At the end of 2024, the US Congress passed legislation that protects US states from banning lower-risk nicotine products that have been determined appropriate for the protection of public health, such as nicotine pouches.
“This should not be a radical idea, but within the chaos of American nicotine regulation, it almost counts as revolutionary,” Roger Bate writes and goes on to explain why states want to ban nicotine products.
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Although Bates’ article below is about the anti-nicotine campaign in the USA, it is likely the same in some other countries, for example, Australia.
Australia is ahead of the rest of the world in implementing the World Health Organisation’s (“WHO’s”) anti-nicotine agenda and, serving as a warning to the rest of the world, seems to be using the anti-nicotine ideology to impose something akin to a police state.
Related: WHO’s anti-nicotine campaign turns dirty
Since 2019, Australia has also been charging travellers an exorbitant duty on cigarettes exceeding one unopened pack of 25 and one opened pack. In THIS video, the Australian Border Security boasts about catching a traveller with 200 cigarettes (one carton), treating him like a criminal, as if they have made a major drug bust, and charging him AUS$261. The Border Security has made its videos unavailable to watch in some countries, such as the UK, so you may have to use a VPN. Restricting the view of its videos feels a little sneaky, as if they are trying to catch travellers out or, perhaps, they’re ashamed of what they’re doing and don’t want the rest of the world to know.
In July 2024, Australian law changed so that all vapes and vaping products, regardless of whether they contain nicotine or not, can only be sold in a pharmacy. To be able to buy any of these products, a prescription from a doctor is required or a consultation with a pharmacist. Without a prescription, it is illegal to use vapes or e-cigarettes in Australia. The regulations get even more ridiculous: advertising of vapes has been banned, single-use vaping products are banned and flavours for vapes are restricted to unflavoured, mint, menthol and tobacco.
The news gets worse for visitors to the country. Since March 2024, the Australian government has prohibited the importation of vaping products, including by visitors to the country who want to carry some with them for personal use. Only under strict conditions can travellers take a limited number of vapes, vape accessories or liquid nicotine. “Severe penalties, including fines and potential jail time, apply for breaking vaping laws,” Quit Clinics warns those wishing to travel to Australia on holiday or for business.
One gets the feeling the Australian government is encouraging people to smoke, rather than give up smoking. To get this insanity past the general public, they say it is for public health, it is for our own good – but don’t be fooled. As Bates explains, it’s really about money.
Why Governments Prefer Cigarette Revenue over Safer Alternatives
By Roger Bate, as published by Brownstone Institute on 12 December 2025
In December 2024, the US Congress did something unusual: it introduced a bill that openly acknowledges tobacco harm reduction. The POUCH Act of 2024, sponsored by Rep. Jack Bergman (R-MI) and co-sponsored by Rep. Don Davis (D-NC), aims to prevent states and cities from banning or restricting FDA-authorised lower-risk products, including modern nicotine pouches and vaping products.
It is a modest bill, but one that finally moves federal policy in a sensible direction. The basic premise is straightforward: if the FDA has determined that a product is appropriate for the protection of public health, states should not be allowed to ban it for political, fiscal or ideological reasons. This should not be a radical idea, but within the chaos of American nicotine regulation, it almost counts as revolutionary.
However, the bill also reveals a deeper truth about why the United States struggles so badly with harm reduction. It exposes the forces that keep smokers tied to cigarettes, protect government revenue streams and effectively eliminate smaller innovators who cannot survive the regulatory gauntlet.
To understand why harm reduction keeps stalling, one must start with a simple reality: state governments make more money from cigarettes than anyone else.
The Real Beneficiary of Smoking: State Treasuries
Public-health activists often blame “Big Tobacco,” but the largest financial beneficiary of smoking in the US is the state itself. For every $100 spent on cigarettes, state coffers typically collect between $60 and $90 through excise taxes, sales taxes and payments from the Master Settlement Agreement. States have built enormous, stable revenue streams on the backs of smokers.
When a smoker switches to nicotine pouches, the state does not merely lose some revenue – it loses most of it immediately. A switch from combustibles to pouches can cut state revenue from around $60–$90 per $100 spent to as little as five or ten dollars. No wonder state governments resist harm reduction. Pouches are good for public health but bad for the budget.
This is where Upton Sinclair’s observation becomes newly relevant: “It is difficult to get a man to understand something when his salary depends upon his not understanding it.” State treasuries do not want to internalise the logic of harm reduction because doing so would mean confronting the fiscal consequences of their dependence on cigarette revenue.
Why the POUCH Act Matters – And Why It Falls Short
The POUCH Act curbs state-level obstruction by instructing governments to respect the FDA’s scientific determinations. If the FDA authorises a nicotine pouch or vape as appropriate for the protection of public health, it should not be banned by states that prefer the revenue from cigarettes. This restores a basic principle of regulatory coherence.
Yet the bill does not address the more fundamental failure at the federal level: the misclassification of nicotine pouches under the Centre for Tobacco Products. Nicotine pouches contain no tobacco leaf, produce no smoke, involve no combustion and have a toxicological profile closer to nicotine replacement therapies. Treating them like cigarettes is scientifically wrong and administratively harmful.
The FDA’s Pre-Market Tobacco Application process, designed for a different era, demands millions of dollars in data, toxicology, modelling and population-level analysis. Large cigarette companies can afford these submissions. Smaller and mid-sized innovators cannot. Many have spent years in regulatory limbo, not because their products are unsafe, but because the agency reviewing them is structurally incapable of seeing the bigger picture. Regulators delay, request more studies and fail to differentiate between high-risk and low-risk products.
In this environment, only the largest incumbents can survive long enough to receive FDA authorisations. Small companies fold. Their products vanish not due to safety failures but because the regulatory system is built in a way that privileges the deep-pocketed.
The irony is obvious: the more the FDA insists on treating safer products like cigarettes, the more it guarantees that cigarette companies will remain the dominant players in the nicotine market.
A Needed Next Step: Remove Nicotine Pouches from FDA-CTP Completely
If Congress wants to support adult switching, it must eventually reform the regulatory structure itself. Nicotine pouches should not be overseen by the Centre for Tobacco Products. They should be subject to a proportionate regulatory framework – age restrictions, manufacturing standards, disclosures, contaminant testing – but not a system designed for combustibles.
Treating pouches like cigarettes guarantees two outcomes: slower harm-reduction adoption and consolidation of the market into a few multinational tobacco firms. Treating pouches like modern consumer products supports innovation, competition and switching.
The Bigger Picture: The POUCH Act Opens a Door Congress Must Walk Through
The POUCH Act is a step in the right direction. It attempts to return a measure of coherence to nicotine regulation by ensuring that states cannot override the FDA’s public-health judgments. It forces transparency around the FDA’s enormous backlog of applications. And it signals a small but important bipartisan recognition that harm reduction matters.
But if Congress wants to truly reduce smoking, it must address the system as a whole: the fiscal incentives that encourage states to keep smokers smoking, the misclassification that traps low-risk products in an inappropriate regulatory category, and the procedural delays that quietly eliminate small innovators while protecting only those companies wealthy enough to outlast the bureaucracy.
The POUCH Act is a beginning, not an endpoint. If lawmakers are serious about improving public health, they must resist the gravitational pull of the Sinclair Trap and design a nicotine policy that rewards switching rather than punishing it.
About the Author
Roger Bate is a Brownstone Fellow, senior fellow at the International Centre for Law and Economics (January 2023-present), board member of Africa Fighting Malaria (September 2000-present), and fellow at the Institute of Economic Affairs (January 2000-present).
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