Philip Morris and other top cigarette makers pay more than $6 billion to US states under settlement agreement

Top US cigarette makers said Monday they have made their annual payments under a 25-year agreement in which some tobacco companies are helping states cover the health costs of ailing smokers, according to Bloomberg. 

Philip Morris, the country's biggest cigarette maker, has paid $3.5 billion for this year under the 1998 Master Settlement Agreement, but is challenging $206 million of that sum, Steve Callahan, a spokesman for the Marlboro-maker, was quoted by Bloomberg as saying.

According to Reuters, Reynolds American, which makes Camels and Pall Mall, has paid nearly $2 billion for 2012 and has put the $469 million that it says it doesn't owe into escrow.

Lorillard, known for its Newport and Kent brands, has paid $1.1 billion and is disputing $98 million of that amount, which it has put in a separate account, the Associated Press reported.

As part of the 1998 settlement states agreed to settle lawsuits against the tobacco industry.

Cigarette manufacturers who signed the deal promised to change the way they marketed their products and make about $206 billion in payments to most states over more than two decades.

Under the terms of the agreement, participating companies' payments are reduced by the amount of market share they lost to firms that did not sign the settlement. But the heavyweight cigarette makers have for years argued the reductions are not big enough.

A report released last month shows tobacco-related deaths have nearly tripled in the last decade.

TobaccoAtlas.org, an anti-smoking website produced by the American Cancer Society and the World Lung Foundation, said tobacco companies earned $35.1 billion in profits in 2010 and made $246.2 billion total in revenue. At the same time, deaths from tobacco continue to rise, especially in China.