Money from the tobacco settlement has been spent, but the killer industry thrives

In 1998, a massive settlement was reached between the nation’s four largest tobacco companies and attorneys general from 46 states and territories but causing cancer remains a profit center for the industry that essentially makes money by killing people.

 Of the 10 films nominated for the Oscar’s top prize, all except “Barbie” feature smoking, according to Truth Initiative’s sixth annual analysis of tobacco imagery in top entertainment, which finds a surge in on-screen tobacco use across the most popular streaming shows among 15- to 24-year-olds, music videos, as well as youth-rated and Oscar-nominated movies.

Financial disclosure reports filed by Phil Murphy while he was the US ambassador to Germany showed that before he became New Jersey’s governor, the Wall Street millionaire owned stocks in all the major tobacco companies. Since he entered the State House, Murphy’s investments have been hidden in a blind trust.

This Master Settlement Agreement (MSA) aimed to address the devastating effects of tobacco use and provide compensation for the costs associated with smoking-related illnesses. However, recent reports have shed light on how the money from this settlement has been utilized and the critical need for more effective allocation to combat tobacco use.

The MSA required tobacco companies to pay billions of dollars to states and territories annually.

This money was intended to cover healthcare costs related to smoking-related diseases and to fund programs aimed at preventing and reducing tobacco use, especially among youth.

Unfortunately, the reality is that many states have not fully utilized these funds for their intended purpose, leading to widespread criticism and concerns about the impact on public health but the tobacco industry is a picture of business fitness in good condition, a robust example of corporate strength and vigor.

Philip Morris International Inc, Altria Group Inc, British American Tobacco Plc, ITC Ltd, and Japan Tobacco Inc were the top five tobacco companies in the world in 2023 by market capitalization.

The top 10 tobacco companies in the world had a combined market cap of $453 billion as of Mar 31, 2023, with Philip Morris International Inc having the highest at $151 billion, followed by Altria Group Inc $80 billion, and British American Tobacco Plc $78 billion, while Vector Group Ltd is the lowest at $2 billion.

According to a report released by the Campaign for Tobacco-Free Kids, American Cancer Society-Cancer Action Network, American Heart Association, American Lung Association, Americans for Nonsmokers’ Rights, Robert Wood Johnson Foundation, and Truth Initiative, the misuse of tobacco settlement funds continues to be a significant issue.

The report, titled “Broken Promises to Our Children: A State-by-State Look at the 1998 Tobacco Settlement,” highlights several key findings:

1. Funding Shortfalls: Many states are not spending a sufficient amount of money on tobacco prevention and cessation programs. Only California comes close to providing the CDC-recommended funding for these programs, while the majority of states fall far short of the recommended levels. New Jersey ranked 36th, spending less than seven percent of the amount recommended by the CDC.
2. Lack of Progress: Despite the substantial funds available from the tobacco settlement, progress in reducing tobacco use has been limited. The percentage of high school students using tobacco products remains high, driven in part by the surge in e-cigarette use among youth.
3. Industry Influence: Tobacco companies continue to spend billions on marketing and advertising, far outweighing the funds allocated for tobacco prevention programs. This disproportionate spending contributes to the ongoing challenge of combating tobacco use.
4. State Rankings: The report ranks states based on their efforts to reduce tobacco use and allocate settlement funds appropriately. California is highlighted as a positive example, while states like Connecticut are criticized for not spending any funding on tobacco prevention programs.

The findings of this report have raised concerns among health organizations and advocates, who are calling for urgent action to address these issues.

They emphasize the need for states to prioritize tobacco prevention programs, implement stricter regulations on tobacco products, and allocate settlement funds effectively to save lives and protect public health.

In addition to state-level challenges, there are also ongoing efforts at the federal level to address tobacco use. The report calls on the federal government to enforce regulations on e-cigarette manufacturers, prohibit menthol cigarettes and flavored cigars, and issue graphic cigarette warnings.

Overall, the money from the tobacco settlement represents a crucial resource in the fight against tobacco use, but its impact is limited without proper allocation and effective strategies to reduce smoking rates, especially among young people.

Advocates urge policymakers to prioritize public health and take decisive action to end tobacco use once and for all.

The Toll of Tobacco in New Jersey

The toll of tobacco use in New Jersey is staggering, with significant impacts on both public health and the economy. According to data from the Campaign for Tobacco-Free Kids, here are some key facts about tobacco use in New Jersey:

• High School Students: Approximately 3.7% of high school students in New Jersey smoke, accounting for about 17,000 students. Additionally, a concerning 21.6% of high school students use e-cigarettes.
• Cigar Use: Among male high school students, 9.8% smoke cigars, while female use is significantly lower.
• First-Time Smokers: Each year, an estimated 13,700 kids under 18 try cigarettes for the first time in New Jersey.
• Adult Smoking: About 10.4% of adults in New Jersey smoke, totaling approximately 755,800 individuals.
• Cancer Deaths: A significant proportion of cancer deaths in New Jersey, approximately 25.8%, are attributable to smoking.

These statistics highlight the widespread impact of tobacco use across different age groups in the state. Furthermore, the economic costs associated with smoking in New Jersey are substantial:

• Healthcare Costs: Smoking directly causes annual healthcare costs of $4.72 billion in New Jersey.
• Medicaid Costs: Smoking-related Medicaid costs in New Jersey amount to $1.25 billion annually.
• Tax Burden: Residents bear a state and federal tax burden of $992 per household due to smoking-caused government expenditures.
• Productivity Losses: Smoking-related productivity losses in New Jersey reach $8.9 billion, impacting the workforce and economy.

These figures underscore the urgent need for comprehensive tobacco control measures, effective prevention programs, and targeted interventions to reduce smoking rates and improve public health outcomes in New Jersey.