$7 Billion in Tobacco Settlement Funds at Risk

Manufacturers participating in the tobacco industry’s Master Settlement Agreement (MSA) claim that their annual tobacco settlement payments should be adjusted downward because they have lost market share to those manufacturers that did not sign onto the MSA (the non-participating manufacturers or NPMs). According to the National Association of Attorneys General (NAAG), the disputed payments total approximately $1.15 billion for sales year 2003 and approximately $7 billion for sales years 2003-2010. To resolve the dispute for sales year 2003, states and manufacturers have commenced a single arbitration. NAAG does not anticipate that any decisions affecting payments will be made before the manufacturers make the next tobacco settlement payment to states in April 2011. However, key decisions regarding the tobacco settlement payment to states in April 2012 could be announced well before that date.