In November 1998, the nation's leading cigarette manufacturers, including Philip Morris USA and the other Original Participating Manufacturers (OPMs), signed a contract called the Master Settlement Agreement (MSA) with the Attorneys General of 46 states, five U.S. territories and the District of Columbia.
Since then, other cigarette manufacturers have signed the agreement and are called Subsequent Participating Manufacturers (SPMs). Collectively, OPMs and SPMs are called Participating Manufacturers. Non-Participating Manufacturers (NPMs) are those cigarette manufacturers and importers that have not signed the MSA.
Prior to entering the MSA, OPMs had reached agreements with Florida, Minnesota, Mississippi and Texas. These agreements with the Previously Settled States, combined with the MSA, are collectively referred to as the state tobacco settlement agreements.
The tobacco settlement agreements brought about the kind of meaningful change that governments and the public health community had long sought in the tobacco business. From marketing to underage tobacco prevention, from industry lobbying to communications about the health consequences of smoking, the agreements impose restrictions on the Participating Manufacturers. The tobacco settlement agreements include strict enforcement provisions and the National Association of Attorneys General (NAAG) helps coordinate the implementation and enforcement of the agreements on behalf of the State Attorneys General.
The tobacco settlement agreements created fundamental changes in how tobacco products are advertised, marketed and sold in the United States. The agreements include a variety of restrictions on the sale and marketing of cigarettes, including prohibiting any Participating Manufacturer from taking any action, directly or indirectly, targeting youth in the advertising, marketing or promotion of tobacco products.
In addition to initial up-front payments totaling over $10 billion, the MSA requires the OPMs to pay approximately $200 billion to the states over 25 years, subject to various adjustments, including volume and inflation. Beyond these 25 years, the MSA requires the Participating Manufacturers to make annual payments to the states in perpetuity.
Since 1997, PM USA has paid more than $62 billion to the states (MSA and Previously Settled States combined).
Among other things, the MSA mandates that certain internal industry documents be made easily available to the public and imposes restricts on Participating Manufacturers from lobbying on certain youth-related matters.
PM USA remains committed to the state tobacco settlement agreements we signed with the Attorneys General. We are committed to working cooperatively with the states.
The substantive provisions of the tobacco settlement agreements are complex and broad in scope. The summary on this page highlights some of the important provisions of the tobacco settlement agreements, but is not intended to cover everything and is not intended to alter, interpret or supersede any of the terms of the tobacco settlement agreements.
The full text of the MSA
is available on the National Association of Attorneys General website