SEOUL Jan 24 South Korea's state health insurer
plans legal action against tobacco firms to get reimbursed for
some of the $1.6 billion it says the country spends each year on
treatments linked to smoking.
The move could spark a legal battle with major global firms
such as Philip Morris and British American Tobacco
The two firms, together with Japan Tobacco International
(JTI), an affiliate of Japan Tobacco Inc, have a
combined share of close to 40 percent of South Korea's tobacco
market, worth an estimated $9.3 billion.
Over the past decade, the three firms have grabbed away
market share from former state-owned tobacco and ginseng
products maker KT&G Corp, reducing it to 61.7
percent by the end of 2013 from 76.7 percent.
The decision to seek damages was made at a meeting of the
National Health Insurance Service (NHIS) board on Friday, but
the scope, timing and counterparties of the lawsuit have not yet
been decided, a spokeswoman for the insurer said.
KT&G, privatised in 2002, declined to comment. Local units
of Philip Morris, BAT and JTI could not be reached for comment.
NHIS Chairman Kim Jong-dae wrote on his personal blog in
December that it could initially sue for the reimbursement of
43.2 billion won spent for lung cancer treatments in 2010 alone.
Kim also said it could provide information or assistance to
any regional governments or lung cancer patients and their
families if they wanted to pursue lawsuits.
Only four "tobacco" lawsuits have ever been brought in South
Korea, all by individuals or families.
There is no precedent of a successful action against a
tobacco company, with two of the cases now awaiting rulings by
the country's Supreme Court, wire service Yonhap has said.
Trade group Korea Tobacco Association issued a rejoinder to
Kim's comments in a statement this week.
Because KT&G was formerly state-run, it added, the national
health insurer's claims for patients who began smoking in the
1980s and 1990s could result in a government body suing the