CVS Cigarette Profits Replaced by Prescriptions


CVS’ lost profits in cigarette sales have been replaced by its prescription drug sales, according to The Boston Globe. CVS Pharmacy recently removed cigarettes from their inventory. Reportedly, 10 million cigarettes are sold each minute in the world, according to the Centers for Disease Control and Prevention.

According to Statista, the value of global tobacco production is in the range of $600 to $700 billion dollars. In today’s economy, not too many businesses are shying away from easy money. In fact, if the need to sustain profits were not enough, CVS could also justify selling cigarettes with an objective to simply fill their customer’s stated need. That, however would have been short-sighted. The company, in effect, has instituted a plan in which not only are they no longer selling cigarettes, the end result may be an aid to helping smokers quit.

CVS has quite a lot to gain from their ban on cigarette sales. The company knows it makes good health sense to help folks stop smoking because studies show that almost 70% of adult smokers want to stop. First came the commercial explaining the company’s health care objectives and willingness to, therefore, drop tobacco. Next, the company announced their corporate name change to CVS Health.

Surprised and curious, this naturally caused some to lean forward. Afterward, it is easy to see that CVS definitely had a point in promoting that smoking is bad for good health. The premise was that smokers might then gauge their smoking risks and consider stopping. Eighteen percent of people smoke, according to the U. S. Centers for Disease control. The company is aware there are those who will need an aid to stop smoking, whether through retail products, or through strategic, but helpful, directives.

Through the power of well-crafted advertising, CVS pulled customers to their website and there they act as a facilitating host, stating “Let’s quit together.” Now, with only a short time since enacting their new business model, the company has already surpassed their third quarter estimates. According to The Boston Globe, the reason is related to prescription drug sales. CVS is finding that prescriptions are replacing and making up the difference from lost cigarette profits.

The partnership with seekers of a healthier lifestyle appears to be proving to be an idea whose time has come. The American Cancer Society has been on the front lines of making changes against the perils of smoking through their funding and research to prevent and cure cancer. The health consequences of smoking has always been evident, yet CVS appears to have capitalized on the promotion of healthy living.

It has taken considerable time to make an adequate counterattack to combat smoking. In March 2010, the American Pharmacists Association made its intentions known that tobacco sales and pharmacies do not mix.

Demonstrably, it took a while for CVS to reveal its game plan, including offering a partnership for better health messaging campaign. To focus on health and halt tobacco sales simply made good business sense, as the company is not an incidental player in the health care industry.

Second only to Walgreens, in terms of its size and reach, CVS manages the pharmacy benefits for 65 million members. To stop cigarette sales would naturally result in a loss of associated profits, to be exact, $2 billion, according to Business Insider. Not surprisingly, losses of CVS cigarette profits is becoming replaced by prescriptions. This could be one of the opportunities the company reportedly identified to offset the impact. The company also has 900 walk-in medical clinics, a natural component to what looks to be a viable, new health-centered focal point.

By Karen J. Dabney

Centers for Disease Control and Prevention
The Boston Globe
Business Insider

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