November 23 Marks Tenth Anniversary of the Largest Civil Settlement in U.S. History

American Lung Association Urges States to End the Tobacco Settlement Spending Spree and Direct Funds to Protect Public Health

(November 19, 2008)

WASHINGTON, D.C., (Embargoed until: November 19, 2008)—This Sunday, November 23, 2008, will mark the ten year anniversary of the signing of the largest civil settlement in United States history. The Tobacco Master Settlement Agreement (MSA) was a court settlement between 46 states and the major tobacco companies that reimbursed the states for smoking-caused health care costs and imposed marketing restrictions on the tobacco companies. The companies agreed to pay these states $206 billion over 25 years.

What should be a milestone public health celebration is instead a somber day resulting in states’ broken promises to improve their resident’s health by failing to utilize the $206 billion dollar settlement award to support smoking cessation and prevention programs. In fact, no states are currently funding their state tobacco cessation and prevention program at levels recommended by the Centers for Disease Control and Prevention (CDC).

“The financial incentives for states to use money from the MSA to fight tobacco use are obvious,” said Bernadette Toomey, President and CEO of the American Lung Association. “Tobacco prevention programs are proven time and again to be highly effective. States that fund prevention programs at levels recommended by the CDC will see a significant decline in their smoking rates and dramatic cuts in their health care costs as a result.”

Although the settlement did not place parameters on how states must use their settlement dollars, promises were made by state governors and attorney generals at the time of the settlement that the money would be used to alleviate the strain tobacco-related healthcare costs have on each state’s Medicaid program in addition to supporting tobacco prevention and cessation initiatives. Those promises were largely ignored.

“In these economically challenged times, states cannot afford to misuse MSA funds,” said Toomey. “The crushing financial burden each state must carry to address the very real costs associated with tobacco-related death and disease will only diminish when smoking rates begin to decline. Yet, the bitter reality is that states are not using the money for what it was intended for.”  

Alabama spends more than 3 billion dollars on tobacco-related health care costs each year, yet devoted millions of its MSA award to building factories for private employers and supporting flood control projects. Some these funds were even used to counter satanic cults in public schools. What the American Lung Association finds even more shocking is that Virginia actually gave $2 million of its settlement award to Star Tobacco Company to be spent on marketing incentives. North Carolina diverted three-quarters of its settlement dollars to support tobacco production.

“These states are not only guilty of taking money from big tobacco companies and giving it right back, but also guilty of contributing to the public health epidemic that causes almost 393,000 deaths in our country each year,” said Toomey.

The American Lung Association calls upon states to stop squandering this money and to address the real issues at hand—the deadly grip big tobacco has on our nation is literally killing us and contributing to our economic woes. Supporting tobacco cessation and prevention programs will save countless lives and will ease the strain on states’ budgets by reducing tobacco-related health care expenditures.

For more information on how states in far too many instances are neglecting to sufficiently protect their residents from the predatory practices of the tobacco industry, visit www.stateoftobaccocontrol.org. Here, the American Lung Association awards grades annually to each state and the Federal government on key tobacco control policies, including tobacco cessation and prevention funding.

About the American Lung Association: Beginning our second century, the American Lung Association is the leading organization working to prevent lung disease and promote lung health. Lung disease death rates are currently increasing while other major causes of death are declining. The American Lung Association funds vital research on the causes of and treatments for lung disease. With the generous support of the public, the American Lung Association is “Fighting for Air.” For more information about the American Lung Association, a Charity Navigator Four Star Charity, or to support the work it does, call 1-800-LUNG-USA (1-800-586-4872) or log on to www.lung.org.