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CVS stops tobacco sales early; corporate parent changes name

At CVS stores around the country, signs promoting smoking-cessation products have appeared in spaces that once held cigarettes and other tobacco products. Shelves are also stocked with nicotine gum and tobacco quit packs.
Published Sep. 3, 2014

As CVS sharpens its focus on customer health, the nation's second-largest drugstore chain is stopping the sale of tobacco nearly a month sooner than planned and tweaking its corporate name.

When they check out, customers will see nicotine gum and other products that help people kick the tobacco habit instead of the cigars and cigarettes that used to fill shelves behind store cash registers.

In a St. Petersburg store at 301 Third St. S, cigarettes and chewing tobacco were replaced by large signs that read, "Let's quit together," "You're not alone" and "Thinking about quitting?"

A store in downtown Indianapolis also stocked free tobacco quit packs where cigarettes used to be. The red-and-white boxes, nearly the size of a cigarette pack, contain coupons, a card showing how much a smoker can save by quitting and a booklet with Sudoku and other games to distract someone fighting the urge to smoke.

CVS had said earlier this year that it would stop selling tobacco products on Oct. 1.

Less obvious to customers, CVS Caremark will now be known as CVS Health. The signs on its roughly 7,700 drugstores won't change, however.

CVS and other drugstores have delved deeper into customer health in recent years, in part to serve the aging baby boomer generation and the millions of uninsured people who are expected to gain coverage under the federal health care overhaul. While competitors Walgreen Co. and Rite Aid Corp. still sell tobacco, they've all started offering more health care products and added walk-in clinics to their stores while expanding the care they provide.

Drugstores now offer an array of vaccinations and flu shots, and many of their clinics can help monitor chronic illnesses like diabetes or high blood pressure.

"We're doing more and more to extend the front lines of health care," CVS CEO Larry Merlo said.

CVS still stocks its shelves with sugary snacks and other foods that are considered unhealthy. But company executives have been quick to point out that while chocolate bars in moderation pose little health risk, no amount of tobacco is considered safe.

The CVS corporate name change reflects the health push while removing a reference to the company's biggest revenue producer, its Caremark pharmacy benefits management.

The name Caremark, however, had never really registered with the average person, according to Laura Ries, president of the brand consulting firm Ries & Ries.

CVS, which is ranked 12th in the 2014 Fortune 500, announced in February that it would phase out tobacco sales by Oct. 1 because it could no longer sell smokes in a setting where health care is offered.

Merlo, CEO of CVS, has said that the company expects to lose about $2 billion in revenue annually after pulling tobacco from its shelves, but executives believe they can counter that loss at least in part through growth the company may get from health care. Merlo declined to estimate how much of a benefit CVS expects.

The potential revenue loss hasn't spooked investors so far. CVS shares have climbed about 22 percent since the tobacco announcement. Shares rose 63 cents to $80.36 Wednesday.

Times staff writer Weston Phippen contributed to this report, which uses information from the Associated Press.

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