CVS Caremark Corporation (NYSE:CVS) announced on Wednesday, September 3rd that it was changing the name of the firm to CVS Health. The retail pharmacy chain also noted that it was ceasing sales of all tobacco products a month earlier than previously announced.
CVS, the first major pharmacy chain to implement a tobacco ban, initially announced its plans back in February.
Ceasing sale of tobacco products
CVS, the second largest pharmacy chain in the U.S., said in its statement that it has removed all remaining cigarettes, cigars, smokeless tobacco and other tobacco products from all of its 7,700 pharmacies across the country. Analysts say the move will almost certainly have a significant impact on the firm’s bottom line over the near term.
The company estimates that it will lose around $1.5 billion in annual tobacco sales and more than $500 million in purchases from those who visit their stores intending to buy cigarettes or chewing tobacco.
However, CVS Caremark Corporation (NYSE:CVS) moving away from selling tobacco clears up an obvious contradiction, and removes a major obstacle for the company as it becomes more deeper involved in providing health care.
CVS Caremark rebranding itself
The move to stop selling unhealthy tobacco products comes as the company, long known as CVS Caremark Corp., announced that it was changing its name to CVS Health, a rebranding to reflect the broader role the firm plans to play in the revamped health care market.
The nation’s largest pharmacy chain Walgreen has long suffered from criticism from health and advocacy groups regarding the sale of tobacco products. Walgreen is also trying to transform into a more health care-focused company, but continues to sell tobacco products.
Statement from CVS Health CEO
“We believe this reflects our broader health care commitment,” explained Larry Merlo, the CEO of the retail pharmacy chain. “What this says about CVS is that we’re a pharmacy innovation company that is at the forefront of a changing health care landscape, and it helps us to play a bigger role in health care.”