A CVS store in Chicago. (M. Spencer Green / AP)
CVS Caremark is kicking the habit of selling tobacco products at its more than 7,600 drugstores nationwide as it focuses more on providing health care.
The nation’s second-largest drugstore chain said Wednesday that it will phase out cigarettes, cigars and chewing tobacco by Oct. 1, a move that will cost about $2 billion in annual revenue but won’t affect its 2014 earnings forecast. CVS Caremark leaders say removing tobacco will help them grow the company’s business of working with doctors, hospitals and other care providers to improve customers’ health.
CVS Caremark Corp. and other major drugstore chains have been adding clinics to their stores and expanding their health care focus for several years now. They’ve been preparing, in part, for an aging U.S. population that will need more care and for the millions of people who are expected to gain health insurance coverage under the federal health care overhaul.
Their pharmacists deliver flu shots and other immunizations, and their clinics also have been expanding the scope of care they deliver. They now help people manage chronic illnesses like high blood pressure and diabetes in addition to treating minor illnesses like sinus infections.
CEO Larry Merlo noted that chronic conditions are made worse by smoking.
“We’ve come to the conclusion that cigarettes have no place in a setting where health care is being delivered,” he said.
The company declined to say what will take tobacco’s prominent shelf place behind cash registers at the front of its stores. CVS Caremark will test some items and may expand smoking cessation products that are already sold near cigarettes. Its drugstores do not sell electronic cigarettes, devices that heat a liquid nicotine solution and create a water vapor that users inhale.
On its own, the CVS move won’t hurt cigarette companies much. Drugstores overall account for only 4 percent of cigarettes sold. That pales compared with gas stations, which generate nearly half of those sales. But it’s another in a long line of changes that have led cigarette sales to fall because of health concerns, higher prices and taxes, and social stigma.
Detroit smokers on Wednesday applauded the chain’s move.
Javon Byrd, 27, lit a cigarette as she left the CVS on Woodward in downtown Detroit Wednesday. She said she usually buys cigarettes from gas stations and isn’t worried that CVS will no longer be an option.
“It isn’t like they’re selling them for a lot cheaper or something,” she said.
Evan Missig, 30, of Troy, said he occasionally buys cigarettes from the drug store but thinks the chain is making a good decision.
“I think it’s a good idea. Economically, it might not be, but it gives them a good name,” he said.
CVS Caremark has been working to team up with hospital groups and doctor practices to help deliver and monitor patient care, and the presence of tobacco in its stores has made for some awkward conversations, CVS Chief Medical Officer Dr. Troyen A. Brennan said.
“One of the first questions they ask us is, ‘Well, if you’re going to be part of the health care system, how can you continue to sell tobacco products?’ ” he said. “There’s really no good answer to that at all.”
The drugstore chain also plans to expand its smoking cessation efforts. That includes training its pharmacists to counsel people on how to quit smoking.
The company’s tobacco plan drew praise from President Obama, who said in a statement that he applauded the news.
“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,” the president said.
Tobacco is responsible for about 480,000 deaths a year in the U.S., according to the Food and Drug Administration, which gained the authority to regulate tobacco products in 2009.
CVS Caremark competitor Walgreen Co., the nation’s largest drugstore chain, sells tobacco, as does the world’s largest retailer, Wal-Mart Stores Inc., which also operates pharmacies in its stores. But Target Corp., another major retailer with pharmacies in its stores, does not.
Most independent pharmacies also do not sell tobacco, according to the National Community Pharmacists Association.
CVS notches about $1.5 billion annually in tobacco sales, but it expects the $2 billion drop in revenue from phasing out tobacco because smokers often buy other products when they visit their stores.
Detroit News staff writer Michael Martinez contributed.