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April 18, 2013

Iowa Receives $65 Million Annual Tobacco Payment

Since 1999, state has received more than $888.6 million in tobacco settlement agreement

(DES MOINES, Iowa)  Tobacco companies involved in the 1998 landmark settlement with states over tobacco-related health care costs this week transferred more than $65 million to the state treasury in their annual payment to Iowa.

The tobacco companies remitted a regular annual Master Settlement Agreement (MSA) payment to Iowa of more than $47 million, and an additional “Strategic Contribution Fund” payment of more than $17 million, for a total payment of more than $65.5 million.

Since 2008, Iowa has received additional annual Strategic Contribution Fund payments because of the roles of Attorney General Tom Miller and his staff in negotiating and reaching the 1998 Master Settlement Agreement (MSA) with tobacco companies.  Those additional payments to Iowa have totaled more than $116 million.

Since 1999, when tobacco companies sent their first MSA payments to the states, Iowa has received $888,669,037 in both regular and additional payments.

“Though this settlement is now 14 years old, it still involves very significant ongoing payments to Iowa,” Miller said. “The settlement also requires continued vigilance and enforcement by our office.  We need to hold the tobacco companies accountable and ensure Iowa gets its fair share under the agreement that we fought very hard to reach.”

In 1998, Miller and attorneys general of 45 states signed the MSA with the nation’s four largest tobacco companies to settle state suits to recover billions of dollars in state health care costs associated with treating smoking-related illnesses.  Since then, more than 40 other tobacco companies have signed onto the agreement.

The MSA called for tobacco companies to pay the 46 states $206 billion over 25 years, and continue annual payments beyond 25 years based on the number of cigarettes sold in the United States.  The MSA is the largest settlement in U.S. history.

The MSA created a broad array of restrictions on the advertising, marketing and promotion of cigarettes.  For example, it bans targeting children through advertising.  It also includes prohibitions on outdoor advertising of cigarettes and the advertising of cigarettes in public transit facilities, as well as the use of cigarette brand names on merchandise, and a host of other restrictions.

The central purpose of the MSA was to reduce smoking, and particularly youth smoking in the United States.  Since it was announced, cigarette sales in the United States have fallen substantially and youth smoking has declined even more.

“The number of cigarettes Americans buy today is roughly equivalent to the number Americans bought in the early 1950s,” Miller said.  “Per capita, that makes it equivalent to the level of smoking we saw in the late 1930s.”

Despite these gains, tobacco remains the number one cause of preventable death in the United States.

“This agreement continues to make a difference in the health of Iowans and has greatly impacted peoples’ attitudes toward smoking.  It has resulted in less disease and fewer deaths in our state and nationally,” Miller said.  “But this is a public heath battle we must to continue to wage as long as companies are manufacturing and marketing tobacco products.”

Miller is a member of the Board of Directors of the Legacy Foundation, the largest non-profit public health charity in the nation devoted specifically to tobacco control.  The Legacy Foundation was formed as a result of the MSA.


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