Blue Cross and Blue Shield of Minnesota Not Party to Settlement Talks.

ST. PAUL, Minn.--(BUSINESS WIRE)--April 16, 1997--Blue Cross and Blue Shield of Minnesota today cautioned against any type of tobacco litigation settlement that provides an easy out for tobacco companies. Blue Cross is not a party to tobacco litigation settlement talks between Philip Morris Cos. and RJR Nabisco Holdings Corp.

"We believe the industry is in deep trouble and is seeking a way out," said Andy Czajkowski, Blue Cross President and CEO. Blue Cross commenced litigation against the tobacco industry in partnership with the State of Minnesota in 1994.

"We have significant concern about this latest proposed agreement," Czajkowski said. "We will continue to monitor these negotiations and insist that our interests be addressed."

Blue Cross was not party to a settlement reached last month between the Liggett Group and 22 state attorneys general. At that time, Blue Cross -- the only corporate purchaser of health care to pursue litigation against the tobacco industry -- reiterated its goals for the suit.

Those goals, which remain unchanged, are:

-- Hold the tobacco industry accountable.

Blue Cross champions the proposition that the tobacco companies must provide adequate compensation for their conduct. This conduct has created a significant burden for Blue Cross and its subscribers due to the enormous costs of increased medical care, disability, premature death and lost productivity. Actual significant financial recoveries against each defendant will have a meaningful impact on future tobacco industry conduct.

-- Uncover the facts about tobacco industry conduct.

The facts must be made known about the decades-long pattern of tobacco company fraud and deception. Industry conduct must come to light when the Minnesota tobacco litigation proceeds to its conclusion in 1998. To date, Blue Cross and the state have reviewed over 30 million pages of industry documents. No other litigation comes remotely close to revealing the facts about the industry's secret research in smoking and health, addiction and nicotine manipulation.

-- Help kids avoid tobacco.

The tobacco industry has concentrated its marketing on impressionable children, the only growth segment in the cigarette market. Children are the industry's replacements for adult smokers who die. America's youth should no longer be preyed upon by the tobacco companies. A well-funded and effective public education campaign directed to children, and paid for by tobacco companies, must be initiated and sustained.

Blue Cross and Blue Shield of Minnesota, based in Eagan, a suburb of St. Paul, Minn., covers more than 1.6 million people through its own health plans or plans that it administers. Blue Cross, an innovator in improving the health of Minnesota communities, is Minnesota's oldest and largest health plan. The company began operations in 1933. Blue Cross and Blue Shield of Minnesota is an independent licensee of the Blue Cross and Blue Shield Association, headquartered in Chicago.

CONTACT: Greg Bury, 612/456-6850

Karl Oestreich, 612/456-1502