Some Tobacco Negotiators Upbeat, Say Solution Near

WASHINGTON —  State attorneys general hoping to forge a massive settlement of litigation with the tobacco industry said late Wednesday that they had grown more optimistic, just 24 hours after declaring that they had hit a major roadblock in the talks.

Some sources close to the negotiations went so far as to predict a settlement today or Friday, with the industry agreeing to a settlement fund of $350 billion to $380 billion. But others urged caution, saying major issues were still unresolved.

“Either they concede on three key points and we have a deal, or they tell us they won’t and we go home,” said Arizona Atty. Gen. Grant Woods, one of the five attorneys general on the negotiating team.

The attorneys general said the tobacco companies must agree to full control of their industry by the Food and Drug Administration, pay punitive damages now for past behavior and agree to the possibility of punitive damages in future litigation.

Sources close to the talks said the state officials presented the industry negotiators with a demand for a $50-billion upfront punitive-damage payment that could be used for a variety of purposes, including stop-smoking programs and health care for children without insurance.

The settlement would resolve 40 suits filed by attorneys general seeking to recover billions in Medicaid costs spent treating sick smokers, as well as 17 class-action lawsuits.

Wednesday evening, the sources said the attorneys general were still awaiting an industry response on that and other points, and talks continued into the night. Negotiators have been shuttling back and forth across the street between two posh Washington hotels where they are staying. Industry spokesmen declined to comment.

Wednesday morning, the attorneys general had taken a tough line, saying the talks might fold. “There are two big problems: They don’t want to be regulated and they don’t want to be punished,” said Florida Atty. Gen. Robert Butterworth.

But at a 5 p.m. news conference, he said there had been a distinct change in the industry’s tone. “I think they got a reality check” when some of the states balked at new industry resistance to FDA jurisdiction, punitive damages and other issues, Butterworth said.

The industry has already conceded to major changes in its advertising and marketing practices, to fund smoking-cessation programs, and a variety of other changes in its practices that would take years to achieve through litigation or other means, according to Mississippi Atty. Gen. Mike Moore.

Moore and several of his peers are still hopeful that the Clinton administration would help move the talks to resolution by endorsing the public health aspects of the deal. A White House endorsement is considered critical for a settlement to pass muster. It would also require congressional approval.

But White House officials reiterated Wednesday they have no such plans. Such key public health leaders as former Surgeon General C. Everett Koop and former FDA Commissioner David Kessler, who are heading a special advisory panel on tobacco policy, are urging caution until all the fine print of any deal has been thoroughly reviewed.

At a meeting of the advisory panel Wednesday, Kessler questioned whether the proposed settlement would be tough enough on the industry, such as a proposed requirement that the industry reduce teenage smoking by 30% in five years and 60% in 10 years or pay $80 million for every percentage point missed.

“If they didn’t meet that goal, it’s a few-cents-per-pack penalty,” Kessler said.

At the meeting, a panel subcommittee chaired by John Seffrin, chief executive of the American Cancer Society, issued a tough preliminary report saying that regulating nicotine--the chemical that makes cigarettes addictive--is not enough.

“The authority to regulate, disclose and, if necessary, prohibit other . . . ingredients must be addressed in any public health policy,” the report states.

“Tobacco additives, carcinogens, dyes, product enhancers and preservatives all play a key role in the cigarette as a delivery device and must be scrutinized in addition to nicotine. Nicotine makes the product addictive, the toxins make it deadly, and the additives make it more consumer-acceptable, like sweetening poison. While the current FDA rules many not hold sway over each of these content areas, any regulatory scheme should include the consideration of these critical cigarette elements,” the report says.