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What Is The Tobacco Master Settlement Agreement?

Posted on 6th May, 2021

by Legal Staff

Imposing significant restrictions on tobacco company marketing, such as banning advertising to youth, the Tobacco Master Settlement Agreement came into effect in November 1998.

Furthermore, this settlement agreement was signed between the four major tobacco manufacturers at the time: R.J. Reynolds, Brown & Williamson, Lorillard, and Philip Morris, Inc., and 46 general attorney states, five U.S. territories, and the District of Columbia; the states also filed Medicaid lawsuits to recover healthcare costs.

In exchange, the companies agreed to cut down or cease various tobacco marketing practices entirely and pay certain annual payments to the states to compensate them for some of the medical costs of providing healthcare to people with smoking-related diseases.

The following are some of the provisions of the Tobacco Master Settlement Agreement:

  • it prohibits tobacco manufacturers from directly or indirectly targeting youth
  • it imposes considerable prohibitions or restrictions on advertising, marketing, and promotional programs or activities
  • it bans or restricts cartoons, transit advertising, most forms of outdoor advertising, such as billboards, product placement in media, branded merchandise, free product samples except in adult-only facilities, and most sponsorships

Under the Tobacco Master Settlement Agreement, manufacturers have to pay billions every year to the settling states. Unfortunately, little has been done with this money concerning tobacco prevention and cessation programs.

According to statistics, the participating states have received approximately $27 billion every year within the last decade from the tobacco companies.

However, they claim that they are still significantly underfunded concerning tobacco prevention and cessation programs that discourage people from taking up this habit and encourage smokers to quit.

Currently, the United States is in the middle of a youth e-cigarette epidemic. Such programs would be of extreme help, as, contrary to popular belief, electronic cigarettes can be as harmful as regular cigarettes.

In 2021, the settling states will receive $26.9 billion from tobacco manufacturers. Still, they will spend only 2.4% of it in other words, $656 million on programs meant to prevent children from engaging in tobacco use and pursue smokers to quit this detrimental habit.

How Are the Settling States Using the Money from Tobacco Companies?

In the meantime, the tobacco companies spend approximately $9.1 billion a year, which means $1 million per hour, to market their deadly and addictive products. This means that tobacco manufacturers spend over $13 to promote their cigarettes for every $1 the states spend to reduce tobacco use, which is alarming.

The following are the U.S. states that are spending 50% or more of the Centers for Disease Control and Prevention's (CDC) recommendations on tobacco prevention programs:

  • Alaska
  • California
  • Utah
  • North Dakota
  • Oklahoma
  • Maine

On the opposite end, the following states are spending less than 10% or no funds at all of the Centers for Disease Control and Prevention's recommendations on tobacco prevention programs:

  • Tennessee
  • Connecticut
  • Washington
  • Texas
  • Louisiana
  • Kansas
  • Missouri
  • Wisconsin
  • Michigan
  • Ohio
  • Kentucky
  • West Virginia
  • Virginia
  • North Carolina
  • South Carolina
  • Alabama
  • Georgia
  • New Jersey
  • New Hampshire
  • Rhode Island
  • Massachusetts

Tennessee and Connecticut have virtually no state funds for tobacco prevention programs. In contrast, only three states, namely Alaska, Maine, and Utah, spend more than 75% of the CDC's recommendations on tobacco prevention programs.

Moreover, the $656 million the states have received from tobacco companies for tobacco prevention programs amounts to just 19.8% of the $3.3 billion the Centers for Disease Control and Prevention recommends for all states combined, which speaks volumes of the endeavors of these states or lack thereof to discourage youth from engaging in smoking and from encouraging smokers to quit.

Yet, disconcertingly, tobacco use claims over 480,000 lives every year in the United States and costs the nation about $170 billion in healthcare expenses annually.

The latest government surveys found that 20.8% of the adults and 23.6% of high school students use some form of tobacco, with cigarette smoking rates at 14% for adults and 4.6% for high school students.

In addition, adult smoking rates are the highest among people with lower income and education, specifically the Midwest residents and the South, American Indians and Alaska Natives, LGBTQ+ Americans, uninsured or enrolled in Medicaid, and those with mental illness.

Numerous states that are part of the Tobacco Master Settlement Agreement must strive to use the money they receive from the major tobacco manufacturers to invest in tobacco prevention programs. Nevertheless, the number of Americans who smoke is still high.

Contact Us to File a Tobacco Claim

Atraxia Law has over 35 years of experience in evaluating personal injury and product liability claims.

Our team will look into your situation and eventually let you know whether you can file a tobacco claim.

Furthermore, if you or a family member still is or was a smoker who began engaging in this habit before 1964 as a minor, and if you struggle from one of the following diseases, you may be eligible to file a tobacco claim against the liable tobacco companies whose cigarettes you have been smoking:

If you are eligible, we will subsequently guide you to a specialized attorney to receive the money you are entitled to. For additional information, please contact us free of charge, and we will promptly answer your questions.