Massachusetts Resolves Disputes Worth $600M with Tobacco Manufacturers

The Massachusetts attorney general has reached a $600 million settlement with major tobacco manufacturers, resolving some of the state’s complaints over how much the tobacco companies owe it under a 1998 master settlement with the industry.

While the manufacturers have paid the state millions every year under the master settlement, the state has maintained that certain manufacturers have withheld hundreds of millions of dollars due to a contractual adjustment. The disputes have been in arbitration, which has now resulted in the state’s $600 million gain.

The settlement resolves seven of the past annual disputes and the agreement should increase the speed at which additional disputes are resolved, according to the attorney general’s office.

In addition to the $600 million that will be paid to the Commonwealth’s general fund this fiscal year, the tobacco companies will make additional payments totaling tens of millions of dollars each year going forward. The agreement also mandates that the companies withhold less money in future years based on a contractual adjustment in the MSA. Accordingly, Massachusetts should receive greater and more consistent annual payments going forward.

“The country’s major tobacco manufacturers have pushed smoking products to young people for decades – and this settlement is evidence of our ongoing commitment to hold these companies accountable for their actions that caused irreparable harm to public health and safety,” said Attorney General Andrea Joy Campbell.

Governor Maura Healey said she was proud to have worked on the case against “Big Tobacco” when she was attorney general to help end the manufacturers’ use of harmful and misleading marketing practices and their “undermining public health for decades.”

The MSA was a settlement with major tobacco companies in which they agreed to stop marketing their products to children, cease other harmful marketing practices, and pay states billions of dollars each year to offset medical expenses caused by smoking. Since the inception of the MSA, Massachusetts has received annual payments from the major tobacco companies totaling hundreds of millions of dollars for past and ongoing medical costs related to smoking.

Truth Initiative, a public health organization created under the MSA, says the MSA has been effective in contributing to a decrease in smoking, particularly among young people. Between 1998 and 2019, cigarette consumption in the U.S. dropped by more than 50%. During that same time period, regular smoking among high schoolers dropped from 36.4% in 1997 to six percent in 2019.

Also according to the Truth Initiative, more than two million middle and high school students used e-cigarettes in 2023. In April 2023, as part of $462 million multistate settlement against JUUL for its role in the nationwide youth vaping epidemic, Massachusetts received $41 million.

Topics Massachusetts Manufacturing