CVS Caremark is taking a huge risk by deciding to stop selling cigarettes and other tobacco products by Oct. 1 at its 7,600 pharmacies and stores.
Larry J. Merlo, president and chief executive of CVS Caremark, said in a prepared release Wednesday: “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.”
That makes a lot of sense. However, the company notes that it will lose $2 billion in revenue annually because of the decision.
That’s not small change. Also consider that people wanting cigarettes or other tobacco products usually pick up medicine, candy bars or booze while in drugstores.
The loss of that revenue also will bite hard on CVS’ bottom line. It’s also not as if CVS Caremark doesn’t have strong competition.
The tobacco sales that CVS Caremark takes a pass on will definitely go to always nearby Walgreens Pharmacies. Yet for now, CVS Caremark is making headlines with its decision.
Even President Barack Obama, who has had difficulty quiting his own smoking habit, weighed in.
Obama said in a prepared statement Wednesday: “I applaud this morning’s news that CVS Caremark has decided to stop selling cigarettes and other tobacco products in its stores and begin a national campaign to help millions of Americans quit smoking instead. As one of the largest retailers and pharmacies in America, CVS Caremark sets a powerful example, and today’s decision will help advance my administration’s efforts to reduce tobacco-related deaths, cancer and heart disease as well as bring down health care costs — ultimately saving lives and protecting untold numbers of families from pain and heartbreak for years to come. I congratulate — and thank — the CEO of CVS Caremark, Larry Merlo, the board of directors and all who helped make a choice that will have a profoundly positive impact on the health of our country.”
The Centers for Disease Control and Prevention notes that smoking causes more than 440,000 deaths each year in the U.S. It is estimated to increase the risk of coronary heart disease two to four times, stroke by two to four times, lung cancer in men 23 times and lung cancer in women 13 times.
CVS Caremark’s news release said that in 1965 about 42 percent of Americans were smokers. That has dropped to 18 percent today.
It is higher in Missouri, where 26 percent of state residents smoke, according to 2011 data. Missouri, Oklahoma, Louisiana, Arkansas, Mississippi and Ohio rank No. 2 in the country right behind Kentucky, where 29 percent of the people in that state smoke.
But Missouri has the distinction of having the nation’s lowest cigarette tax. Maybe the state legislature can finally raise the tax from an embarrassing 17 cents a pack to $2 a pack to go along with CVS Caremark’s courageous decision.
The overall U.S. average state tax on cigarettes is $1.53 a pack.