Feb 5 (Reuters) - CVS Caremark Corp said on Wednesday that it would stop selling tobacco products at its 7,600 stores by October, becoming the first U.S. drugstore chain to take cigarettes off the shelf.
Public health experts called the decision by the No. 2 U.S. drugstore chain a precedent-setting step that could pressure other stores to follow suit.
CVS, whose Caremark unit is a major pharmacy benefits manager for corporations and the government Medicare program, believes the decision will strengthen its position as a healthcare provider.
"I think it will put pressure on other retailers who want to be in healthcare," said CVS Caremark Chief Medical Officer Dr. Troyen Brennan.
Although some U.S. cities, including Boston and San Francisco, already ban the sale of tobacco products in pharmacies, advocates hope CVS' voluntary decision will have a ripple effect among other pharmacy chains.
Some retailers stopped selling cigarettes years ago: Target Corp decided to drop them in 1996, while East Coast supermarket chain Wegmans Food Markets did so in 2008.
Matthew Myers, president of the Campaign for Tobacco-Free Kids, which advocates for tobacco control, said that CVS's announcement could drive momentum for declining tobacco use.
Dr. Risa Lavizzo-Mourey, chief executive officer 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."
While headline grabbing, CVS said the move will not make a big dent in its profits.
CVS said it will lose about $2 billion in annual sales and between 6 and 9 cents of profit per share this year. Analysts expect the company to report 2014 revenue of $132.9 billion and a profit of $4.47 per share, according to Thomson Reuters.
U.S. cigarette sales have fallen 31.3 percent between 2003 and 2013, according to Euromonitor International.
The falling smoking rates, along with new competition in the last two years from the low-cost Family Dollar Stores Inc and Dollar General Corp chains, suggest shrinking prospects for tobacco product sales at CVS. Dollar stores have far more locations and offer goods at lower prices.
Although adult smoking rates have fallen from 43 percent of Americans in 1965 to the current 18 percent, smoking remains the leading cause of preventable death in the United States, killing more than 480,000 people each year.
Last month, the American Lung Association and other advocacy organizations called on political leaders to commit to cutting smoking rates to less than 10 percent of the population in a decade and to protect all Americans from secondhand smoke within five years.
The CVS decision comes on the heels of several recent deals bolstering CVS Caremark's position in the healthcare market.
CVS in December said it expected its pharmacy benefit manager revenues to rise between 7.25 percent and 8.5 percent in 2014, easily outpacing growth of 2 percent to 3.25 percent in its retail business.
In December, CVS and pharmaceutical distributor Cardinal Health Inc announced a 10-year agreement to form the largest generic drug sourcing operation in the United States. A month earlier it said it was buying Coram LLC, Apria Healthcare Group Inc's specialty infusion services business unit.
CVS executives said the company will replace some of lost cigarette sales through smoking cessation programs at its pharmacies and will offer more programs to Caremark members. CVS said the programs will be also be a key selling point as it tries to land more corporate contracts this year.
Our 2024 Coverage Needs You
It's Another Trump-Biden Showdown — And We Need Your Help
The Future Of Democracy Is At Stake
Our 2024 Coverage Needs You
Your Loyalty Means The World To Us
As Americans head to the polls in 2024, the very future of our country is at stake. At HuffPost, we believe that a free press is critical to creating well-informed voters. That's why our journalism is free for everyone, even though other newsrooms retreat behind expensive paywalls.
Our journalists will continue to cover the twists and turns during this historic presidential election. With your help, we'll bring you hard-hitting investigations, well-researched analysis and timely takes you can't find elsewhere. Reporting in this current political climate is a responsibility we do not take lightly, and we thank you for your support.
Contribute as little as $2 to keep our news free for all.
Can't afford to donate? Support HuffPost by creating a free account and log in while you read.
The 2024 election is heating up, and women's rights, health care, voting rights, and the very future of democracy are all at stake. Donald Trump will face Joe Biden in the most consequential vote of our time. And HuffPost will be there, covering every twist and turn. America's future hangs in the balance. Would you consider contributing to support our journalism and keep it free for all during this critical season?
HuffPost believes news should be accessible to everyone, regardless of their ability to pay for it. We rely on readers like you to help fund our work. Any contribution you can make — even as little as $2 — goes directly toward supporting the impactful journalism that we will continue to produce this year. Thank you for being part of our story.
Can't afford to donate? Support HuffPost by creating a free account and log in while you read.
It's official: Donald Trump will face Joe Biden this fall in the presidential election. As we face the most consequential presidential election of our time, HuffPost is committed to bringing you up-to-date, accurate news about the 2024 race. While other outlets have retreated behind paywalls, you can trust our news will stay free.
But we can't do it without your help. Reader funding is one of the key ways we support our newsroom. Would you consider making a donation to help fund our news during this critical time? Your contributions are vital to supporting a free press.
Contribute as little as $2 to keep our journalism free and accessible to all.
Can't afford to donate? Support HuffPost by creating a free account and log in while you read.
As Americans head to the polls in 2024, the very future of our country is at stake. At HuffPost, we believe that a free press is critical to creating well-informed voters. That's why our journalism is free for everyone, even though other newsrooms retreat behind expensive paywalls.
Our journalists will continue to cover the twists and turns during this historic presidential election. With your help, we'll bring you hard-hitting investigations, well-researched analysis and timely takes you can't find elsewhere. Reporting in this current political climate is a responsibility we do not take lightly, and we thank you for your support.
Contribute as little as $2 to keep our news free for all.
Can't afford to donate? Support HuffPost by creating a free account and log in while you read.
Dear HuffPost Reader
Thank you for your past contribution to HuffPost. We are sincerely grateful for readers like you who help us ensure that we can keep our journalism free for everyone.
The stakes are high this year, and our 2024 coverage could use continued support. Would you consider becoming a regular HuffPost contributor?
Dear HuffPost Reader
Thank you for your past contribution to HuffPost. We are sincerely grateful for readers like you who help us ensure that we can keep our journalism free for everyone.
The stakes are high this year, and our 2024 coverage could use continued support. If circumstances have changed since you last contributed, we hope you'll consider contributing to HuffPost once more.
Support HuffPostAlready contributed? Log in to hide these messages.