Benefits in Tobacco Deal

True, the proposed $206-billion agreement between the tobacco industry and several states including California offers fewer dollars than the plan that failed in Congress last year. True, California might be able to drive a better bargain if it pursued its own lawsuit against the tobacco companies. But there’s no assurance of that, and the new deal contains distinct advantages beyond the fact that the congressional plan is dead and this one is viable.

On balance, it appears to be to California’s advantage to accept the agreement. It would give the state $24 billion over the next quarter-century, half of which would go to cities and counties. It also would impose significant restrictions on tobacco marketing, especially to young people.

There are two major issues. First, the states want to recover from Big Tobacco the public health costs of smoking-related illness. Second, the states want tobacco companies to stop enticing young people.

It’s in the latter category that the proposed settlement makes the most gains. If the tobacco companies accept the deal, they would have to stop targeting young people in advertising, promotions and marketing. All outdoor advertising, including ads on billboards and in sports stadiums, would be banned. Sponsorship of athletic events would be severely limited. The companies could no longer pay to get their products used in movies and could not sell products bearing brand names, such as clothing and backpacks.

Trade associations including the Tobacco Institute and the Council for Tobacco Research would be disbanded. Tobacco lobbyists could not oppose any state law or regulation aimed at keeping young people from smoking. And the industry would have to spend nearly $2 billion for anti-tobacco education programs. To make sure the industry complies with the agreement, the companies would put up $50 million for enforcement by the state attorneys general. Given the tobacco companies’ ingenuity in evading previous restrictions on their advertising, the enforcement war chest is a necessity.

The agreement does not give the federal Food and Drug Administration authority to regulate nicotine. That’s a critical step in terms of promoting public health, but it’s a congressional matter, not within the power of the states. The Clinton administration has promised to push such legislation, and it should be a priority with Congress next year.

One reason the failed congressional pact was so generous to the states was that it protected the tobacco companies against most liability for illnesses and deaths among tobacco users. Under the new pact, the states themselves could not pursue further legal action, but there’s nothing to restrict pending and future class action lawsuits or legal action by individuals. The industry stands to lose billions more as such litigation moves forward.

In monetary value, this settlement is about half what was proposed in Congress, but the California suit was based on antitrust law violations by the tobacco industry rather than seeking reimbursement of state health costs. This protects the state from having to share the award with the federal government, which co-sponsors the Medi-Cal program that covers the cost of health care for the poor. The net payout to California would be closer to that of the congressional plan than appears at first blush.

This settlement of course does not solve all the issues of tobacco use. And nothing can deter some young people from puffing on that first cigarette. But the plan strikes a sizable blow against the tobacco companies’ ability to sell tobacco use as glamorous when it is in fact an invidious and deadly addiction. That is a worthy achievement.