U.S. Cigarette Makers Reach Deal with States

Three U.S. cigarette makers say they have reached a settlement with 17 states, Washington D.C. and Puerto Rico to resolve a dispute over payments required under a 1998 anti-smoking agreement.

Philip Morris USA, R.J. Reynolds Tobacco Co. and Lorillard Inc. said Tuesday that they will give the states their portion of more than $4 billion in disputed payments. In exchange, the manufacturers will receive credits against future payments.

The payments stem from the 1998 Master Settlement Agreement that ultimately prevented companies from being sued by state governments for the costs of health care for smokers. The settlement required a combination of yearly payments to states and voluntary restrictions on tobacco advertising and marketing.

Copyright 2012 The Associated Press