New legislation to consider NIS 40 billion payment by tobacco companies

Bill to impose liability on tobacco companies could garner up to NIS 40 billion for health system and social needs.

January 18, 2018 18:43
3 minute read.
Smoking is one of the most harmful activities and even second handsmoke does damage to the body.

Smoking is one of the most harmful activities and even second handsmoke does damage to the body.. (photo credit: TNS)


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The Ministerial Committee on Legislation will consider a private member’s bill on Sunday that, if approved, could solve the financial problems of the health funds, the health basket, the hospitals, the National Insurance Institute and the disabled.

The bill wants to enable the authorities to force Israeli and foreign tobacco companies to pay between NIS 35 billion and NIS 40b. to cover the huge medical expenses that have been spent on tobacco-related diseases.

The bill, initiated by Yesh Atid MK Yael German, is supported by 35 lawmakers from both the coalition and the opposition.

It is modeled on a Canadian law that was passed in 2000 in British Columbia, and has been copied by other provinces, including Quebec. Israel’s Supreme Court referred to the Canadian law as a model in a 2011 judgment regarding tobacco compensation.

The public health interests who favor it hope it will lead to a result like that in the US, where litigation required compensation for tobacco-related medical care to the tune of $245b. paid over 25 years to Medicaid, which constitutes 15% of the US health system, as most of it is private and was not included in demands for compensation.

Most of that money has been paid up by the companies.

The state of Minnesota alone, which has a relatively small population of 5.2 million people, received under the US case $7b. in compensation, and this included only a minority of the medical expenditures for treating tobacco-related diseases in that state.

The series of lawsuits in the US was launched in 1994 and settled in 1998, a very quick result.

In Canada, the various provinces and the federal government are still arguing over their lawsuits for compensation.

“If the bill is passed and implemented, it will solve huge budgetary and human problems in Israel,” Amos Hausner, the anti-tobacco lawyer who heads the Israel Council for the Prevention of Smoking, told The Jerusalem Post on Thursday.

In 1998, Hausner appeared in court on behalf of Clalit Health Services – the country’s largest health fund – in a suit against the tobacco companies, demanding compensation for its medical expenditures for patients with tobacco-related diseases.

“I hope the government will stand by its citizens – the smokers who paid taxes and became ill as a result and the non-smokers who have had to pay for the smokers’ medical expenses – and demand compensation from the tobacco companies,” Hausner said.

Asked to comment on the bill, the Health Ministry spokesman would only say: “The issue was referred to the Justice Ministry for its position on this complex legal issue. The Health Ministry will announce its position during the discussion of the Ministerial Committee on Legislation.”

No comment was available by press time from the office of Justice Minister Ayelet Shaked.

In 2011, then-Supreme Court justice Ayala Procaccia, who headed the hearing of a similar case, sympathized with the anti-tobacco side, saying that the legislation for compensation was needed to deter foreign and local tobacco companies from “improper behavior,” such as the use of dangerous additives like ammonia to increase addiction, misleading the public by naming their menthol cigarettes as “lite,” and other measures taken to increase public tobacco consumption.

Thus, the current proposal was asked for by the Supreme Court years ago to deter the tobacco companies from their dangerous activities and products.

“The money will not come from smokers, but from the companies, mostly those abroad. According to the bill, they will all be liable to pay for health damages to the Israeli public,” Hausner said.

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