Senate Passes Historic Tobacco Bill

WASHINGTON (Reuters) - The Senate overwhelmingly approved a landmark tobacco deal on Thursday to give the Food and Drug Administration long-sought power to regulate cigarettes and give $12 billion in aid to tobacco farmers.

Though hailed as a breakthrough by public health groups, the measure faces an uncertain future because it was approved as part of a massive corporate tax bill that must still be reconciled with the House of Representatives's version. Those talks are expected to be long and complex.

The lopsided 78-15 vote will strengthen the Senate position in those negotiations, and many lawmakers who want greater public health jurisdiction over tobacco were more optimistic than they had been since 1998, when a tobacco bill linked to multibillion-dollar state lawsuits against tobacco companies collapsed.

"This represents a fundamental change and a fundamental step forward," said Matt Myers of the Campaign for Tobacco-Free Kids.

While the House and Senate have had extensive hearings and probes of Big Tobacco, Myers noted this would be the first time either chamber had passed meaningful regulation of the companies' advertising, marketing, ingredients and safety claims.

The FDA itself tried to assert its authority over tobacco in the 1990s, but the battle went to the Supreme Court, which ruled in 2000 that the FDA did not have jurisdiction under existing law. This legislation would change the law and grant the agency that explicit power.

Under the proposal, the tobacco industry would finance a $12-billion buyout of Depression-era crop quotas, an arcane price support system that no longer serves farmers' economic interests in an increasingly global market.

Mitch McConnell, who represents the tobacco-growing state of Kentucky and is the number two Republican leader in the Senate, agreed the components of the bill had to be linked if either was to pass.

"It's not a shotgun wedding, it's a marriage of convenience," said McConnell, lead author of the buyout legislation.

"Yes it's a marriage of convenience, but I believe it's a good marriage," agreed Ohio Republican Mike DeWine, a co-author with Massachusetts Democrat Edward Kennedy of the FDA bill.

"This is the most important step we can take for public health short of curing cancer itself," Kennedy said.

The proposal would give the FDA expanded powers to require more forceful health warnings on cigarette packs, regulate advertising, more aggressively combat underage sales and regulate ingredients to make cigarettes less harmful. It could not ban cigarettes or completely eliminate nicotine.

The major cigarette companies are divided over the measure. The Altria Group, the parent company of Philip Morris, has endorsed it, but R.J. Reynolds Tobacco Co on Thursday repeated its "vigorous opposition."

A rival House version of the tobacco measure attached to the corporate tax bill would cost taxpayers -- not the industry -- $9.6 billion, and is not linked to FDA regulation.

Smoking is the top preventable cause of death in the United States, leading to 400,000 deaths a year. Ninety percent of smokers get hooked as children or teen-agers, according to public health groups.

(Notice the date. This has been going on for quite sometime)

Smoke screen/Phillip Morris Wants The FDA to regulate cigarettes

What's Really Going On- 07/29/2002

(If they are so against smokers and cigarettes, why do they continually sell cigarettes and tobacco products? Why don't they just pull it off of the market and stop making them!)

Philip Morris, the nation’s largest cigarette manufacturer and historically a leading opponent of tobacco regulation, has broken with the rest of the industry and is embracing the government intervention it has spent decades fighting.

NEXT WEEK, Senate health committee Chairman Ted Kennedy, a longtime Philip Morris nemesis, is holding hearings on a bill that would put cigarettes under the oversight of the Food and Drug Administration. In a shift that has surprised both allies and opponents, Philip Morris lobbyists say they are eager to see the Kennedy bill move forward.

Philip Morris believes in “soup to nuts regulation of the entire industry, and we think that the FDA should be involved in all of that,” says chief legislative counsel Mark Berlind. He says the company wants to see federal oversight of cigarette ingredients, warning labels, manufacturing, and marketing-with, he adds, a few limitations. But more on that later.

APART FROM THE PACK

Philip Morris’ flip-flop has left the rest of the tobacco industry feeling confused, angry, and jilted. “They are impenetrable to me. Their strategy is impenetrable, their positions are impenetrable,” says a veteran lobbyist for one of the cigarette makers opposing FDA regulation, who spoke on the condition his name not be used. “I find their positions to be nuts.” By endorsing even limited regulation, he says, Philip Morris is opening a Pandora’s Box.

The smaller companies — R.J. Reynolds, British American Tobacco, Lorillard, and chewing tobacco and cigar manufacturers — all stridently oppose FDA regulation.

“It’s as fractured as the industry has been on an issue,” says Robert Campagnino, senior tobacco analyst for Prudential Securities.

It wasn’t so long ago that Marlboro-maker Philip Morris was public enemy No. 1 in Washington. In 1998, Philip Morris spearheaded a $100 million tobacco-industry advertising and lobbying blitz to fend off the legislation sponsored by Sen. John McCain to put the industry under FDA control.

Its fight was successful, and today cigarettes have less federal oversight than hot dogs. But $74 billion in punitive-damage judgments and more than 1,500 current lawsuits can make even the most recalcitrant corporation rethink its strategy. “We want people to know that we are dealing with the issues that arise from this product, and we think that FDA regulation is the best way to get there,” says Philip Morris’ Berlind.

BEHIND THE SMOKE

Philip Morris’ quest for governmental approval is not masochistic: There are solid business reasons for it. The company, which commands more than half of the U.S. tobacco market, earned $20 billion last year from domestic cigarette sales. But that market is, literally and figuratively, dying off at 2 percent to 3 percent a year. Philip Morris sees the future in a line of “safe” cigarettes it is developing. An FDA stamp of approval for them would be a major marketing asset. With its commanding share of the U.S. market, the company figures it can work within FDA rules to swamp its smaller competitors.

“The way they calculate it is they are going to lock in their market share so they can go to the investors and say, ‘Look, we’re practically a utility. We can guarantee this revenue stream. There aren’t any risks out there from government, we’ve solved them all,’ ” says James Derderian, who was chief of staff to the Republican-controlled House Commerce Committee during the late 1990s tobacco wars.

Philip Morris’ struggling rivals can’t afford its boldness. R.J. Reynolds is desperate for a larger share of the U.S. market. The company sold off its profitable foreign operations to Japan Tobacco in 1999, leaving it with billions in potential liability and a shrinking customer base. British American Tobacco, while fighting regulation in the United States, is simultaneously pitching itself as a responsible corporate actor abroad, leading the industry’s fight against smuggling and corruption.

The smallest of the opponents, Loews Corp.’s Lorillard Tobacco Co., calls the Kennedy bill the “Marlboro monopoly act.” “It will virtually eliminate our ability to communicate with adult consumers, thereby locking in Marlboro’s dominant position,” says Lorillard spokesman Steve Watson.

CHANGE IN STRATEGY?

Philip Morris doesn’t accept all the regulation proposed in the Kennedy bill. Probably the most controversial change Philip Morris seeks is to limit the FDA’s ability to ban cigarette ingredients. Berlind says Philip Morris just wants to prevent the FDA from making cigarettes so unpalatable that nobody will smoke them. But according to a longtime policy adviser to the company who spoke on condition of anonymity, Philip Morris is really worried that the FDA will ban nicotine. “If they say you can have half as much nicotine, and then have half as much again, and pretty soon you have a product nobody will buy,” says the adviser.

Public-health advocates are dubious of the Philip Morris reversal — they’re especially leery of Philip Morris’ desire to advertise its new smokes as “safe” — but they are starting to accept that the tobacco giant has changed strategy. “In the beginning I was cynical and thought this was a concerted ploy by the industry, but now I do think there is a real split,” says American Lung Association chief lobbyist Paul Billings, who has been fighting the tobacco industry for a decade.

Philip Morris actually began its campaign to get an FDA stamp of approval right after the Bush administration took office, according to lobbyists who do work for the company. Philip Morris tried to get the administration to sponsor an FDA bill, but Bush advisers decided the president should stick to tax refunds and avoid a messy tobacco fight.

LOBBYING POWER

Appalled at their former ally’s betrayal, the remaining tobacco companies have banded together to block any potential regulation. They have scored a lobbying coup by hiring former Rep. Tom Bliley, the pro-tobacco ex-chairman of the Commerce Committee. Bliley was once known as “the congressman from Philip Morris” because his district included the company’s Richmond, Va., manufacturing headquarters. Capitol Hill scuttlebutt has it that Bliley and Philip Morris never really got along, so his working for the competition is not a surprise.

“Bliley is there to make sure that members realize that there’s more than Philip Morris in the industry,” says a lobbyist for one of the cigarette-makers in the anti-FDA coalition. He says that Bliley, who did not return a call, has been telling his former GOP colleagues that taking up tobacco control legislation is a waste of time because it’s controversial, tedious, and in the end accomplishes nothing.

But as Bliley should know more than anyone, Philip Morris has spent decades (and millions) getting Congress to do what it wanted — which was usually nothing. Now it wants something done, so something may happen.

U.S. Senators offer bill regulating tobacco by FDA

Senators Snowe and Collins of Maine support this. Both RINO'S

Friday June 14, 3:21 pm Eastern Time -By Susan Cornwell

WASHINGTON, June 14 (Reuters) - The Food and Drug Administration would regulate tobacco products under legislation introduced on Friday by a bipartisan group of senators looking to stop tobacco advertising aimed at children.

Co-sponsor Sen. Edward Kennedy denied the intent was to ban smoking. "This legislation is about protecting children," the Massachusetts Democrat told a news conference. "There are Americans who are going to smoke, and we understand that."

The U.S. Supreme Court ruled two years ago that the FDA had overstepped in authority in 1996 when it issued sweeping regulations for tobacco products.

"This legislation will give FDA the power to prevent industry advertising designed to appeal to children wherever it will be seen by children," Kennedy said at a news conference along with co-sponsors Sen. Mike DeWine, an Ohio Republican, and Sen. Richard Durbin, an Illinois Democrat.

Kennedy said the bill closely tracked a 1998 bill that had broad support in the Senate. He expected companion bipartisan legislation to be introduced in the House of Representatives soon, but he declined to name the anticipated sponsors.

The tobacco industry lobby is divided over efforts to legislate FDA authority over their products.

Loews Corp.'s Lorillard Tobacco Co., maker of Newport and Kent cigarettes, quickly issued a statement denouncing the measure as an attempt to ban smoking.

"We interpret this proposed legislation as a thinly-veiled attempt to grant authority to an agency that by the terms of its existing mandate, must find cigarettes are not and can never be made safe and effective, and therefore would have no choice but to eventually ban the product," said Steve Watson, the company's vice president for External Affairs.

But tobacco giant Philip Morris Cos. Inc. said it welcomed the Kennedy bill. "Where there are difference, they are in degree only," said Michael Pfeil, public affairs vice president.

Under the bill, the FDA would have the authority to reduce or remove hazardous ingredients from cigarettes.

The measure would also provide for stronger warning labels on all cigarette and smokeless tobacco packages, and give the FDA the authority to prevent "misrepresentations" of tobacco products.

And it would give the FDA the power to limit the sale of cigarettes to face-to-face transactions in which the age of the purchaser can be verified by identification.

The legislation was backed by over two dozen public health groups including the American Cancer Society and the Campaign for Tobacco-Free Kids. They said it was an improvement over earlier proposals that also would have allowed the FDA to regulate tobacco but were "filled with loopholes.". (Washington congressional newsroom, 202-898-8390))

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$12 BILLION Welfare! ??