BACKGROUND-AIM:
The tobacco industry generates substantial profits from selling products that cause significant health and societal costs. These profits enable the industry to use price as a flexible marketing tool, including using market segmentation and pricing strategies to undermine the intended outcomes of increased tobacco taxation. Consequently, there have been calls for a scheme to cap the wholesale price of tobacco products and to offset this with higher taxation, thereby reducing price variation and raising tax revenue - an approach labelled as a ‘polluter pays levy scheme’ by advocacy organisations in the UK, and a forward looking measure by the WHO Framework Convention on Tobacco Control expert group. This research models the health and economic impact of such a scheme in England.

METHODS:
We used the Sheffield Tobacco and Alcohol Policy Model v2.5.1, an individual-level microsimulation, to project tobacco consumption, consumer spending, tax revenues, industry revenues, and health outcomes for adults in England aged 18–89 from 2025 to 2044. We investigated six illustrative scenarios for implementing a wholesale price cap and concomitant tax rises, comparing outcomes against a business-as-usual scenario of an annual 2% real terms tax escalator.

RESULTS:
Outcomes vary with the level of the price cap, with lower caps and hence higher tax rises yielding larger effects, particularly for the most disadvantaged societal quintile. All scenarios show a narrowed market price distribution, reduced tobacco prevalence, enhanced tax revenue, lower mortality, and fewer hospital admissions. Industry revenues decline, but tobacco user expenditure remains largely unchanged, suggesting the tobacco industry profits are the source of the increased tax revenue. An immediate hard cap could generate £4.9 billion in additional tax revenue by 2029, and by 2044, result in 1636 fewer deaths, 43987 fewer years of life lost, and 10073 fewer hospital admissions. These health impacts would be expected to increase further if at least some of the additional tax revenue were spent on tobacco control related activities.

CONCLUSIONS:
A tobacco price cap and tax increase would raise a substantial amount of tax revenue, improve health, and reduce health inequalities, while also reducing the scope to use price as a tobacco marketing tool. Countries with high tobacco taxation should consider this to be an attractive endgame measure worthy of future exploration. Tobacco endgame, Strategies and policies to permanently end the tobacco epidemic.