Cost-effectiveness of a sugar-sweetened beverage excise tax in the United States

Background: Reducing sugar-sweetened beverage (SSB) consumption through taxation is a promising public health response to the obesity epidemic. This study quantifies the expected health and economic benefits of a national SSB excise tax of 1 cent per ounce. Methods: We adapted the Assessing Cost Effectiveness modeling methodology to the US and used systematic reviews to estimate impact of the tax on body mass index (BMI) after one year of implementation. National health care costs were estimated from Medical Expenditure Panel Survey data; costs and DALYs averted were discounted at 3.5%. The model was developed in a compiled programming language, replicated from a spreadsheet version. Assuming maintenance of the BMI effect, lifetime disability-adjusted life years (DALYs) from downstream disease and healthcare costs averted were estimated for the 2005 U.S. population of children and adults. Results: We estimate the tax would reduce SSB consumption by 27%, leading to a 0.17 (95% Uncertainty Interval (UI): 0.06; 0.32) BMI unit reduction among adults and a 0.33 (95% UI: 0.12; 0.63) reduction among children ages 2-19. Implementing the tax nationally would cost $38 million/year, avert 6.1 million DALYS (95% UI: 2.0-13.1 million), and result in $49.5 billion (95% UI: $17.2 100.0) in discounted cost offsets. The tax would save $1,289 for every dollar spent administering the tax over the lifetime of the cohort and in addition generate $12.6 billion in annual revenue (2005 dollars). Conclusions: The proposed tax could substantially reduce BMI and healthcare expenditures, and increase healthy life and revenue for health promotion.