Proposed National Tobacco Deal Is Flawed From Public Health Perspective, New Report Concludes

The establishment through legislation of a national tobacco control policy based on a widely publicized negotiated deal between the tobacco industry and some state attorneys-general would be less effective than no federal legislation at all in promoting public heath and reducing smoking, concludes a new analysis.

According to Stanton A. Glantz, a prominent University of California San Francisco tobacco researcher, and his colleagues, Brion Fox JD, and James M. Lightwood, PhD, the continued use of already established federal authority, the pursuit of class-action and individual lawsuits, and the preservation of the rights of states and local jurisdictions to enact and enforce their own tobacco-control measures would have a more beneficial impact on public health.

The public-health-promoting components of the deal can be achieved without granting the industry immunity from litigation or any other concessions, the researchers report. “There are no barriers other than a lack of political will to adopting the beneficial provisions of the deal, the analysis concludes.

The UCSF researchers, from the Institute for Health Policy Studies and the Division of Cardiology at UCSF, published the report on February 12, 1998, on the UCSF library web site (http://galen.library.ucsf.edu/tobacco/ustl/). Glantz also presented the study’s findings at the Commonwealth Club in San Francisco.

Summary of the Proposed Deal
The proposed deal provides for payments from the industry, an advertising campaign to discourage youth from smoking, and other public health programs. It is favored by some public health proponents as a means to control tobacco and by the industry as a means of limiting liability. Although several commentators have said the deal is “dead,” it still is likely to serve as the blueprint for any deal that may be negotiated in Congress, according to the UCSF researchers.

The proposed deal would protect the tobacco industry from virtually all litigation and thereby from disclosures of wrongdoing that can occur during the legal process, according to the report. Providing the industry with liability protection may preempt consumer protection and antitrust laws in every state, the report states.

Also, the analysis concludes, the deal is anticompetitive, because it ensures the profitability of the tobacco industry while erecting significant barriers to entry by new companies that may develop and market a less harmful product.

Furthermore, provisions intended to induce the industry to help reduce smoking by minors actually offer no effective financial incentive for the industry to do so, according to the analysis.

From an economic perspective, while the payments the tobacco industry would make under the deal, about $368 billion, appear to be large, they are minimal compared to the actual cost to society posed by tobacco addiction, Glantz says. According to the analysis, “If the deal is designed to reimburse society for all damage done by tobacco, it provides less than 10 cents on the dollar.”

“The taxpayers will absorb a substantial fraction of the nominal costs to industry, since tobacco-industry payments are tax deductible,” the report notes. “The tax subsidy provided to the tobacco industry by the deal, amounting to about $4 billion a year, dwarfs both the current tobacco price-support program and the funds the deal makes available for public-health programs.”

Effects of Limiting Liability
The tobacco industry has insisted on liability limits as a condition for supporting congressional action. The deal would eliminate many types of lawsuits against the tobacco companies and impose changes in rules of evidence and civil procedure that would make it more difficult to pursue the few individual lawsuits that would remain, the report concludes. Incentives that the civil justice system provides for the tobacco companies to modify their behavior in essence would be eliminated, according to the analysis.

The researchers suggest that the effects of limiting liability may have potential implications in other countries, which are now initiating their own litigation against tobacco companies.

“According to the Federal Trade Commission’s analysis, the industry will avoid about $150 billion to $200 billion in liability at a cost of less than $11 billion,” the report notes.

Although many public-health groups, including the American Medical Association and the American Lung Association, oppose the idea of limiting tobacco company liability, the industry is vigorously pursuing this goal.

“The tobacco industry is increasing its already substantial presence in Congress through increased lobbying efforts and increased campaign contributions,” the report states. “In 1995-1996, Philip Morris was the single largest source of ‘soft money’ contributions to political parties, giving $2,520,518 to the Republicans and $1 million to the Democrats, in addition to contributions made to individual candidates.”

The analysis concludes, “A close reading of the deal reveals that the benefits to the tobacco industry are concrete and substantial, whereas the public-health benefits are less clear.”