American drug store giant CVS Caremark has taken a gamble in banishing tobacco from its thousands of stores

It was praised as bold and controversial when the giant US pharmacy chain CVS Caremark announced in February that it would no longer sell tobacco products at its 7,600 stores.

“Cigarettes have no place in an environment where healthcare is being delivered,” said Larry Merlo, the 58-year-old former pharmacist who is chief executive of CVS Caremark.

Although the move was widely applauded by medical professionals and politicians – “It will have a profoundly positive impact on the health of our country,” said president Barack Obama, who has kicked his own cigarette addiction since he’s been in office – it did not come without risk.

Tobacco, one of the most lucrative products for US pharmacies, generated $2bn in sales for CVS in 2013. The hit on revenue is expected to shave about 17 cents a share off 2014’s earnings. But that’s pocket change if the strategic repositioning of the company pays off.

“This is the right decision at the right time as we evolve from a drug store into a healthcare company,” Merlo said. In other words, this move is not just good for health; it’s good for business.

Paul Argenti, professor of corporate communications at Dartmouth’s Tuck School of Business, wrote in the Harvard...

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CVS Caremark  healthcare  tobacco  tobacco sales ban 

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