Cancer Society Urges Revisions in Tobacco Deal

The American Cancer Society said Thursday that substantial revisions must be made to the pending $368.5-billion tobacco settlement if it is to achieve the key goals of reducing tobacco use and tobacco-caused disease and death.

“The American Cancer Society supports the right settlement--but this is not that settlement,” said George Dessart, the organization’s chairman.

While saying that the settlement “provides a rare opportunity to make substantial inroads in combating tobacco-related illnesses--the largest cause of disease and death in the United States”--the society’s leaders recommended several significant modifications for the settlement to pass muster.

In fact, Dr. Myles Cunningham, the group’s president, said that two are “deal breakers.” Cunningham said provisions restricting the Food and Drug Administration’s ability to regulate the industry are unacceptable, and that the terms designed to reduce teen smoking are too lax and provide “no economic incentive to ensure the industry will meet the target goals.”

The statements by the highly influential Cancer Society, coming on top of similar criticisms leveled by a special congressional task force headed by former Surgeon General C. Everett Koop and former FDA Commissioner David A. Kessler, is likely to put more pressure on the Clinton administration to come out for a tougher deal when it completes its review of the proposal next month.

“The Cancer Society’s action reflects an emerging pattern of public health groups who believe the agreement provides a good building block but needs to be strengthened in critical areas,” said Matt Myers, director of the National Center for Tobacco Free Kids, who played a key role in negotiations between the tobacco industry and state attorneys general that led to the settlement.

A massive tobacco accord is not likely to get White House and congressional approval without the support of most of the major public health organizations. The American Medical Assn. and the American Heart Assn. are developing critiques of the settlement. The American Lung Assn. has already vehemently opposed the deal.

The Cancer Society took its stand with considerable fanfare at a packed news conference in downtown Washington. The organization also released:

* Polling data saying 69% of the public favors FDA regulation of tobacco products and 84% favor disclosure of the tobacco industry’s internal documents.

* A lengthy critique of the deal’s FDA provisions, prepared by Hogan & Hartson, a high-powered Washington law firm.

* A financial analysis of the settlement, prepared by MIT economist Jeffrey Harris.

Harris’ analysis--which said the agreement may only cost the industry about $194.5 billion, or slightly more than half its declared value--and reams of other material were contained in slick, loose-leaf binders distributed to the media and sent to the White House and every member of Congress.

Harris said the $368.5 billion does not take into account a provision of the deal that states that the industry’s annual payment obligations will be reduced if sales volume of cigarettes declines. Virtually everyone involved in the deal anticipates that sales will decline because the industry is expected to finance its payments largely by raising the price of cigarettes.

The economist said that if the settlement is enacted, he anticipated that the price of a pack of cigarettes would rise by 41 cents in the first year and gradually increase to 62 cents a pack by the fifth year. Consequently, Harris said, U.S. cigarette consumption would fall from 24.2 billion packs annually to 22.3 billion packs in the first year of the settlement and then decline gradually to 18.4 billion packs by the 25th year.

Harris noted that the reduced sales could result in lowering the face value of the settlement from $368.5 billion to about $304 billion. However, the cost to the industry in that case would really be only about $194 billion, he reasoned, because that is the discounted value that investors would be willing to pay today for a portfolio of 25-year corporate bonds that would be worth $304 billion at maturity.

The organization’s analysis of the FDA provisions of the settlement paralleled criticisms leveled by President Clinton and others, but it was much more detailed.

The settlement says that in order to substantially reduce the nicotine level in cigarettes, the FDA must prove by “substantial evidence” that such changes would have a significant positive impact on public health, be technologically feasible and not create a black market for higher-nicotine cigarettes.

Attorney Stephan E. Lawton, who prepared the analysis, said vaulting the first two hurdles “should not prove difficult” for the agency, but he said the third would be virtually impossible.