With its roots as Consumer Value Stores – first planted in working-class New England – what has become the towering tree that is CVS Health Corp. is now a major player in the U.S. health sector.
The scale of the company, and its principal branches, is fairly staggering.
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Learn MoreA total of 215,000 employees – working in pharmacy-benefit management, prescription mail order, the company’s in-store health clinics, retail pharmacy, as well as, still all these years later, beauty and other nonpharmacy retail – make CVS Health a behemoth of a company, with revenue in 2014 of nearly $140 billion.
No matter how large it’s grown, however, the company has kept its community involvement at the forefront. For instance, last year CVS Health delivered more than $90 million in charitable donations, volunteer hours, in-store fundraising and other contributions. The Rhode Island Free Clinic, Women & Infants Hospital, the American Cancer Society, the Rhode Island Community Food Bank, Amos House and the YMCA are just a few of the organizations benefiting from CVS Health’s charitable commitment.
After a long string of acquisitions saw the company scoop up Revco, Peoples Drug, Caremark and MinuteClinic, the CVS leadership team saw an opportunity to do something far bolder than merely buying another company. It could improve the community even more.
Against the counsel of heavyweight business analysts, the company announced that it would walk away from the billions of dollars in annual cigarette sales that it had been making.
“Ending the sale of cigarettes and tobacco products at CVS/pharmacy is simply the right thing to do for the good of our customers and our company,” President and CEO Larry J. Merlo said in a statement at the time.
Although the company long had devoted considerable volunteer hours and money to a welter of deserving causes, this would be where community involvement became the new business model.
If corporations are capable of having spiritual awakenings, that was just what CVS, which would now call itself CVS Health, was in the process of having.
Feedback on the company’s new self-conception was loud, and uniformly positive. Praise came from the American Cancer Society and the American Heart Association, among many other quarters.
“I’ve been so impressed by the reaction of our colleagues,” said Eileen Howard Boone, senior vice president of corporate social responsibility at CVS Health. “Everyone is so proud of the decision that CVS Health made. … Business decisions like this create a personal connection and it has been personally motivating for so many colleagues – to quit smoking themselves or to help others to quit or never to start smoking.”
The analysts predicting a tobacco-free profit downturn at CVS Health proved less than prescient. Net revenue increased 9.6 percent for the first nine months of 2015 over the same period in 2014 to $112.1 billion. Earnings increased 12.5 percent for the same period to $3.7 billion.
The decision, branded as #CVSquits, got the company the kind of attention that money generally cannot buy. A prime example: Merlo was invited to the 2015 State of the Union Address as the guest of First Lady Michelle Obama and took a bow at his seat in the House Chamber balcony when his company was mentioned during the president’s speech.
Back at company headquarters in Woonsocket, Boone’s work includes performing an annual internal audit and an attendant Corporate Social Responsibility report.
“We’ve come a long way from being a regional chain drugstore to becoming a fully integrated national pharmacy health care provider,” she said, “and it’s been wonderful to see and feel that shift across our organization.” •