The recently announced tobacco industry "settlement" is quite simple: The
tobacco companies get economic certainty by eliminating the threat that
litigation will destroy them. In exchange, they pay out $368 billion over
25 years and $15 billion a year after that.
Fifteen billion a year sounds like a lot of money, but it is not. Smoking
costs society $100 billion a year in medical and related costs alone. The
industry Is getting off for pennies on the dollar. Even more troubling, the
tobacco companies will simply pass these costs through to their victims,
the smokers, leaving management and investors untouched. The litigation
discovery process will stop and we will never know the full extent of the
wrongdoing. The likelihood that industry officials and lawyers will face
criminal prosecution drops.
One of the key provisions of the agreement, the "look back" provision,
fines the tobacco companies if certain goals for reducing teen smoking are
not met. Unfortunately, the fines for not meeting these goals are smaller
than the value of addicting new smokers. The deal will make the tobacco
industry a little less profitable while guaranteeing its continued
longterm health.
Finally, free of the huge threat that litigation held, and a stable
situation for continuing to do business here in the United States, the
tobacco industry will be free to expand its markets in Asia, Eastern Europe
and elsewhere. Even if fewer Americans die from tobacco as a result of this
deal, it will be at the price of more deaths overseas.
Above all, keep in mind that this "settlement" is not really a settlement
at all. A settlement in a legal dispute is an agreement among the parties.
What was announced Friday is a back room political deal in which the
negotiators freely gave away the rights of the people who were not in the
room.

Stanton Glantz Professor
University of California, San Francisco