CVS stunned both the business and public health communities yesterday when it announced that it was ceasing the sale of tobacco products at all of its locations starting in October of this year.
According to the company, tobacco and associated purchases make up a small portion ($2 billion) of their annual revenue. Given the increasing role that CVS has been playing in health care with its Minute Clinics, the company decided that continuing to sell tobacco products didn’t fit with its overall role in health and wellness as a pharmacy. CVS also recognized that the revenue lost from tobacco sales would likely be recouped in the growth of its pharmaceutical products and clinic services, as well as increased payments from insurers for helping customers quit smoking. The move was applauded by medical and public health advocates as a major step forward in reducing tobacco consumption and improving the nation’s health.
But the CVS decision raises many important questions. Is CVS underestimating the impact that the decision will have on its bottom line? Will CVS start selling e-cigarettes? Will other pharmacy chains like Walgreens and Rite Aid follow suit? If CVS is trying to become a “wellness company”, should it be selling soda, candy, and snacks that are linked with increasing obesity rates? And does the CVS decision really matter to tobacco companies?
As it turns out, the bulk of tobacco sales come not from pharmacy chains but convenience stores like 7-Eleven, gas stations, and discount chains like Family Dollar (and no, the irony is not lost on me there). Drug stores account for only about 4% of tobacco sales. While decreasing the availability of tobacco products is important for reducing consumption, the CVS decision will hardly make a dent in overall tobacco sales. If anything, the average person will find another place to buy them. That said, the CVS move is a great step forward in the fight against tobacco use related illnesses. Strong work CVS.