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 for several years now. Their pharmacists deliver flu shots and other immunizations, and those clinics also have been expanding the care they deliver. They now help people manage chronic illnesses like high blood pressure and diabetes.
CEO Larry Merlo noted that conditions like those 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.
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 company's announcement 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.