Non-settling states adjustment. This factor reduces the amount due to states that do not approve the settlement, but does not affect states that approve the settlement. Non-participating manufactures adjustment. This factor reduces payment amounts if participating manufacturers lose market share to firms that are not subject to the agreement. Federal legislation offset .
Litigation releasing parties offset.
Finally, unlike the tobacco agreement considered by Congress, this agreement only applies to US manufacturing subsidiaries. Thus, the parent companies are not liable for payments if a US subsidiary declares bankruptcy. In previous deliberations, the federal government reserved the right to claim the portion of the funds allocated to the states on behalf of Medicaid clients. In an attempt to prevent such a federal claim, the settlement agreement explicitly states that the payments authorized are not made as reimbursement for Medicaid expenditures. President Clinton recently announced plans to pursue federal litigation against the tobacco industry.