By Roger Bate at Brownstone dot org.

In December 2024, 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-authorized 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 internalize 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 authorizes 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 Center 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, modeling, 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 authorizations. Small companies fold. Their products vanish not due to safety failures but because the reg...