The landmark decision by CVS Caremark on Wednesday to halt tobacco sales at its 7,600 U.S. drugstores by Oct. 1 ratchets up pressure on its larger rival, Deerfield-based Walgreen Co., to follow suit.
CVS, the nation’s No. 2 drugstore chain, said it would forgo $2 billion in annual sales by dropping sales of cigarettes, smokeless tobacco and other tobacco products, reflecting its continued shift toward being more of a health care provider than simply a storefront that disburses prescription drugs.
Retail pharmacies like CVS, Rite Aid and Walgreen are seeking to play a larger role in the U.S. health system by becoming more comprehensive health care providers with in-store clinics, vaccination administration and other services.
They’re collectively trying to capture a surge of newly insured Americans who are gaining coverage through the health care overhaul law, which is expected to expand insurance to 11 million to 13 million by the end of 2014.
The CVS initiative, the first major pharmacy to undertake such a ban, puts the bullseye on the back of Walgreen, the nation’s largest pharmacy chain that has faced withering attacks from health and advocacy groups for years surrounding its policy of selling tobacco products.
Despite its more recent transformation into a more health care-focused company, Walgreen has remained steadfast in its tobacco policy, arguing last year that it must continue to sell those products to stay competitive with other drug store chains, convenience stores and grocery stores.
Michael Polzin, a Walgreen spokesman, said Wednesday the company has been evaluating its tobacco line for “some time,” and said it “will continue to evaluate the choice of products our customers want, while also helping to educate them and providing smoking cessation products and alternatives that help reduce the demand for tobacco products.”
Walgreen on Wednesday also announced a partnership with GlaxoSmithKline Consumer Healthcare to launch a free, Internet-based smoking cessation program called Sponsorship to Quit.
The program will provide smokers with customized tools to track their progress in quitting smoking.
While Walgreen does not break out tobacco sales, the company last year cited the introduction of cigarette sales in dollar stores as a key contributor to a decline in its store traffic for its third quarter.
The $2 billion in annual sales CVS said it is giving up accounted for about 1.6 percent of the company’s total revenue in 2012, the last year for which full-year statistics are available.
The move drew praise from President Barack Obama, a former smoker, who said CVS “sets a powerful example … that will have a profoundly positive impact on the health of our country.”
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