A good move
Ever since cigarettes definitively were linked to cancer in the 1960s, pharmacies have been in the dubious position of selling cancer drugs at the prescription counter and cigarettes at the retail goods counter.
Now CVS Caremark will end that contradiction. It will stop selling cigarettes by October in its 7,600 stores.
The company is not the first major retailer to swear off tobacco revenue. Target stopped selling smokes in 1996 and Wegmans did so in 2008. But CVS is the first major pharmacy chain to realize that it can prosper without cigarette revenue.
Indeed, part of the CVS decision is a shrewd business move. The company said the decision will cost about $2 billion a year in sales and 6 to 9 cents in profit per share. Industry analysts expect the company to generate about $140 billion in sales this year with earnings of $4.47 per share.
But the company's Caremark division is a major benefits manager for corporations and Medicare and a major player in the growing role of pharmacies as health-care providers. CVS expects to make up some of the lost revenue through smoking-cessation clinics. And the company said the decision to stop selling cigarettes will strengthen its position as a health care provider.
CVS is a abandoning a declining business - cigarette sales fell 3.13 percent over the last decade - for a growing one.
Other major pharmacy chains should see the CVS move as a herald of inevitable change, and help to hasten the day when cigarettes can't be bought at a pharmacy.