Products Liability Law Daily Pennsylvania settles with tobacco companies over payments dispute
Friday, June 22, 2018

Pennsylvania settles with tobacco companies over payments dispute

By Georgia D. Koutouzos, J.D.

Pennsylvania Attorney General Josh Shapiro announced on June 21, 2018, that his office has reached a settlement on behalf of the Commonwealth with several tobacco companies, ending 20 years of past and future disputes related to the 1998 Tobacco Master Settlement Agreement (MSA)—a landmark public health agreement signed by Pennsylvania and 45 other states to settle state lawsuits and recover billions of dollars in healthcare costs associated with smoking-related illnesses. Original participating manufacturers in the 1998 agreement included the four major tobacco companies that initially had been sued: Philip Morris USA, R. J. Reynolds Tobacco Co., Brown & Williamson Tobacco Corp., and Lorillard Tobacco Co. More than 40 smaller tobacco companies subsequently joined the MSA.

Under the latest agreement, Pennsylvania will receive nearly $357 million in tobacco settlement money during fiscal year 2018–2019, on top of the $350 million it receives annually from tobacco companies. Besides the initial amount, Pennsylvania also will receive $279 million more over the next 12 years, which will go to the Commonwealth’s general fund. Since the inception of the MSA, Pennsylvania has received $6.85 billion in payments.

The latest settlement resolves disputes from 2004–2015 as well as existing and anticipated disputes for 2016–2024. The agreement reduces risks for two years longer than has been agreed with any other state, according to the AG’s Office. The MSA’s central purpose was to end the deceptive advertising and unfair marketing of tobacco products that induces healthy people to start smoking. By ending these practices and increasing prevention/cessation efforts, the MSA sought to reduce smoking dramatically. Nationwide and in Pennsylvania, the volume of cigarettes smoked declined by 44 percent from 1998–2016, while the number of individuals smoking nationwide declined by more than 36 percent during that period.

MainStory: TopStory SettlementAgreementsNews TobaccoProductsNews PennsylvaniaNews

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