Smoking prevention gets just small slice of Maryland’s $2.3B from tobacco settlement

By Darcy Costello and Erin Serpico

Capital News Service

To successfully combat smoking, Anne Arundel Medical Center would need to receive $1 million per year from the county health department, officials said.

This year, the center received about $20,000.

That gap is part of why the hospital system is only addressing a “tiny fraction” of the smoking problem, said Catherine Brady-Copertino, executive director of the DeCesaris Cancer Institute,  which is within the medical center in Annapolis.

“It’s simply not enough,” Brady-Copertino said. “We need more funding to be able to do what we need to do, to make a difference.”

The state has a special fund designed to help Anne Arundel County and the 23 other local health departments in their fight against smoking, including putting money toward programs like those at the institute.

But about 15 years and $2.3 billion later — and despite the creation of the state’s Cigarette Restitution Fund to deter and repair damage from tobacco — smoking remains a statewide health concern.

Cigarette Restitution Fund money stems from the 1998 Master Settlement Agreement between 46 states, including Maryland, and four major tobacco companies, after officials were found to have lied about the dangers of smoking. In the years since the agreement was signed, the Maryland adult smoking rate decreased by 6%age points — from 22.4 to 16.4% in 2015, according to the Campaign for Tobacco-Free Kids.

No clear guidelines for spending settlement

Though the settlement agreement addressed tobacco companies’ responsibility for people contracting cancer as a result of using their products, it didn’t contain clear-cut guidelines for how each state should spend the money.

Maryland receives an annual payment ranging from about $130 million to $150 million per year from the master settlement, which is based on the state’s fixed 2.26% of the nationwide annual payment.

Maryland legislators set up the Cigarette Restitution Fund, which was signed into law in 1999. Legislators intended this fund to direct money to programs that combat the harms and dangers from tobacco, prevent people from smoking and reduce tobacco farming in the state, said Delegate Sandy Rosenberg, D-Baltimore, a co-sponsor of the bill that created the fund.

“The money that we’re receiving from (tobacco companies) should go to address the problems they cause, prevent other people from getting sick, from being poisoned by starting to smoke, and then to reduce the amount of Maryland tobacco that’s on the market,” Rosenberg said.

But it doesn’t — at least not entirely.

In fiscal 2015, the $20,000 sent to the medical center came from the total $910,800 that the Anne Arundel County Department of Health received from the state fund, according to Elin Jones, the public information director for the department.

Countywide, $232,585 (including the medical center’s $20,000) was directed to tobacco use prevention and cessation at locations including Anne Arundel Community College, Baltimore Washington Medical Center and Owensville Primary Care, and the rest of the funding — nearly $700,000 — dedicated to the county through the Cigarette Restitution Fund went toward cancer prevention and screening.

Jones explained that the state gives jurisdictions specific amounts for cancer- and tobacco-related activities, but doesn’t specify which organizations should get the money — or how much.

Anne Arundel Medical Center uses the $20,000 on school-based prevention, counseling programs and cessation classes, but with more funding could offer additional intervention services, such as clinical research on tobacco-related motivations and more lung cancer screenings, Brady-Copertino said.

“If you look at the way Maryland is spending the funds … it’s appropriate to spend them on the burden of disease that’s been created by this issue,” said Brady-Copertino explaining that treating cancer is important, but giving smokers more methods to quit is also needed. “People choose different interventions for different reasons … So, you need to have a variety of programs to meet that individual where they are.”

Federal recommendations disregarded

In 2014, the Centers for Disease Control and Prevention recommended Maryland spend $48 million on tobacco prevention and cessation. But in fiscal year 2015, which began in mid-2014, the state spent just 17% of that amount — $7.7 million in Cigarette Restitution Funds — plus an additional $1 million from the General Fund — on those programs.

Maryland is not required to abide by CDC recommendations, said Dawn Berkowitz, director of Maryland’s Center for Tobacco Prevention and Control, a part of the state’s health department.

As established in the 1999  state law that allocated Maryland’s Master Settlement funds, the money can go toward tobacco prevention and cessation, cancer screenings, substance abuse treatment and breast and cervical cancer initiatives, among other health-related priorities.

At least half of the fund in most years goes to Medicaid to cover the costs the state accrued in treating people who got sick from tobacco-related behaviors.

The way the fund is distributed aligns with goals the state government had at the time of the creation of the CRF, said former Gov. Parris Glendening, who served from 1995 to 2003.

He said he was “personally motivated” to fight the companies following the death of his mother — a two-pack-a-day smoker — from tobacco-related lung cancer.

“Why did she smoke so much? Why did she keep doing this?” Glendening said he asked himself. “The truth is she was totally addicted and just couldn’t get away … And that’s where we started making the link between these things.”

Although Glendening saw the settlement as an opportunity for states to address the issue of tobacco use, others, such as tobacco lobbyist Bruce Bereano, thought states used it more as an opportunity to bring in more money — billions of dollars.

“Some people saw it for what they thought was good, that is, preventing smoking,” Bereano said. “Others saw it as a good old boondoggle, a real chance — sort of like a modern gold rush. … I was very saddened by it, I thought it was all wrong, it was all money motivated.”

According to the National Association of Attorneys General, Maryland has received $2,330,898,515 from the time the Master Settlement Agreement began in 1998 through 2015.

Adult smoking reduced

Maryland, which spent 17.7% on prevention programs last year, has cut adult smoking rates to 16.4%, ranking the state No. 23 in the nation.

Maryland has seen larger decreases in adult smoking rates than other states that spend a greater percentage on prevention.

The states spending the greatest percentage on prevention funding — North Dakota at 97.1% and Alaska at 95.6% — have cut adult smoking rates to 21.2% and 22.6% respectively. But since 2000, adult smoking rates in these two states have decreased just 2% and 3%, according to the CDC.

The way Maryland allocates its money can fluctuate from the original distribution; the current fund structure requires the governor to sign off on any changes.

During the Great Recession, for example, the money from the Cigarette Restitution Fund intended for tobacco and cancer initiatives helped the state balance its budget, said Allan Pack, the chief financial officer for the Department of Health and Mental Hygiene. Some tobacco-related program funding was reduced to “offset general funds and the Medicaid program,” he said.

Pack noted the allotment of funds over time was “rather fluid,” which Rosenberg agreed was one of the flaws in its creation. His “one big mistake” in drafting the bill, Rosenberg said, was including Medicaid in the Cigarette Restitution Fund. Without a cap on how much money can go to Medicaid, more goes toward the health care program for the poor than Rosenberg said he envisioned.

“Nothing against Medicaid, but we were hoping it would be more targeted to programs more specifically related to cigarette smoking and the harms that it causes,” he said.

He suggested more funds could instead be put toward treatment, research into cancer and to prevention efforts, such as deterring smoking at a young age, Rosenberg said.

Not all of the money goes to health-related programs — in 2001, legislators amended the allocations to include money for private school textbooks.

Taxes, other methods reduce smoking

Not all anti-smoking efforts need to be in the form of tobacco prevention programs, however. Brady-Copertino from Anne Arundel Medical Center proposed raising the state tax on cigarettes as another prevention measure, citing the direct correlation between tobacco tax amounts and smoking rates. Every time the tax has been raised, she said, there has been a significant drop in the number of smokers in the state.

The American Lung Association recommended the state add an additional dollar per pack tax, bringing it to $3, in order for the state to decrease the smoking rate of 16.4% to 10% by 2024.

But Bereano said cigarette tax increases haven’t worked as well for lowering the smoking rate because smokers can buy cigarettes in neighboring states.

“It looks like people are smoking less in Maryland — they’re just buying less in Maryland,” he said.

Bereano also said more money could be put toward enforcing existing tobacco laws, including preventing minors from purchasing, selling and using tobacco products. Punishment could serve as a deterrent, he said.

“All this money is being poured into it, everyone is blaming and pointing fingers at the retail community — the gas stations, the convenience stores, the supermarkets — wherever tobacco products are sold, and I think it’s wrong,” Bereano said.

Bonita Pennino, Maryland and D.C. Government Relations Director from the Cancer Action Network, said she also believes larger penalties for business violators would decrease sales to minors.

“Something that could be helpful, and would be helpful, is if we could raise the fines for selling to youth,” Pennino said. “We refer to it as the ‘cost of doing business.’ If your fine is so low, but you can make that up in tobacco sales, it’s unfortunate.”

Tobacco taxation is a powerful component to lowering smoking rates, but it isn’t the “silver bullet” to prevent use, said John Schachter, director of state communications at the nonprofit advocacy organization Campaign for Tobacco-Free Kids. This is where prevention, cessation and treatment programs come into play.

This four-minute video depicts a good summary of this story.

Cancer research and prevention

The Maryland legislature in 2015 allocated approximately $17.9 million toward cancer prevention and research programs, an amount that comes from settlement money, according to a Cigarette Restitution Fund report.

These programs, such as colorectal screenings, allowed the state to use settlement money to both prevent and treat residents for cancer at the same time, creating a larger payoff, according to Donna Gugel, director of the Cigarette Restitution Fund.

As a result of treatment programs, Maryland, which had the ninth-highest overall cancer mortality rate in 1998, ranked No. 26 for the period 2007-2011, according to the Maryland Department of Health and Mental Hygiene.

Although Maryland saw success in its screening process, tobacco use prevention programs are cheaper than dealing with the side effects of smoking, Schachter said.

The state of Florida saw high school smoking rates plummet from 15.7% to 7.5% since the settlement, suggesting that the nation could save $122 billion in treatment costs if it follows suit, according to the Campaign for Tobacco-Free Kids.

Florida spends about 34% of CDC-recommended funding on smoking prevention, through education and media campaigns, ranking them No. 15.

Deceipt and harm

To Glendening, the major tobacco companies’ original actions were deceitful and harmful to the general public, as the major players consistently denied their product’s addictive quality.

“The big picture is that tobacco companies knew tobacco was addictive, and even more importantly, they actually added compounds to make it more addictive,” Glendening said. “When I think about any company that makes billions of dollars of profit at the expense of our lives and our children’s lives, I call that blood money.”

The tobacco companies’ only obligation is to comply with Master Settlement Agreement requirements and make the required payments, which they do, Bereano said.

“They have honored and followed their part of the settlement, which the court has required. It’s the other party, it’s the recipients, that really need to be accountable,” Bereano said.

A representative for Altria, parent company for Philip Morris USA, said they have held up their end of the settlement.

“Since signing the tobacco settlement agreements in 1997 and 1998, (Philip Morris) USA has paid the states more than $70 billion,” according to the representative in an email. “MSA payments provide states valuable resources to fund tobacco cessation and underage tobacco prevention programs. Philip Morris USA believes states should use MSA payments to fund these programs at levels recommended by the Centers for Disease Control.”

Bereano mentioned that despite the CDC recommendation, prevention efforts haven’t worked well and the money could go elsewhere, like for enforcement. For example, there could be a law that bans the sale and use of tobacco products by adults in the state, making it essentially illegal to use tobacco, he said.

“Everyone that smokes or uses a tobacco product, they know the consequences. They’re on the ads, they’re on the packages, and that’s all good and that’s proper and that’s appropriate,” Bereano said. “But again, it’s still legal and lawful, and as long as it’s legal and lawful, people should be left alone.”

CNS correspondents Bethany Hooper and Matt Beinart contributed to this report.