Pedestrians walk past a CVS store in Chicago in February 2012.(Photo: M. Spencer Green, AP)
WASHINGTON (USA TODAY) -- Drug store giant CVS Caremark announced Wednesday it will no longer sell tobacco products at its 7,600 pharmacies by Oct. 1.
sells $2 billion in tobacco and tobacco-related products a year, or 3%
of overall sales, but CVS officials said selling cigarettes while
promoting wellness doesn't make sense.
"Selling tobacco is very
inconsistent with being in that business," said Helena Foulkes, CVS's
pharmacy president. "We really thought about this decision as it relates
to the future as a health company - it's good for customers and our
company, in the long run."
Foulkes told USA TODAY that CVS sees
its future as an alternative to the doctor's office, with 26,000
pharmacists and nurse practitioners counseling customers about how to
control their high cholesterol, diabetes and high blood pressure.
form of tobacco use makes those chronic conditions more difficult to
deal with," she said. "This is good for business and the right thing to
President Obama - a former smoker - hailed the announcement,
saying in a statement Wednesday: "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
health care costs - ultimately saving lives and protecting untold
numbers of families from pain and heartbreak for years to come."
STORY: Obama applauds CVS decision on tobacco
officials met with tobacco company executives Tuesday to explain the
decision, understanding that eliminating tobacco products from the
pharmacies would likely affect the tobacco industry's bottom line, as
"Obviously, you would think they would be disappointed about
the decision," said Larry Merlo, CEO of CVS Caremark, of the meeting
with the officials. But he said they understood the rational behind the
decision. And it probably won't be a huge loss for them: Morgan Stanley
issued an analysis Wednesday stating that CVS probably accounts for
about 2% of industry sales.
"We do not believe that CVS's exit -
or the potential exit of other pharmacy chains in the future - will
reduce total sales," the statement reads.
pharmacies are expected to eventually follow suit, and some cities in
California and Massachusetts have banned tobacco sales at all
pharmacies. The American Pharmacists Association asked for a ban on
sales in 2010 at pharmacies, including at grocery stores that have
pharmacies, according to an article published in the Journal of the American Medical Association (JAMA) Wednesday
the Affordable Care Act is implemented, it's important to help people
stay healthy, said Troy Brennan, the company's chief medical officer.
expensive to provide health care for all the people through the ACA,"
Brennan said. The company will announce a "very large" smoking cessation
program in the spring.
Foulkes said seven out of 10 smokers would like to stop, and half have tried to in the past year.
Emanuel, a University of Pennsylvania bio-ethicist and one of the
architects of the health care law, said he sees smoking as one of the
top health issues facing the United States. He agrees that reducing
smoking-related costs is important as more people become insured so
others don't have to take on the burden of those costs and called
working to reduce smoking "kind of a no-brainer."
CVS expects to
lose about $2 billion in sales annually, Foulkes said, but the company
hopes to recoup its losses in other ways, including an increased focus
on its pharmacy management benefit program to help insurers save money
on employees' health. Merlo said the change would not affect their
And while they intend to look at other ways to push a
health-oriented focus, Merlo said they had no plans to eliminate
alcohol or candy from the pharmacies, saying that "occasional use does
not cause the problems that tobacco does." Instead, they intend to focus
on keeping tobacco out of the hands of young people so they don't begin
lifelong addictions, he said.
More than 480,000 people die from
smoking-related ailments a year, according to the JAMA article by
Brennan and Steven Schroeder, director of the Smoking Cessation
Leadership Center at the University of California.
gone down significantly, from 42% of adults in 1965 to 18% today. This
comes after increases in taxes, and public areas - such as airports,
bars and federal buildings - where smoking is prohibited. Advertising
also diminished the appeal of smoking. Just this week, the American
Cancer Society launched an advertising campaign aimed at how teenagers
would look in the future if they begin smoking now. Still, 42 million
people smoke and 16 million are sick, according to JAMA.
Island-headquartered company maintained that its exit from the tobacco
category will not affect its 2014 operating profit guidance. Its shares
are down about 1% in pre-market trading.
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