The tobacco settlement agreement of 1997

Social Ethics -- Tobacco Regulation

TOBACCO DEAL of 1997: SOCIAL and ETHICAL ISSUES

Who were the key stakeholders involved, or affected by the negotiations for a tobacco deal and what were their interests. To what degree were the interests of the various stakeholders met by 1997 settlement? By the 1998 settlement?

The actual parties to the lawsuits that eventually resulted in the deal accepted in 1997 and ultimately settled in 1998 were the major American tobacco manufacturers, such as the American Tobacco Company, Philip Morris, R.J. Reynolds, Brown & Williamson, Liggett & Meyers, the Tobacco Institute, among others, and the states attorneys general of several states, including Arkansas, Maryland, and Virginia.

Since the individual state law suits were settled at the federal level, it now applies to the interests of all 50 states and to all their citizens. The settlement called for initial payments totaling $200 billion to the states with subsequent payments totaling another

168 billion paid out more gradually over 25 years. Critics point out that the settlement fell short of what is necessary to address the magnitude of harm caused by tobacco smoking in society. According to them, its provisions are still too permissive with respect to its limits on the authority of the Food and Drug Administration (FDA) to regulate nicotine as a drug and also with respect to allowing certain advertising mechanisms for the tobacco industry that would have been prohibited under earlier versions of an agreement that was not passed by Congress earlier (NYT 1997).

2. Should the FDA regulate tobacco? What are the key arguments for and against involvement of the FDA in restricting or banning the sale or promotion of tobacco products?

Testimony and other evidence discovered in connection with the tobacco suits that precipitated the 1997 settlement established that nicotine content of cigarettes is precisely controlled and adjusted for the purpose of inducing addiction rather than for taste" as previously maintained by tobacco industry executives in congressional hearings (Lehrer 1998). Tobacco companies regulate nicotine by growing specific strains of high- nicotine tobacco in foreign countries secured by patents granted in those countries, for large-scale importation for sale in the United States; they also artificially manipulate nicotine content in other ways, such as by reintroducing nicotine into tobacco plant by- products processed into cheaper tobacco (FPO 2007). They also secured patents for the process of combining ammonia and tobacco, because ammonia alters the chemical composition of tobacco smoke to make it more addictive in a manner similar to the role of ammonia in producing freebase cocaine smoke (STIC 1998).

The only argument against FDA regulation is that nicotine is not intended to treat health condition or disease, but by virtue of the way nicotine is used to alter human behavior with respect to nicotine consumption, tobacco products should be regulated by the FDA. This is especially true in light of the massive and uncontroverted evidence of the magnitude of medical harm and financial cost to society of treating the known health consequences of tobacco use in the manner that the products are intended to be used.

3. What mechanisms of political influence had the tobacco industry historically used? Did the tobacco industry influence the public policy process legitimately, or did it have too much influence?

Historically, the tobacco industry is probably the single most notorious example of the ability of large and well-funded business concerns to influence government policy and industry regulation. Through political contributions, tobacco industry lobbyists managed to undermine regulation that threatened their profits, measured in billions of dollars for decades. As late as 1994, representatives from the biggest tobacco companies still argued before Congress that no evidence established a link between tobacco use and human illness. At least part of the motivation for settling the lawsuits that initiated the 1997 arrangement was the disclosure by one industry executive that industry representatives had perjured themselves by contradicting some of their own internal statements about the medical consequences of tobacco use and their efforts to manipulate nicotine to maximize the addictive nature of their products (STIC 1998).

4. Was it ethical for the tobacco industry to continue to market cigarettes, even after evidence emerged that smoking caused lung cancer and other illnesses?

Purely from a rule utilitarian and personal rights perspective, it is difficult to justify so-called vice legislation, because governmental paternalism conflicts with individual freedoms of adults to make choices for themselves. From a more general functional utilitarianism perspective and general principles of justice in society, certain personal vices require legislation, simply because even their personal use harms society as a whole (Taylor, 1989). For example, tobacco use in public is a direct threat to the health and welfare of others, by virtue of exposure to second-hand smoke. Even more importantly, the aggregate cost in medical expenses ultimately borne by public health systems and insurers depletes public resources.

Ethically, there is no justification for manufacturing a product known to cause as much harm and human suffering as tobacco, when used exactly as intended by its manufacturers. The mere fact that tobacco manufacturers purposely add an ingredient designed to make their product addictive creates an ethical problem much larger than simply providing a product whose use is a matter of choice rather than clinical addiction.

5. Is new tobacco legislation needed? What would be the key elements of such a legislation?

The 1997/98 settlement falls short of what is required for the benefit of public welfare: instead of limiting only advertising through cartoon characters, tobacco should be banned from advertisements depicting its use by human characters as well, and also from any association with professional sports.