Tobacco companies reached a settlement with the Massachusetts Attorney General’s Office, the largest agreement in recent years. Photo credit: Nick Youngson, CC BY-SA 3.0, Pix4free.
The Massachusetts Attorney General’s Office (AGO) finalized a landmark US$600 million settlement with major tobacco companies, making it the largest agreement the office has seen in recent years. This fiscal year, the US$600 million will be added to the state’s general fund, and the companies will continue to contribute additional payments amounting to tens of millions of dollars annually going forward.
The agreement, representing the Commonwealth, stems from the 1998 Master Settlement Agreement (MSA). This settlement required major tobacco companies to stop marketing to children, end other “harmful” advertising practices, and pay billions of dollars annually to states to cover smoking-related medical costs.
Accusing some MSA signatories of withholding "substantial funds," AGO moved disputes over hundreds of millions of dollars into arbitration. Seven of those past disputes for 2005 through 2011 are now resolved, resulting in the latest settlement.
In addition to the US$600 million payment, the settlement stipulates that the companies will reduce the amount they withhold in future years due to a specific adjustment in the MSA. This means Massachusetts will receive increased annual payments going forward.
In a press statement, AGO said enforcing the MSA is part of its continued commitment to enhancing public health and that it “continues to prioritize addressing youth nicotine use, including the use of e-cigarettes, particularly as new products are brought to market that incite nicotine addiction.”