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CVS Caremark Puts $2 Billion On The Line With Tobacco Ban

  • Written by  Alicia Fiorletta

cvs
CVS Caremark
is attempting to help customers break their smoking habits by no longer selling cigarettes and other tobacco products.

By Oct. 1, 2014, the pharmacy retailer will stop selling all forms of tobacco merchandise in all 7,600 CVS/pharmacy stores across the U.S. The decision to exit the tobacco category won’t affect the company's 2014 segment operating profit guidance or the  five-year financial projections, according to a company press release. However, CVS Caremark estimates that it will lose approximately $2 billion in revenue on an annual basis from tobacco sales.

"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," said Larry J. Merlo, President and CEO at CVS Caremark. "Put simply, the sale of tobacco products is inconsistent with our purpose."

In response to lost revenue from tobacco sales, CVS Caremark is focusing on offering additional services and guidance to customers, which will help the company better address the wants and needs of patients, clients and health care providers.

For example, CVS/pharmacy will be launching a national program designed to decrease the U.S. smoking rate. With a tentative Spring 2014 launch date, the initiative will offer information and treatment on smoking cessation at all CVS/pharmacy and MinuteClinic locations, as well as a variety of online resources. CVS Caremark pharmacy benefit management plan members also will have access to comprehensive programs that will help them quit smoking.

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