Kudos to you, CVS… HEALTH

In February, CVS made an unprecedented announcement – all of its 7600+ retail locations would stop selling cigarettes and other tobacco products.  The company became the first pharmacy chain to ban the sale of tobacco products, claiming that the continuing to sell cigarettes wasn’t consistent with the company’s increasing focus on its customers’ health.  “Focusing on its customers’ health” will cost CVS roughly $2 billion in revenue, a mere fraction of its overall revenue.

Yesterday, CVS announced that it was removing cigarettes from its shelves one month earlier than previously reported and simultaneously launched a smoking-cessation program for customers.  In the announcement, the corporate entity opted for a name change – to CVS Health.

So why the shift?  Simple – health care is a more lucrative market than retail, and CVS wants to be seen as a legitimate health care company.  It’s a no brainer really – tobacco sales accounted for less than 2% of CVS total revenue and tobacco sales overall are declining.  Additionally, tobacco sales are a fairly low-margin product, meaning tobacco probably accounted for even less of the company’s profits.

Health care on the other hand?  The company already runs 900 Minute Clinics, and pharmacy services already account for more than half of CVS’s annual revenue.  It’s a lot easier to market yourself as a health care company when you don’t have cigarettes behind the counter.

Snaps to CVS.

CVS quits for good ends tobacco sales


About justgngr

the ramblings of a medical professional by day, judgmental ginger by night
This entry was posted in health policy and tagged . Bookmark the permalink.

One Response to Kudos to you, CVS… HEALTH

  1. BosGuy Blog says:

    Agreed. Have you seen their new branding campaign video? It is excellent. Happens to also include a same-sex couple which is nice to see.

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