The powers-that-be at CVS Caremark announced this morning that they will stop selling all tobacco products at the company’s more than 7,600 stores by October 1st.
“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,” said Larry J. Merlo, CVS President and CEO, in a press release issued today. “Put simply, the sale of tobacco products is inconsistent with our purpose.”
It doesn’t take a genius to figure out why the pharmacy chain was selling tobacco in the first place. According to a paper published online this morning in the Journal of the American Medical Association, CVS raked in approximately $1.5 billion in revenues annually from tobacco sales. But “the financial gain is outweighed by the paradox inherent in promoting health while contributing to tobacco-related deaths,” according to the paper, which was co-written by CVS chief medical officer Troyen A. Brennan. “As a result, CVS has decided to cease tobacco sales in a phased approach over the next year.”
The American Pharmacists Association has been pushing pharmacies to go tobacco-free since 2010, and the American Medical Association, American Heart Association, the American Cancer Society, and the American Lung Association have since joined the cause.
To dovetail this effort, CVS is launching a smoking-cessation program this spring. It will include information and treatment on smoking cessation at CVS pharmacies and MinuteClinics, as well as online resources.
Because CVS estimates that it will lose as much as $2 billion in revenues annually from the tobacco shopper, the company expects its stock to take a 17-cents-per-share hit. According to the press release: “The company has identified incremental opportunities that are expected to offset the profitability impact. This decision more closely aligns the company with its patients, clients and health care providers to improve health outcomes while controlling costs and positions the company for continued growth.”
U.S. Secretary of Health and Human Services Kathleen Sebelius said in a statement that the CVS decision was “an unprecedented step in the retail industry,” adding that it would have “considerable impact.” Time will tell if other major retails will hop on board.
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