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CVS to Remove Tobacco Products from all Store Shelves

Cigarette CVSYesterday, CVS announced that it plans to stop selling cigarettes and all other tobacco products at its 7,500 stores by October 2014, making it the first U.S. drugstore chain to remove cigarettes from its shelves.
Public health officials praised the decision of the second-largest drugstore in the country a trail-blazing step that may set a precedent for other stores to follow. CVS is also betting that the move will reinforce its position as a national healthcare leader.
“I think it will put pressure on other retailers who want to be in healthcare,” said CVS Chief Medical Officer Dr. Troyen Brennan.
Although several U.S. cities, including Boston and San Francisco, already prohibit the sale of tobacco products in pharmacies, anti-smoking advocates hope that CVS’ voluntary decision will influence other pharmacy chains.
A number of prominent retailers have stopped selling cigarettes in recent years: Target dropped them back in 1996, while Wegmans Food Markets (a Northeastern supermarket chain) did the same in 2008.
Matthew Myers, chairman of the Campaign for Tobacco-Free Kids and leading advocate for tighter control on tobacco products, stated that CVS’s announcement could generate momentum for reducing tobacco use.
Dr. Risa Lavizzo-Mourey, CEO 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 sentiment is also shared by workers compensation attorneys, Cancer Researchers and advocates for workplace health.
Yet although the decision grabbed headlines, CVS stated that the ban will not make a major dent in its profits. The company estimates a loss of about $2 billion in annual sales. Analysts predict the company to report $132.9 billion of revenue in 2014 and a profit of $4.47 per share, according to Thomson Reuters.
U.S. cigarette sales have fallen more than 30% between 2003 and 2013, according to Euromonitor International. Yet although smoking rates have dropped from 43% of Americans in 1965 to the present rate of 18%, smoking still remains the leading cause of preventable death in the U.S., killing more than half a million people every year.
Just last month, the American Lung Association and partner organizations made a highly publicized appeal to U.S. political leaders to work toward reducing smoking levels to under 10% of the population within a decade; in addition, they’ve called on those elected official to protect all Americans from secondhand smoke in the next five years.

FOCUS ON HEALTHCARE

The CVS decision follows a number of deals that have boosted CVS’s position in the healthcare market. Last December, the company said it projected its pharmacy revenues to increase between 7 and 8% in 2014, vastly outpacing 2% expected growth in its retail business.
CVS executives said the company would recoup some of the lost tobacco sales through in-house smoking cessation programs. CVS said the programs will be also be a key selling point as it tries to land more corporate contracts this year.

Third Party Injury Claims

If you have an illness related to second-hand smoke at the workplace, the Third Party Claim Attorneys at Emery Reddy can represent your rights. We also have extensive experience negotiating with the department of Labor and Industries, and help clients win appeals for denied L&I claims. Contact our office today for a free consultation.

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