Tobacco Master Settlement Agreement Factsheet

image of broken cigarette over blue backdrop

In 1998, 46 states and territories reached a Master Settlement Agreement (MSA) with four major cigarette manufactures in the United States. The purpose of the MSA was to settle numerous lawsuits filed by states against the tobacco industry to recoup medical costs for tobacco related conditions. In exchange for dismissing the pending lawsuits, the MSA requires the participating manufacturers (PMs) to make annual multi-billion dollar payments to states for the associated health care costs resulting from tobacco use; permanently restricts PMs from targeting advertising at youth; and required PMs to make a one-time contribution of $1.5 billion toward public education and counter advertising against cigarette use. Of the annual disbursements, 2.27 percent of the payments are allocated to the State of Missouri. This percentage is known as Missouri’s allocable share. This amount stays the same and does not vary by cigarette sales. The Settlement payments contribute an estimated $130 million to Missouri’s treasury each year.