Loss of tobacco revenue is unlikely to cost CVS

By Patrick Anderson
PBN Staff Writer

It’s a store layout as familiar to New Englanders as the bright, red CVS signs dotting retail strips across the region: medicine at the back of the store, cigarettes and candy at the checkout. More

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Loss of tobacco revenue is unlikely to cost CVS

PBN FILE PHOTO/MICHAEL PERSSON
CLINICAL TRIAL: Nurse practitioner Corissa Pond enters patient data at a MinuteClinic in a Seekonk CVS/pharmacy. CVS Caremark applied in November to open seven MinuteClinics in Rhode Island, a move to expand its health care offerings.

By Patrick Anderson
PBN Staff Writer

Posted 2/17/14

It’s a store layout as familiar to New Englanders as the bright, red CVS signs dotting retail strips across the region: medicine at the back of the store, cigarettes and candy at the checkout.

But as drugstores creep into clinical care, the contrast between the two sides of the store is causing some retailers to rethink pieces of that tried-and-true format, including the temptations behind the register.

Now Woonsocket-based CVS Caremark Corp. has taken a major step toward the growing health care side of its business, announcing this month it would stop selling tobacco products at its pharmacies by Oct. 1.

“Put simply, the sale of tobacco products is inconsistent with our purpose,” said CVS Caremark President and CEO Larry J. Merlo in a news release announcing the decision. “As the delivery of health care evolves with an emphasis on better health outcomes, reducing chronic disease and controlling costs, CVS Caremark is playing an expanded role in providing care through our pharmacists and nurse practitioners.”

Although the public identifies CVS with its drugstores, more than half of the company’s $127 billion in revenue last year was generated by the Caremark unit, which manages pharmacy benefits for corporations and Medicare.

And going forward, CVS intends to grow its role as a health care provider through its in-store MinuteClinics, where walk-in customers can get basic medical services from nurse practitioners and physician assistants.

CVS now operates about 800 MinuteClinics in 28 states, including Massachusetts, with plans to add more.

A major obstacle is regulatory, as illustrated in Rhode Island, where MinuteClinics sought permission to operate in 2005, but withdrew in the face of opposition from doctors, who argued the retail clinics could erode the quality of primary care.

Opponents have also pointed to the presence of cigarettes under the same roof as MinuteClinics as a reason they should not be allowed to provide medical services.

CVS last November submitted a new application to open seven MinuteClinics in the state. The R.I. Department of Health asked for additional information and has not heard back from CVS, according to spokesman James Palmer.

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