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Bismarck Tribune Editorial: N.D. becomes leader in tobacco fight

North Dakota has garnered praise for its spending efforts to reduce tobacco use. There’s a little irony in this since the Legislature in the past has questioned the amount of spending.
The Campaign for Tobacco-Free Kids looked at how states used the billions of dollars received from lawsuits settled with major tobacco companies in 1998.
According to the Centers for Disease Control and Prevention, North Dakota is the only state to spend at levels it recommended. The state also was one of five states to spend at least 50 percent of what the CDC recommends.
Spending by states on tobacco prevention programs bottomed out at $459.5 million in 2013, according to the campaign’s report, and is expected to reach $468 million in 2016. At the same time, an estimated $25.8 billion will be collected in settlement funds and tobacco taxes. Tobacco companies reportedly spend about $9.6 billion a year on marketing. North Dakota has $10 million planned for fiscal year 2016.
The anti-tobacco campaign appears to be working.
A survey conducted by the state Department of Public Instruction and the Department of Health shows 80 percent of the students responding said they did not use cigarettes, cigars or smokeless tobacco, an increase from 74 percent two years ago. The percentage of high school students who said they had smoked a cigarette at least once in the month dropped from 19 percent to 12 percent. The percentage of high school students who said they had ever tried to smoke a cigarette was 35 percent, down from 41 percent in 2013. Smokeless tobacco use declined from 14 percent to 11 percent this year.

The anti-tobacco effort emphasizes keeping kids from using tobacco and if they do, getting them to quit. The numbers indicate they are being successful. Some have questioned the amount of money being spent and how it’s being used. While the campaign may appear heavy-handed at times, it’s getting the point across. In the past some legislators wanted to spend less on anti-tobacco efforts and divert the tobacco settlement money to other programs. In 2008 North Dakotans passed a measure requiring a portion of the settlement funds be used for tobacco prevention.
Even a tobacco company favors the spending. “We believe states should use (settlement) payments to fund tobacco cessation and underage tobacco prevention programs at levels recommended by the Centers for Disease Control,” Brian May, a spokesman for Philip Morris, told the Forum News Service.
The anti-tobacco effort has been successful in other areas with smoking banned in public areas. And now the efforts go beyond traditional forms of tobacco to vaporing products. The dangers of second-hand smoke is another focus, with apartment residents being urged to demand a smoke-free environment. Some may think this is going too far, but anti-tobacco campaign is on a roll and has the money to keep going.
Society is getting closer to being smoke-free, too fast for some and too slowly for others.
http://bismarcktribune.com/news/opinion/editorial/n-d-becomes-leader-in-tobacco-fight/article_ed7dc472-6eb0-5e6d-b63b-51c4cd23e599.html

Fargo Forum editorial: Tobacco cessation succeeds

There is good news in the war against tobacco use: North Dakota is winning.
The Campaign for Tobacco-Free Kids said last week that North Dakota is the only state spending at levels recommended by the U.S. Centers for Disease Control and Prevention on tobacco cessation programs. That level is 50 percent of funds designated from the 1998 tobacco settlement lawsuits.

But it’s about more than spending dollars where they were meant to be spent. It’s about results, and on that score North Dakota is a leader. For example, a portion of the money was spent to fund a study of secondhand smoke’s effects in Grand Forks, the results of which were pivotal in that city passing a 2010 law that outlawed smoking in bars, casinos and truck stops. Several North Dakota cities, using information compiled locally and by the North Dakota Center for Tobacco Prevention and Control Policy, easily approved ordinances directed at ending secondhand smoke in public places and businesses. Most of the cities were ahead of a Legislature that remained in the thrall of the state’s tobacco lobby, and it took a 2012 ballot measure to impose statewide restrictions on smoking and secondhand smoke.
There has been some grousing and whining about how tobacco settlement money is being spent in North Dakota. It’s come mostly from special interests that lost the tobacco cessation battle years ago. They were wrong then and are wrong now about the effects of the expenditures. For example, during the time that education and public service efforts were ratcheted up, smoking among youths plunged to 11.7 percent this year after hovering at about 20 percent the eight previous years.
Anti-tobacco programs work. The statistics are unambiguous. Tobacco settlement money has been well-spent in North Dakota, and the CDC and others recognize the state’s success. That’s good news.
Forum editorials represent the opinion of Forum management and the newspaper’s Editorial Board
http://www.inforum.com/opinion/editorials/3903588-forum-editorial-tobacco-cessation-succeeds

Press Release: Heitkamp Announces Significant Federal Funding for Tobacco Prevention

WASHINGTON, D.C. – U.S. Senator Heidi Heitkamp today announced nearly $914,000 in federal funding to support statewide efforts to prevent tobacco use.

These funds, awarded to the North Dakota Department of Health, will be used to support its Tobacco Prevention and Control program, which includes information for schools and health care providers, programs to help North Dakotans quit smoking, data collection and trainings.

“Over the past several decades, the devastating health effects caused by tobacco use have become more and more clear,” said Heitkamp. “As North Dakota’s Attorney General in the 1990s, I led the charge to hold tobacco companies responsible for what their products were doing to North Dakotans, so I understand the importance of investing in tobacco prevention efforts and providing resources to help folks quit smoking. These funds will help the North Dakota Department of Health continue its great work to stop tobacco use and help make sure the next generation of North Dakotans are tobacco-free.”

While Attorney General, Heitkamp helped to broker an agreement between 46 states and the tobacco industry, which forced the tobacco industry to tell the truth about smoking and health. The settlement resulted in the award of about $336 million to North Dakota taxpayers to date and was one of the largest civil settlements in U.S. history.

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US is marking 50th anniversary of surgeon general report that turned the tide against smoking

Article by: MIKE STOBBE , Associated Press
ATLANTA — Fifty years ago, ashtrays seemed to be on every table and desk. Athletes and even Fred Flintstone endorsed cigarettes in TV commercials. Smoke hung in the air in restaurants, offices and airplane cabins. More than 42 percent of U.S. adults smoked, and there was a good chance your doctor was among them.
The turning point came on Jan. 11, 1964. It was on that Saturday morning that U.S. Surgeon General Luther Terry released an emphatic and authoritative report that said smoking causes illness and death — and the government should do something about it.
In the decades that followed, warning labels were put on cigarette packs, cigarette commercials were banned, taxes were raised and new restrictions were placed on where people could light up.
“It was the beginning,” said Kenneth Warner, a University of Michigan public health professor who is a leading authority on smoking and health.
It was not the end. While the U.S. smoking rate has fallen by more than half to 18 percent, that still translates to more than 43 million smokers. Smoking is still far and away the leading preventable cause of death in the U.S. Some experts predict large numbers of Americans will puff away for decades to come.
Nevertheless, the Terry report has been called one of the most important documents in U.S. public health history, and on its 50th anniversary, officials are not only rolling out new anti-smoking campaigns but reflecting on what the nation did right that day.
The report’s bottom-line message was hardly revolutionary. Since 1950, head-turning studies that found higher rates of lung cancer in heavy smokers had been appearing in medical journals. A widely read article in Reader’s Digest in 1952, “Cancer by the Carton,” contributed to the largest drop in cigarette consumption since the Depression. In 1954, the American Cancer Society announced that smokers had a higher cancer risk.
But the tobacco industry fought back. Manufacturers came out with cigarettes with filters that they claimed would trap toxins before they settled into smokers’ lungs. And in 1954, they placed a full-page ad in hundreds of newspapers in which they argued that research linking their products and cancer was inconclusive.
It was a brilliant counter-offensive that left physicians and the public unsure how dangerous smoking really was. Cigarette sales rebounded.
In 1957 and 1959, Surgeon General Leroy Burney issued statements that heavy smoking causes lung cancer. But they had little impact.
Amid pressure from health advocates, President John F. Kennedy’s surgeon general, Dr. Luther Terry, announced in 1962 that he was convening an expert panel to examine all the evidence and issue a comprehensive, debate-settling report. To ensure the panel was unimpeachable, he let the tobacco industry veto any proposed members it regarded as biased.
Surveys indicated a third to a half of all physicians smoked tobacco products at the time, and the committee reflected the culture: Half its 10 members were smokers, who puffed away during committee meetings. Terry himself was a cigarette smoker.
Dr. Eugene Guthrie, an assistant surgeon general, helped persuade Terry to kick the habit a few months before the press conference releasing the report.
“I told him, ‘You gotta quit that. I think you can get away with a pipe — if you don’t do it openly.’ He said, ‘You gotta be kidding!’ I said, ‘No, I’m not. It just wouldn’t do. If you smoke any cigarettes, you better do it in a closet,'” Guthrie recalled in a recent interview with The Associated Press.
The press conference was held on a Saturday partly out of concern about its effect on the stock market. About 200 reporters attended.
The committee said cigarette smoking clearly did cause lung cancer and was responsible for the nation’s escalating male cancer death rate. It also said there was no valid evidence filters were reducing the danger. The committee also said — more vaguely — that the government should address the problem.
“This was front-page news, and every American knew it,” said Robin Koval, president of Legacy, an anti-smoking organization.
Cigarette consumption dropped a whopping 15 percent over the next three months but then began to rebound. Health officials realized it would take more than one report.
In 1965, Congress required cigarette packs to carry warning labels. Two years later, the Federal Communications Commission ordered TV and radio stations to provide free air time for anti-smoking public service announcements. Cigarette commercials were banned in 1971.
Still, progress was slow. Warner recalled teaching at the University of Michigan in 1972, when nearly half the faculty members at the school of public health were smokers. He was one of them.
“I felt like a hypocrite and an idiot,” he said. But smoking was still the norm, and it was difficult to quit, he said.
The 1970s also saw the birth of a movement to protect nonsmokers from cigarette fumes, with no-smoking sections on airplanes, in restaurants and in other places. Those eventually gave way to complete smoking bans. Cigarette machines disappeared, cigarette taxes rose, and restrictions on the sale of cigarettes to minors got tougher.
Tobacco companies also came under increasing legal attack. In the biggest case of them all, more than 40 states brought lawsuits demanding compensation for the costs of treating smoking-related illnesses. Big Tobacco settled in 1998 by agreeing to pay about $200 billion and curtail marketing of cigarettes to youths.
In 1998, while the settlement was being completed, tobacco executives appeared before Congress and publicly acknowledged for the first time that their products can cause lung cancer and be addictive.
Experts agree the Terry report clearly triggered decades of changes that whittled the smoking rate down. But it was based on data that was already out there. Why, then, did it make such a difference?
For one thing, the drumbeat about the dangers of smoking was getting louder in 1964, experts said. But the way the committee was assembled and the carefully neutral manner in which it reached its conclusion were at least as important, said Dr. Tim McAfee, director of the Office on Smoking and Health at the Centers for Disease Control and Prevention.
At the same time, he and others said any celebration of the anniversary must be tempered by the size of the problem that still exists.
Each year, an estimated 443,000 people die prematurely from smoking or exposure to secondhand smoke, and 8.6 million live with a serious illness caused by smoking, according to the CDC.
Donald Shopland finds that depressing.
Fifty years ago, he was a 19-year-old who smoked two packs a day while working as a clerk for the surgeon general’s committee. He quit cigarettes right after the 1964 report came out, and went on to a long and distinguished public health career in which he wrote or edited scores of books and reports on smoking’s effects.
“We should be much further along than we are,” the Georgia retiree lamented.
http://www.startribune.com/lifestyle/health/238716101.html?page=all&prepage=1&c=y#continue

States spend 2% of tobacco settlement money on cessation

WASHINGTON, Dec. 19 (UPI) — Fifteen years after the $246 billion tobacco legal settlements were reached most states are not spending much on tobacco cessation, U.S. researchers say.
Tobacco use is the top cause of preventable U.S. death, killing more than 400,000 Americans and costing the nation $96 billion in healthcare bills each year and most states involved in the settlements promised a significant portion of the money would be spent on programs to prevent children and teens from smoking and help smokers quit.
The report, entitled “Broken Promises to Our Children: The 1998 State Tobacco Settlement 15 Years Later,” was released by the Campaign for Tobacco-Free Kids, American Heart Association, American Cancer Society Cancer Action Network, American Lung Association, Robert Wood Johnson Foundation and Americans for Nonsmokers’ Rights said the states lied.
Over the past 15 years, the states received $391 billion in tobacco-generated revenue — $116.3 billion from the tobacco settlement and $274.5 billion from tobacco taxes. However, they spent only 2.3 percent of their tobacco money, or $8.9 billion, on tobacco prevention programs, the report said.
For fiscal year 2014, the states will collect $25 billion in tobacco revenues, but will spend only 1.9 percent of it — or $481.2 million — on tobacco prevention programs. This year’s funding is a slight increase from a year ago, but it fails to restore deep cuts that have reduced tobacco prevention funding by a third since 2008.
The states currently provide just 13 percent of the tobacco prevention funding recommended by the Centers for Disease Control and Prevention with only North Dakota and Alaska funding tobacco prevention programs at the CDC-recommended level.
Only four other states — Delaware, Wyoming, Hawaii and Oklahoma — provide even half the recommended funding.
http://www.upi.com/Health_News/2013/12/19/States-spend-2-of-tobacco-settlement-money-on-cessation/UPI-73441387435282/#ixzz2nxbwftkL

National Report: North Dakota Ranks 1st in Protecting Kids from Tobacco

Washington, DC – Fifteen years after the 1998 state tobacco settlement, North Dakota ranks 1st in the nation in funding programs to prevent kids from smoking and help smokers quit, according to a national report released today by a coalition of public health organizations.
North Dakota currently spends $9.5 million a year on tobacco prevention and cessation programs, which meets the funding level recommended by the U.S. Centers for Disease Control and Prevention (CDC).  North Dakota is one of only two states, along with Alaska, that currently fund tobacco prevention programs at CDC-recommended levels.
Other key findings for North Dakota include:
•        North Dakota this year will collect $64.3 million in revenue from the 1998 tobacco settlement and tobacco taxes and will spend just 14.8 percent of it on tobacco prevention programs.
•        The tobacco companies spend $27.9 million a year to market their products in North Dakota. This is 3 times what the state spends on tobacco prevention.
The annual report on states’ funding of tobacco prevention programs, titled “A Broken Promise to Our Children: The 1998 State Tobacco Settlement 15 Years Later,” was released by the Campaign for Tobacco-Free Kids, American Heart Association, American Cancer Society Cancer Action Network, American Lung Association, the Robert Wood Johnson Foundation and Americans for Nonsmokers’ Rights.
A 2008 voter-approved ballot initiative requires North Dakota to fund a tobacco prevention and cessation program at the CDC-recommended level.  In just two years, from 2009 to 2011, North Dakota reduced smoking among high school students by 13.5 percent (from 22.4 percent to 19.4 percent who smoke).
North Dakota made further progress in 2012 when voters overwhelmingly approved a comprehensive smoke-free law that applies to all workplaces, including restaurants and bars.  Health advocates are urging North Dakota leaders to also increase the state’s cigarette tax, which at just 44 cents per pack ranks 46th in the nation and is well below the state average of $1.53 per pack.
“We applaud North Dakota for its strong commitment to preventing kids from smoking, helping smokers quit and protecting all its citizens from harmful secondhand smoke,” said Matthew L. Myers, President of the Campaign for Tobacco-Free Kids. “North Dakota is making a smart investment in tobacco prevention that will save lives and save money by reducing tobacco-related health care costs. To further reduce tobacco use, North Dakota’s leaders should also increase the tobacco tax.”
In North Dakota, 19.4 percent of high school students smoke, and 400 more kids become regular smokers each year. Tobacco annually claims 800 lives and costs the state $247 million in health care bills.
Nationally, the report finds that most states are failing to adequately fund tobacco prevention and cessation programs. Key national findings of the report include:
•        The states this year will collect $25 billion from the tobacco settlement and tobacco taxes, but will spend just 1.9 percent of it – $481.2 million – on tobacco prevention programs. This means the states are spending less than two cents of every dollar in tobacco revenue to fight tobacco use.
•        States are falling woefully short of the CDC’s recommended funding levels for tobacco prevention programs. Altogether, the states have budgeted just 13 percent of the $3.7 billion the CDC recommends.
There is more evidence than ever before that tobacco prevention and cessation programs work to reduce smoking, save lives and save money. Florida, which has a well-funded, sustained tobacco prevention program, reduced its high school smoking rate to just 8.6 percent in 2013, far below the national rate. One study found that during the first 10 years of its tobacco prevention program, Washington state saved more than $5 in tobacco-related hospitalization costs for every $1 spent on the program.
Tobacco use is the number one cause of preventable death in the U.S., killing more than 400,000 people and costing $96 billion in health care bills each year. Nationally, about 18 percent of adults and 18.1 percent of high school students smoke.
More information, including the full report and state-specific information, can be obtained at www.tobaccofreekids.org/reports/settlements.
 

North Dakota No. 1 in protecting kids from tobacco

By: Helmut Schmidt, INFORUM
WASHINGTON – North Dakota is ranked first in the nation in funding programs to prevent kids from smoking and to help smokers quit, according to a report released Monday by a coalition of public health organizations.
The state will spend $9.5 million in fiscal year 2014 on tobacco prevention and cessation programs. That’s 102.3 percent of the amount recommended by the U.S. Centers for Disease Control and Prevention.
Alaska is ranked second, spending $10.1 million, or 94.8 percent of the CDC-recommended amount.
“I think this is something that our state should be hugely proud of,” said Holly Scott, tobacco prevention coordinator for Fargo Cass Public Health.
The high school smoking rate was in the 40 percent range in the late 1990s and early 2000s, Scott said.
By 2011, the percentage of high school students smoking had dropped to 19.4 percent. It was even lower in the Fargo area at 13.1 percent, Scott said.
“That’s enormous in terms of the amount of progress made,” she said.
Other states spending at least half of CDC’s recommended level are:

  • No. 3 Delaware, $8.3 million, 59.9 percent.
  • No. 4 Wyoming, $5.1 million, 56.7 percent.
  • No. 5 Hawaii, $7.9 million, 51.7 percent.
  • No. 6 Oklahoma, $22.7 million, 50.5 percent.

Minnesota is 12th in the nation, spending $21.3 million a year, or 36.4 percent of the funds recommended by CDC.
South Dakota follows at 13th, spending $4 million, or 35.4 percent of the CDC-recommended level.
“Right now we know that here in Minnesota, tobacco use is still a problem,” said Keely Ihry, the Partnership for Health tobacco coordinator for Clay County Public Health.
Ihry oversees the program for Clay, Wilkin, Becker and Otter Tail counties.
Ihry said among high school seniors in Clay County, 32 percent of males and 21 percent of females use tobacco.
In Becker County, 38 percent of males and 24 percent of females use tobacco.
In Wilkin County, 50 percent of males and 13 percent of females use tobacco. And in Otter Tail County, 46 percent of males and 26 percent of females use tobacco.
In North Dakota, a 2008 voter-approved initiative requires the state to fund its tobacco prevention and cessation program at the CDC-recommended level.
North Dakota’s program has seen success. From 2009 to 2011, the state reduced smoking among high school students from 22.4 percent to 19.4 percent.
In 2012, North Dakota voters also overwhelmingly approved a smoke-free law that applies to all workplaces, including restaurants and bars.
The annual report on states’ funding of tobacco prevention programs, titled “A Broken Promise to Our Children: The 1998 State Tobacco Settlement 15 Years Later,” was released by the Campaign for Tobacco-Free Kids, American Heart Association, American Cancer Society Cancer Action Network, American Lung Association, the Robert Wood Johnson Foundation and Americans for Nonsmokers’ Rights.
The states will collect $25 billion this year from the tobacco settlement and tobacco taxes, but will spend just 1.9 percent of it – $481.2 million – on tobacco prevention programs. This means the states are spending less than 2 cents of every dollar in tobacco revenue to fight tobacco use, the report said.
http://www.inforum.com/event/article/id/420703/group/News/

Lawmakers updated on efforts to fight tobacco use

By Nick Smith
BISMARCK, N.D. _ A statewide effort to fight tobacco use is spending about $55.60 on each North Dakota adult who uses tobacco products, the director of the agency behind that effort says.
State lawmakers got an update Wednesday from Jeanne Prom, the executive director of the North Dakota Center for Prevention and Control Policy, on how much her agency spends.
With an average annual budget of about $10.7 million, it amounts to $55.59 spent on each adult tobacco user in the state, or $14.57 per capita, Prom told lawmakers. But she said that is much less than the tobacco industry spends on marketing.
“It takes a lot more to market it (tobacco),” Prom said.
In North Dakota, it cost approximately $40 per capita in 2009-11 — the most recent available estimate — for the tobacco industry to market its products, Prom said. She called it a positive sign that combating tobacco use is cheaper than marketing it.
The tobacco prevention center, using an annual state Health Department survey, estimated the state’s adult tobacco-using population at 192,105.
Krista Fremming, Tobacco Prevention and Control Program director for the state Health Department, said the department had expanded its advertising efforts for the NDQuits program this past June and July, something that had not been done in years past. The advertising campaign cost approximately $467,000.
The NDQuits program pushes to keep people from starting to smoke and helping people quit, using online sources, counselors and other services.
Fremming said the program served 341 people in July, up from 255 in June. But she said the program has not seen an increase in the number of people who use or want to quit e-cigarettes, possibly because people mistakenly think they are safe.
“There has been a lot of activity over the past couple of years … regarding e-cigarettes being used as a cessation aid,” Fremming said. “The truth is, we just don’t know if they’re safe.”
Fremming added that e-cigarettes are not approved by the U.S. Food and Drug Administration for that purpose. She said a large number of NDQuits members who reported e-cigarette use also smoke traditional cigarettes.
“A large portion of the upcoming NDQuits media campaign will focus on reaching smokeless and dual tobacco users,” Fremming said.
http://bismarcktribune.com/news/local/govt-and-politics/lawmakers-updated-on-efforts-to-fight-tobacco-use/article_7275a6e4-41ac-11e3-b615-0019bb2963f4.html

Marlboro Maker Altria 3Q Profit More Than Doubles

By MICHAEL FELBERBAUM AP, Tobacco Writer

Altria Group’s third-quarter profit more than doubled as the Marlboro maker paid out less in legal settlements and freed itself from charges related to paying off debt early last year.

Higher prices and volumes for both cigarettes and smokeless tobacco bolstered its underlying results, which topped Wall Street expectations.

The owner of the nation’s biggest cigarette maker, Philip Morris USA, posted earnings Thursday of $1.39 billion, or 70 cents per share. That’s up from $657 million, or 32 cents a share, in the year-ago period, which included a $874 million charge for a loss on early extinguishment of debt.

Excluding one-time items, earnings were 65 cents per share, beating analyst estimates by a penny. That excludes a $145 million benefit from credits for disputed payments under the 1998 Master Settlement Agreement in which some cigarette makers are paying states for smoking-related health care costs.

Revenue for the Richmond, Va., company, excluding excise taxes, increased 6.6 percent to $4.8 billion. Analysts expected $4.53 billion, according to FactSet.

Its shares fell 13 cents to $36.25 in early morning trading Thursday.

Volumes increased more than one percent to 34.1 billion cigarettes compared with a year ago. Adjusting for trade inventory changes, cigarette volumes fell 3 percent during the quarter, compared with a total industry decline of 3.5 percent.

Marlboro volumes grew 1.5 percent, while volume for its other premium brands fell by more than 7 percent, and volumes for discount cigarette brands like L&M increased 5 percent.

Its share of the U.S. retail market rose 0.2 percentage points to 50.7 percent. Marlboro’s share of the U.S. market was flat at 43.7 percent.

The Marlboro brand has been under pressure from competitors and lower-priced cigarette brands amide economic uncertainty and high unemployment.

That’s on top of the tax hikes, smoking bans and a social stigma that have made the cigarette business tougher.

The Marlboro brand sold for an average of $5.86 per pack during the third quarter, compared with an average of $4.36 per pack for the cheapest brand.

The company has introduced several new products with the Marlboro brand, often with lower promotional pricing, to try to keep the brand growing and to lure smokers away from its competitors.

Altria and others are focusing on cigarette alternatives — such as electronic cigarettes, cigars, snuff and chewing tobacco — for future sales growth because the decline in cigarette smoking is expected to continue.

After launching its first electronic cigarette under the MarkTen brand in Indiana in August, Altria said Thursday that its NuMark subsidiary plans to expand into Arizona in December.

Volumes of Altria’s smokeless tobacco brands such as Copenhagen and Skoal rose 9.5 percent from a year ago. Adjusting for an extra shipping day and trade inventory changes, Altria says its smokeless volumes grew about 4 percent. For the quarter, the company’s smokeless tobacco brands had about 55 percent of the market, though smokeless tobacco is a tiny market compared with cigarettes.

Volumes for its Black & Mild cigars rose 6 percent during the quarter.

Altria Group Inc. also owns a wine business, holds a voting stake in brewer SABMiller, and has a financial services division.

 http://abcnews.go.com/Business/wireStory/marlboro-maker-altria-3q-profit-doubles-20666767

15 Years Later, Where Did All The Cigarette Money Go?

by NPR STAFF
Fifteen years after tobacco companies agreed to pay billions of dollars in fines in what is still the largest civil litigation settlement in U.S. history, it’s unclear how state governments are using much of that money.
So far tobacco companies have paid more than $100 billion to state governments as part of the 25-year, $246 billion settlement.
Among many state governments receiving money, Orange County, Calif., is an outlier. Voters mandated that 80 percent of money from tobacco companies be spent on smoking-related programs, like a cessation class taught in the basement of Anaheim Regional Medical Center.
“So go ahead and take a minute or two to write down reasons why you want to quit and we’ll talk about them in just a bit,” Luisa Santa says at the start of a recent session.
Every year since 1998, this program has been funded by money from the tobacco settlement. The five-part class is free for anyone living or working in Orange County. When they sign up, participants get a “quit kit” full of things like toothpicks and gum. And, if they come for at least three of the five sessions, they get a free two-week supply of nicotine patches.
Making Big Tobacco Pay
In the mid-1990s, Mississippi was the undisputed leader on the tobacco issue. In 1994, Mike Moore, the state attorney general, filed the first state lawsuit against big tobacco.
Individual lawsuits by smokers failed because courts held people responsible for their decision to smoke, but Moore argued that Mississippi shouldn’t be forced to pay the costs of treating smoking-related diseases.
“Things such as lung cancer, heart disease, emphysema, low-birth-weight babies and others, we have to pay,” Moore told NPR in a 1994 interview. “The state is obligated to pay for those for our citizens that are not covered in other ways, and we feel like they’re caused by the tobacco products.”
Moore argued that tobacco companies should pay for medical bills, and eventually the courts agreed. That agreement said no ads and no targeting youth. Popular advertising characters like Joe Camel and the Marlboro Man were killed off as a result.
The settlement left the tobacco industry immune from future state and federal suits, but the agreement said nothing about how states had to spend the money. Looking back on it, Moore remembers it was a long slog.
“It was not an easy task,” Moore tells NPR’s Arun Rath. “When we filed our case here in 1994, my governor actually sued me to try to stop the tobacco case.”
The tobacco companies sued Moore as well, he says, and it went all the way to the Supreme Court. “It took me two years before I even had five states who would agree to join the efforts.”
Moore now serves on the board of directors of the American Legacy Foundation, a group created by the tobacco settlement. The organization’s mission is to create national anti-smoking campaigns, like the famous Truth ads.
The tobacco settlement included money specifically to fund public service announcements, but Moore says most of the settlement money came with no strings attached, and that has made it impossible to hold states accountable.
In Mississippi, where the settlement money was put into a trust fund, a lot of it was spent on things other than smoking prevention and health care, Moore says.
“What happened as the years went by, legislators come and go, and governors come and go … so we got a new governor and he had a new opinion about the tobacco trust fund,” he says. “So a trust fund that should have $2.5 billion in it now doesn’t have much at all, and unfortunately that’s one of my biggest disappointments.
And it’s not just Mississippi; Moore says that all across the country hundreds of millions of dollars have gone to states, and the states have made choices not to spend the money on public health and tobacco prevention.
It’s not all bad news in Mississippi, however; Moore says money that was spent on tobacco prevention has helped reduce teen smoking by more than 50 percent in just five years. Adult smoking has been reduced by about 25 percent, and he says it is that way around much of the U.S. as well.
“We need to continue the vigilance,” he says. “We have new products coming out — e-cigarettes and the like — we just need to talk the states into spending the money to do something about it.”
The Settlement Aftermath
Myron Levin covered the tobacco industry for the Los Angeles Times for many years and is also the founder of the health and safety news site Fair Warning. He says talking states into spending settlement money on tobacco prevention is a tough sell.
To show the settlement was not just a big money grab, Levin says, there was definitely a feeling that states had a moral obligation to spend at least a sizeable chunk of money on programs to help people quit smoking and to prevent kids from starting.
“So it was understood without being codified into the agreement that states would make a big investment in this,” he says. “They haven’t.”
To help guide state governments, in 2007 the Centers for Disease Control and Prevention recommended that states reinvest 14 percent of the money from the settlement and tobacco taxes in anti-smoking programs. But most state governments have decided to prioritize other things: Colorado has spent tens of millions of its share to support a literacy program, while Kentucky has invested half of its money in agricultural programs.
“What states have actually done has fluctuated year by year … but it’s never come close to 14 percent,” Levin says. “There are some fairly notorious cases of money being used for fixing potholes, for tax relief [and] for financial assistance for tobacco farmers.”
Levin says some states don’t have any money coming in anymore because they securitized their future payments with an investor in order to receive a lump sum. That lump sum often went into their state’s general fund.

For its part, the tobacco industry has managed to weather the settlement fairly well. New products like smokeless tobacco and electronic cigarettes have put many companies on the road to big sales, Levin says.
“When you are supplying the most widely used addictive product in the world, you have certain advantages,” he says. “Their cash flows remain enormous.”
One indirect effect of the settlement, Levin says, is legislation that gave the Federal Drug Administration control over tobacco products. President Obama signed the law in 2009.
“Something that could happen, although I wouldn’t put a lot of money on it, is they could ratchet down the allowable levels of nicotine in cigarettes to a level that is essentially nonaddictive,” he says. “That would be a total game changer.”
Nonaddictive cigarettes would indeed be a game changer for people like Susan Hallock, an attendee at the class in Orange County, who says she desperately wants to quit.
“I feel ashamed,” she says. “I feel like I have to hide my hand with the cigarette in it.”
But the nicotine keeps her coming back, over and over. “I’ll smoke like six to eight months and quit. Or a month and quit. It’s just different every time.”
She’s hoping that this time, with the help of the free class, she’ll be successful. And she has a real chance: The program has a 50 percent success rate for adults like her.
http://www.npr.org/2013/10/13/233449505/15-years-later-where-did-all-the-cigarette-money-go