The nation’s top tobacco manufacturers have agreed to pay Massachusetts a combined $600 million this year to settle disputed Master Settlement Agreement payments covering 2005 to 2011.
The agreement released Tuesday by the Massachusetts Attorney General’s Office said unresolved parts of the dispute runs through 2023.
The largest U.S. tobacco manufacturers agreed in 1998 to settle lawsuits that 46 state attorneys general — including in North Carolina — brought over smoking-related health care costs.
The companies agreed at that time to pay the participating states at least $206 billion over 20-plus years. Some states, including North Carolina, negotiated for annual payments in perpetuity. The agreement also set marketing limits on the companies.
In November 2017, a deal was reached with North Carolina and 25 other states in which the manufacturers agreed to release some escrow funding in exchange for securing credits on future annual Master Settlement Agreement payments.
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Neither the agreement nor the Massachusetts AG news release disclosed how much Philip Morris USA, R.J. Reynolds Tobacco Co. and ITG Brands are paying from their escrow accounts.
According to Law360.com, Philip Morris USA and Reynolds are providing nine figures. Reynolds declined to comment on pending litigation.
The manufacturers have agreed in the Massachusetts settlement to make additional payments totaling tens of millions of dollars each year going forward.
Meanwhile, the manufacturers receive credits representing 46%, or $97.1 million, of what Massachusetts was projected to receive from the escrow amounts for 2005-11. Beginning with 2017, Massachusetts will receive 75% of the annual escrow amounts.
Reynolds will receive a combined $67.5 million in credits for Master Settlement Agreement payments in 2026 through 2030, while Philip Morris USA is getting a combined $27.6 million.
Annual Master Settlement Agreement payment amounts are based on traditional cigarette sales in each state. The amounts are declining as fewer adults are smoking.
Massachusetts said its annual MSA payments have totaled into the hundreds of millions of dollars. North Carolina has received on average between $130 million and $140 million annually.
Like North Carolina, most states have redirected the bulk of their Master Settlement Agreement funding away from public-health initiatives to other areas, typically their General Fund. Massachusetts said the $600 million would go to its General Fund.
“The country’s major tobacco manufacturers have pushed smoking products to young people for decades — and this settlement is evidence of our ongoing commitment to hold these companies accountable for their actions that caused irreparable harm to public health and safety,” Attorney General Andrea Joy Campbell said in a statement.
According to the settlement, the Massachusetts AG office has resolved seven of the annual disputes and “has reached an agreement that should increase the speed at which additional disputes are resolved.”
“Accordingly, Massachusetts will receive greater and more consistent annual payments going forward.”
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Publish date : 2024-08-14 01:02:00
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