Tobacco company makes $3.5B payment

The amount includes about $400 million the Richmond-based tobacco company disputes owing. The company said it will try to get that money back through negotiations or arbitration.

Philip Morris took the same approach last year, paying the full amount rather than making a partial payment and depositing the disputed amount into a separate account as allowed under the settlement agreement.

The company “hopes that its gesture will facilitate an expeditious resolution” of the dispute, said Denise Keane, executive vice president and general counsel.

As part of the landmark settlement to reimburse states for smoking-related health care costs, tobacco companies agreed to make about $206 billion in annual payments over more than two decades. Those companies say a provision in the settlement entitles them to a reduction if they lose market share to “nonparticipating manufacturers” ? competitors operating outside the pact.