“Tobacco Just Doesn’t Fit In:” CVS Exec Gives Story Behind the Story
Oct 22, 2014, 4:01 PM, Posted by Catherine Arnst
Along with the start of CVS Health, the sale of cigarettes and tobacco products at CVS/pharmacy ends today. By eliminating cigarettes and tobacco products from sale in our stores, we can make a difference in the health of all Americans.”—CVS Health CEO Larry Merlo
On October 20, The Campaign for Tobacco-Free Kids launched a national campaign calling on America’s retailers to stop selling tobacco products, and a new mobile-friendly website—www.ShopTobaccoFree.org—that has an interactive map that allows consumers to search for the nearest tobacco-free retailers. The website currently features more than 20 retail chains with more than 13,000 separate store locations—chief among them CVS Health.
On September 3, CVS ended sales of tobacco products at all of its 7,700 stores, a month ahead of its previously targeted date of October 1. It is the first, and so far the only, national pharmacy chain to take this step. The company also changed its corporate name to CVS Health in order to reinforce its broader commitment to the health of its customers.
RWJF applauds CVS’s actions wholeheartedly—indeed, we collaborated with CVS on the initial announcement back in February that it would end the sale of tobacco products. So we asked CVS Health executive VP and chief medical officer Troy Brennan MD, to tell us the story behind the story. Just how do you get a publicly traded company to sacrifice some $2 billion in annual sales?
RWJF: What was the impetus for the decision to end the sale of tobacco products?
Troy Brennan: In many ways we are building a Culture of Health, just like you. Health is the most important thing in terms of what we do for our customers, who are often also our patients. We like to say that health is the prism through which we see all the work that we do—and tobacco just doesn’t fit in.
RWJF: When did CVS first start considering an end to tobacco sales?
TB: The appropriateness of selling cigarettes in pharmacies is not a new issue. The American Pharmacists Association has for years said that it was unethical to sell tobacco products in a pharmacy. I’ve been vocal about it and a number of people in the company, especially our CEO, agreed that as we started thinking of ourselves more and more as a health care company, we needed to end tobacco sales. In terms of the products we sold, tobacco was the number one threat to the health of consumers.
RWJF: Was there much pushback from within the organization?
TB: It was not an easy decision for anyone, based both on the revenue loss as well as the thinking that smokers would just buy their cigarettes elsewhere—which made us wonder whether our action would have an impact. We now have data that indicates that removing tobacco products from retailers with pharmacies will lead to substantially lower rates of smoking, with implications for reducing tobacco-related deaths. That’s been very gratifying to know that our decision can make a difference in people’s lives.
The response we received from our pharmacy benefits manager (PBM) clients was also gratifying. Our leadership got tremendous feedback, with clients saying that our decision to quit selling tobacco really does ‘tip the scales’ in their eyes in terms of what kind of company we are—a health care company.
It was also very gratifying to see how excited our colleagues were in the stores. It really had an important effect overall on company morale.
RWJF: Was it difficult to convince the board of directors and investors?
TB: Our Board of Directors was critical in making this decision and they were extremely involved and supportive. Everyone agreed that this was the right time for us to make this decision as a company—both strategically and financially. The analysts who follow us agreed and understood why we made this choice.
RWJF: How did you go about putting the plan into place?
TB: There was a whole logistical plan that went into operationalizing our exit from tobacco. We had to wind down inventory, starting with the February announcement and culminating Labor Day weekend. Lots of credit goes to our CEO Larry Merlo for his leadership as well as to Helena Foulkes, who is the president of CVS/pharmacy.
Helena was central to helping the organization understand the importance of making this decision as a health care company. She was also able to drive and inspire the front store team to get this job done quickly, and they did it in a seamless fashion.
RWJF: How were you able to beat your original timetable by a month?
TB: Once we decided to get it done, things moved very fast. Overall we felt like we could get it done sooner than October 1.
RWJF: How do you respond to criticism that the CVS stores continue to sell unhealthy snack foods and soda?
TB: None of those products have the same caliber of harm as tobacco. There is no such thing as "moderate use" of tobacco products.
RWJF: Why change your name to CVS Health?
TB: There has been tremendous positive feedback for the name change—nearly 100 percent. It’s helping to change our image to be both an innovative and caring company that is helping people on their path to better health. Our new name is a reminder of that.
RWJF: What changes do you see in the next few years for CVS Health?
TB: The pharmacy’s role is really changing. In the past, the major integrated academic medical centers had their own pharmacies. Now, we have affiliations with more than 40 major medical centers to work together as pharmacies and retail clinics play an expanded role as part of the health care team. We want to be active in the changing health care landscape and we’ve been developing comprehensive programs to do that.