Tobacco Settlement Portends New Day
by Phillip Gardiner, Dr. P.H.

Whatever form the proposed tobacco settlement takes, it will profoundly impact the lives of all Americans. Whether legal immunity is granted or not, the tobacco industry landscape could be changed fundamentally in the years to come. The recent release of RJ Reynolds documents provided unmistakable evidence that the tobacco industry has, for years, made a practice of targeting their advertisements toward adolescents. Daily disclosures of unfavorable documents, coupled with ongoing litigation and the emerging congressional debate, have all added momentum toward the greater regulation and curtailment of the tobacco industry.

The initial settlement proposal, a product of a compromise between some state attorneys general, private lawyers, and a few representatives of the public health community, provided for the tobacco industry to pay $365 billion over 25 years to reimburse state Medicaid plans for the cost of treating tobacco-related disease. The June 1997 proposal also included provisions to: enact prominent new warning labels; limit tobacco advertising, including a ban on vending machines and outdoor billboards; end tobacco advertising that uses human and cartoon characterizations; fine the industry if reductions in youth smoking rates are not met; and give limited jurisdiction to the FDA to regulate nicotine, the addictive ingredient in tobacco. The industry has agreed to these measures provided it is given immunity from future lawsuits.

The proposal is controversial on a number of counts. Tobacco control advocates pointed out that the June proposal would limit the role of the FDA in regulating nicotine, and make the proposed $15 billion a year in payouts tax-deductible. Furthermore, since smoking costs the nation some $100 billion per year, the proposed settlement falls well short of its stated goals of reimbursing state coffers.

However, the major stumbling block to any tobacco settlement appears to be the industry’s demand for immunity from all past and most future litigation, which would require preemption of existing state and local legislation. This issue has divided not only lawmakers but also the ranks of the public health community. William Novelli, speaking for the Campaign for Tobacco-Free Kids, at the TRDRP Annual Investigators Meeting stated: “limited liability protection . . . If we can achieve [public health goals], if they are on the table, then we are willing to talk about limited liability protection for past wrongdoings.” On the other hand, Dr. Stanton Glantz, speaking at the same meeting asserted: “It is very clear that the ENACT Coalition, led by Tobacco-Free Kids, is willing to trade away immunity and preemption to get other things. That to me is fundamentally wrong.”

Regardless of its perceived merits and faults, the proposed settlement has generated much discussion, posturing, and some disclosures since June of 1997. Three states -Mississippi, Florida, and Texas - have settled their suits with the tobacco industry, while the much awaited Minnesota case began in January of 1998. RJ Reynolds has retired “Joe Camel” while agreeing to pay the city of San Francisco $10 million dollars for targeting their advertising toward adolescents. A Federal Court in North Carolina has held that the FDA does have jurisdiction over the regulation of tobacco as a drug, but cannot restrict all tobacco advertising. The Koop/Kessler Committee report, followed by the President’s recommendations, have attempted to rectify some of the shortcomings of the June proposal. The most striking reversal of positions generated by the proposed settlement is that of the tobacco executives themselves. In 1994, in a picture etched in time, seven CEOs for the major tobacco companies all testified under oath that they believed that smoking cigarettes was harmless and non-addicting. Yet, the majority of the current CEOs have admitted to Congress that smoking is addictive and national legislation is necessary. Capping off the flurry of activity surrounding the proposed settlement has been the release of RJR documents demonstrating that the tobacco industry has been marketing their products to children for decades.

To further complicate the proposed tobacco settlement, in the 1999 Federal budget President Clinton has proposed to fund new social programs with tobacco money. The Clinton administration proposes to fund child care programs, reduce class sizes, increase the rolls of lower income children on Medicaid, increase funding for the FDA, and increase NIH research funds by $25 billion over 3 years, with $400 million earmarked for the CDC to fight smoking. The President’s proposal did not mention exactly how this money should be generated. Neither did the President speak to the issue of immunity/preemption.

The proposed $365 billion tobacco settlement has created more questions than answers. The only thing that is certain now is that the tobacco industry and the American public have reached a crossroads. In the coming year, the public and congressional debate on smoking and tobacco will redefine our relationship to this industry and its products. And whatever the final outcome and contours of the tobacco settlement, the fight to reduce smoking in America will escalate.