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Commentary: Tobacco: Don't Jump At This Deal

America now has an unprecedented opportunity to save millions of lives. With public outrage at Big Tobacco hitting all-time highs, and the industry's power sinking to new lows, it appears to be politically feasible--for the first time ever--to impose a powerful regulatory regime on cigarettes, one of the world's deadliest consumer products.

But there's a risk that the country will blow this historic opportunity. Well-publicized peace talks are now under way over the future of tobacco. Unfortunately, these negotiations--and the public debate--are dominated by three groups that do not necessarily have society's best interests at heart: the industry, plaintiffs' lawyers, and attorneys general from 24 states that have sued manufacturers. Rather than focusing on the regulation of tobacco, these players have put the bulk of their energy into developing a $250 billion to $300 billion fund that would compensate the industry's alleged victims. It's clear what they find appealing about such a deal: Plaintiffs' lawyers stand to make hundreds of millions; the industry wants to limit its liability and stabilize its stock valuations; and the state AGs will be able to crow about the billions they have won for their states.

TEMPTATION. But these peace talks are worrisome. While it's tempting to grab the industry's billions now, the price for such a mammoth compensation fund will be far too high. In exchange for a share of tobacco's profits, the powerful lawyers at the bargaining table may have to trade off the right to fully regulate everything from tobacco advertising to nicotine content. While the attorneys would obtain tougher limits than those that currently exist, there are already signs that they would fall far short of what is needed to seriously slash tobacco use. Then America's hands would be tied, since the negotiators want to cement their deal in congressional legislation. Says former Food & Drug Administration Commissioner David A. Kessler: "We can't afford to buy into a system that looks good today but may turn out not to be effective."

Kessler is right. While there may come a time when settlement talks are appropriate, now isn't it. The public-health community, unprepared for the speed with which Big Tobacco's political power has crumbled, still has to do some serious thinking about the right way to cut tobacco use. Moreover, the wrong parties are at the table. The industry, the AGs, and the plaintiffs' lawyers share a strong financial interest in striking a deal that focuses on compensating Big Tobacco's victims rather than regulating it in the future. While paying money to smokers and states that have shouldered huge Medicaid bills may one day be desirable, it isn't the top priority.

Instead, it is far more important to take immediate steps to raise cigarette taxes, curb tobacco advertising, and accelerate the campaign to ban smoking in public places. Only after these goals have been achieved should the issue of a compensation fund be addressed. "If there is only a limited amount of money available, it's always better to use that money to prevent future loss than to compensate people for past loss--as cruel as that choice may seem to be," says Jeffrey O'Connell, a professor at the University of Virginia law school and expert in injury-compensation plans.

Taking tougher steps to prevent future smoking is possible right now--without conceding anything to the industry. An enormous legal hurdle to regulation fell on Apr. 25, when a North Carolina federal judge declared that the FDA has jurisdiction over tobacco. If the decision is upheld on appeal, as many legal experts expect, the FDA could accelerate its attack on teenage smoking--and begin thinking about such dramatic future steps as requiring reductions in the amount of nicotine in cigarettes. Before striking an irreversible deal with the industry, let's see what the FDA can do first.

What, specifically, should be done? Looking forward, policymakers should be guided by some fundamental principles. University of Michigan tobacco policy expert Kenneth E. Warner, for instance, advocates four key rights: All Americans have the right to breathe air not tainted with tobacco smoke at work and in public places; addicted smokers deserve more help to quit; children and teenagers have the right to an environment free of ads and other inducements to use tobacco; adults who are well-informed about all the risks should have the right to use tobacco.

We would add to Warner's list another important right, dear to the hearts of Americans: the right to sue manufacturers of dangerous products.

TAX HIKE. We must, of course, be careful to respect freedom of choice, also a cherished American value. If restrictions are placed on people's smokes, critics wonder, what will be next? "Before I jump on the tobacco bandwagon, I want to know why aren't caffeine, chocolate, sugar on there, too," grumbles Lawrence W. Schonbrun, a Berkeley (Calif.) attorney who fights excessive class-action lawyers' fees.

Keeping all these principles in mind, here are some steps worth taking. For starters, the most effective way to prevent smoking is to raise the tax on cigarettes. A 10% rise in the cost of tobacco sends sales down 4%--and among youths, the drop is higher, perhaps as much as 12%. "Kids are sensitive to price, if not to risk," explains health economist Willard G. Manning of the University of Minnesota (table, page 112). We should heed the recommendation of smoking foes for a major nationwide tax increase--about $2 per pack, to roughly $4.50.

From an international perspective, that's still not very high: A pack costs $4.80 in Britain. But it would be enough to discourage children and push millions of adults to cut back or quit. Admittedly, new taxes are a hard sell in Congress, but polls show that Big Tobacco is a pariah to a majority of Americans, so cigarette taxes may be a breed apart. Some key Republicans have signed onto a bill that would modestly raise cigarette levies, and a record number of states are considering boosts. The billions of dollars raised could be used to fund education programs and hard-hitting antismoking campaigns. Such revenues might eventually fall as consumption does, but that's the point, after all.

Another effective tool: strict curbs on ads and promotions aimed at kids. Right now, America's youth are bombarded with merchandise offers, clever ads in magazines and on billboards, and alluring store displays--a barely regulated free-for-all. That's just what the FDA was trying to curb when it announced new ad restrictions last fall. U.S. District Judge William L. Osteen blocked the FDA's ad limits in his recent ruling, but the U.S. Supreme Court on Apr. 28 endorsed the government's right to regulate commercial speech for the public good--a sign that some restrictions on tobacco marketing are likely to be tolerated.

That's welcome news. More than 90% of current smokers begin puffing before the age of 18, and in recent years such enticements as cartoon characters and free merchandise have helped boost smoking by kids. Typically, they're well aware of the hazards of smoking, and they never intend to make it a lifelong habit. But before they reach adulthood, they're hooked. "The big problem is that kids underestimate the addictive power of nicotine," explains Neal Benowitz, an addiction expert at the University of California at San Francisco Medical School.

The message that smoking is cool also comes from secondary-source promotion through the mass media, such as Hollywood movies. There is a deliberate industry-funded effort to get cigarettes placed in movies and TV shows. "We're getting killed in the entertainment media," laments Gregory Connolly, director of the tobacco-control project at Massachusetts' Public Health Dept. It's a tough problem to solve, given the First Amendment. But it's worth trying to jawbone Hollywood into deglamorizing smoking.

We also need to push companies and local government to make everything from offices to sections of restaurants smoke-free. "It's the most effective single intervention," says Stanton A. Glantz, a prominent antitobacco activist. When a company bans smoking, about one-quarter of smokers quit, and the rest cut back 20%. But we have a long way to go. A new Massachusetts survey shows that in 1995, 35% of companies in the state still didn't have such a ban--and Massachusetts is one of the more enlightened states on this issue.

Individuals should be free to smoke, of course. But full disclosure of all the ingredients in tobacco--and their effects--is crucial if people are to make more rational choices. Massachusetts officials, using recent focus groups, discovered that a majority of smokers believe "lite" cigarettes offered a safer way to quit than nicotine patches did. That's because the patches come with an extensive list of warnings about their dangers, while cigarettes, despite containing a bevy of more toxic ingredients, say next to nothing about their dangers.

HOOKED. We may also want to consider the controversial idea of reducing the level of nicotine in cigarettes. That could conceivably allow teenagers to experiment with tobacco without getting hooked. It would also take away the most compelling reason for adult smoking. "We've largely won the public-health battle if we take the nicotine out of cigarettes," says a former FDA lawyer.

True, there's the problem of 48 million Americans still addicted to the drug. Heavy smokers would have to smoke more to get their daily nicotine fixes. And it might encourage bootlegging of stronger foreign brands. But patches, gum, or other delivery systems could be just as effective in satisfying the craving, without many of the health risks.

Naturally, any course of action needs flexibility, fine-tuning, and plenty of debate. And it's wise to remember that in the case of even the most well-meaning regulations, the industry has a history of turning the laws to its advantage. After the 1971 ban on radio and TV tobacco ads, for example, companies rebounded with a series of strategies--from merchandise giveaways to sports sponsorships--that reached impressionable youth.

Once a strong regulatory scheme is in place, then it may be time to move on to the issue of compensating Big Tobacco's victims. But beforehand, society needs to reach a consensus on how much money smokers really deserve. After all, the vast majority knew of the risks of cigarettes and therefore contributed to their own injuries. So is it fair to force the industry to pay for their full medical expenses?

There's also reason to believe that any compensation scheme for tobacco victims would be a mess. The crux of the problem: Smoking causes a wide variety of health ailments, but it is not the sole cause of any of them. If a compensation scheme tries too hard to separate legitimate claimants from illegitimate ones--weighing factors such as how long they smoked--it will burn up every penny in the fund. But without some guidelines, millions of people could be eligible for money--reducing the average payout to a fraction of most victims' medical expenses and lost wages.

Given these flaws, it may never be worth handing the industry blanket immunity from liability solely in exchange for a compensation fund. There's no reason to deprive people of their day in court, especially since the FDA's recent triumph in court has reduced the need to provide the tobacco industry legal protection in exchange for cooperation.

America is at a crucial crossroads. The tobacco industry is on the run, and there is a unique opportunity to shape the future. Let's not rush into a lawyer-driven deal that sacrifices this once-in-a-lifetime chance to kick the tobacco habit.

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