CVS/Pharmacy announced on Wednesday that its stores will discontinue cigarette sales by October 1 of this year. CVS Caremark, the parent company of the pharmacy chain, predicts that the move could lose the company $2 billion in revenue for 2014, but won’t affect its earnings forecast.
“We’ve come to the conclusion that cigarettes have no place in a setting where health care is being delivered,” CVS Caremark CEO Larry Merlo told AP of the decision. He added in a written statement that ultimately discontinuing sales was “the right thing for us to do for our customers and our company to help people on their path to better health.”
The company will discontinue not just cigarette sales, but also sales of all tobacco products. Additionally, pharmacies will begin offering new cessation programs to help smokers kick the habit. These programs will include treatment options, as well as information campaigns both in stores and online about the negative effects of smoking on people’s health and how to quit.
CVS’s decision is a big blow to already-struggling tobacco companies. Cigarette sales have been falling nationally, and are largely propped up by retail sales. Rates of smoking are also decreasing, from a high of 42 percent of Americans in the 1960s to just 21 percent of Americans today.
But the negative health effects of smoking remain immutable. Smoking has killed over 20 million Americans in the last 50 years. About 400,000 people a year die from smoking-related diseases. And a report by the surgeon general predicts that 5.6 million children in the United States will die prematurely unless rates of smoking drop further. That directly impacts Americans consumers in the form of health costs. The country spends about $96 billion annually on health care related to smoking illnesses — and about $58.3 billion of that comes from the government, meaning it’s a cost passed on to taxpayers.
Cessation programs like the one CVS is launching could help reverse this, though. According to a brief from the Robert Woods Johnson Foundation, every dollar spent on cessation is predicted to save $50 in health related costs.
President Obama, whose signature health care law factors in smoking both in the form of cessation programs and higher premiums for smokers, applauded CVS’s move in a written statement Wednesday morning.
“As one of the largest retailers and pharmacies in America, CVS Caremark sets a powerful example, and today’s decision will help advance my Administration’s efforts to reduce tobacco-related deaths, cancer, and heart disease, as well as bring down health care costs — ultimately saving lives and protecting untold numbers of families from pain and heartbreak for years to come,” his statement said.