Consumers can no longer run into this drugstore for a pack of cigarettes. CVS is reinventing itself to be more focused on consumer health by changing its name and removing tobacco products from behind the counter.
The drugstore chain formally known as CVS/Caremark Corp. will now be known as CVS Health, a change made to show "its broader health care commitment" to help Americans become healthier.
Caremark, which represents the pharmacy and benefits management business of the drugstore, was dropped from the name because the average consumer didn't know what it stood for. CVS Health better brands the drugstore and allows Wall Street to know what the company does. According to 2014's Fortune 500 list, CVS ranked 12th.
"Changing the name catches up with what we have been doing," says CVS Health CEO Larry Merlo.
While many of the 7,000 CVS signs won't see any change, consumers will notice at checkout that nicotine gum has replaced the various branded packs of cigarettes and other tobacco products. The second largest drugstore chain announced in February that it would stop selling tobacco products on October 1, but the healthy makeover features the ban prematurely.
The company says it refuses to contradict its message by selling tobacco in a place where health care products and services are offered. "Even more important, there is evidence developing that indicates that removing tobacco products from retailers with pharmacies will lead to substantially lower rates of smoking with implications for reducing tobacco-related death," chief medical officer at CVS Health, DR. Troyen Brennan says.
Drugstores have stepped up to help serve the aging population of Americans by expanding the services that are provided. One example of this is the 900 already established walk-in clinics. The walk-in clinics allow CVS Health and other drugstores to administer cold and flu shots, as well as helping people manage certain illnesses.
"We're doing more and more to extend the front lines of health care," says Merlo.
CVS Health partnered with MedStar Health, a system of 10 hospitals in the Washington, D.C. area, last month to expand its health system and health care provider affiliations. These relations are important as more people become insured under President Obama's Affordable Care Act. Banning tobacco sales may have health care providers interested in partnering with the company so they can benefit from Affordable Care Act savings.
Stopping the sale of tobacco products will cost the company approximately $2 billion in sales, but Merlo says the decision is "one of those intangibles" that will help the company gain new business that will make up for the loss.
Neither Walgreens nor Wal-Mart, both competitors of CVS Health, have decided to quit selling tobacco.
