June 21, 1997 in Nation/World

Tobacco Firms Settle Suits, Bow To Limits Industry To Pay Billions, Oks Broad Restraints

From Wire Reports
 

In what some called the most significant public health achievement in American history, the tobacco industry finally conceded Friday that cigarettes are harmful - and it agreed to pay $368.5 billion over the next 25 years to repair some of the damage.

After that, the industry will pay $15 billion in fines every year. Forever.

But despite concessions from the cigarette makers, the groundbreaking proposal would allow the tobacco industry to win reprieve from the gravest legal and financial threats it has ever faced.

In return for protection from pending and future suits, ending 70 years of denial and defiance, the tobacco industry also submitted to sweeping restraints on advertising and marketing that will redefine how cigarettes are sold and consumed in the United States.

Banned: outdoor ads, Joe Camel and other cartoon characters, the Marlboro Man and all other human images in advertising, cigarette vending machines, brand-name sponsorship of sports events, smoking in most public places and workplaces.

Required: stricter enforcement of laws prohibiting sales to minors, the surrender of most tobacco company research on addiction and health hazards, industry payments of billions of dollars a year for health-related claims, anti-smoking campaigns and smoking-cessation programs for some of the 50 million Americans addicted to nicotine.

“It’s an opportunity for all Americans to take a fresh breath,” said Christine Gregoire, Washington’s attorney general.

In addition, the front of every pack of cigarettes will be dominated by ominous new warnings, printed in black and white.

Among them: “Cigarettes cause cancer. Cigarettes are addictive. Cigarettes cause fatal lung disease. Smoking can kill you. Tobacco smoke can harm your children.”

Cigarettes and nicotine also will be regulated as drugs by the federal Food and Drug Administration, though the agency cannot demand reduced nicotine levels until 2009.

In return, 40 states agreed to drop multibillion-dollar lawsuits that sought reimbursement for treating Medicaid patients made ill by cigarettes.

“We wanted the industry to stop selling to our children, to stop targeting our children,” Robert Butterworth, Florida’s attorney general said. “Now, the Marlboro man will be riding into the sunset on Joe Camel.”

The deal - which touches on many legal issues including federal regulations, advertising bans and the right to file lawsuits - still must be approved by Congress and President Clinton.

Though most initial reviews of the deal were favorable, some health groups and other anti-tobacco activists vowed to fight it, raising the prospect of a vigorous public debate.

They said it did not go far enough to punish the industry, which has annual sales of $50 billion, or in protecting youngsters and other future smokers from addiction and disease.

Still, the tobacco industry and the attorneys general have significant influence in Congress, so eventual passage seemed likely - though possibly in a modified form and not before September.

The White House has monitored the negotiations and President Clinton said he would closely examine the deal.

Federal officials say that 400,000 Americans die annually from smoking-related diseases, another 3,000 die from exposure to second-hand smoke, 3,000 teenagers start smoking every day and 90 percent of all new smokers are minors.

The American Cancer Society, one of several public health groups that supported a settlement, said the concessions accepted by the industry Friday could save the lives of 1 million children.

But a breach appeared to widen in the public health community. The American Lung Association, long aligned with the cancer society in fighting the tobacco industry, said the deal sacrificed too many legal rights and was too weak.

“I think the tobacco industry will be laughing all the way to the bank,” said Sandra Kessler, executive director of the association’s Florida branch.

Nevertheless, the attorneys general said the deal would have a profound impact on public health and the tobacco industry.

“We believe this is the most historic public health achievement (ever),” said Michael Moore, Mississippi’s attorney general and a lead negotiator.

Tobacco company reaction was sparse. Steve Parrish, an executive of Philip Morris, said the industry accepted provisions “with which we do not necessarily agree … in the interest of reaching an overall resolution of the important issues facing the nation and the industry.”

MEMO: This sidebar appeared with the story: Highlights of tobacco deal By Scripps-McClatchy Summary: Tobacco industry would pay $360 billion over 25 years and would accept dozens of new regulations aimed at reducing smoking. In exchange, government would offer immunity from punitive damages based on past actions. Payments: Of total payments, $50 billion is for past wrongdoing by tobacco companies. $25 billion of that would go to fund for uninsured children, the remainder for public education. The other $310 billion would go to states for smoking education programs, payment of actual medical claims by smokers (up to $5 billion a year), programs to help smokers quit and various enforcement activities. Advertising, sales: Prohibits tobacco ads on billboards and other outdoor advertising. Bans human images like Marlboro Man or cartoon characters like Joe Camel. Prohibits Internet advertising. Bans sponsorship of sports events like the Winston Cup racing program and promotional products like T-shirts. Youth magazines contain only text-only advertising. Vending machine sales banned. Location bans: Smoking allowed in public places and most workplaces only if separately ventilated. Exceptions: restaurants, bars, private clubs, hotels, casinos and prisons. Smoking banned in fast-food restaurants. Youth smoking targets: Sets targets for reducing cigarette smoking by youths under 18 - 30 percent in 5 years; 50 percent in 7 years; 60 percent in 10 years. Tobacco industry would be fined $80 million for each percentage point shy of those targets. States penalized if they failed to improve compliance with laws banning sales to minors. Nicotine regulation: Imposes standards for reducing and eliminating harmful components like nicotine, which could be banned after 2009. But FDA would have to show that an underground nicotine market wouldn’t develop. Agency could also veto any new ingredient added to cigarettes. Litigation: Tobacco companies would be immune from punitive damage claims based on past practices, but not on future actions. State lawsuits filed by 40 attorneys general, as well as 17 class-action claims, would end. Individual lawsuits could proceed. Industry disclosure: Tobacco industry must provide all research - past and future - relating to health, toxicity, addiction and drug dependence. And it must establish a public library that includes all documents relating to health effects, including marketing practices aimed at children.

This sidebar appeared with the story: Highlights of tobacco deal By Scripps-McClatchy Summary: Tobacco industry would pay $360 billion over 25 years and would accept dozens of new regulations aimed at reducing smoking. In exchange, government would offer immunity from punitive damages based on past actions. Payments: Of total payments, $50 billion is for past wrongdoing by tobacco companies. $25 billion of that would go to fund for uninsured children, the remainder for public education. The other $310 billion would go to states for smoking education programs, payment of actual medical claims by smokers (up to $5 billion a year), programs to help smokers quit and various enforcement activities. Advertising, sales: Prohibits tobacco ads on billboards and other outdoor advertising. Bans human images like Marlboro Man or cartoon characters like Joe Camel. Prohibits Internet advertising. Bans sponsorship of sports events like the Winston Cup racing program and promotional products like T-shirts. Youth magazines contain only text-only advertising. Vending machine sales banned. Location bans: Smoking allowed in public places and most workplaces only if separately ventilated. Exceptions: restaurants, bars, private clubs, hotels, casinos and prisons. Smoking banned in fast-food restaurants. Youth smoking targets: Sets targets for reducing cigarette smoking by youths under 18 - 30 percent in 5 years; 50 percent in 7 years; 60 percent in 10 years. Tobacco industry would be fined $80 million for each percentage point shy of those targets. States penalized if they failed to improve compliance with laws banning sales to minors. Nicotine regulation: Imposes standards for reducing and eliminating harmful components like nicotine, which could be banned after 2009. But FDA would have to show that an underground nicotine market wouldn’t develop. Agency could also veto any new ingredient added to cigarettes. Litigation: Tobacco companies would be immune from punitive damage claims based on past practices, but not on future actions. State lawsuits filed by 40 attorneys general, as well as 17 class-action claims, would end. Individual lawsuits could proceed. Industry disclosure: Tobacco industry must provide all research - past and future - relating to health, toxicity, addiction and drug dependence. And it must establish a public library that includes all documents relating to health effects, including marketing practices aimed at children.


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