CVS Caremark announced that it will stop selling cigarettes and other tobacco products at its more than 7,600 CVS/pharmacy stores across the U.S. by October 1, 2014.
“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, President and CEO, CVS Caremark. “Put simply, the sale of tobacco products is inconsistent with our purpose.”
Merlo continued, “As the delivery of health care 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 health care providers and better positions us for continued growth in the evolving health care marketplace.”
“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.”
CVS Caremark’s decision to stop selling tobacco products is consistent with the positions taken by the American Medical Association, American Heart Association, American Cancer Society, American Lung Association and American Pharmacists Association that have all publicly opposed tobacco sales in retail outlets with pharmacies.
“As a leader of the health care community focused on improving health outcomes, we are pledging to help millions of Americans quit smoking,” said Merlo. “In addition to removing cigarettes and tobacco products for sale, we will undertake a robust national smoking cessation program.”
The program, to be launched this Spring, is expected to include information and treatment on smoking cessation at CVS/pharmacy and MinuteClinic along with online resources. The program will be available broadly across all CVS/pharmacy and MinuteClinic locations and will offer additional comprehensive programs for CVS Caremark pharmacy benefit management plan members to help them to quit smoking. Approximately seven in ten smokers say they want to quit and about half attempt to quit each year.
“Every day, all across the country, customers and patients place their trust in our 26,000 pharmacists and nurse practitioners to serve their health care needs,” commented Helena B. Foulkes, President, CVS/pharmacy. “Removing tobacco products from our stores is an important step in helping Americans to quit smoking and get healthy.”
The decision to exit the tobacco category does not affect the company’s 2014 segment operating profit guidance, 2014 EPS guidance, or the company’s five-year financial projections provided at its December 18th Analyst Day.The company estimates that it will lose approximately $2 billion in revenues on an annual basis from the tobacco shopper, equating to approximately 17 cents per share. Given the anticipated timing for implementation of this change, the impact to 2014 earnings per share is expected to be in the range of 6 to 9 cents per share. 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.