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Legalized crack.

By Chris Rangel MD ⋅ January 19, 2007 ⋅  Email this post ⋅  Print this post ⋅ Post a comment

How the tobacco settlement has failed.

Remember back in 1994 when seven CEOs representing the largest tobacco companies testified before the House Subcommittee on Health and the Environment and stated, quite clearly, their beliefs that nicotine is NOT addictive? Well, according to a new study, these same tobacco companies thought it important enough to increase the amount of this allegedly non-important, non-addictive substance in their products by 11% from 1998 to 2005.

Not too surprisingly the documented increase came on the heels of a massive $246 Billion 1998 “Master Settlement Agreement” (MSA) between 4 of the largest tobacco companies and 46 states (the total amount is being distributed to the states over 25 years on the pretext of reimbursing the states for the health costs of cigarette use). This latest news is more evidence that the MSA was and is not worth a disgusting jar of year old cigarette butts.

The MSA had “little effect” on cigarette advertising especially that directed towards teenagers which it was intended to limit. It also appears that the big tobacco companies simply passed the costs of the MSA on to their addicted customers to the tune of about $1.28 per pack from 1998 to 2002. The net result is essentially a tax on tobacco addicts since the MSA allowed the payments to the states to be tied to sales. As tobacco product sales decline so to do the settlement payments each year. Yet, the MSA doesn’t even appear to have had any significant effect on the slow rate of decline in tobacco usage which began in the 1970s, decades before the MSA!

What the MSA did do was to let big tobacco off the hook and was a huge gift in disguise. It provided tobacco companies some protection against current and future lawsuits and gave them an excuse to raise prices to counter declining sales. The MSA created an unholy and ironic alliance between big tobacco and the states since both now have a vested interest in keeping tobacco sales up. The MSA was designed to do this by allowing the tobacco companies to essentially fix prices and reduce competition. Best of all, the MSA gave the Republican controlled Congress a great excuse to avoid any attempt to pass legislation to regulate tobacco products.

The 1998 MSA was the biggest consumer product lawsuit of all time and is one of the best examples of how litigation as a substitute for legislation fails to protect consumers or especially in this case, to compensate those injured by harmful products. The end results of the MSA are typical for this type of litigation; The states got some but not full compensation for tobacco related health costs, the tobacco companies got richer, some lawyers got massively richer, tobacco remains unregulated and dangerous, and the consumer/addict got screwed out of $1.28 a pack.

Almost a decade after the MSA and we find that cigarettes have 11% MORE nicotine in them and tobacco products continue to cause over 400,000 premature deaths each year. Tobacco remains the most dangerous and least regulated consumer product in the US. For a country obsessed with consumer product safety, this general lack of concern over the dangers of tobacco use and addiction is a glaring and bizarre omission.

Maybe it’s because tobacco has been around for so long (thousands of years) and the dangers known for so long (since the 1950s) that we don’t pay much attention given our modern 24 hour news cycle collective memories. Maybe it’s because only 2 to 3 out of every 10 of us regularly use tobacco and we have a tolerance for allowing people to do dangerous things as long as 1.) The dangers are known and 2.) It’s not dangerous to anyone else (not everyone believes in the effects of second hand smoke). Maybe it’s because tobacco takes so long to kill.