Profiting from Smokers*

In the late 1990s more than 40 state attorneys general sued the major tobacco companies for the excessive medical costs imposed on the states by smoking. In November 1998 this litigation was concluded with the companies agreeing to pay approximately $9 billion a year, to be adjusted for inflation, in damages and lawyers' fees. The deal was incredibly corrupt; had it been made in any other industry it would surely have been declared illegal. And the tobacco companies were not the only bad guys in this story. The trial lawyers, the politicians, and even the public health officials and antismoking advocates who believed that any means were appropriate to achieve their desired ends of massive fees, political victories, and higher cigarette prices were the ones who most abused the system. W. Kip Viscusi, an economist and professor at Harvard Law School, focuses on the merits of the state tobacco litigation, principally whether the companies were guilty of inadequately communicating the risk of their products to smokers, which links to youth smoking, and the economic damages the states suffered because of smoking. Viscusi, who has worked on these issues for many years, was hired by Philip Morris to testify on these two topics in the litigation. Nevertheless, he makes a credible case on both issues. Viscusi is substantially less interested in the actual structure and implications of the negotiated deal and spends only a limited amount of time exploring the policy implications of today's tobacco politics, though he does spend a concluding chapter advocating improved information about tobacco for smokers.