By Albert Lin
CVS Caremark announced on Wednesday that it would stop selling all tobacco products—cigarettes, cigars and chewing tobacco—in its 7,600 drugstores by Oct. 1. CVS is the first national pharmacy chain to make this move, eschewing an estimated $2 billion in annual revenue from the sale of such products.
“Ending the sale of cigarettes and tobacco products at CVS/pharmacy is the right thing for us to do for our customers and our company to help people on their path to better health,” President and CEO Larry J. Merlo said in a statement. “Put simply, the sale of tobacco products is inconsistent with our purpose.
“As the delivery of healthcare evolves with an emphasis on better health outcomes, reducing chronic disease and controlling costs, CVS Caremark is playing an expanded role in providing care through our pharmacists and nurse practitioners. The significant action we’re taking today by removing tobacco products from our retail shelves further distinguishes us in how we are serving our patients, clients and healthcare providers and better positions us for continued growth in the evolving healthcare marketplace.”
Here’s Merlo discussing the decision on CBS This Morning:
In a statement, President Obama said, “As one of the largest retailers and pharmacies in America, CVS Caremark sets a powerful example, and today’s decision will help advance my administration’s efforts to reduce tobacco-related deaths, cancer and heart disease, as well as bring down healthcare costs—ultimately saving lives and protecting untold number of families from pain and heartbreak for years to come.”
— The White House (@WhiteHouse) February 5, 2014
Some 480,000 deaths each year are linked to smoking, according to the U.S. Department of Health and Human Services. Forty-two million Americans are currently smokers, and 16 million current and former smokers have a smoking-related illness. Nine out of 10 cases of lung cancer are a result of smoking.
“It’s obvious that the average person will just find somewhere else to buy cigarettes,” said Troyen A. Brennan, Executive Vice President and Chief Medical Officer. “What we’re thinking about is if others want to emulate this business decision we’ve made, then over time that will make cigarettes less available—and scientific literature does suggest that a reduction in the availability of cigarettes reduces smoking.”
John R. Seffrin, CEO of the American Cancer Society, said in a statement that the decision is “an important new development in the fight to save lives from the devastating effects of tobacco use. We applaud CVS Caremark for its leadership and strongly encourage other industry leaders to follow suit.”
The company also announced that it will launch a smoking-cessation program in the spring, with information and treatment available at all of the company’s stores and its MinuteClinics. The cost of this treatment is expected to offset some of the lost revenue. (CVS reported revenues of $123 billion in 2012 and analysts project CVS’ 2014 revenue to approach $133 billion, meaning tobacco products would account for just 1.5 percent of total revenue.)
“This is a great example of how we’re evolving from a retail company to a healthcare company,” said Helena Foulkes, Executive Vice President, CVS Caremark and President, CVS Pharmacy. “This is the kind of offering we can bring to clients like insurance plans and companies, many of which will pay for such a program.”
CVS Caremark is one of DiversityInc’s 25 Noteworthy Companies.