Just over 50 years after the release of the first United States Surgeon General’s Report on Smoking and Healthlinkingcigarette smoking to poor healthCVS Caremark announced that it stops selling cigarettes and other tobacco products at its more than 7,600 CVS/pharmacy stores across the U.S. by October 1, 2014. This makes the company the first national pharmacy chain to take this step in support of the health and well-being of its patients and customers.[1][2]
Explaining the primary reason for the extraordinary initiative, Larry J. Merlo, President and CEO, CVS Caremark noted: “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. Put simply, the sale of tobacco products is inconsistent with our purpose.”
Emphasis on better health outcomes
Merlo continued, “As the delivery of health care evolves with an emphasis on better health outcomes, reducing chronic disease and controlling costs, we’re 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.”
…put simply, the sale of tobacco products is inconsistent with our purpose…
Premature disease and death
Smoking is the leading cause of premature disease and death in the United States with more than 480,000 deaths annually. While the prevalence of cigarette smoking has decreased from approximately 42% of adults in 1965 to 18% today, the rate of reduction in smoking prevalence has stalled in the past decade. More interventions, such as reducing the availability of cigarettes, are needed.
Promoting health
“CVS Caremark is continually looking for ways to promote health and reduce the burden of disease,” noted 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.”
In a Journal of the American Medical Association (JAMA) Viewpoint published online this morning, Brennan and co-author Steven A. Schroeder, Director, Smoking Cessation Leadership Center, University of California, San Francisco, wrote, “The paradox of cigarette sales in pharmacies has become even more relevant recently, in large part because of changes in the pharmacy industryMost pharmacy chains are retooling themselves as an integral part of the health care system. [3] They are offering more counseling by pharmacists, an array of wellness products and outreach to clinicians and health care centers. Perhaps more important, pharmacies are moving into the treatment arena, with the advent of retail health clinics. These retail clinics, originally designed to address common acute infections, are gearing up to work with primary care clinicians to assist in treating hypertension, hyperlipidemia and diabetes all conditions exacerbated by smoking.”
Public support
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.
A smoking cessation program
“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.”
Financial Consequences
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.
Government response
In a statement by Kathleen Sebelius, Secretary of Health and Human Services applauds CVS Caremark initiative. In her statement, Sebelius notes “Last month, I called on all sectors of the United States ? from businesses to local and state governments to the faith community ? to join in the Obama Administration?s sustained effort to make the next generation tobacco-free. Smoking takes an enormous toll on our friends, families and communities…. it costs us $289 billion annually. Each day, more than 3,200 youth under age 18 in the United States try their first cigarette and more than 700 kids under age 18 become daily smokers. If we fail to reverse course, 5.6 million American children alive today will die prematurely due to smoking. This is unacceptable.”
Sebelius also said: “We need an all-hands-on-deck effort to take tobacco products out of the hands of America?s young generation, and to help those who are addicted to quit. Today?s CVS Caremark announcement helps bring our country closer to achieving a tobacco-free generation. I hope others will follow their lead in this important new step to curtail tobacco use.”
For more information:
[1] The Health Consequences of Smoking?50 Years of Progress. A Report of the Surgeon General [Report]
[2]Onco’Zine Dossier: 50 Years After the First Surgeon General’s Report on Smoking and Health [Article]
[3] Brennan TA, Schroeder SA Ending Sales of Tobacco Products in Pharmacies. JAMA. Published online February 05, 2014. doi:10.1001/jama.2014.686 [Article]
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