CVS Execs Choose to Stop Selling Cigarettes
March 2014
On February 5, 2014, CVS announced their decision to stop selling cigarettes and other tobacco products. “We have about 26,000 pharmacists and nurse practitioners helping patients manage chronic problems like high cholesterol, high blood pressure, and heart disease, all of which are linked to smoking. We came to the decision that cigarettes and providing health care just don’t go together in the same setting,” declared Larry J. Merlo, president and chief executive of CVS. All tobacco products will be removed from CVS’s 7,600 pharmacies by October 1, 2014.
CVS estimates that they will lose approximately $2 billion from their annual revenue. However, this is only a small fraction of the $123 billion yearly revenue recorded in 2012. The company also climbed five places to number thirteen on the Fortune 500 in the past year. In addition, company stocks have risen approximately 5.21 percent from the original announcement made on February 14, 2014. CVS looks forward to increasing success in the new year. Executive Vice President Helena Foulkes explained, “We are seeing this tobacco decision as an opportunity to connect even more with consumers as an expert in health and beauty and to build our loyalty with them.”
CVS executives are also hopeful for a “ripple effect” to spread over the pharmaceutical community. Kathleen Sebelius, secretary of Health and Human Services, believes CVS’s decision is “an unprecedented step in the retail industry” and predicts it will have “considerable impact.” Major competitors of CVS, such as Walgreens and Rite-Aid, released statements following the announcement. Walgreens claims that it has been assessing its tobacco sale for “some time now,” and that it has still not reached a final decision. Rite-Aid presented a more ambiguous response, saying that it is continually evaluating whether it is meeting “the needs and interests of customers.”
As of now, Walgreens interprets “interest” to mean customers are more concerned with purchasing cigarettes than with prioritizing their health. Statistics from the U.S. Centers for Disease Control and Prevention show that over 293 million cigarettes were sold in 2011. Kathleen Selebius goes on to explain that, because of these statistics, 5.6 million children alive today will die prematurely because of smoking-related diseases such as lung cancer and diabetes.
Smoking can also lead to other conditions, including heart disease, colorectal and liver cancers, and ectopic pregnancy. Smoking is also linked to an increased risk of stroke and Alzheimer’s disease.
One of the best ways to prevent smoking-related deaths is to stop the addiction before it begins. Recently, freshmen attended the “Drug and Alcohol Seminar,” where they talked about the danger of addiction to many drugs, including nicotine. “The seminar definitely made me more aware of the effects smoking has on your body,” said Lena Urick ’17. Sebelius of Health and Human Services states that approximately 3,200 children under the age of eighteen will try a cigarette each day. Of that 3,200, 700 will go on to become daily smokers. In keeping with these figures, 225,500 children high school age and younger will become addicted to smoking each year. Because many people become addicted at such young ages, raising awareness of the risks associated with smoking and addiction is key. Simone Veale ’17, explained, “It [the seminar] really helped us understand how dangerous it is for us and our future.”
CVS hopes that their decision to limit customers’ access to cigarettes will help to stop the consumption of products that are harmful to consumers’ health. However, customers will not completely lose their outlet for purchasing cigarettes. According to consumer research firm EuroMonitor International, only 3.6 percent of all cigarette sales in the United States are made in drug stores. Almost half occur at gas stations, with the remaining sixteen percent made in convenience stores such as 7-Eleven. The question now lies in whether these competitive companies will follow CVS’s example or will instead continue down the road of dangerous yet lucrative sales they maintain today.