CVS to stop selling cigarettes by Oct. 1 by Sarah Kliff
CVS, one of the nation’s largest drugstore chains, said Wednesday that it will stop selling cigarettes at its 7,600 locations in an expensive but calculated bid to boost its image as a full-fledged health-care provider rather than a simple purveyor of greeting cards and shampoo.
Executives said the move will cost the company $2 billion a year in lost sales. But they are gambling that abandoning smokers will help them strike more profitable deals with hospitals and health insurers — and appeal to growing ranks of customers newly insured under the Affordable Care Act.
Industry analysts and public health advocates called it a watershed decision that could pressure other major pharmacies to follow suit. With health care on track to make up a fifth of the U.S. economy by 2022, CVS, Rite Aid, Walgreens — even Wal-Mart, Target and Kroger — have been rushing to open in-store clinics that administer flu shots and provide other services more traditionally offered in a doctor’s office.
“Health care is becoming more decentralized, and consumers are getting more choices about where to get care, whether that’s a retail clinic or a traditional hospital,” said Vaughn Kauffman, a principal in PriceWaterhouseCooper’s Health Industries practice. “As we’re out there talking to companies that are in retail, they see big opportunity here and are looking for ways to give consumers more convenient options.”
To date, these sanitized settings have existed side by side with cigarettes and other tobacco products, the leading cause of preventable death in the United States. By Oct. 1, CVS aims to be the first to break that link.
“By removing tobacco products from our retail shelves, we will better serve our patients, clients and health-care providers while positioning CVS Caremark for future growth as a health-care company,” Larry Merlo, president and chief executive of CVS, said in a video statement. “Cigarettes and tobacco products have no place in a setting where health care is delivered. This is the right thing to do.”
Read More: http://www.washingtonpost.com/blogs/wonkblog/wp/2014/02/05/why-cvs-thinks-it-can-win-big-by-ending-cigarette-sales/?wpisrc=al_comboNE