Maybe I’ll buy a penthouse condo or take a round-the-world cruise or buy a cup of latte at Starbucks. What are you going to do with your share of the loot, now that you’ve already gone through that earlier windfall from tobacco industry? I am referring, obviously, to the billions to be handed out by the Sackler family. If you have spent the last few weeks debating the Presidential debates, here’s a brief rundown to put you up to speed. The opioid crisis is an epidemic, even though deaths have declined slightly, from about 49,000 in 2017 to 47,600 in 2018. A prime supplier of OxyContin, an opioid pain medication sometimes called a narcotic, is Purdue Pharma, owned by the Sackler family. They have a net worth estimated at $14 billion, making them America’s 19th-richest family, according to Forbes magazine. But the exact value of their fortune is not known and is believed by some to be much larger. The New York attorney general has found $1 billion the family hid in Swiss banks.
Facing thousands of lawsuits, the Sacklers say they will fold. The agreement between the family with about half the states and attorneys – others are holding out for more — representing roughly 2,600 local governments, forced Purdue to file for bankruptcy and pay as much as $12 billion over time, with about $3 billion coming from the Sackler family itself. In addition, the family would give up its ownership of the company and contribute an additional $1.5 billion by selling another of its pharmaceutical companies, Mundipharma. Texas is among the states that have agreed to the settlement. More than 1,400 people in Texas died from overdoses involving opioids in 2017, according to the National Institute on Drug Abuse, which obtained its data from the U.S. Centers for Disease Control and Prevention. While this is not nearly as many deaths as in northern states like Ohio and Pennsylvania, the number of such deaths has been increasing steadily in Texas over the past 20 years, with the bulk resulting from prescription opioids.
For spending guidelines, we turn to the Tobacco Master Settlement Agreement of 1998, the largest civil settlement in U.S. history. This settlement between 46 states (some states settled separately) and the District of Columbia with the major tobacco companies provided for annual payments to the states of $206 billion over the first 25 years and the payments continue indefinitely. In turn, the states promised to spend the funds on ads, specifically aimed at young people, telling them about the evils of smoking, plus medical costs of caring for the 16 million Americans who have smoking-caused illnesses. But the settlement agreement did not require that it be spent for a particular purpose. Oh, you are already ahead of me. Guess what? In the current budget year, Fiscal Year 2019, the states will collect $27.3 billion from the settlement and taxes. But they will spend just 2.4 percent of it – $655 million – on programs to prevent kids from smoking and help smokers quit.
Colorado has spent tens of millions of its share to support a literacy program, while Kentucky has invested half of its money in agricultural programs. South Carolina gave 15 percent of settlement funds to tobacco farmers affected by the drop in prices for their crop, while North Carolina used 75 percent of its settlement funds for tobacco production, while some went to private tobacco producers, covering tobacco-curing equipment, a tobacco auction hall, video production for a tobacco museum and plumbing for a tobacco processing plant.
Michigan spent 75 percent of its settlement funds on scholarships for high school students. New York allocated $250 million for debt reduction. While only spending $5 million on youth smoking prevention, Illinois dropped $22.1 million to improve state buildings. Two Nevada PBS stations received $2 million to develop high-definition TV capabilities in exchange for airing some anti-tobacco ads. Niagara County in upstate New York spent $700,000 for a sprinkler system at a public golf course. The county also spent $24 million for a county jail and office building. In Wrangell, Alaska, $3.5 million was used to renovate shipping docks. In Los Angeles, former Mayor Richard Riordan proposed using $100 million in tobacco money to defend cops who are accused of planting drugs and guns on suspects. He was turned down.
The Centers for Disease Control and Prevention (CDC) recommended that states should spend approximately $3.3 billion per year on tobacco prevention and education, but the states budgeted a little less than 2 percent of that money, or less than $500 million. That means that for every dollar the states got from the tobacco settlement, two cents was spent on preventive programs. How about Texas? The CDC reported that Texas:
• Ranks 44th among the states in spending the money as promised.
• Rakes in $1.933.3 billion in a total tobacco revenue
• Spends on tobacco prevention: $4.2 million, which is 1.6 percent of the CDC’s recommendation of $264.1 million
• Spends: 4.2 percent of state budget on anti-smoking programs
Here are a few more stats on Texas tobacco to consider before lighting up:
• Estimate annual tobacco marketing in Texas: $652.4 million
• Adult Texans who smoke: 3,287,300 (15.7 percent)
• High school students who smoke: 181,200 (11.3 percent)
• High school students who use e-cigarettes: 1.89 percent
• Death caused by smoking each year: 28,000
• Annual health care costs directly caused by smoking: $8.85 billion
• Texas residents’ state and federal tax burden from smoking-caused government expenditures: $747 per household
Back to all that money from Purdue Pharma. None of it will go to individuals, but to various governments. Just what Texas will do is not known, but maybe it will pay for private treatment centers, so set up your own string of Texas Anti-Opioid Clinics. Slogan: “We’re a shot in the arm.” Buy some ads, hire people to don white coats, and “doctors” (their doctorate can be a PhD in history), then stand by to collect. If you don’t do it, someone else will.
Ashby is greedy at firstname.lastname@example.org