external costs considered). These conclusions were
robust to sensitivity analyses surrounding the parameters.
Conclusions: Campaign expenditures were cost efﬁcient. The cost savings resulting from The Real
Cost represent a large reduction in theﬁnancial burden to individuals, their families, and society as
a result of tobacco. Public health campaigns, like The Real Cost, that reduce tobacco-related mor-
bidity and mortality for a generation of U.S. youth also provide substantial cost savings.
Am J Prev Med 2018;55(3):319325. © 2018 American Journal of Preventive Medicine. This is an open access
article under the CC BY-NC-ND license. (http://creativecommons.org/licenses/by-nc-nd/4.0/)
rior research has shown that mass media cam-
paigns to reduce tobacco use can promote cessa-
tion and decrease initiation among youth.
Several economic evaluations of media campaigns have
found tobacco-focused mass media campaigns to be cost
36 Given a changing environment (e.g., declin-
ing smoking rates, rise of social media, and changes in
accessing media), campaigns may differ in effectiveness
and costs. It is increasingly important that federal funds
to improve public health are cost effective, and guide-
lines have set an acceptable threshold for costs savings
related to health interventions aimed to reduce mortality
79 Assessing the cost utility and returnon investment (ROI) of public health expenditures
allows stakeholders and policy makers to determine
whether the economic investment in the campaign can
be justiﬁed by the public health outcomes and provides
insight into the potential cost savings of these outcomes.
From the 1RTI International, Research Triangle Park, North Carolina; 2Center for Tobacco Products, U.S. Food and Drug Administration, Silver
Spring, Maryland; 3Department of Communication, George Mason Uni-
versity, Fairfax, Virginia; and 4Akira Technologies, Washington, District
Address correspondence to: Anna J. MacMonegle, MA, RTI Interna-
tional, 3040 E. Cornwallis Road, P.O. Box 12194, Research Triangle Park
NC 27709. E-mail:[email protected]
© 2018 American Journal of Preventive Medicine. This is an open access article under the
CC BY-NC-ND license. (http://creativecommons.org/licenses/by-nc-nd/4.0/)Am J Prev Med 2018;55(3):319325319
Since February 2014, the Food and Drug Administra-
tion has conducted a national tobacco public education
campaign designed to prevent the initiation of cigarette
smoking among youth aged 12 to 17 years who have
never smoked but are susceptible to smoking (suscepti-
ble nonsmokers) and to discourage further smoking
among youth who have experimented with smoking in
the past (experimenters). The Real Cost has appeared on
national TV, radio, the Internet, and out-of-home dis-
plays, as well as in magazines and movie theaters. The
central theme of the campaign is:“Every cigarette costs
you something.”In theﬁrst 3 years of advertising, cam-
paign themes focused on the cosmetic effects of smok-
ing, loss of control caused by addiction, and the
dangerous mix of toxic chemicals in cigarette smoke.
A nationally representative longitudinal study of U.S.
youth examined campaign awareness levels and evalu-
ated the effect of The Real Cost on smoking-related
beliefs and behaviors. After 8 months of advertising,
more than 90% of the campaign’s target audience (sus-
ceptible nonsmokers and experimenters) reported ad
awareness, and most surveyed youth considered adver-
tisements to be effective based on assessments of per-
10 After 14 months on air,
agreement with the eight campaign-targeted beliefs
increased 11.5% from baseline measurement, and cam-
paign exposure was associated with increased odds of
agreeing with campaign-targeted beliefs.
In January 2017, Farrelly et al. 12 published the results
of a model examining the effect of campaign exposure
on smoking initiation. Among youth who reported never
having smoked a cigarette in the baseline survey, high
campaign exposure was associated with a 30% decrease
in the risk for smoking initiation (AOR=0.70, 95%
CI=0.55, 0.91). Exposure to The Real Cost was associated
with preventing an estimated 348,398 U.S. youth aged 11
to 18 years from initiating smoking during February
2014March 2016 (95% CI=331,825, 365,168).
This study assesses the cost effectiveness of The Real
Cost by measuring efﬁciency in two ways: (1) examining
the cost utility of the campaign by estimating the cost
per quality-adjusted life year (QALY) saved and (2)
examining the total ROI for the campaign. Both meth-
ods are based on the results of the smoking initiation
12 The QALY framework is one of several stan-
dard approaches that have been used to calculate the
cost effectiveness of similar public health inter-
35,13 and assists in comparing The Real Cost
with other health interventions. In addition, the cost sav-
ings, or beneﬁts, associated with The Real Cost are quan-
tiﬁed using methodology from Sloan and colleagues
and compared with campaign costs to calculate the ROI
for the campaign.
The cost per QALY saved was estimated from a campaign per-
spective using the following key parameters: campaign costs, esti-
mated number of smokers averted between 2014 and 2016 as a
result of the campaign, and number of QALYs saved per pre-
vented smoker. This methodology is comparable to previous stud-
ies on cost utility for youth prevention.
The ROI analysis used three key parameters: campaign costs,
estimated number of smokers averted, and cost savings per
averted smoker. The cost savings were calculated using the frame-
work documented inThe Price of Smoking
14to estimate a compre-
hensive measure of the smoking-related costs averted as a result of
the reduction in smoking initiation. The ROI analysis compares
the beneﬁts, or cost savings, of the campaign with the costs associ-
ated with its implementation. This method estimates the dollar
value of the campaign’s beneﬁts for each dollar spent.
Campaign costs and resulting outcomes for the two analyses
are compared with what would have happened in the absence of
the campaign. Univariate sensitivity analyses were conducted for
individual parameters for both cost per QALY and ROI analyses
to account for the impact of uncertainty on the conclusions of
each analysis. All analyses were conducted in 2017.
Table 1presents the costs associatedwith implementing The Real
Cost. aThese costs include the media contract for planning and
development, media purchase, partnerships, outreach, and adminis-
tration. The cost of the contract awarded to RTI International to
evaluate the campaign was also included. No costs were included for
campaign exposure, as viewing advertisements introduced no addi-
tional time burden beyond one’s usual media viewing habits.
Campaign costs were aggregated over time to generate gross imple-
mentation costs for the study period. Costs for 2016 reﬂect partial
costs for the year (JanuaryMarch) to reﬂect the timing of the
Theﬁrst estimate established was the number of averted estab-
lished adult smokers attributable to The Real Cost.The starting
value for this estimate was the number of youth averted from ini-
tiating smoking, based on the estimate from Farrelly et al.
(N=348,398, 95% CI=331,825, 365,168). Not all those who initiate
smoking as an adolescent go on to become established smokers.
Gruber and Zinman,
15 using National Health Interview Survey
data, found that about 50.5% of youth who try smoking between
the ages 12 and 17 years will become established smokers when
aged28 years. This estimate most closely reﬂects the age range
for the analyses. Thus, the number of averted established adult
smokers is 175,941 (348,398£0.505).
Quantiﬁable metrics of an intervention’s health outcomes are LYs
and QALYs saved. QALYs account for the morbidity and mortality
of health outcomes. Here, they represent a combined measure of
quantity of LYs lost and quality-of-life losses resulting from smok-
ing-related illnesses. To estimate the LYs and QALYs saved, research
by Wang and colleagues
13was used. Wang and colleagues estimated
LYslostforthreesmokertypes(former smokers, light smokers, and
heavy smokers) using National Health Interview Surveyadjusted
aThese costs were provided by Food and Drug Administration Center for
www.ajpmonline.org 320MacMonegle et al / Am J Prev Med 2018;55(3):319325
life tables for smokers aged 25 to 29 years. 16The life expectancy for a
ger than a light smoker, and 14.2 years longer than a heavy smoker.
Future LYs lost were discounted to their present value using a 3%
annual discount rate
17and weighted to account for the relative pro-
portion of each smoker type for individuals aged 25 to 29 years. The
study also found that the weighted average of discounted LYs saved
for each smoker was 0.67 and report an estimate of 1.05 QALYs
saved per smoker (1 LY=1.57 QALYS, 1.57£0.67=1.05 QALYs
saved per smoker). The conversion value for LYs to QALYs for
smokersaged25to29yearswasderived by Wang and colleagues
using published data from Cromwell et al.
18The values of 0.67 LYs
and 1.05 QALYs saved per smoker were theﬁnal values used in the
cost per QALY analysis.
The total cost savings per smoker are a combination of (1) pri-
vate, (2) quasi-external, and (3) external costs. The private costs
of smoking are the costs incurred directly by the smoker. The
quasi-external costs reﬂect the costs to an average smoker’s spouse
or children because of secondhand smoke. The external costs of
smoking include the costs not borne by the smoker or their family
and instead incurred by society. Together, these direct and indi-
rect costs represent the cost burden of smoking to society. The
costs were rigorously calculated by Sloan and colleagues
life-cycle or longitudinal approach. This approach is particularly
well suited to this analysis as it documents all costs accrued over
an average smoker’s lifetime and addresses the question,“If we
could inﬂuence a person not to smoke, what would be the savings
over the individual’s lifetime?” 14,19
To calculate the present-day value of all costs, the estimates
from Sloan and colleagues were adapted to this study by applying
a 3% discount rate to further discount values to the average age of
prevented smokers. Because the costs occur in the future, their
present-day value is lower for an individual aged 15.5 years than
for an individual aged 24 years. Additionally, the values were
updated to 2016 dollars using the Consumer Price Index (CPI)
medical component for medical costs and the CPI less medical
care for other cost categories, in keeping with similar research.
Table 2presents results from the costutility analysis.
Campaign costs between 2013 and March 2016 totaled
$246,915,233 (Table 1). From the estimated number of
youth prevented from initiating smoking (n=348,398)
and the corresponding adjustment of the likelihood of
being an established smoker at age28 years (50.5%),
the campaign resulted in an estimated 175,941 fewer
established smokers (0.505£348,398) aged28 years
(95% CI=167,572, 184,410). Using the values of 0.67 LYs
lost per smoker and 1.05 QALYs lost per smoker, the
Table 1.Cost Elements of The Real Cost 20132016
Actual expenses ($)
Variable FY2013 FY2014 FY2015 FY2016
Strategy planning and research 3,661,466 164,227 2,558,150 491,099 6,874,942
Creative development 5,356,446 12,494,574 6,446,464 1,537,518 25,835,002
Media buying 562,472 85,659,350 84,284,681 12,847,167 183,353,670
Digital media 1,605,209 4,762,952 6,192,044 1,533,772 14,093,977
Media outreach 86,073 468,597 125,702 16,842 697,214
Partnerships 51,258 315,284 343,623 158,249 868,414
Administration 851,340 724,660 809,582 211,900 2,597,482
Grand total 12,174,264 104,589,644 100,760,245 16,796,547 246,915,233
aCosts for 2016 reﬂect partial-year costs for JanuaryMarch 2016.
Table 2.Input Parameter Values and Cost-Utility Analysis of The Real Cost
Parameter Parameter deﬁnition Total
C Gross campaign costs ($) 246,915,233.75
A Established smokers averted 175,941
Q QALYs saved per established smoker 1.05
LY LYs per established smoker 0.67
(A*Q) QALYs saved 184,738
(A*LY) LYs saved117,880
C/(A*Q) Cost per QALY saved (excluding medical care costs saved) ($) 1,336.57
C/(A*LY) Cost per LY saved (excluding medical care costs saved) ($) 2,094.62
LY, life year; QALY, quality-adjusted life year.
September 2018MacMonegle et al / Am J Prev Med 2018;55(3):319325321
estimates for costs per LY saved and QALY saved were
$2,095 and $1,337, respectively. Sensitivity analyses were
conducted around the cost per QALY analysis parame-
ters and mainﬁndings were robust to variation in these
parameters (Appendix A, available online).
Table 3summarizes the adapted values for each cost
type incurred by an average smoker; the private costs,
quasi-external costs, and external costs. The last column
inTable 3represents the total costs of smoking. These
values account for the increase in CPI between year
2000 U.S. dollars and year 2016 U.S. dollars using a mul-
tiplier of 1.777 for the medical care cost CPI and 1.359
for the CPI less medical care costs. The net present value
for a smoker aged 15.5 years (the mean age of averted
smokers) was estimated by multiplying each value by
0.777 (calculated from: 1/[1.03]
8.5) to adjust for the
8.5 years of additional discounting from the original val-
ues for an individual aged 24 years. The next sections
provide an overview of calculations for the three cost
components (Table 3; for more detail on each cost, see
Sloan and colleagues
aged 15.5 years in 2016 is $149,573. The private costs
include the present-day value of all future expendi-
14,23 (Table 3). Their sum is the total present-day
value of a smoker’sexpendituresoncigarettes,
>$14,000 in 2016 dollars. Thisﬁgure does not
account for additional cigarettes smoked between the
ages of 15.5 and 24 years.
The largest private costs of smoking are the smoker’s
mortality and disability. The WHO recommends that
the premature death and loss of LYs should be valued
when considering the economic impact of smoking.
The mortality costs are based on a value of $100,000 per
LY, the lowest of three LY values typically employed in
valuations of LYs saved.
17 The private medical care costs
are the present-day value of the increase in out-of-pocket
insurance payments and taxes funding public insurance
programs, such as Medicaid.
The other private costs accounted for include the
reduction in Social Security taxable earnings and the
reduction in Social Security and deﬁned beneﬁt pension
The quasi-external costs reﬂect the costs to an average
smoker’s spouse or children because of secondhand
Table 3.Lifetime Cost of Smoking for a Smoker Aged 15.5 Years (Male and Female Weighted Average)
Cost component a,b Private cost
(smoker) c Quasi-external cost
(smoker’s family)External cost
(rest of society)Total costs (society
as a whole)
Cost of cigarettes 10,673.03 0.00 0.00 10,673.03
Federal excise taxes on tobacco 1,609.60 0.00 (1,609.60) 0.00
State excise taxes on tobacco 1,815.94 0.00 (1,815.94) 0.00
d 92,363.77 0.00 0.00 92,363.77
Disability cost 15,455.61 0.00 0.00 15,455.61
Medical care cost of smoker 1,439.43 0.00 2,854.85 4,294.28
Loss in smoker’s earnings 23,468.51 0.00 0.00 23,468.51
Lost income taxes on earnings 0.00 0.00 4,693.53 4,693.53
Work loss (sick leave/ absenteeism) 0.00 0.00 3,464.07 3,464.07
Other productivity losses 0.00 0.00 1,064.22 1,064.22
SSI outlays and beneﬁts 4,628.46 (776.55) (3,851.92) 0.00
Private pension outlays 6,260.33 (547.95) (5,712.38) 0.00
Life insurance outlays (8,141.33) 0.00 8,141.33 0.00
Spouse mortality cost (SHS)
d 0.00 23,677.42 0.00 23,677.42
Spouse disability cost (SHS) 0.00 1,104.46 0.00 1,104.46
Infant deaths (SHS) 0.00 645.55 0.00 645.55
Medical expenditures (SHS) 0.00 744.87 0.00 744.87
Totals 149,573.35 24,847.81 7,228.18 181,649.34
Note:Values are in U.S. dollars.aThe original values for Table 3 come from Tables 11.1, 11.2, and 11.3 in Sloan et al. 14(pp. 252255). All values have been updated to reﬂect dis-
counting to age 15.5 years and the increase in the Consumer Price Index between 2000 and 2016.
bValues in parentheses reﬂect negative numbers or cost savings of smoking.cThe cost for each smoker is calculated by Sloan et al. and is the weighted average for males and females based on 514,733 female and 678,554
male smokers aged 24 years.
dSloan et al. estimate mortality costs based on a value of $100,000 per LY, a conservative LY value employed in valuations of LYs saved. 17,21,22 The
costs of smoking can be calculated using alternate values for a LY or excluding the monetary costs of mortality. Changing this value will yield higher
or lower values for the costs of smoking accordingly.
SHS, secondhand smoke; SSI, Supplemental Security Income.
www.ajpmonline.org 322MacMonegle et al / Am J Prev Med 2018;55(3):319325
smoke. These values account for increased morbidity
and mortality of a spouse, infant deaths, and medical
expenditures resulting from secondhand smoke. The
costs also account for a reduction in private pension pay-
outs and Social Security that result from the increased
mortality for the smoker’s spouse. The present-day value
of the quasi-external costs of a smoker aged 15.5 years is
$24,848 in 2016 U.S. dollars.
The external costs of smoking are the smallest of
the three types of smoking costs and represent the
costs not borne by the smoker or their family. The
main costs are increases in medical care costs borne
by nonsmokers, productivity losses and losses because
of sick leave, a loss of taxes as a result of lower Social
ance payments not fully subsidized by a smoker’slife
insurance premiums. These costs are partially offset
by reductions in the payouts or outlays to smokers
for Social Security and deﬁned beneﬁt pensions. The
increase in taxes negates the payment of taxes by
total tax costs. The present-day value of the external
costs of a smoker aged 15.5 years is $7,228 in
2016 U.S. dollars.
The aggregate costs for each smoker total $181,649.
Every adolescent aged 15.5 years averted from smoking
in 2016 represents>$180,000 in present-value costs
To quantify the ROI,the total present-day value for
the cost per smoker documented inTable 3,
$181,649.34, was multiplied by the number of averted
established smokers (n=175,941). The total value repre-
sents>$31 billion in cost savings ($31,959,566,529)
attributable to The Real Cost (Table 4). When consi-
dering only external costs, the total cost savings are
Table 4presents the ROI, calculated by dividing the
costs saved (net costs of the campaign) by the costs of
implementing the campaign, $246,915,233. Every $1
spent on The Real Cost resulted in a present-day cost
savings of $128. When considering external costs only,
every $1 spent resulted in a cost savings of $4. Sensi-
tivity analyses were conducted around the parameters
fortheROIanalyses(Appendix A, available online).
Even when considering external costs only, the num-
ber of prevented smokers would need to be
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