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Who Is Really Benefiting From the Tobacco Settlement Money?

ALERT: The Master Settlement Agreement involves a 1998 settlement reached between the nation's four largest tobacco companies and attorneys general from 46 states and territories. Despite recent reports on the internet, there is no provision for payments to individuals. The West Virginia Attorney General issued this alert in response to the incorrect information currently circulating.

You may or may not remember this, but there was a time when the tobacco industry even more openly and brazenly marketed tobacco products to our kids. It was then and continues today to be their business plan: they hook kids young, which can lead to a lifetime of addiction and tobacco industry profits.

And their profits come at our expense: Tobacco use causes or makes worse a whole host of diseases and conditions, including lung cancer and chronic obstructive pulmonary disease (COPD). Tobacco also eventually kills over a third of people who use it.

In the 1990s, policymakers finally stood up to the industry and acted. Congress held hearings and state attorneys general sued the tobacco companies. In 1998, almost every state in the U.S. came together to approve the largest civil settlement in U.S. history, the Tobacco Master Settlement Agreement (MSA). This court settlement between 46 states and the District of Columbia and the major tobacco companies forced them to end some of their more egregious marketing practices and provided for annual payments to the states for some of the medical costs of caring for the 16 million Americans who have smoking-caused illnesses. The settlement was huge: $206 billion over the first 25 years and the payments continue indefinitely into the future.*

When the settlement was signed, states made promises about how this money would be used to reduce tobacco use. Some states such as Alaska, North Dakota and Oklahoma have done the right thing by setting aside portions of these dollars for programs to prevent and reduce tobacco use based on the Centers for Disease Control and Prevention's (CDC's) Best Practices for Comprehensive Tobacco Control Programs -- 2014. However, the vast majority of states have failed to use the funds for their intended purpose - some have used them to fill budget holes or pay off debts. A couple of states have even in the past used it to benefit the tobacco industry. For instance, South Carolina gave 15 percent of settlement funds to tobacco farmers affected by the drop in prices for their crop**, while North Carolina used 75 percent of its settlement funds for tobacco production. Some of those North Carolina funds went to private tobacco producers, covering tobacco-curing equipment, a tobacco auction hall, video production for a tobacco museum and plumbing for a tobacco processing plant.1

This misuse of tobacco settlement funds continues to this day. According to the "State of Tobacco Control 2016" report, 40 states and the District of Columbia got a failing grade for spending less than 50 percent of what the CDC recommends should be spent on tobacco prevention programs in its Best Practices. That's over 80 percent of states that failed the test!

Image of half circle pie chart with small cut made to represent 2 cents per dollar

In total, states are spending close to $470 million on tobacco prevention and cessation programs in the 2015-2016 fiscal year. However, this is less than 2 cents of every dollar or close to $26 billion total that states receive from tobacco settlement payments and tobacco taxes each and every year.

The American Lung Association believes that states must use these tobacco settlement dollars, which are intended to compensate states for the healthcare costs from treating sick smokers and former smokers, and revenue from tobacco taxes to fund robust tobacco prevention programs to help tackle the #1 preventable cause of death in this country, tobacco use. Clearly, we have a tall mountain to climb though.

Learn more about your state's efforts on tobacco control at and then please take action to let decision makers know that enough is enough - we need to end tobacco use once and for all.


*Four additional states settled separately with the tobacco industry prior to the 1998 agreement.

** National Conference of State Legislators, September 2003.

1 Mother Jones Magazine, November/December 2002.

Related Topics: Tobacco & Smoking, Impact,

  • Thomas Carr
    Director of National Policy
    American Lung Association
    Thomas Carr has been the Director of National Policy at the American Lung Association since October 2010 and held the title of Manager, National Policy and Policy Analyst with the Lung Association prior to that.

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Submitted by Teddrose at: July 14, 2019
I'm really trying to find the name of a product that my mother used a little over 10 years ago to help her quit smoking. It was a series of three four pills I'm not sure with vitamins??
Submitted by Anonymous at: December 25, 2018
My mother die 18 years ago from lung cancer in the state of texas is there a settle I could put her name in.
Submitted by Bk at: October 21, 2017
How do I find out how the tobacco companies will help pay for my medicine?
Submitted by Sweetpea at: September 21, 2017
In 1998 I was working for housing authority of New Orleans when I first sign my name to the classaction lawsuite they had me to fill out a card form with my name and address how do I go by of getting my settlement
Submitted by msfuzz at: September 20, 2017
I'm 76 and smoked for 50+plus years and had lung cancer and a million other things because of cigarettes....WHERE'S MY MONEY and everyone else that smokes. we are entitled to it dang it!
Submitted by Cory at: September 12, 2017
I would like more information on how to collect funds from the master settlsettlement. Which broker knows about the program and that I may visit.
Submitted by Lindahugs at: September 12, 2017
Why is it that the people who suffer from the tobacco doesn't get the money . Why does it go to the states instead of the people and families . I lived around smokers all my life . I didn't smoke but have copd and asthma not. because of choices I made but because of choices other people made . My fiancé is bed fast from his lungs being so bad he just can't breath enough to walk 2 or 3 steps . On oxygen inhalers nebulizer . Those who suffer are the ones who should receive the money . Those who suffer should sue the states who received the money .
Submitted by Smokaholic864 at: August 10, 2017
This is typical of our corrupt, criminal organization aka United States Government! They misuse funds of any sort, every time they smell money! The taxpayers are always the ones who get screwed! Every one of our elected officials should go to hell, bipartisan hell.
Submitted by Dasha at: August 1, 2017
I have sarcoidosis,I contacted it by breathing in Second-hand smoke from my work-place,and my late husband. At this time I also was put on a C-Pap machine,I have to use it to this day. I also need restitution from the tobacco companies. I never smoked a day of my life,but I'm suffering because of the tobacco companies. M
Submitted by Rene at: July 26, 2017
I smoked for 35 years and quit 5 years ago I'm I entitled for some funds of the settlement
Submitted by P-ron at: July 18, 2017
I smoked for 35 years and lung cancer from cigarettes cost me a lung and I'm on oxygen for the rest of my life I was lucky and survived but I believe that big tobacco owes me for that suffering and my families suffering
Submitted by billed at: July 10, 2017
is there anytruth that you can get a portion of the money i smoked for 40 years i quit 2 years ago
Submitted by Duane at: July 9, 2017
I would like information on how to collect funds from the master settlsettlement
Submitted by Anonymous at: July 8, 2017
Individuals who smoke or have smoked cigarettes should be entitled to funds from the settlement. I need for someone to pay for me to see a hypnotist, to quit smoking cigarettes. How can I go about that?
Submitted by Mztrscott55 at: July 5, 2017
Please send me information on how to claim or receive money from The Master Settlement Agreement
Submitted by Shorty at: June 28, 2017
I would like information on how to be eligible to receive payments from this settlement I understand that there is an initial investment
Submitted by DeborahD at: June 20, 2017
Thank you for the warning to the scam about this "Master Settlement Agreement" - apparently there is a HUGE SHAME-SHAME due to all but 3 states for once again "ripping off" the taxpayers by "misappropriation of these funds". What's new right? I smoked for 45 years and quit 2 years ago in August 2017, it was MY choice both to smoke and to quit. I was tired of paying more in 2 to 3 times the taxes on a pack of cigarettes than the cost of the pack, only to have the government screwing it away and from seeing how much the cigarette companies have/are and will continue to pay to "help" people with medical costs, to have anti smoking information and etc. but they are misappropriate these funds - more than likely INTO THEIR POCKETS because they are NOT helping ANYONE with medical and the anti-smoking things they have done do NOT cost ANY continuing funds so where IS this money GOING????? Then the thief online trying to STEAL money from anyone dumb enough to believe his scam - THINK people "pay him what $250.00(?) and then you get a monthly check forever"???? Seriously?? If it was REAL everyone would have done it already and it would be common knowledge. Then there are STILL people in this comment area wanting to know "how to get their share without paying what this Fitzgerald person a fee" - Good for you that you didn't pay it but now go back and read the first paragraph again - if you STILL have the same question. The answer is "No go pay Fitzgerald and good luck with that!"
Submitted by Cherkabe at: June 16, 2017
I have COPD from smoking, how can I get help?
Submitted by Ddean at: June 12, 2017
How do I go about signing up
Submitted by American Lung Association at: June 12, 2017
Hi there, thank you for your comments. The Master Settlement Agreement involves a 1998 settlement reached between the nation’s four largest tobacco companies and attorneys general from 46 states and territories. Despite recent reports on the internet, there is no provision for payments to individuals. We added a link at the top of this post to an alert from the West Virginia Attorney General in response to the incorrect information currently circulating.
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