By Kim Jae-won
The nation’s health insurance agency said Thursday it is considering filing a damage lawsuit against KT&G and other tobacco companies for expenses it paid out in connection with diseases related to smoking.
The National Health Insurance Service (NHIS) said the state-run agency is studying the cause and effect between smoking and high cost diseases, such as cancers of the lungs, throat and stomach. Cerebrovascular illness and those related to high blood pressure are also subjects of the study, it said.
“We are researching how smoking affects diseases. We will discuss whether to file a lawsuit or not after the results come out,” said a spokesman for the NHIS.
If the NHIS files a damage lawsuit, experts say the amount will be at least a few billion dollars.
According to data from an in-house think tank of the NHIS, it paid 1.6 trillion won ($1.5 billion) in medical expenses in 2011 on diseases the agency assumes to be related to smoking.
It is the first time the national agency has considered legal actions against tobacco companies.
A group of individuals, including Bang Hyo-jeong, filed a damage lawsuit against tobacco companies for the first time in Korea 13 years ago, but lost at both a district court and a court of appeal in February 2011 after 12 years of legal battle.
KT&G, the nation’s biggest tobacco company, said that it is figuring out the intentions of the insurance agency and will prepare for if the agency files a lawsuit.
“We are collecting information about the NHIS research and are preparing how to respond to the lawsuit if it files,” said a spokeswoman for the company.
KT&G is the biggest player in the local tobacco market, accounting for 62 percent of market share last year. It posted 775.9 billion won of net profit in 2012, up from 768.4 billion won from a year ago.
The situation is very different from the United States, which acknowledges the relationship between smoking and lung cancer and has ordered tobacco companies to pay medical expenses.
For instance, in 2004, a New York jury awarded $20 million to the wife of a long-term smoker who died of lung cancer at the age of 57. That was the first time a New York court held a tobacco company liable for an individual smoker's death.