The Tobacco Master Settlement Agreement is signed

What 46 states settled, and for how much

In November 1998 the attorneys general of 46 states signed an agreement with the major US tobacco companies, ending a wave of lawsuits over the public cost of treating smoking-related illness.

The US Government Accountability Office describes the terms. The Master Settlement Agreement commits tobacco companies to pay approximately $206 billion over the first 25 years. Of that, an estimated $204.5 billion goes to the 46 states, the District of Columbia and five US territories.

Four states settled separately before the MSA, for a further $40 billion over 25 years.

The payments do not stop at 25 years. GAO records that the agreement requires annual payments to states in perpetuity.

The advertising rules, which are the part you can see

The money is the headline. The marketing restrictions are what most people actually encountered.

The California Attorney General's office lists what the agreement prohibits for participating companies:

• Direct or indirect targeting of youth in advertising, marketing and promotions.
• Brand-name sponsorship of concerts and sports events, and of events with a largely youth audience or youth participants.
• Youth access to free samples.
• Payments for tobacco product placement in the media.
• Outdoor advertising.
• Transit ads, on or in public or private vehicles.
• Cartoons used to advertise tobacco.
• Tobacco brand-name merchandise.

The cartoon ban and the sponsorship ban changed what a generation of children grew up seeing. That was the intent. Our page on smoking, vaping and lung cancer risk covers what the habit itself does.

Where the money actually went

Here the story turns.

The MSA lets states spend their payments on anything at all. There is no requirement that a single dollar go to health.

The GAO looked at how states used the first payments. By April 2001, 45 of the 46 states had received nearly $13.5 billion. Health programs took the largest share of allocations at 41 percent, much of it expanding Medicaid and children's health insurance coverage.

Tobacco control programs got about 7 percent.

Another 26 percent went to education, social services, infrastructure and other state priorities. Seven of the 13 tobacco-growing states put 6 percent of total payments toward help for growers and economic development.

A settlement over the health costs of smoking spent roughly one dollar in fourteen on stopping people smoking.

Why lung cancer is the disease behind the litigation

Lung cancer starts in the tissues of the lung. The two broad groups are non-small cell lung cancer, which is the most common, and small cell lung cancer.

For 2026 the American Cancer Society projects 229,410 new US lung and bronchus cancer cases and 124,990 deaths; SEER republishes both. That is 20 percent of all US cancer deaths, making it the leading cause of cancer death in the country. Median age at diagnosis is 71.

Five-year relative survival for cases from 2016 to 2022 is 29.5 percent overall. By spread at diagnosis it is 65.5 percent while confined to the lung, 38.2 percent with regional lymph nodes involved, and 10.5 percent for distant disease.

The distribution is the problem. Only 24 percent are found localized. Fifty-one percent are already distant. These are registry averages describing a whole population, not any individual, and they cover all smoking histories together. Our page on lung cancer sets out how the types differ.

When to get checked

Lung cancer screening has hard numeric criteria, and they are worth knowing precisely.

The US Preventive Services Task Force recommends annual screening with low-dose computed tomography for adults aged 50 to 80 who have a 20 pack-year smoking history and either smoke now or quit within the past 15 years. It is a grade B recommendation. A pack-year means one pack a day for a year, so 20 pack-years is one pack daily for 20 years, or two packs daily for 10.

The task force also says when to stop: once a person has not smoked for 15 years, or develops a health problem that substantially limits life expectancy or the ability to have curative lung surgery.

NCI notes that low-dose CT is the only screening test shown to lower the risk of dying from lung cancer. Chest x-ray and sputum cytology do not. NCI also names the harms plainly: false positives leading to unneeded invasive procedures, and overdiagnosis of some cancers.

Symptoms are a separate track. A cough that will not settle after three weeks, coughing blood, chest pain, breathlessness, hoarseness or unexplained weight loss all warrant an appointment, whatever a person's smoking history. Our page on lung cancer screening covers who qualifies and what the scan involves.

What this does not mean

The MSA is a contract between states and companies, not a law. It binds the participating companies. It does not regulate tobacco.

Federal regulation came later and separately, with the Family Smoking Prevention and Tobacco Control Act of 2009.

The restrictions cover participating manufacturers. Companies that never joined are outside them, which is why states run separate escrow rules for non-participating manufacturers.

Payment figures are estimates, not fixed sums. GAO calls $206 billion the original estimate, and actual payments track cigarette sales, which have fallen.

And nothing in the agreement changes an individual's medical care. It shaped advertising and state budgets. Whether screening or treatment fits one person is decided in a clinic.

Sources

• US Government Accountability Office, Tobacco Settlement: States' Use of Master Settlement Agreement Payments (GAO-01-851), via govinfo — https://www.govinfo.gov/content/pkg/GAOREPORTS-GAO-01-851/pdf/GAOREPORTS-GAO-01-851.pdf
• California Attorney General, Master Settlement Agreement fact sheet and documents — https://oag.ca.gov/tobacco/msa
• NCI PDQ, Lung Cancer Screening (Patient Version) — https://www.cancer.gov/types/lung/patient/lung-screening-pdq
• US Preventive Services Task Force, Lung Cancer: Screening — https://www.uspreventiveservicestaskforce.org/uspstf/recommendation/lung-cancer-screening
• SEER Cancer Stat Facts, Lung and Bronchus Cancer — https://seer.cancer.gov/statfacts/html/lungb.html

How this article was prepared

An AI-assisted editorial system helped prepare this page. No named medical reviewer has reviewed it unless one is listed.

The National Cancer Information Foundation publishes Cancer Explained. This page is for learning. It is not medical advice and does not suggest a test or treatment.

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