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The Spokesman-Review Newspaper
Spokane, Washington  Est. May 19, 1883

Tobacco Signals It May Submit To Fda Control

New York Times

Tobacco industry executives expressed concern at the White House on Thursday about demands for stiffer penalties if they fail to meet targets for reductions in smoking by teenagers under the proposed tobacco settlement. They said that the $15 billion annual payments under the plan were all they could afford.

But the executives signaled they were prepared to accept broad Food and Drug Administration authority over nicotine and other cigarette components in exchange for partial immunity from state and private lawsuits, said participants in the White House discussions.

The meetings were part of a series of talks between administration officials and industry representatives over the proposal to change the way cigarettes are made and marketed in America.

Under the plan, major cigarette makers would pay $368 billion over 20 years to settle lawsuits filed by 39 states and Puerto Rico and two dozen class action suits.

Clinton administration officials are nearing completion of a review of the proposal. The president is expected to announce his conclusions early next month.

As part of the administration review, officials of the Treasury Department and the Office of Management and Budget assessed the impact of the deal on the companies’ financial health.

They concluded that the cigarette makers would suffer little economic harm because they would pass on virtually all the costs of the settlement in the form of higher prices. Estimates of those price increases ranged from 60 cents to $1 a package, depending on how much consumption declined as a result of higher prices and how much profit retailers took on each pack.

The president and his advisers have already indicated that Clinton would not endorse the deal unless the FDA’s power to regulate tobacco was strengthened and penalties for failing to live up to the agreement were stiffened.