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Commentary | PERSPECTIVE ON THE TOBACCO SETTLEMENT

Marlboro Man Still in the Saddle

The sweetheart deal will recover only about 36 cents on the dollar of Medicaid costs from smoking.

November 24, 1998|RALPH NADER | Ralph Nader has been the leading U.S. consumer and environmental advocate since the 1960s

With 46 states, the District of Columbia and four territories agreeing to a sweetheart deal, tobacco companies appear to have fended off the greatest challenge yet to their ability to conduct carcinogenic business as usual.

Unless a few newly elected attorneys general and public health organizations can persuade judges to block or at least delay the deal, an unparalleled public health opportunity will be lost.

In a settlement to which all major tobacco companies--Philip Morris, R.J. Reynolds, Brown & Williamson and Lorillard--have agreed, the industry will pay the states just over $200 billion over 25 years and accept some inconsequential marketing restrictions. In exchange, the states will drop their health care cost reimbursement lawsuits against the tobacco drug marketeers.

After reaching a tentative agreement running more than 100 pages and written in extremely technical and confusing language, the industry issued a preposterous demand: The states would have less than a week to accept or reject the deal. The only conceivable purpose for this demand is to prevent careful scrutiny of the terms and to ram the deal through before newly elected tougher-on-tobacco attorneys general take office in California and New York.

What does the industry want to hide? Lots. The $200 billion figure is highly misleading. Payments are tax deductible and spread out over 25 years. The settlement will recover only about 36 cents on the dollar of the Medicaid costs due to smoking-related disease. And the settling states will receive proportionally less than Minnesota, Texas, Florida and Mississippi, which previously reached individual settlements with the tobacco companies.

The marketing restrictions in the deal are laughably weak and loophole-ridden. R.J. Reynolds will be forbidden from using Joe Camel, a campaign it already canceled, while Philip Morris can continue to use the Marlboro Man. Among the industry pledges in the deal is an agreement not to lobby against "limitations on tobacco product advertisements in or on school facilities." This will not curtail Big Tobacco's promotional onslaught or its targeting of children.

The deal bars future suits by the states against Big Tobacco for health-related claims. It also preempts or undermines local and county claims against the tobacco companies for medical-care-cost recovery. It may even block certain local efforts to issue fines for tobacco company violations of local restrictions. Thousands of the industry's secret documents will remain secret.

The tobacco companies do not acknowledge that smoking causes cancer or heart disease, they do not drop their challenge to Food and Drug Administration authority to regulate tobacco ingredients such as nicotine and they do not withdraw their legal challenge to Environmental Protection Agency findings that secondhand smoke is a dangerous pollutant.

An invidious provision establishes that industry payments will be reduced, dollar-for-dollar, if any federal tobacco tax money is transferred to the states. Congress is not going to give money to the states if it will only serve to reduce industry payments.

The deal is, in one respect, an improvement from last year's settlement proposal, which gave Big Tobacco immunity from class action suits brought by individuals and suits by insurance companies and unions. But that does not make the agreement satisfactory.

This is not a customary litigation settlement. It is de facto public health policymaking. Before approving a settlement, state judges should allow a public comment period and review seriously the concerns voiced by the attorneys general-elect in California and New York and by virtually every public health group. Public health, as well as the public treasury, would be much better served by the states continuing with their cases and settling them individually or bringing them to trial. Also, the federal government should file its own medical care cost recovery suit.

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