Under a 1998 national settlement, the major tobacco companies agreed to make annual payments to the states in perpetuity to resolve their liability for health-care costs attributed to smoking. Some states and cities borrowed against the payments, which are based on cigarette shipments. Altria Group Inc. , estimated that domestic cigarette industry shipment volume decreased by about 3.5 percent in the first half of 2017. Moody’s Investors Service projects 80 percent of the securities won’t make scheduled payments based on historical declines of 3 percent to 4 percent in U.S. smoking. A U.S. Food and Drug Administration proposal in July to cut the amount of nicotine in cigarettes to non-addictive levels cut tobacco bond returns 0.4 percentage point in the third-quarter, a potential buying opportunity, Barton said. Tobacco companies are expected to vigorously oppose the proposal. “Near-term, we don’t see a ban of nicotine in cigarettes," Barton said.
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Court of Appeals for the District of Columbia Circuit also ruled that the statements cannot include the phrase that Kessler required: “Here is the truth.” The court’s order requires that the companies publish five statements related to cigarette smoking across several communication channels, including on their websites and on cigarette packs for at least a year. The statement will cover these categories: Lack of significant health benefit from smoking “low tar,” “light,” “ultra light,” “mild” and “natural’ cigarettes. Manipulation of cigarette design and composition to ensure optimum nicotine delivery. Adverse health effect of exposure to secondhand smoke. “This industry has changed dramatically over the last 20 years, including becoming regulated by the FDA, which we supported,” Murray Garnick, the general counsel for Philip Morris USA’s parent company Altria Group Inc., said in a statement. “We’re focused on the future and, with FDA in place, working to develop less-risky tobacco products.” The newspaper ads with the corrective statements will appear in the front section of the Sunday edition on five different dates: Nov. 26, Dec. 10, Jan. 7, Feb. 4 and March 4. Each week will feature a different statement theme.
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