Editorial by Jack Ryan
From a health perspective, it’s easy for a business to decide to stop selling tobacco products when their hazards are so well documented. But it surely becomes a lot more difficult choice to make when you stand to lose $2 billion a year in sales.
That’s how much money the CVS drugstore chain will give up after its announcement this week that it’s removing cigarettes and other tobacco products from its stores. It wants its 7,600 locations to evolve from a mere supplier of prescription medicine to a more comprehensive health care provider.
No doubt $2 billion is a lot of money, but it’s only about 1.5 percent of the company’s $133 billion in annual revenue. The loss of cigarettes will have a short-term effect on CVS’ earnings, costing it an estimated 9 cents per share this year and 15 cents in 2015.
So why do it? After all, smoking may be addictive and the nation’s leading cause of preventable death, but it’s still legal. And if you’re going to stop selling cigarettes, what about all the other drugstore goodies that can lead to health problems if abused, such as beer, family-sized bags of potato chips, high-sugar candy and soft drinks?
CVS probably would argue that tobacco is in a class by itself when it comes to harmful effects. Indeed, a recent surgeon general’s report estimated that smoking plays a role in up to 480,000 deaths per year. Smoking-related illnesses cost $130 billion a year for medical care and another $150 billion in lost productivity, such as sick days at work.
According to The Wall Street Journal, the CVS decision is part of a major push by pharmacy chains to play “a more integrated role of providing basic health services to Americans — including millions of newly insured — amid an expected shortage of primary care doctors.”
The Journal said CVS and other drugstore chains, such as Walgreens and Rite Aid, are trying to create business partnerships with hospitals, physician groups and medical insurers. CVS wants its locations to have in-store clinics that could be a more convenient alternative to waiting in a doctor’s office for treatment.
As for tobacco buyers, CVS plans to offer stop-smoking classes at its pharmacies. Given that a majority of smokers say they would like to quit and have tried unsuccessfully to do so, that sounds like a good trade — swapping sales from smokers for helping those who want to kick the habit.
It will be interesting to see whether competing drugstores follow CVS. Few other companies have done it. The only national retailer that quit selling cigarettes was Target, back in 1996, which said they weren’t profitable and were too difficult to stock. CVS is by far the largest company to remove tobacco, and the only one who cited health concerns as its reason for doing it.
Cigarettes will still be available at places like convenience stores. But this week’s news is one more slap at the tobacco industry, which in the space of 50 years has seen its use plummet with Americans.