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Iowa Attorney General
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April 18, 2014

Iowa Receives $71 Million in Annual Tobacco Payment

Since 1999, state has received more than $960 million
in tobacco settlement agreement

(DES MOINES, Iowa)  Tobacco companies involved in the 1998 landmark settlement with states over tobacco-related health care costs transferred more than $71 million this week in their annual payment to Iowa.

The tobacco companies remitted a regular annual Master Settlement Agreement (MSA) payment to Iowa of more than $54 million, and an additional “Strategic Contribution Fund” payment of more than $17.5 million, for a total payment of more than $71.6 million.

The payment includes a $6 million tobacco arbitration judgment from September.  In that case, cigarette manufacturers claimed that Iowa did not diligently enforce its tobacco statutes in 2003, as required under the settlement.  A unanimous three-judge panel sided with Iowa.

“Our office carefully monitors and aggressively enforces this agreement so Iowa gets its fair share of the settlement,” Miller said.  “We continue to hold tobacco companies accountable under the agreement, and we continue to fight the public health battle.”

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 $133 million.

Since 1999, when tobacco companies sent their first MSA payments to the states, Iowa has received $960,275,103 in both regular and additional payments.

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.

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

“As long as tobacco companies sell their products in Iowa, we’ll work hard to reduce smoking, tobacco-related diseases and tobacco-related deaths,” Miller said.

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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