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Negotiators Finish Work on Tobacco Pact

Settlement: Copies of $206-billion agreement with four firms are sent out. It would satisfy states' claims to cover costs of treating sick smokers.

November 15, 1998|From Associated Press

NEW YORK — Negotiators for the nation's four biggest tobacco companies and eight state attorneys general finished a proposed agreement Saturday under which the companies would pay $206 billion to settle remaining state claims over the costs of treating sick smokers, the Washington state attorney general said.

They were shipping copies of the documents to state attorneys general across the country for their review. It took several days to nail down the final details after The Times reported the negotiators' agreement on all major points last week.

The settlement proposal, which salvages parts of a broader tobacco agreement that died in Congress earlier this year, also places new limits on how tobacco makers market their products.

"We have finished," said Atty. Gen. Christine M. Gregoire of Washington state, who led the states' team, which included California, during more than five months of negotiations. "We have done the best we can do here."

If enough states embrace the plan, it would be the biggest U.S. civil settlement ever.

The industry payments, which will be made through 2025, would reimburse the states for expenses under the Medicaid program for treating smoking-related illnesses. The money would also help finance programs and research to discourage smoking, especially by young people.

In exchange, the settlement would lift a huge legal and financial threat that has been hanging over tobacco makers.

Although the settlement would not require it, it is expected that tobacco prices will be increased to pay for the deal.

A formal announcement of details of the agreement was expected Monday.

State officials have until Friday to agree to the deal or take their chances fighting the industry alone in court. Some anti-smoking activists say more time should be allowed to evaluate the plan.

The four major tobacco companies agreeing to the settlement are Philip Morris Cos., R.J. Reynolds Tobacco, Brown & Williamson Tobacco and Lorillard Tobacco.

The negotiating states in addition to Washington and California were New York, North Carolina, Colorado, Oklahoma, North Dakota and Pennsylvania.

Fred Olson, a spokesman for Gregoire, said the state payments would range in size from $23.9 billion for New York and California to about $466 million for Wyoming. Smaller amounts would also go to several U.S. territories, such as Puerto Rico and Guam.

The states would be free to spend the money as they wish, and public health advocates were certain to put pressure on settling states to use the money in the fight against smoking.

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