The National Health Insurance Service (NHIS) said it was suing the two global cigarette makers, as well as local market leader KT&G Corp, in a South Korean court.
South Korea’s state health insurer said on Monday it was seeking an initial 53.7 billion won ($51.9 million) from three tobacco companies, including the local units of Philip Morris and British American Tobacco, to offset treatment costs for diseases linked to smoking.
Only four tobacco lawsuits have ever been heard in South Korea, all by individuals or families, and there is no precedent of a successful action against a tobacco company.
“We believe the NHIS, as it takes responsibility for the health of the public and oversees the insurance budget, has a natural duty to bring this tobacco lawsuit,” NHIS lawyer An Sun-young told reporters.
The damages were calculated based on data on payments by state insurers for patients with three cancer types associated with smoking, NHIS added. The insurer has previously said it spends more than $1.6 billion each year on treating smoking-linked diseases.
This lawsuit is the first by a state organization against tobacco firms among 37 countries and territories in the Western Pacific, according to the World Health Organization’s Western Pacific Region Office.
KT&G said it would base its response to the lawsuit on previous legal processes. Philip Morris was not immediately available for comment. BAT declined to comment.
Philip Morris and BAT combined for about a third of South Korea’s $9.3 billion tobacco market. KT&G accounts for the remaining just over 60 percent while Japan Tobacco International (JTI), an affiliate of Japan Tobacco Inc, has the smallest market share at 6.4 percent. JTI was not named in the lawsuit.
The NHIS lawsuit comes after South Korea’s Supreme Court ruled last week in favor of KT&G on a separate case brought by individuals.
Smoking is illegal and strictly prohibited in the following premises:
- Office, multi-use or factory buildings larger than 1,000 square meters in floor area (of which offices, conference rooms, auditorium and lobby must be smoke-free).
- Institutions larger than 1,000 square meters in floor area (of which classrooms, waiting rooms and lounges must be smoke-free).
- Shopping malls, department stores and underground malls (of which any shop selling goods must be smoke-free).
- Hotels and resorts (of which the lobby must be smoke-free).
- Universities (of which lecture rooms, lounges, auditorium, cafeteria and conference hall must be smoke-free).
- Indoor sports facilities such as basketball and volleyball courts which can seat more than 1,000 people (of which the seats and pathways must be smoke-free).
- Social welfare facilities (of which the living and working rooms, lounge, cafeteria and conference hall must be smoke-free).
- Airports, bus terminals and train stations (of which waiting rooms, domestic flights, cabins, inside trains, subway car and its platform and underground stations and underground pathways must be smoke-free).
- Any vehicle that can seat more than 16 people.
- Public baths (of which changing rooms and bathing rooms must be smoke-free).
- Game arcades, comic book renting shops and internet cafes.
- Restaurants such as cafes, fast food restaurants and bakeries.
- Baseball or football stadiums which can seat more than 1,000 people (of which the seats and pathways must be smoke-free).
- Kindergartens, primary and secondary schools.
- Hospitals and health centers.
Philip Morris sued by South Korea’s state health insurer BAT for Smoking Damages.