In 1998, the Attorneys General of 46 states signed the Tobacco Master Settlement Agreement (MSA) with four of the largest tobacco companies in the United States: Brown & Williamson, Lorillard, Philip Morris, and R.J. Reynolds.
The purpose of the MSA was to settle lawsuits by states to recover costs associated with the treatment of smoking-related illnesses. Four states – Florida, Minnesota, Texas, and Mississippi – settled their tobacco cases separately from the MSA states. The MSA authorizes additional tobacco product manufacturers to participate in the Agreement. As of October 2018, there are more than 50 Participating Manufacturers who are bound by the terms of the MSA.
As part of the MSA it is estimated Participating Manufacturers will pay $246 billion over the first 25 year to the Settling States, including Nevada.
The MSA imposes restrictions the advertising, promotion, and marketing or packaging of cigarettes including a ban on targeting youth.
In 1999, the Nevada Legislature passed two bills, Assembly Bill 474and Senate Bill 496, that decided how the tobacco settlement proceeds would be distributed. These bills said that approximately 60% of Nevada’s annual MSA payment would go toward health care programs and the remaining 40% of the funds would be used for Nevada’s Millennium Scholarship Program.
The U.S. Centers for Disease Control and Prevention (CDC) has developed estimates of what it would cost each state to adequately fund a comprehensive tobacco control effort. These estimates make it very clear that each state could run a strong statewide tobacco prevention program with only a fraction of the settlement payments they receive each year from the tobacco companies.
Twenty-three years after the 1998 state tobacco settlement, Nevada ranks 27th in the nation in funding programs kids from smoking and help smokers quit, according to a national report.
Nevada currently spends $3.5 million per year on tobacco prevention and control programs using the MSA payments it receives, which is just 11.5% of the $30 million recommended by the CDC.
Notable policy milestones for Nevada
1998: Tobacco Master Settlement Agreement (MSA) is signed between major tobacco companies and 46 U.S. states and District of Columbia, including Nevada.
1999: The Fund for a Healthy Nevada (FHN) was created under Nevada Revised Statute 439.620 using a portion of the state’s share of the MSA.
2000: The State of Nevada initiates use of FHN funding for tobacco control. Nevada dedicates approximately $2 million of FHN funds yearly to tobacco control, nearly matching federal funding granted by the CDC to the state at the time.
2003: Nevada increases its state tax on cigarettes from 35 to 80 cents per pack.
2006: The Nevada Clean Indoor Air Act (NCIAA) is passed by a majority of Nevada voters and took effect December 8, 2006. A majority of voters also rejected a competing measure that would have weakened existing smoke-free laws. The passage of the NCIAA provides for major changes to Nevada’s smoking laws to protect children and adults from secondhand smoke in most public places and indoor places of employment. It also allowed local (city/ county/town) governments in Nevada to enact smoking laws within their jurisdictions that are even stronger than state law.
2009: The federal tax on cigarettes increases from 39 cents to $1.01 per pack. At the same time, NTPC is successful in preventing a repeal of the NCIAA, Senate Bill 340 is drafted and supported by state and local health authorities identifying Local Lead Agencies (LLA) for tobacco programming and FHN funding beginning July 2010.
2010: Southern Nevada Health District is awarded $14.6 million for tobacco control through the Communities Putting Prevention to Work initiative.
2013: NTPC efforts advocating for restoration of FHN funds dedicated to tobacco control are successful, resulting in reinstatement of FHN funds for tobacco control at half the previous amount, $1 million annually.
2015: Nevada increases its state tax on cigarettes from 80 cents to $1.80 per pack. Nevada also passes a law prohibiting a person from selling, distributing, or offering to sell e-liquid containing nicotine for electronic smoking devices to any child under the age of 18. Youth smoking prevalence in Nevada drops to its lowest recorded level at just 7.5 percent.
2016: Adult smoking prevalence in Nevada drops to its lowest recorded level at just 16.5 percent.
2019: SB 263 passed, requiring that vapor products and alternative nicotine products be taxed and regulated as other tobacco, implemented 30% tax of wholesale price for vapor products, penalties for selling to minors including internet sales. Expanded the NCIAA to included electronic smoking devices secondhand aerosol and/or vapor.
What will happen if tobacco prevention funding is cut?
Tobacco use is the single most preventable cause of death and disease in our society. If Nevada does not invest in efforts to prevent and control tobacco use, Nevadans will experience not only increased smoking rates but also increased health complications, reduced quality of life, and increased medical costs associated with the chronic diseases that result from tobacco use. Studies have found that once tobacco prevention funding is eliminated or reduced significantly, smoking rates begin to increase quickly, leading to a reversal of positive tobacco trends. A reduction of tobacco prevention funding could also result in job loss within Nevada’s public health work force, as it did just a few years ago when funding was eliminated.
The best way for a state to reduce tobacco use and its harms and costs is to establish an adequately funded comprehensive tobacco prevention program that employs a variety of proven approaches, including smoke-free laws and periodic tobacco tax increases. Published studies provide evidence of the effectiveness of comprehensive tobacco control programs and tobacco control policies, in both reducing harms associated with tobacco use and increasing quit rates among smokers.