CVS Caremark says ‘no’ to tobacco

Drugstore giant, CVS Caremark, said Wednesday (Feb. 5) that it will stop selling tobacco products by Oct. 1. The play was highly scrutinized by Wall Street analysts that predict it’s a $2 billion ding to retailer’s annual topline sales. Overall, the company brought in more than $123 billion in total revenue in 2012.


The move, which drew praise from President Barack Obama, doctors and anti-smoking groups puts pressure on other retailers to stop selling tobacco as well. But in the highly competitive marketplace for retail foot traffic it could be a hard sale for other convenience chains.


CVS CEO Larry Merlo said the company concluded it could no longer sell cigarettes in a setting where health care also is being delivered. CVS and other drugstore chains have been adding in-store clinics and expanding their health care offerings. They've also been expanding the focus of some clinics to include helping people manage chronic illnesses like high blood pressure and diabetes, which has made for some awkward conversations, the company noted in the release.


"CVS Caremark is continually looking for ways to promote health and reduce the burden of disease," said CVS Caremark Chief Medical Officer Troyen A. Brennan, M.D., M.P.H. "Stopping the sale of cigarettes and tobacco will make a significant difference in reducing the chronic illnesses associated with tobacco use."


But CVS is in a unique position from some of its peers. While it trails only Walgreen in number of drugstores, it draws most of its revenue from its pharmacy benefits management business that runs prescription drug plans for employers, insurers and other customers.
 Analysts believe other drugstore chains may follow suit, especially those the see themselves as part of the health care solution.

Northwest Arkansas will get its first CVS Pharmacy by early summer as construction in already underway in Bella Vista at the intersection of Dartmoor and Bella Vista Way, (U.S. 71.)