Robert G. Bell, Ph.D. is president and owner of Drug and Biotechnology Development LLC, a consultancy to the pharmaceutical industry and academia for biological, drug, and device development.
On February 5, 2014, CVS Caremark (CVS) pharmacies, the 13th largest U.S. business as rated by Fortune 500, announced they will stop selling tobacco products in their more than 7,600 stores. “CVS quits for good” is displayed on their homepage, and no more tobacco products will be sold as of October 1, 2014. The decision will cost CVS about $2 billion a year in revenue which is small in comparison to its overall sales of $125 billion in 2012.
In a statement by CVS CEO Larry Merlo, it is “the right thing to do”, realizing tobacco products are a contradiction in healthy living. President Obama also chimed in, saying CVS is setting a “powerful example,” and the decision will help his administration’s efforts to reduce tobacco-related deaths and disease and bring down health care costs. CVS is announcing they will be implementing smoking cessation programs across all of the CVS pharmacies and minute clinics.
Losing $2 billion a year in revenue is never an easy decision to make in a publically traded company. On an interview with CBS This Morning, Merlo said CVS wants to play a bigger role in the evolving health care system. “It’s my job as the CEO to ensure that we’re positioning the company for not just short term success, but long term success,” he said. CVS is evolving into more of a health care company. “We have 26,000 pharmacists and nurse practitioners, who are helping millions of patients across the country every day, manage conditions like high blood pressure, high cholesterol, diabetes – all conditions whose effects are worsened by the impact of smoking.”
In response to CVS, Walgreens released a statement saying, “We will continue to evaluate the choice of products our customers want, while also helping to educate them and providing smoking cessation products and alternatives that help to reduce the demand for tobacco products.”
Target banned the sale of tobacco products from their stores in 1996.
How does this impact the tobacco industry? David P. Howard, a spokesman for R.J. Reynolds Tobacco Co., issued a short statement saying that Reynolds values the relationship it had with CVS and respects the pharmacy chain’s decision. Furthermore, Howard cited market research by Euromonitor International that indicated only about 3.6 percent of cigarettes sold in the U.S. in 2012 were sold at pharmacies. Nearly 48 percent were bought at gas stations, 21 percent in specialty tobacco stores, and about 16 percent in convenience stores.
The pharmacist, along with many other health care providers, has always been on the front line of defense for your health. And with healthcare systems still evolving, the pharmacy and pharmacist will take more active roles in patients’ overall health and subsequent outcomes. Many pharmacies have clinics that provide multiple health services, including vaccinations, diagnostic testing, medication management, and Medicare plan reviews. CVS is taking a proactive approach in not providing products inconsistent with healthy outcomes. CVS is trying to integrate a holistic health approach to overall wellness, which will only benefit their communities, patients, and customers who visit their pharmacies. The upcoming CVS smoking cessation programs, as well as ceasing the sale of tobacco products, demonstrates their commitment to providing positive health outcomes over retail interests.
An interesting health care dilemma presents itself with medical marijuana. Although there are noted benefits with medical marijuana, smoking is still smoking and carries the same health risks as smoking tobacco. It seems we have a contradiction in the making, but we will leave that for another time.
The CVS decision may be a brilliant business move in the ever-changing and evolving nature of the pharmacy healthcare business rather than effectively snuffing out tobacco. But thanks CVS, every little bit helps.