CVS Caremark made a bold decision to "walk the talk" when it announced that it would no longer sell cigarettes in its pharmacies.
The announcement means that the shelves of CVS won't offer any tobacco products in any of its 7600 pharmacies around the country after October 1, 2014.
Larry Merlo, CVS Caremark President and CEO, was straightforward. In his own words, "Put simply, the sale of tobacco products is inconsistent with our purpose."
While there are some who would wish that CVS didn't wait until the fall to get rid of all those cigarettes, the announcement was met with far ranging support. Print and broadcast media put the story front and center, above the fold and on headline news. The world of social media was filled with comments applauding the decision.
CVS Caremark's description of itself on Twitter, "reinventing pharmacy for better health," seems to have been for real. And now with a strong statement and equally strong action underway, people are listening, tweeting and re-tweeting.
Reality, however, reminds us that this kind of decision is costly for CVS. At least in the short run. So, it certainly wasn't just a philosophical decision or a theoretical exercise. CEO Merlo candidly understood the financial impact: "The company estimates that it will lose approximately $2 billion in revenues on an annual basis from the tobacco shopper, equating to approximately 17 cents per share."
Clearly, the focus for CVS goes well beyond the quarter or even fiscal year financial results that might prompt some early reaction by investors and the financial markets.
Regardless, the point to keep in mind is that the decision about tobacco for CVS is a long-term one -- in keeping with its business strategy.
The clear expectation is that CVS pharmacies will grow because they are on the right side of the cancer and smoking disease equation and, more importantly and enduring, on the right side of the broader healthcare equation. Considering the demand for simpler and more personal health care and prevention, CVS seems to see a much more meaningful opportunity, well beyond selling packs of cigarettes.
With its growing number of CVS MinuteClinics and, as Helena Foulkes, president of CVS/Pharmacy, said in the announcement, "26,000 pharmacists and nurse practitioners ...", CVS is determined.
It is likely making a good bet... from two perspectives.
First, it shows courage as a company. Not only does it speak to principles but it now puts teeth into them by walking away from products that, although certainly lucrative, go against the company's purpose and what it believes is right.
Second, it has a much broader mandate in mind. CVS is determined to be a health company, not just a pharmacy, and to make "better health" possible by serving as a single source for much more than prescriptions.
In a world where the talk about healthcare seems so confusing and challenging, just maybe we are seeing some light.
Interestingly, sometimes we find guidance on things that otherwise appear complicated from old-fashioned values and simple sources. In an interview for my recent book, "The Power of Reputation" (American Management Association), Manny and Lily Dominguez, the husband and wife owners of a local, independent, family pharmacy in New Jersey, spoke about what underlies the relationships they have with those who come in the door:
I call everyone who comes into my pharmacy my patient. I treat them that way... not as customers but as patients. I know that I can't just fill the prescription. If I am to continue to be successful, I have to do more.
The pharmacy becomes an extension of our values and our beliefs. We are there for them. We are an extension of their family. For us, that is critical. Some might call it old-fashioned but we think it has created a very special reputation for us and that has been critical to our success.
So, are we starting to see a large-scale rejuvenation with some of the qualities of the local, corner pharmacy at the core?
And is CVS leading the way?
Surely looks that way.
Pharmacies of the future will be light years different. They will not be a throwback to the ones we can imagine having been painted by Norman Rockwell, but there's no doubt that values need to prevail and the pharmacies built on principled business decisions with a clear view toward what really is important.
For the business. And for the patients. Both.
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