The landmark 1998 tobacco settlement was supposed to bring in billions of dollars for health care for Americans. Of the $61.5 billion that's been divided among 46 states between 2000 and 2006 only 30% has gone for health care according to the GAO. The Associated Press estimates that less than 4% has gone towards anti-smoking efforts.
States would rather use the money to fatten their general budgets. New York used some of its money for new carts and sprinklers for the Niagara County golf course. Alaska used some of its money to complete a museum featuring mummified bison. In Nebraska part of the money went for a dog catcher in Lincoln.
In 2005 the tobacco industry spent $13.1 BILLION on advertising and marketing. The Campaign for Tobacco-Free Kids estimates that states spent $718 Million on prevention.
States won the court case claiming the need to pay for medical expenses for those injured by tobacco products and to prevent tobacco illnesses in the future. Clearly once they got the money they had higher priorities.