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azcentral: Tobacco sale ban by CVS praised

by Peter Corbett and Ken Alltucker for The Republic, azcentral:

CVS Caremark Corp.’s decision to stop cigarette sales drew praise Wednesday for a move perceived as putting health before profits even as skeptics wondered whether alcohol, sugary sodas and other products would be next.

CVS, the nation’s second-largest drugstore chain, announced that cigarettes and tobacco products no longer would be sold in its 7,600 drugstores nationwide as of Oct. 1.

Officials at CVS Caremark Corp. said the company’s 7,600 U.S. drugstores will stop selling cigarettes and tobacco products as of Oct 1. (Michael Chow/The Republic)

“Put simply, the sale of tobacco products is inconsistent with our purpose,” said Larry Merlo, CVS Caremark president and CEO.

CVS is the first major pharmacy chain to halt tobacco sales nationwide, but drugstores have been under pressure to end the practice for years.

In 2010, the American Pharmacists Association recommended a ban on cigarette sales in drugstores and supermarkets with pharmacies.

San Francisco banned tobacco sales in pharmacies in 2008, a move that was challenged by Walgreens, and later expanded that to include supermarkets with pharmacies.

Boston and other municipalities in Massachusetts have similar bans.

CVS is expected to lose $2 billion annually in tobacco and ancillary sales.

Business analysts and health-care advocates say CVS will take a short-term economic hit from halting tobacco sales, but it will get a boost in public perception for staying true to its health-care mission.

Ross Muken, a health-care services analyst with the ISI Group in New York, said CVS’ move helps its credibility.

“The average citizen is skeptical of big business,” Muken said. “They don’t assume that companies will forgo profits. But in the long term, this will help (CVS) to not be in that market.”

Analyst Scott Mushkin of Wolfe Research in New York said it was unlikely that large grocery retailers with pharmacies, such as Kroger and Walmart, would halt tobacco sales any time soon, but other retailers might follow CVS’ lead.

“I think this puts pressure on Walgreens and Rite Aid,” Mushkin said. “It doesn’t make sense to give out drugs to keep people healthy and yet you’re selling them tobacco.”

CVS stands to lose about 1 percent of its $136 billion in annual revenue.

“That’s pretty small potatoes from a big company,” Mushkin said.

Walgreen spokesman Michael Polzin said in an e-mail his company has been evaluating tobacco products “for some time to balance the choices our customers expect from us, with their ongoing health needs.”

He said the company will continue to do this while also providing products that help people kick their smoking habit.

Public-health advocates hailed CVS’ decision as an important step in the efforts to curb tobacco use.

“To have one retailer the size of CVS to make such a bold move and be willing to give up significant revenue is really important,” said Bill Pfeifer, president and CEO of the American Lung Association of the Southwest, which includes Arizona.

Pfeifer said the decision resonates for both symbolic and practical reasons.

He said it’s a signal that a national health-oriented retailer is taking a stand to promote healthy living among its customers. It also could have practical benefits, with competitors such as Walgreens feeling heightened pressure to follow CVS’ lead.

“Using tobacco products is really not the normal thing in today’s society. Just 18 percent of the population in the U.S. is using tobacco products. Here a major retailer decided to make a statement,” Pfeifer said.

Tobacco is responsible for about 480,000 deaths a year in the U.S., according to the Food and Drug Administration.

Pfeifer added that he is equally pleased that CVS’ decision extends to banning the sale of electronic cigarettes.

Though these nicotine-delivery devices are tobacco-free, some public-health experts believe more study is needed before declaring the devices safe.

Will Humble, director of the Arizona Department of Health Services, said the move is smart because CVS’ business focuses on health and wellness.

“It’s a good move in the long run because it sends a really clear message to all of their customers and all their potential new customers that they really take that mission seriously,” Humble said. “They are willing to take a short-term hit on the revenue side to make that strong commitment to their wellness mission.”

CVS got plenty of support from the public for its decision, but many raised questions about its motives and whether the company would eliminate alcohol and other products that can be unhealthy.

“If they’re so keen on health care, then better get rid of sodas, candy and chips as well,” wrote Jeff Edson on the Facebook message board.

CVS chief medical officer Dr. Troyen Brennan said the company has no plans to remove alcohol.

“At this point, we’re dealing with cigarettes, which are unalterably unhealthy for people and different from any other substance that people either drink or eat,” he said.

David Livingston, a supermarket consultant with DJL Research in Milwaukee, said CVS could attract a better mix of customers, noting that Whole Foods, Trader Joe’s and other retailers do not sell cigarettes.

“I can remember when drugstores sold pornography,” he said. “But they have taken steps to improve their image, and this is the same type of thing.”

In addition to eliminating tobacco products, CVS plans to launch smoking-cessation programs at its pharmacies and MinuteClinic locations.

CVS Caremark’s stock price closed the day at $65.44, down 1 percent from the previous close.

5 Feb 2014

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