The Master Settlement Agreement (MSA)

As evidence of the harmful effects of tobacco use mounted in the 1990s, states began filing lawsuits against tobacco companies that were responsible for manufacturing and marketing cigarettes. The plaintiffs sought payment for damages related to the effects of smoking and costs associated with treating tobacco-related illnesses within state healthcare systems. In 1998, 46 states and six U.S. jurisdictions agreed to the terms of the Master Settlement Agreement (MSA) with the leading cigarette manufacturers in the U.S. The MSA requires major tobacco companies to make annual payments to state governments that can help cover current and future costs of treating individuals for tobacco-related illnesses.

The MSA also places restrictions on tobacco manufacturers related to advertising tobacco and suppressing negative information about tobacco use. In addition, the MSA established the American Legacy Foundation (now known as the Truth Initiative) in order to promote tobacco cessation and prevent initiation of tobacco use among teens.

While the MSA was negotiated in response to the costs of treating tobacco-related illnesses, it does not require states to use the funds to implement and maintain tobacco prevention and control activities. The Public Health Law Center reports that in 2015, only 1.9% of the $25.6 billion that states received from the MSA were reserved for tobacco control programs.