As an incentive to join the transaction agreement, the agreement provides that when an MPS has entered into the transaction contract within ninety days of the date of execution of the transaction contract, that PMS is exempt from annual payment to the implementing states, unless the PMS increases its market share in the domestic cigarette market beyond its 1998 market share or beyond 125% of the market share of the 1997 MPS. If, in any given year, the market share of exempt MPS increases beyond these relevant historical limits, the MSA requires the exempt MPS to make annual payments to settlement states, similar to those of OPMs, but only on the basis of PMS sales, which represent the increase in the market share of the exempt MPS.  In the mid-1990s, more than 40 states launched a lawsuit against the tobacco industry seeking fair and underestimated financial relief under various consumer protection laws and agreements.  The first was declared in May 1994 by Mississippi Attorney General Mike Moore. But there are still huge challenges. The most recent data show that 34.3 million adults in the United States still smoke and 47 million — about 1 in 5 adults — still use some form of tobacco. In addition, there are large differences on the part of smokers who suffer from tobacco diseases. Smoking rates vary considerably by population and region: this comparison process has resulted in two other national agreements: revenues from domestic sales of tobacco products have increased after reaching the MSA and profits from this source have also increased. Although total domestic cigarette consumption decreased (22), cigarette prices were more than offset. These price increases have reduced the market share of OPMs, as price-sensitive smokers have switched to cheaper brands. Price increases have reduced total consumption, but they have also stimulated demand for these brands.23,24 OPMs have lost market share in PMS and NPM, which primarily markets discount brands. Given the considerable increase in the price of cigarettes, this postponement is plausible. The elasticity of demand estimates in the literature25 is for the industry as a whole.
The elasticity of demand for some companies is expected to be much higher than the elasticity of industry demand. For this reason, the long-term effect of MSA over a decade or more may be less business-friendly than in the first four years post-MSA. In this context, the status of the guardianship model requires that: that an NPM that sells cigarettes in a particular state do one of two things: 1) join the MSA and agree to “become a participating manufacturer (as defined in Section II (jj) of the [MSA] and, in general, make similar annual payments in a “reserve of responsibility” of the State. whose resources can only be used to pay a judgment or a means of transaction on a claim against the NPM. (After 25 years, the balance of the fiduciary account is returned to the NPM.)   Annual trust payments of an NPM in a given state are calculated by multiplying a cigarette amount set by the state legislator and set by law by the number of cigarettes sold in that state by the NPM in the year for which the payment is made.  The parties agree that this amount per cigarette is roughly equal to that requested by the MSA to OPMs and PMS for sales that are not tax-exempt.