CVS Ceased To Sell Cigarettes Because Of Intimidation Or Cronyism, Not Public Health
By Theodore J. King, Author, The War on Smokers
On February 5th, the pharmacy chain CVS Caremark announced that as of October 1st it will no longer sell tobacco products. Just this month they announced they had ceased selling tobacco products a month early.
Immediately after the CVS announcement last February, President Obama praised the pharmacy chain’s decision. This immediate response from the White House was suspicious as one may assume the administration had been given advance notice by CVS. President Obama and many in the press made it appear that CVS was being altruistic, forsaking between 1.5 and 2 billion dollars in annual revenue from the sale of tobacco products. The reality is this was a business decision by CVS in order to cash in on the Affordable Care Act (a.k.a. Obamacare), which allows insurance companies to charge up to 50 percent more in premiums for smokers and get favorable publicity from much of the media already hostile to tobacco. CVS is more than within its right to sell or not sell a legal product but they should be honest about it.
Currently, CVS has 800 in-store clinics where customers can see a primary care specialist without having to visit a hospital. The chain has plans to increase that number by the year 2017.
It is important to read the last line of this statement by CVS Caremark’s president, Larry J. Merlo, regarding his company’s decision last February: “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.”
In other words, CVS is scrapping tobacco for future revenue it will receive from Obamacare.
CVS claims it is saving lives by not selling tobacco products, but that does not prevent CVS from continuing to sell over the counter abortion inducing drugs like Plan B. In our politically correct times, some controversial products are more acceptable than others.
The scandal in this story was the letter of intimidation from 28 attorneys general. This letter to retailers Walgreens, Wal-Mart, Rite-Aid, Kroger food stores, and more was signed by attorneys general from 24 states, two territories and the District of Columbia. Former U.S. Senator Mike DeWine, who is now attorney general of Ohio, stated: “My fellow Attorneys General and I are asking these national retailers to take an additional step forward in keeping tobacco products away from youth by voluntarily not selling them in their stores with pharmacies … The health of our kids is just too important.”
I gather Mike DeWine is aware, as are the other attorneys general, that it is illegal to sell tobacco to minors. Oh well, they won’t let the facts get in the way of using their government posts to intimidate the private sector.
Here are a few excerpts from the letter dated March 14th; this particular letter went to Kroger foods:
Kroger has demonstrated leadership in the area of tobacco control by entering into an Assurance of Voluntary Compliance with the Attorneys General in 2007, and we appreciate your cooperation in working to reduce sales to youth. But now we ask you to take the next step and to stop all sales of tobacco products in your retail stores that have pharmacies. Doing so would effectively bring us full circle, back from the time when a tobacco manufacturer could advertise that “More doctors smoke CAMELS than any other cigarette” to a time when cigarettes simply cannot be purchased from a business that sells products prescribed by doctors.
And the letter menacingly ends with: “We [28 attorneys general] look forward to hearing from you.”
I’ll bet they do!
This letter is like a sheriff, wearing a loaded gun, going into a shop and telling the owner what shouldn’t be sold even though it’s a legal product. And what happens if some of these chain stores choose to cave? What precedent does that set for our big government? If retailers can be pressured by law enforcement officials into not selling tobacco in the name of protecting youth what will it be next? Beer? Guns? Wal-Mart sells guns. And what about the real, health crisis facing youth today — obesity. Will these attorneys generals target the sale of snack foods and candy next? I’m sure Michelle Obama would be pleased if they did.
This letter was tyrannical. Voters should be reminded that many of these attorneys general are up for reelection this fall. The attorneys general signatories are:
Republican Michael Geraghty of Alaska
Republican Tom Horne of Arizona
Democrat George Jepsen of Connecticut
Democrat Beau Biden of Delaware (the Vice President’s kid)
Democrat David Louie of Hawaii
Republican Lawrence Wasden of Idaho
Democrat Lisa Madigan of Illinois
Republican Greg Zoeller of Indiana
Democrat Tom Miller of Iowa
Democrat Janet Mills of Maine
Democrat Doug Gansler of Maryland
Democrat Jim Hood of Mississippi
Democrat Catherine Cortez Masto of Nevada
Democrat Joseph Foster of New Hampshire
Democrat Gary King of New Mexico
Democrat Eric Schneiderman of New York
Republican Mike DeWine of Ohio
Democrat Ellen Rosenblum of Oregon
Democrat Kathleen Kane of Pennsylvania
Democrat Peter Kilmartin of Rhode Island
Democrat Robert Cooper Jr. of Tennessee
Republican Sean Reyes of Utah
Democrat William Sorrell of Vermont
Democrat Robert Ferguson of Washington
In addition to these 24 states attorneys general were the attorneys generals for Puerto Rico, Guam, the North Mariana Islands and the District of Columbia. All of them should be voted out.
The ‘Coincidence’ of CVS and Tobacco
Back in February, when CVS announced that it would stop selling tobacco products, I wrote thatCVS was looking for something in return: more access to the lucrative Affordable Care Act health care market.
Now the New York Times is reporting that the “drugstore chain seeks to redefine itself as [the] health care destination for consumers.”
February’s CVS announcement looked suspicious because it was coordinated with the White House. An hour after the announcement, President Obama congratulated CVS CEO and President Larry Merlo by name, saying, “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.”
CVS gave up $2 billion in revenues by halting the sale of cigarettes, and its stock declined. The question was, what did CVS get from the administration in return?
Seven months later, the answer is clear. CVS spokeswoman Carolyn Castel told the Times that “the company opened 32 clinics last quarter and is on track to open 150 more this year.” Revenues at its clinics have increased by 24 percent in the second quarter of 2014 compared with the second quarter of 2013. CVS plans 1,500 clinics by 2017, up from 900 at present.
It is beneficial for people to have the option of inexpensive walk-in clinics staffed by nurse practitioners-with perhaps an occasional doctor added to the staff. But if a walk-in clinic gets special favors through aquid pro quo with the government, it smacks of cronyism.
With the federal government taking over a large share of the health care business through the new Affordable Care Act exchanges, providers such as CVS need to be in regulators’ good books. CVS’s drug business is at the mercy of regulators from the Food and Drug Administration, the Center for Medicare and Medicaid Services, and numerous other agencies within the Department of Health and Human Services and elsewhere.
The company is taking no chances that it could fall out of government’s favor. CVS spent $13 million on lobbying in 2013, according to the Center for Responsive Politics, over 17 times as much as the firm spent in 2007.
Not all drugstores are caving in to government pressure on cigarettes. Walmart, Walgreens, and Rite Aid, among others, continue to stock tobacco. But health care is a growing market, and a tough one. Sometimes it helps to have friends in high places.
With health care accounting for nearly one fifth of the U.S. economy, one often-overlooked consequence of government intervention is that businesses can compete for favors among government officials rather than on the basis of their value to consumers.
As the health care market shakes out, business could skyrocket for CVS’s walk-in clinics CVS. In one of four quarter page ads in Monday’s Washington Post, CVS announced, “We’re making health more affordable and accessible with MinuteClinic. In time, half of all Americans will have one within 10 miles of home, for affordable walk-in medical care.”
One obvious source of clients is the uninsured, who need an inexpensive place to go for a strep test when they have a sore throat. In a medical crisis, the uninsured will go to emergency rooms, but for routine care, they will increasingly turn to walk-in clinics as emergency rooms become overcrowded.
Even with the Affordable Care Act, 31 million Americans are projected by the nonpartisan Congressional Budget Office to lack health insurance in 2024. There will be plenty of business from this group for the foreseeable future.
A less obvious source of revenue is people who have health insurance through the Affordable Care Act health care exchanges but who do not want to visit their doctors because of the high deductibles. In 2015 deductibles will be capped at $6,450 for singles and $12,900 for families, according to the IRS. For those who have to spend $6,450 before starting to collect, CVS is a better option than Johns Hopkins.
A third source of customers for the walk-in clinics are those with high-deductible plans offered by employers. A report by the National Business Group on Health estimates that a third of large employers will offer high-deductible plans in 2015.
CVS’s MinuteClinics have a substantial advantage: nurse practitioners can write prescriptions for patients, and then sell them the prescribed drugs on the spot. This is true vertical integration. Many states have limits on the ability of doctors to sell pharmaceuticals out of their offices, because of possible conflicts of interest. Apparently regulators turn a blind eye to potential conflicts of interest at CVS, such as writing prescriptions that the company then fills.
This confers a substantial boon to CVS, and the unequal treatment puts doctors at a disadvantage. Even if CVS were not able to charge the government for the walk-ins, CVS can earn profits on selling more prescription and non-prescription medicines to the walk-in patients, much of it at government expense. It will be a lucrative business.
Now add the business of charging the government for walk-in visits, and CVS is making three types of profits on walk-ins: (1) charge the government for walk-in visits; (2) charge the government for prescription medications filled at the same pharmacy where CVS employees write prescriptions; and (3) profits on non-prescription medications that the government-paid CVS employee may recommend to walk-in patients such as over-the-counter pain-killers or antibiotic ointments.
As CVS said in another Monday ad, “Anyone can get pills into bottles. We help get them into mouths.” Dropping tobacco sales is a small price to pay.
Did CVS Burn Itself by Banning Tobacco Sales?
August 17, 2014
By Motley Fool
CVS Caremark warned earlier this year that its decision to ban tobacco sales from all of its stores would come with costs, but investors may not have realized just how widespread they would be.
CVS Caremark will stub out all tobacco sales at its stores come Oct. 1.
The retail pharmacy leader declared in February that it would stop selling cigarettes at all of its 7,600 drugstores by Oct. 1. It said it would behypocritical to advocate for better consumer health when it was also selling products that are a leading cause of sickness and death.
CVS said it sold some $1.5 billion worth of tobacco in 2013, an admittedly small percentage of its $127 billion in total revenue. However, the company said that aside from the revenue lost, eliminating tobacco sales would stub out as much as $0.17 per share annually from earnings, or almost 5% of the 2013 total. For the current fiscal year, however, the impact would only amount to between $0.06 to $0.09 per share, because of the ban’s timing.
During the pharmacy chain’s second-quarter earnings conference call, it confirmed that it remains on track to see sales fall by $2 billion this year, but what may have caught some unawares was the impact on sales beyond cigarettes. CVS said a broad basket of goods was also going wanting as a result of the ban.
Although front-end same-store sales dropped only 0.4% in the quarter because a number of stores still sell tobacco ahead of the Oct. 1 end date, CFO David Denton said that CVS expects front-store comps to be “negatively impacted” by as much as four or five percentage points in the third quarter and to worsen further in the fourth as the negative effects from kicking the tobacco habit doubles the comps’ decline.
Dollar for dollar
So far, rivals such as Walgreen and Rite Aid have failed to follow CVS’ lead despite pressure form doctors, politicians, and state attorneys-general. Although the retailers have publicly taken a wait-and-see approach , the precipitous drop in CVS sales may convince them it’s better to fight than switch.
Pharmacies are also feeling the competitive effects of deep discount dollar stores and convenience stores that are luring in customers with new and varied products. Dollar General recently said that strong tobacco sales since it introduced the products into its consumables category enabled the segment to far outpace the growth witnessed in nonconsumables last year. Total sales jumped 9.2% in 2013 to $17.5 billion, with same-store sales 3.3% higher as traffic and average transaction amount rose.
Similarly, Family Dollar pointed to tobacco as a primary cause for the robust sales growth it enjoyed last year and for the first six months of 2014. Though third-quarter comps fell 1.8% due to fewer customer transactions, the company’s results were likewise best in consumables because of strong growth in tobacco.
Convenience stores have also recently grabbed hold of the latest trend in smoking — electronic cigarettes — an area that CVS has voluntarily excluded itself from, saying it prefers to wait until the FDA issues regulations.
Up in vapor. CVS won’t be participating in e-cig revolution. Photo: Vuse Vapor.
This is a fast-growing segment of the tobacco industry, and some analysts believe it can one day overtake traditional tobacco sales, but CVS has turned the market over to the competition.
For all the losses it was willing to accept, CVS hoped that it could win more business from hospitals and insurance companies as a result of its stance. If the company can be seen as helping to make their patients healthier, it just might gain something from the halo effect of its actions. So far, though, that hasn’t panned out.
Management said in the latest earnings call that it can’t pinpoint any one win for pharmacy benefits management that it could tie to the tobacco ban. Sure, it’s still early yet and that win could still come, but this potential tangible benefit to the ban hasn’t materialized. Investors need to hope that this branding effort around public health ultimately helps the business overcome these more tangible headwinds.
The War on Smoking
February 11, 2014
By The Sound of Ideas
Fifty years ago the US surgeon general declared that cigarettes are deadly. By now, that’s a message that’s hard to ignore, with gruesome warning labels pasted on cigarette boxes. A new Surgeon General’s report expands on that initial warning, linking it to more diseases. Even CVS won’t sell cigarettes any more. Health advocates applause the measure, but smokers say they have a right to smoke.
Terry Allan, Cuyahoga County Department of Health Director
David W. Kuneman, Midwest Regional Director for Citizens Freedom Alliance
Sarah Jane Tribble, ideastream health reporter
One cardiologist on CVS and cigarettes: Let’s not fall for the spin
FEBRUARY 14, 2014
WES FISHER, MD
By now the world has heard the remarkable news. CVS Caremark will no longer be selling its tobacco products in any of its stores.? Locked and loaded with the news, the American Heart Association, American College of Cardiologists, local public health experts, Phillip Morris, and even the former-smoking president of the United States was quick to applaud the news by publishing press releases.
But when press releases and major announcements of a single company’s business decision floods the airwaves, newsfeeds, and radio spots, my bullsh*t antenna goes up.
This is not to say that CVS Caremark’s announcement wasn’t nice to hear.? It was.? But making me feel better isn’t going to stop people from smoking.?? Is pulling the supply of cigarettes from one pharmacy/convenience store chain really going to affect the incidence of smoking in America?? Is it really going to “send a message” to other convenience stores and states who make billions of dollars from the sale of cigarettes each year?? Can we really sit and applaud this action while more and more states (like Illinois) seem to feel that smoking marijuana is just fine for our health?
After all, despite the public’s widespread knowledge of the dangers of smoking, being ridiculously taxed, stored behind counters, and withheld from minors for years, tobacco smoking is seeing a huge resurgence in both the young and old in America.
But politicians and public health experts, reeling from this reality, are desperately in need of some good news to spin.? They need to show the world how their self-righteous drum beats of preventing disease by restricting the supply of cigarettes at one business will make a difference to people’s consumption behavior.
It seems these same people have forgotten prohibition.
To understand smoking in America, you have to meet smokers where they are — specifically their social circumstance.? People are growing up in a time of unprecedented pessimism in America.? They can’t get jobs.? They are incredibly anxious, fractionated, and uncertain about their futures.? They are desperate to belong, to gain their own identity, to feel important, and to belong to a set of peers.? If smoking helps them achieve their own set of personal, social, or professional needs, no feel-good corporate policy announcement is going to change their minds about using cigarettes.
Supply-side public policy edicts will never affect psychology.
How do I know this?? Because I see people who smoke despite knowing these risks every day.? I know this because I am one of the most argent anti-smoking promoters to my kids.? As a cardiologist and father, how else could I be?? Throughout my entire career and my kids’ entire lives, they’ve heard about the dangers of smoking, the addictive potential of nicotine, the poisons in the smoke, and the horrible cases I saw of lung, oral, and bladder cancer in my training.? My wife and I have never allowed cigarettes to be smoked in our house and have we have never smoked.
But despite all of our harping and example-setting, I recently learned that one of my young-adult kids has started smoking.? He felt so conflicted about this decision that he knew he was making, he recently met with my wife and me over dinner to explain.? His reasons were specific to him and him alone.?? He just didn’t want to lie to us about his decision and I know for certain that this decision wasn’t because he didn’t know the dangers of smoking or what it could do to him.? Were we happy about this? Of course not.? But the decision is his and I know that if he wants something, he’s going to get it, even if CVS Caremark doesn’t carry cigarettes any longer.? Hopefully, as his life circumstances change, he’ll quit.
This is why we need to get over ourselves about the CVS Caremark business decision to stop selling cigarettes — there are just too many other confounding variables and mixed messages out there that are bringing people to smoke.? Sure the CVS Caremark announcement was good news but good news and one pharmacy chain’s decision to not sell tobacco products won’t really affect the booming incidence of smoking in America.? CVS Caremark’s announcement has already come and gone.? Smoking, however, is still here.
To me, when we start focusing on why people are smoking despite the known well-known dangers of this habit we’ll be much closer to gaining a real foothold on this public health problem.
Anything else is just spin.
CVS doesn’t need tobacco for its revenues: it has Obamacare
Obamacare is one of CVS’ best chances to grow its business and smokers are the opposite of that business opportunity
5 February 2014
By Heidi Moore
Does this seem like odd timing? Decades after tobacco lawsuits, settlements and other conflicts swept the country, one major retailer, CVS, has said it will no longer sell any tobacco products in its 7,600 stores. The move will cost CVS somewhere in the neighborhood of $2bn, which normally would be the kind of loss that would panic executives and worry anyone holding CVS stock.
It turns out that the timing however, is perfect. CVS doesn’t need tobacco for its revenues because a bigger source of business is on the horizon: Obamacare. And Obamacare is invested in pressuring smokers to quit by forcing them to pay more for healthcare.
Obamacare is one of CVS’s best chances to grow its business, according to Wall Street analysts. Tobacco – and smokers – are directly the opposite of that business opportunity. Obamacare doesn’t like smokers; it is set up so that smokers may pay healthcare premiums as much as 50% higher than people who don’t smoke.
CVS Caremark: An Alarming Merger, Two Years Later
How the CVS-Caremark merger increases health plan costs, creates obstacles to oversight, and threatens patient privacy
An Update on Change to Win’s Report:? CVS Caremark: An Alarming Prescription
CVS and cigarettes, an embarrassing Rorschach test
8 February 2014
by Carl V Phillips
Presumably anyone who reads in this area is already aware that the CVS drug store chain announced that they will stop selling cigarettes and other tobacco products.? The practical consequences of this are almost nil, but the response to it are rather educational.? It is a veritable Rorschach test (though not exactly the same, since no one seems to have said “it looks like a butterfly” or likened the announcement to some bit of the female anatomy).
The immediate practical consequences of the move are:? (a) CVS will lose $2 billion/year in revenue, by their own estimate; (b) some smokers will have to make an extra stop if they want to buy both toothpaste and cigarettes; (c) C-stores and other competitors will thus gain about $2 billion/year in revenue; (d) some C-store may also increase their profit margin on cigarettes because they no longer have to price-compete with a nearby CVS.? It is probably also the case that: (e) tobacco companies will increase their profits a bit because CVS’s size allowed it to negotiate better wholesale prices for cigarettes than their average competitor.
Of course, none of those could possibly be the motive for the decision.? To the extent that I have seen cogent explanations of the motives, it appears to have happened because CVS’s biggest cash cow and growth area is not retail, but providing insurance-like services to big companies.? Apparently their clients and potential clients (presumably strong-armed by the tobacco control industry) pressured CVS into making the move.? Assuming this is true, it was a symbolic gesture in which they decided to take something away from their peon retail customers in order to please (not even materially benefit) their big corporate customers who offer much bigger margins.
Of course, that is not how they spun it to the public.? It very convenient when you can spin a sacrifice you are forced to make (in order to get some benefit) as a good thing in itself rather than a price paid.? So, of course, CVS claimed exactly that in their (transparently false) public statements — it was a principled decision because they did not feel that people should be buying cigarettes the same place they are buying medicines.
The most obvious hypocrisy in that spin has been pointed out by pretty much every commentator on the topic, even those that know little about tobacco:? CVS sells — right up front in their most prominent displays — unhealthy snack foods, “energy drinks”, candy, and so on, so this is clearly not about removing products because they are unhealthy.? A more sophisticated take on the hypocrisy comes from the observation that they are removing not just cigarettes, but smokeless tobacco.? If this were really about health, they would have kept the latter and steered would-be cigarette purchasers to this low-risk alternative.
What is most interesting, however, is how the tobacco control industry went gaga over this move that had only symbolic consequences.? The Robert Wood Johnson Foundation added it to their animated timeline of the most important moments in the history of tobacco control (and apparently did so within minutes of CVS’s announcement — not that this proves that the surprise announcement was actually an orchestrated conspiracy or anything).? Then @RWJF_PubHealth tweeted about this addition approximate once per hour, and even paid to promote the tweets (must be nice to be able to pay to get people to look whenever you update your website).
The Rorschach test tells us the tobacco control industry is so starved for anything they can call a victory that they celebrate this useless gesture.? They are beside themselves with delight that smokers who are shopping at CVS will now have to go cleeear to the nearest C-store to buy cigarettes. To the present generation of tobacco controllers, this is all they can add to the list that includes such genuinely important moments as the 1964 Surgeon General report, the groundbreaking epidemiology on smoking from the 1950s, and….? Well, actually those are really the only things that ought to appear on a story of the great moments in anti-smoking.
Of course, that RWJF timeline is not actually about successes of tobacco control(i.e., events that reduced smoking), but successes of the the tobacco control industry (i.e., events that demonstrated and/or increased their power and wealth, or inflicted punishment on tobacco users for their sins, even though almost all were inconsequential in terms of reducing smoking).? In that sense, I suppose, this was a victory for them.
While desperation for something to claim as a victory, along with boasting about their ability to exercise power, probably explain most of the TCI reaction, to some extent it is genuine innumeracy (albeit intentionally-cultivated — i.e., lie-based — innumeracy).? Notice that the above list of consequences of CVS’s move did not include “there will be less smoking”.? This is because of the obvious fact that one fewer retailer of cigarettes has absolutely no effect on the demand for cigarettes, and it is the demand that matters.? Or, as I tweeted about it, “#CVSQuits selling cigarettes. Tobacco controllers demonstrate their continued failure to understand supply is not demand by celebrating.”
Part of the core myth of tobacco control is that there is no demand for tobacco, and that the reason people consume it basically demonic possession.? So, the “reasoning” goes, since demand is not causing consumption — contrary to what anyone with a modicum of knowledge about economics or human beings would conclude — then it must be supply.? Ergo, eliminate some of the supply and you eliminate some of the consumption.
But it is not just the TCI who saw what they wanted to in CVS’s move.? NJOY and other e-cigarette companies, as well as many vapers, celebrated this as a victory for e-cigarettes.? Huh?? There are some reports that CVS specifically promised they would also not sell e-cigarettes after the removal date, though there are also contrary reports on this point.? But either way, the fact that they are removing low-risk tobacco products along with cigarettes does not exactly suggest that they will be restocking the back wall with a different low-risk tobacco product.? Moreover, it is not as if the TCI bullies who leveraged this move in the first place are going to let up on e-cigarettes, and so CVS will probably be pressured into not selling them either.? E-cigarette merchants and cheerleaders need to figure out that each restriction on cigarettes should be interpreted not as “more for us”, but as “you’re next”.
Indeed, the backlash resulting from a (very hypothetical) principled stand by CVS — were they to insist that e-cigarettes are pro-health and therefore they are going to sell them — would probably be increased as a result of them already caving on cigarettes.? Once you cave to someone’s political pressure — giving up billions in revenue to get some goodwill — they own you.? The revenue is gone, but they can still take away the good will that justified the loss, and so they have even more power over you than they did before.
So while it is possible that CVS will be stocking e-cigarettes instead, it seems ridiculously optimistic to assume they will, or even to conclude that it is more likely to happen given the removal of cigarettes than would be the case had they kept them.? And this is to say nothing of the fact that it is better to have e-cigarettes displayed next to where people are buying their cigarettes so they might spontaneously choose to try the former.? Bottom line:? What some elements of the e-cigarette community saw in the inkblot also suggests they suffer from some of the same problematic thinking as the TCI — not nearly as badly, for sure, but remarkably similar.
The final category of reaction I will note is that of every single smoker who was quoted in the mandatory “we asked this random shopper” section of news reports about the move.? Unsurprisingly, the reaction was basically, “Really? Oh well, I guess I will have to buy my cigarettes somewhere else.”? There were barely even any hints of annoyance.? You could almost hear the subtext: “My dry cleaner does not sell cigarettes. My bank does not sell them, nor does McDonalds.? Now my usual drug store won’t either.? But so what?? It is not like I can’t go to a gas station / 7-11 / other drug store / etc.”? In this population — the people who know best, after all — it never even crossed their mind that change in one source of supply would have any effect on demand.
CVS insults its own customers: Opposing view
February 5, 2014
By Jan Johnson and David W. Kuneman
It’s more an opportunity to get free publicity than any serious public health move.
Many of us have been smokers for years. We have lived through losing out on jobs, paying higher taxes, being cast out of establishments we once went to for fun, and watching places we once loved close down after smoking was banned.
Society has acted as if one-fifth of its people don’t exist, simply because they choose to smoke. We believe smoking is a choice, of using a legal product.
The decision by CVS Caremark executives to stop selling cigarettes is their choice, and they are apparently prepared to face a $2 billion loss of annual revenue. But they might not be taking into account the other sales lost when smokers no longer enter their stores.
OUR VIEW: Intersection of 2 positive trends
It’s probably not coincidental that CVS stock dropped 1% on Wednesday. This doesn’t sound like a company that cares about its shareholders.
CVS may claim its intention is to promote better health among its customers, but if that’s the case, then why continue to sell alcoholic beverages, candy, soda and other forms of junk food that also are claimed to be unhealthy? And what about the energy drinks that have come under so much fire lately?
Cigarette sales made in pharmacies have recently been a small component of total cigarette sales, but if 20% of CVS customers smoke, why inconvenience those who do buy their cigarettes and other tobacco products there?
CVS must know that those customers will simply go elsewhere to purchase tobacco products. This move by CVS is unlikely to make even one smoker in America quit. This is much more likely just an opportunity for CVS to get free publicity than any genuinely serious public health move.
The decision will no doubt be used by government officials, including President Obama and Health and Human Services Secretary Kathleen Sebelius, to pressure other pharmacies and stores to banish tobacco. That would drive even more smokers to the black market, an untaxed and unregulated place where even the worst of ingredients can make it into cigarettes.
As the prohibition of alcohol showed, forcing a product underground doesn’t mean people won’t still use it.
Jan Johnson is Florida state coordinator and David W. Kuneman is director of research for the Citizens Freedom Alliance, which supports smokers’ rights.
CVS not just blowing smoke: Our view
February 5, 2014
The Editorial Board, USATODAY
Retailer’s quitting cigarettes marks intersection of 2 positive trends.
The simplistic way to look at CVS’ announcement Wednesday that it will quit selling cigarettes later this year is that it’s the right thing for a major retailer to do — one more welcome sign that a product that sickens and kills people when used as intended has become even more socially unacceptable.
The decision is much more interesting than that, however, because it marks the intersection of two positive trends with broad public impact: Tobacco use is declining, and drugstores are beginning to provide basic health care services more cheaply and conveniently than doctors can.
Abandoning tobacco is not without cost for CVS, which says it is giving up $2 billion in annual sales, or about 1.5% of its revenue, plus whatever else customers buy when they come in for cigarettes. At least for the moment, rival Walgreens seems happy to take the business.
But longer term, CVS’ thinking — that selling health is incompatible with selling tobacco — seems likely to give the company a marketing edge that will more than make up for the lost sales. Customers already get flu shots and other health care at in-store clinics. As technology advances and cost pressures continue to rise, other basic medical services are sure to follow.
CVS, Walgreens, Rite Aid and other stores already operate more than 1,600 retail health clinics, with the total expected to top 2,800 by 2015.
If CVS’ move puts more pressure on other big, brand-conscious retailers to join the parade away from tobacco, all the better. Airlines and hotels have already gambled that smoke-free environments can also be good business, and they were right.
As this has happened, smoking rates have tumbled — from about 42% of adults in 1964, when the surgeon general issued his health warning, to 18% now. But in recent years, the trend has stalled. Tobacco still prematurely kills almost half a million people every year, and smoking is still considered the biggest single preventable threat to Americans’ health.
Asked in a recent interview with USA TODAY’s Editorial Board what one problem he would solve if he could wave a magic wand, Thomas Frieden, director the Centers for Disease Control and Prevention, didn’t hesitate.
“It would have to be tobacco,” he said. “It just is unparalleled as a cause of suffering and death in this country.”
CVS’ move won’t realize Frieden’s wish. It probably won’t even have much immediate impact on tobacco sales. More than three-quarters of cigarettes are already sold at convenience stores.
But the company’s effort to brand itself less as a variety store and more as a wellness enterprise is another marker of society’s shift away from tobacco, and toward more efficient ways to practice medicine in a country that spends vastly more on health care (about $8,500 per person) than other countries, with inferior results (the U.S. ranks 25th out of 34 advanced nations in female life expectancy, and 22nd in male life expectancy).
Whether the plan pans out for CVS shareholders remains to be seen. But it’s a two-way winner for public health.
USA TODAY’s editorial opinions are decided by its Editorial Board, separate from the news staff. Most editorials are coupled with an opposing view — a unique USA TODAY feature.
Drug Store Plans To Rid Its Shelves Of Tobacco Products
February 05, 2014
by Yuki Noguchi
Listen to the Story: All Things Considered
The pharmacy giant CVS plans to eliminate cigarettes and other tobacco products from its stores by October. The company says it made the decision because the drug store business is changing and that selling cigarettes is no longer consistent with its mission. Medical experts and the White House hailed the move. NPR’s Yuki Noguchi reports.
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From NPR News, this is ALL THINGS CONSIDERED.
MELISSA BLOCK, HOST:
And I’m Melissa Block. The pharmacy giant CVS said this morning that it would stop selling cigarettes and other tobacco products later this year. The decision means forgoing a lot of reliable revenue, but, the company says, its business and its mission are headed in another direction. As NPR’s Yuki Noguchi reports, medical experts and the White House hailed the move as a hopeful sign of things to come.
YUKI NOGUCHI, BYLINE: Cigarettes and tobacco generate a lot of revenue for drug stores, more than $2 billion in annual sales for CVS. But speaking in an online video, President and CEO Larry Merlo said that’s no longer the direction CVS wants to go.
LARRY MERLO: And when we asked ourselves where we expect to be in the future as a healthcare company, it became clear that removing tobacco products from our stores is the right thing to do.
TROYEN BRENNAN: I think we think it’s a good business decision.
NOGUCHI: That’s Troyen Brennan, CVS’s chief medical officer who spent most of his career in academia and public health. Brennan says CVS and other drug store chains are evolving, doing more than just filling prescriptions and becoming more like clinics offering nursing care. As part of that effort, he says, CVS is trying to forge more partnerships with hospitals.
BRENNAN: Whenever we go into meet with them and talk about partnerships, one of the first questions they ask is how can you continue to sell tobacco products?
NOGUCHI: CVS is the first national chain to eliminate tobacco sales. But in a statement, industry leader Walgreen said it, too, has been evaluating its options, weighing what customers want against their ongoing health needs. Cities, meanwhile, are tightening their squeeze on tobacco and smokers. New York City banned smoking in public areas, and San Francisco and Boston are among a growing number of cities that have banned the sale of cigarettes in pharmacies.
The push to halt the sale of medicine alongside cigarettes is nothing new. The American Medical Association and the American Lung Association, among others, has advocated for it for several years. Richard Wender is chief cancer control officer for the American Cancer Society. He says he believes cutting back on the number of places one can buy tobacco will discourage young people, in particular, from starting or continuing to smoke.
RICHARD WENDER: I guarantee you some people will quit because of this decision by CVS.
NOGUCHI: David Kuneman disagrees.
DAVID KUNEMAN: I’ve never heard of anybody saying, gee, I just couldn’t find a place to buy a pack of cigarettes so I’m going to quit. Now, that has never happened.
NOGUCHI: Kuneman is Midwest regional director for Citizens Freedom Alliance, a smokers’ rights group. He notes that he and most other smokers he knows buy their cigarettes at gas stations and convenience stores, not at drug stores. And, in fact, according to the market research firm, Euromonitor International, pharmacies account for less than four percent of cigarette sales. Kuneman also notes CVS sells plenty of junk food and controlled substances that can cause health problems as well.
KUNEMAN: There should be some consistency in their policy if they want to stop selling tobacco products. There’s a lot of other things in their stores that they should stop selling, too.
NOGUCHI: CVS says it will stop selling tobacco products in all of its 7600 stores by October of this year. Yuki Noguchi, NPR News, Washington.
CVS Caremark to stop selling tobacco products
February 5, 2014
Kelly Kennedy, USA TODAY
WASHINGTON — Drug store giant CVS Caremark announced Wednesday it will no longer sell tobacco products at its 7,600 pharmacies by Oct. 1.
Column: Why applaud CVS’ no-cigarettes move?
February 5, 2014
Can we please stop making smoking the No. 1 vice to be avoided in America?
CVS Pharmacy, the second-largest drug store chain in the United States, announced today that it will cease selling cigarettes in all its stores this year, citing the company’s commitment to health care. CVS chief medical officer, Troyen Brennan, said in a statement that, “Stopping the sale of cigarettes and tobacco will make a significant difference in reducing the chronic illnesses associated with tobacco use.”
There’s no doubt that cigarettes are unhealthy — and that second-hand smoke has exposed non-smokers to health risks as well. But CVS’ decision doesn’t affect second-hand smoke, and won’t necessarily make a steep dent in overall smoking rates. Other chains, such as Target, haven’t sold cigarettes in years.
But cigarettes are hardly the only “unhealthy” item CVS sells. Take junk food: Sure, some people consume sweet treats in moderation, but as our obesity rates show, plenty of Americans are simply eating too much — and facing elevated risks of acquiring diabetes as a result. Or what about alcohol, which is stocked by some CVS locations? According to the Centers for Disease Control and Prevention’s overview of national surveys, “One in six U.S. adults binge drink about four times a month, consuming about eight drinks per binge.” The CDC notes that “binge drinking is associated with many health problems, including … high blood pressure, stroke, and other cardiovascular diseases, liver disease, (and) neurological damage.”
And that’s just looking at physical health. What about moral health? CVS currently sells lottery tickets — despite the fact that less affluent Americans are more likely to waste their money on tickets than those who can more easily afford to. According to a 2011 Wired article, “On average, households that make less than $12,400 a year spend 5% of their income on lotteries” and “high-frequency (lotto) players tend to be poor and uneducated.”
Or what about celebrity magazines? Is it really healthy for us as a culture to read the latest gossip, the stories that detail the divorces and drug use and alcohol abuse of people we’ve never met, much less had a conversation with? Few of us would want our poor decisions to become national news — yet we rarely seem to consider whether we should give celebrities the same consideration.
CVS is hardly alone in targeting cigarettes. Last month, acting surgeon general Boris Lushniak pushed Hollywood executives to reduce movie scenes featuring smoking. In 2012, a children’s author released a version of ‘Twas the Night Before Christmas that deleted the lines about Santa smoking a pipe.
We don’t have an infinite amount of energy — and resources — as a culture to combat vices. Right now, Americans are bombarded with information about the dangers of smoking, and cultural disincentives to take up or maintain the habit.
Of course, CVS, as a private business, needs no permission to make decisions about what products it sells or doesn’t. But it’s worth asking if our nation’s obsession with smoking is blinding us to the danger of other vices that we continue to promote and make readily available.
Katrina Trinko, a member of USA TODAY’s Board of Contributors, is managing editor for The Foundry. Her views do not represent The Heritage Foundation.
Obama applauds CVS ban on cigarettes
February 5, 2014
David Jackson, USA TODAY
President Obama is praising CVS Caremark’s announcement Wednesday that it will stop selling tobacco products at its 7,600 pharmacies, and begin a campaign to discourage smoking by Americans.
Dollar Stores Stand To Profit From CVS Tobacco Ban
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Feb 5, 2014
Watch the video.
CVS to become first major US drugstore to drop cigarettes
February 5, 2014
BY SARAH KLIFF
On Wednesday, CVS Caremark Corp announced that its 7,600 stores would stop selling all tobacco products by October — making the company the first U.S. drugstore chain to remove cigarettes from its shelves.
Public health experts called the decision by the No. 2 U.S. drugstore chain a precedent-setting step that could pressure other stores to follow suit.
CVS, whose Caremark unit is a major pharmacy benefits manager for corporations and the government Medicare program, believes the decision will strengthen its position as a healthcare provider.
“I think it will put pressure on other retailers who want to be in healthcare,” said CVS Caremark Chief Medical Officer Dr. Troyen Brennan.
Although some U.S. cities, including Boston and San Francisco, already ban the sale of tobacco products in pharmacies, advocates hope CVS’ voluntary decision will have a ripple effect among other pharmacy chains.
Some retailers stopped selling cigarettes years ago: Target Corp decided to drop them in 1996, while East Coast supermarket chain Wegmans Food Markets did so in 2008.
Matthew Myers, president of the Campaign for Tobacco-Free Kids, which advocates for tobacco control, said that CVS’s announcement could drive momentum for declining tobacco use.
Dr. Risa Lavizzo-Mourey, chief executive officer of the Robert Wood Johnson Foundation, which focuses on public health, called CVS’ decision “a bold, precedent-setting move because it acknowledges that pharmacies have become healthcare settings.”
The move was also applauded by President Obama, who said CVS could set a powerful example for other drugstores.
‘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,” the president said in a statement.
While headline grabbing, CVS said the move will not make a big dent in its profits.
CVS said it will lose about $2 billion in annual sales and between 6 and 9 cents of profit per share this year. Analysts expect the company to report 2014 revenue of $132.9 billion and a profit of $4.47 per share, according to Thomson Reuters.
U.S. cigarette sales have fallen 31.3 percent between 2003 and 2013, according to Euromonitor International.
The falling smoking rates, along with new competition in the last two years from the low-cost Family Dollar Stores Inc and Dollar General Corp chains, suggest shrinking prospects for tobacco product sales at CVS. Dollar stores have far more locations and offer goods at lower prices.
Although adult smoking rates have fallen from 43 percent of Americans in 1965 to the current 18 percent, smoking remains the leading cause of preventable death in the United States, killing more than 480,000 people each year.
Last month, the American Lung Association and other advocacy organizations called on political leaders to commit to cutting smoking rates to less than 10 percent of the population in a decade and to protect all Americans from secondhand smoke within five years.
Focus on health care
The CVS decision comes on the heels of several recent deals bolstering CVS Caremark’s position in the health care market.
CVS in December said it expected its pharmacy benefit manager revenues to rise between 7.25 percent and 8.5 percent in 2014, easily outpacing growth of 2 percent to 3.25 percent in its retail business.
In December, CVS and pharmaceutical distributor Cardinal Health Inc announced a 10-year agreement to form the largest generic drug sourcing operation in the United States. A month earlier it said it was buying Coram LLC, Apria Healthcare Group Inc’s specialty infusion services business unit.
CVS executives said the company will replace some of lost cigarette sales through smoking cessation programs at its pharmacies and will offer more programs to Caremark members. CVS said the programs will be also be a key selling point as it tries to land more corporate contracts this year.