CVS Caremark (CVS:US), the largest provider of prescription drugs in the U.S., plans to stop selling cigarettes and tobacco-related products across the nation by Oct. 1 in an effort to support the health of its patients and customers.
CVS, operator of 7,600 pharmacy stores in the U.S., would be the first national pharmacy chain to take this step, the Woonsocket, Rhode Island-based company said in a statement today. The decision will cut annual revenue (CVS:US) by about $2 billion, equating to 17 cents a share, CVS said.
The move comes as public health officials try to educate about 42 million U.S. adult smokers about the dangers of the habit. Last month, a report from the acting U.S. Surgeon General, Boris Lushniak, criticized the “fraudulent campaigns” by cigarette companies, weaknesses in regulation and a rebound in smoking depicted in Hollywood films. The study, which came half a century after smoking was first linked to lung cancer, cited new evidence that common ailments such diabetes, arthritis and impotence can be linked to tobacco use. “Anytime a company puts public health and the long-term good ahead of short-term profit, it’s sort of an eye opener,” Ross Muken, a New York-based analyst at ISI Group, said in a phone interview today.
The impact for 2014 earnings per share for will be 6 cents to 9 cents following the change, CVS said. The company has identified “incremental opportunities” to offset the profitability impact, according to the statement.
Discuss, do you think it’s a good idea or do you think adults should be able to choose what they want or do not want?