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In February, the new director of the Oregon Health Authority appeared before lawmakers to eat humble pie.
Dr. Sejal Hathi told lawmakers, advocates and business leaders on an Oregon Liquor and Cannabis Commission task force that her agency was wrong to bury a report that showed increasing taxes on beer and wine would do little to curb excessive drinking. The shelving of that report, when exposed by The Oregonian, left the impression that OHA had withheld the report because it clashed with the agency’s desire to hike taxes to reduce excessive drinking.
Staff had made a mistake, Hathi said Feb. 23. The report should have been released, she said, and going forward she was “committed to transparency.”
But what she didn’t say, and apparently did not know, was the full story why the report had been buried. The report was not only politically inconvenient. According to some of the field’s most prominent scientists, it was also deeply flawed—because it was based on research funded by the alcohol industry.
It is surprising Hathi didn’t know, given that red flags were raised a year earlier by a federal health official. What’s more, the blemished report leads to questions about one of Oregon’s most respected economic research firms.
Records now obtained by WW show a researcher at the U.S. Centers for Disease Control and Prevention told the agency she had “concerns” with the report in early 2022. It was one of the main reasons the report wasn’t published at the time, according to internal OHA emails.
But Hathi didn’t know of the CDC’s reservations until “the past few weeks,” a spokesman now tells WW. By then it was far too late to reverse course. Within days of receiving blowback, the agency published the report unmodified—errors and all.
The report’s burial and resurrection were part of a larger war over the best way to reduce the widespread harms of drinking—a long and complex fight that has left Hathi in an uncomfortable position. On one side is the alcohol industry and economists who say increased regulation, not taxes, is the government’s most powerful tool. On the other is the CDC, which has long told states to increase taxes to fight excessive drinking.
But public health experts who read the report in question tell WW that the right choice was obvious.
“The initial decision not to publish it was the correct one. The decision to publish—as is—was the wrong one,” says Dr. Jeffrey Drope, a research professor at the Johns Hopkins Bloomberg School of Public Health.
WW obtained a copy of the CDC’s objections through a public records request. They were sent to the agency attached as comments to a marked-up version of the report. (The Oregonian has reported on the existence of the CDC’s concerns, but has not detailed them.)
WW then forwarded the records and asked a pair of the field’s leading researchers for their thoughts.
“The CDC comments were spot on,” Drope says. “This thing should never have seen the light of day.”
Oregon taxes beer sales at the lowest rate in the nation. We’re outdone only by New Hampshire when it comes to wine. This is partly because the state has no sales tax. But it’s also because Oregon’s tax rate on beer hasn’t changed since 1977. (The tax on wine was updated more recently: in 1983.) Together, the two taxes raise around $20 million a year—an amount that pales in comparison to the nearly $300 million Oregon pockets by marking up hard liquor at its state-run liquor stores.
Alcohol now kills 180,000 people nationwide every year, according to the latest CDC estimates. And increasing taxes is a good way to reduce that number, at least according to many public health experts. An independent panel convened by the CDC in 2007 recommended “raising taxes to reduce excessive alcohol consumption,” a directive that remains in force today.
Looking for ways to gain support for a tax hike, Oregon health officials turned to New Mexico, which had commissioned a report that found a 25-cent tax increase would lead to a 13% drop in youth binge drinking.
Seeking similar results, the state commissioned a Portland research firm to replicate the study in Oregon. But the results were not what state officials expected.
ECOnorthwest’s report, submitted to the state in late 2021, concluded that a tax hike “may have little effect on risky behaviors such as binge drinking” among youth. The paltry effect held for adults, too. A 20-cent per drink tax increase, researchers found, would reduce consumption by the highest-frequency drinkers about 2%.
ECOnorthwest says its findings were based on research more recent than the CDC panel’s, showing that demand for beer and wine doesn’t dissipate much as you jack up the price.
But in a Jan. 11, 2022, email to OHA, Dr. Marissa Esser, the CDC researcher who was given a copy of the report, pointed to a different explanation for ECOnorthwest’s surprising conclusions: The report leaned heavily on research “of questionable scientific quality” that had been funded by the alcohol industry.
“I have many questions, as well as some concerns, about the foundational methods and interpretation of the literature,” Esser wrote in her email to OHA.
As governments worldwide push to limit alcohol consumption, makers of beer, wine and spirits have taken a page from Big Tobacco’s playbook and funded studies of their own. By one recent estimate, research funded by the industry has increased more than 50% since 2009.
This has led to a series of high-profile embarrassments at the nation’s leading research institutions, as both the National Institutes of Health and the National Academies of Sciences, Engineering, and Medicine conceded that their researchers were influenced by the alcohol industry.
The ECOnorthwest report, the CDC warned Oregon officials, was similarly tainted—not because ECOnorthwest had conflicts of interest, but because some of the studies it relied on did.
The report borrows numbers, used in its calculations, from research conducted by Dr. Jon Nelson, who retired from his position as economics professor at Pennsylvania State University in 2004. Since then, he’s continued publishing a series of studies on the impacts of alcohol taxes, using funding from the International Center for Alcohol Policies.
ICAP was created in 1995 by 10 of the world’s largest alcohol companies.
One of Nelson’s studies, published in 2013, was a “meta-analysis” that found taxes would have less impact on alcohol consumption “than previously claimed.” Two years later, he found that the pattern extended not just to alcohol consumption in general, but binge drinking too.
But David Jernigan, a professor at the Boston University School of Public Health, says Nelson’s analysis left out studies that contradicted his findings. “Nobody else in the field agrees with his conclusions,” Jernigan says.
In an interview with WW, Nelson hotly defended his research, which he noted was peer-reviewed prior to publication. He denied cherry-picking studies and said his research was not biased by its financial backers. “I received no interference or direction from them,” he said. He declined to disclose how much ICAP paid him.
The manager of the project for ECOnorthwest, Joel Ainsworth, has similarly dismissed the CDC’s concerns. In emails with OHA, he defended Nelson’s studies as “solid” but said the report would have come to the same conclusions even without them.
“As you know, lots of egos wander the halls of academia,” Ainsworth wrote. ECOnorthwest declined to speak with WW, citing scheduling conflicts.
Danelle Romain, an industry lobbyist who leads the Oregon Beer & Wine Distributors Association, was also skeptical. She noted that ECOnorthwest’s report cited more than 50 other sources. “The findings by ECOnorthwest are consistent with numerous other studies,” she adds.
Jernigan disagrees. “Their whole analysis is based on a discredited meta-analysis by Nelson,” he says. “The kindest interpretation is that they were naive and they didn’t really understand the field they are writing about.”
The CDC’s pushback soured OHA officials’ initial plans to release the study. Fixing the issues would require a major rewrite, but the agency’s contract with ECOnorthwest had ended and staffers didn’t have the time or expertise to do it themselves, agency spokesman Robb Cowie tells WW.
Amid a leadership reshuffle, no one told the agency’s top brass. So when The Oregonian revealed the report’s existence, Director Hathi ordered it released as is “to demonstrate the agency’s commitment to transparency,” Cowie says.
As a result, the public has been left in the dark about the CDC’s problems with the report. And it’s now treated as accepted fact. In a July 18 presentation, a senior economist at the state’s Legislative Revenue Office cited the report by name, noting that “increasing prices are not likely to curb use significantly, as many studies show.”
Five days later, after WW had been pressuring the agency for weeks to explain why the report was released unedited, Cowie said a caveat acknowledging the CDC’s concerns would be published online alongside the report.
“We needed to do better,” Hathi says of OHA’s handling of the report, “and we learned from this experience.”
Correction: An earlier version of this story misstated the magnitude of the proposed tax increase in the study. It’s 20 cents per drink, not 10%. We regret the error.