6 ms·

CVS turned a tobacco ban into a financial win

68 points by dpflan 7y ago

smelendez 7y ago
Nicotine patch sales are growing and cigarette sales are declining in general in the US. There's not enough evidence or analysis here to show CVS made a big difference. Also remember this was a time where vape shops were popping up everywhere and people were switching from cigarettes to e-cigs.
- jondwillis 7y ago
  They also quote the stock price and earnings per share as evidence for the decision being positive. But their quote was over a very bullish period for equities, without providing contrast versus other similar publicly traded companies, nor context (including: CVS’ higher than average share buybacks in part fueled by tax cuts)
  - thaumaturgy 7y ago
    > They also quote the stock price and earnings per share as evidence for the decision being positive. No, actually. There's a tiny but important distinction here: the author is merely saying that there was a certainty that there would be negative effects, and that the expected negative effects didn't happen. The author even grants that there isn't a certainty that this decision caused a positive outcome: "Of course, there are many other factors that have contributed to CVS’s ... stock performance." The article's only point is that ideologues and demagogues often assume with 100% certainty that there will be some negative outcome from some company changing some policy or another, but that this is a flaw in their thinking, because they're imagining the market to be something much more limited, simple, and rigid than it really is.
hughrlomas 7y ago
Meanwhile their shelves are flooded with homeopathic "remedies" that appear legitimate. These items deceive consumers that have been raised to assume items stocked in a pharmacy have actual medical benefits. People offload their trust to an authority, a pharmacy, to stock actual medicine. Just like when they go to a grocery store they expect to buy actual food and not sawdust shaped and packaged as food. Try looking for cold or flu medicine, or earache drops at CVS. You will find the tiny print "homeopathic" on nearly every item being presented on the shelf. All of them are mimics that have all of the trappings of medicine (official looking labels, colors, words) but none of the results. I think this is an ethical failure that is worse than the sale of tobacco, because it not only dupes people looking for proven medical solutions to say, their child's earache that bring home a vial of water instead, it also continues to lend credence to the industry of swindlers and snake oil.
- rubidium 7y ago
  I hear you, but “ethical failure year is worse than the sale of tobacco” is a stretch. Tobacco killed millions. Homeopathic stuff is typically harmless and not a major killer. Also I usually find Tylenol PM just fine at my cvs. Along with benedryl, ibuprofen and other routine “real” meds.
  - catalogia 7y ago
    > "Homeopathic stuff is typically harmless and not a major killer." Does that analysis include people who neglect to seek real medical attention because snakeoil crackpottery has lured them into a false sense of security? (I would not expect as many people to be harmed by homeopathy as cigarettes, but nevertheless I don't think you should characterize it as harmless.)
  - Baeocystin 7y ago
    It is 100% fraud, taking advantage of ignorance and selling people false medicine. There is nothing harmless about that. It prevents people from seeking real treatments, and there are real long-term consequences to public health that come along with that.
  - colejohnson66 7y ago
    > Homeopathic stuff is typically harmless and not a major killer. Homeopathic stuff may be harmless, but homeopaths are sometimes actively harming themselves or others by not getting proper treatment.
  - bbanyc 7y ago
    Homeopathic stuff is typically harmless but there was a case in the 2000s where Zicam sold a "homeopathic" nasal spray at a low dilution of zinc (i.e., it actually contained zinc) as a cold remedy. The result: hundreds of people caused permanent damage to their senses of smell. This changed my attitudes towards consumer protection a lot. I thought I was smart enough to tell medicine from snake oil, but Zicam ads had high production values and looked just like ads for Tylenol or NyQuil. It was a far cry from the laughable marketing of that other '00s homeopathic product, HeadOn. (Apply directly to the forehead!) So I thought it was a legit product until the news of the lawsuits came out.
lowercased 7y ago
Will they ever get to the point where they decide to stop selling soda and junk food as well?
- on_and_off 7y ago
  As somebody that discovered the USA not so long ago, this was one of the weirdest parts. Pharmacies carry a lot of stuff that have nothing to do with health and that includes junk food.
  - x0054 7y ago
    It’s business 101, you have to make your customers need you :)
  - briandear 7y ago
    CVS isn’t just a pharmacy. It’s more of a variety store that also has a pharmacy.
    - bbanyc 7y ago
      CVS started as a variety store (it stood for Consumer Value Stores) and there are still a few older locations that don't have pharmacies, but pharmacy counter revenue has greatly outpaced "front store" revenue for a long time now. Today the parent company is called CVS Health and in addition to the retail chain it owns health insurer Aetna and pharmacy benefits manager Caremark. (As well as the pharmacy counters inside Target stores.) So CVS is primarily a pharmacy, unlike Walmart and Kroger, which are stores that have pharmacies.
      - plorkyeran 7y ago
        The pharmacy may be what makes most of the money, but I've never seen a CVS where the pharmacy was more than a tiny thing at the back of a large store.
        7y ago
Gusen 7y ago
Listen to President Donald Trump demand a $4 billion dollar bribe from child rapists to "turn a blind eye" on January 3, 2019. Download the video, turn the volume all the way up and put head phones on. Trump is on a call from with Henry Porter and Gigi Hadid. (Page 63) Bribe demand @1018am https://drive.google.com/file/d/1Grdr8xF2psKNsuYlEnl9dIRV-77.. https://drive.google.com/file/d/1Grdr8xF2psKNsuYlEnl9dIRV-77.... This is the tip of the iceberg. PDF link below: Full 84 page document [updated 9Sep]: FBI_FinalDraft_26Jul2019_BSchlenker.pdf https://drive.google.com/file/d/1Sj9EN_pHmicKS6rFQlmk67knMdJ.. https://drive.google.com/file/d/1Sj9EN_pHmicKS6rFQlmk67knMdJ....
lacker 7y ago
I’m disturbed by the author treating Jim Cramer as a representative of serious Wall Street opinion. There’s no real evidence here that it was a good decision - all sorts of things go into the stock price.
- nirav72 7y ago
  I use to do some day trading. The joke among the day trading community in those days was that if Kramer recommends buying into a company, then usually a good idea to do the opposite.
  - deleted 7y ago
    [deleted]
  - mattmaroon 7y ago
    That's probably true due to the size of his megaphone. Even if all his advice was great, his recommending a stock could quickly drive the price up to where it wasn't great anymore.
    - radarthreat 7y ago
      No, his secret is that he'll praise a stock one week and pan it the next (or vice versa) so that he can cherry pick his 'wins' later.
      - mattmaroon 7y ago
        Ha, that's pretty smart.
RcouF1uZ4gsC 7y ago
Are people who are happy about this also supportive of pharmacists who don’t dispense drugs that terminate pregnancies because they have a moral objection?
- oofabz 7y ago
  Yes. I support the right of private enterprise to choose what products and services they offer.
  - stallmanite 7y ago
    Is it cool if they refuse to serve black people then? Where is the line in your mind?
    - oofabz 7y ago
      No, it's not okay for businesses to decide who to serve. That's totally different than deciding what to serve.
- icebraining 7y ago
  Personal opinion: no, because regular products like tobacco are not comparable to prescription drugs like mifepristone and misoprostol. Being granted the right to sell controlled substances can come with additional restrictions on what you can refuse to sell.
- Dylan16807 7y ago
  Pharamacies, as critical medical infrastructure, need to do their best to dispense anything prescribed by a doctor. They don't need to carry anything else. And convenience stores obviously don't have to carry anything in particular. Ideally there's also a full suite of basic over the counter medicines but I wouldn't say it's a necessity at pharmacies. I would say it's very important that somewhere carries those...
csdreamer7 7y ago
I remember leaving a CVS at one time. Seeing all the posters and health products. Then seeing an employee unlock the case for cigarettes. Really felt like a mixed message. When I first heard the news I worried it would kill CVS. Tobacco companies at the time had famous tech company margins. It would really hurt them to do so. Still do it seems: Phillips Morris operating margin is 38%. I am really glad it worked out for them. I hate it when other people can smoke because I can smell it downwind. I can smell it on other people. I could barely smell it on one guy who said he washed his hands and arms in the bathroom sink afterwards to avoid others smelling it.
- mehhh 7y ago
  The smell is only part of the problem for nom-smokers, if you spend any significant time around a person smokibg your clothes will get the smell of cigarettes embedded.
  - csdreamer7 7y ago
    Indeed. If I have to walk through smoke I have to change my clothes or it gives me a headache.
sudosteph 7y ago
I worked at a CVS in high school, and tobacco products were definitely a huge percentage (30%-ish) of transactions back then. But at the time, my CVS was also the only easily accessible destination for people in town without cars to buy those products. And it was a college town too, so there were plenty of those folks. I do think that getting rid of tobacco products helps the brand image though. It always took longer to get customers through a line when you had to find their particular brand out of 30. It's also true that many of the customers buying tobacco were noticeably lower-class, so I could imagine this change making middle class and higher people more into CVS (sort of like the Target vs Walmart divide).
eth0up 7y ago
Good fucking grief. Courage? I don't need to regurgitate the discrepancies mentioned by many here, eg sugar snake oil, junkfood, ALCOHOL etc. I'll instead infuriate some guardian angels with a less pharisaic perspective on tobacco. Tobacco is a plant. Its use is not solely relegated to neatly packed, ugly boxes of pre-rolled toxic cardboard shavings. It can and does take the form of hand-rolled cigars and snus - which when not consumed fanatically, have low correlation with disease. Snus is not exposed to heat, neither in processing or consumption. This results in a product with negligible nitrosamines. Until a nephilim lands amongst us with enough courage to ban hotdogs and candybars, public danger thereof will probably exceed that of snus, if frequency of consumption is proportionate. The same ideology that impels such extreme measures as botanical bans, has humans suffering for decades in cages for possessing marijuana; another plant. I will be reasonable and suggest that one could easily go on a diet of hotdogs, beer and candybars and fare worse than one who enjoys a daily cigar, and they could do it shopping exclusively at CVS (not the cigar smoker though, who must shop at Walgreens and doesn't drink). A more obscure but significant problem with some tobacco is psychology. The packaging, quantity and pre-rolling exacerbate it, making it too easy to effectively smoke a habit, rather than cigarette, ie some smoking is done less because of addiction and more due to habit. Cigarettes, and in some cases tobacco, are obviously problematic. Abandoning either rather than banning both altogether seems reasonable. However, I can no longer buy a cigar at CVS. I can get Rx for restless leg filled and wash it down with acetaminophen and beer and Skittles though. Meanwhile, cigars are legal, but CVS is at a higher level. I know tobacco can be a problem. Is it a problem? Maybe some applications are problematic. Well, certainly some are.
- shadowmore 7y ago
  I am in awe of your wordsmithing capabilities and would like to subscribe to your newsletter.
nitwit005 7y ago
Seems a bit odd given that the stores are still filled with alcohol, and they seem to target the pot smoking crowd with some of the eye drop products. It seemed pretty clear to me their business was prescriptions and addictions in one convenient place.
wrs 7y ago
He missed a piece of the story. Caremark (the pharmacy benefit manager owned by CVS) also introduced an optional pharmacy network that increases copays at pharmacies that sell cigarettes -- that is, pretty much every retail pharmacy other than CVS's. [1] Whether this is just more "Courage to Lead", or a genius ploy to increase CVS's retail pharmacy revenue, or both, I leave you to consider. [1] https://www.drugchannels.net/2014/10/thoughts-on-caremarks-no-tobacco.html https://www.drugchannels.net/2014/10/thoughts-on-caremarks-n...

68 points by dpflan 7y ago

Nicotine patch sales are growing and cigarette sales are declining in general in the US. There's not enough evidence or analysis here to show CVS made a big difference. Also remember this was a time where vape shops were popping up everywhere and people were switching from cigarettes to e-cigs.

jondwillis 7y ago
They also quote the stock price and earnings per share as evidence for the decision being positive. But their quote was over a very bullish period for equities, without providing contrast versus other similar publicly traded companies, nor context (including: CVS’ higher than average share buybacks in part fueled by tax cuts)
- thaumaturgy 7y ago
  > They also quote the stock price and earnings per share as evidence for the decision being positive. No, actually. There's a tiny but important distinction here: the author is merely saying that there was a certainty that there would be negative effects, and that the expected negative effects didn't happen. The author even grants that there isn't a certainty that this decision caused a positive outcome: "Of course, there are many other factors that have contributed to CVS’s ... stock performance." The article's only point is that ideologues and demagogues often assume with 100% certainty that there will be some negative outcome from some company changing some policy or another, but that this is a flaw in their thinking, because they're imagining the market to be something much more limited, simple, and rigid than it really is.

hughrlomas 7y ago

Meanwhile their shelves are flooded with homeopathic "remedies" that appear legitimate. These items deceive consumers that have been raised to assume items stocked in a pharmacy have actual medical benefits. People offload their trust to an authority, a pharmacy, to stock actual medicine. Just like when they go to a grocery store they expect to buy actual food and not sawdust shaped and packaged as food. Try looking for cold or flu medicine, or earache drops at CVS. You will find the tiny print "homeopathic" on nearly every item being presented on the shelf. All of them are mimics that have all of the trappings of medicine (official looking labels, colors, words) but none of the results. I think this is an ethical failure that is worse than the sale of tobacco, because it not only dupes people looking for proven medical solutions to say, their child's earache that bring home a vial of water instead, it also continues to lend credence to the industry of swindlers and snake oil.

rubidium 7y ago
I hear you, but “ethical failure year is worse than the sale of tobacco” is a stretch. Tobacco killed millions. Homeopathic stuff is typically harmless and not a major killer. Also I usually find Tylenol PM just fine at my cvs. Along with benedryl, ibuprofen and other routine “real” meds.
- catalogia 7y ago
  > "Homeopathic stuff is typically harmless and not a major killer." Does that analysis include people who neglect to seek real medical attention because snakeoil crackpottery has lured them into a false sense of security? (I would not expect as many people to be harmed by homeopathy as cigarettes, but nevertheless I don't think you should characterize it as harmless.)
- Baeocystin 7y ago
  It is 100% fraud, taking advantage of ignorance and selling people false medicine. There is nothing harmless about that. It prevents people from seeking real treatments, and there are real long-term consequences to public health that come along with that.
- colejohnson66 7y ago
  > Homeopathic stuff is typically harmless and not a major killer. Homeopathic stuff may be harmless, but homeopaths are sometimes actively harming themselves or others by not getting proper treatment.
- bbanyc 7y ago
  Homeopathic stuff is typically harmless but there was a case in the 2000s where Zicam sold a "homeopathic" nasal spray at a low dilution of zinc (i.e., it actually contained zinc) as a cold remedy. The result: hundreds of people caused permanent damage to their senses of smell. This changed my attitudes towards consumer protection a lot. I thought I was smart enough to tell medicine from snake oil, but Zicam ads had high production values and looked just like ads for Tylenol or NyQuil. It was a far cry from the laughable marketing of that other '00s homeopathic product, HeadOn. (Apply directly to the forehead!) So I thought it was a legit product until the news of the lawsuits came out.

lowercased 7y ago

Will they ever get to the point where they decide to stop selling soda and junk food as well?

on_and_off 7y ago
As somebody that discovered the USA not so long ago, this was one of the weirdest parts. Pharmacies carry a lot of stuff that have nothing to do with health and that includes junk food.
- x0054 7y ago
  It’s business 101, you have to make your customers need you :)
- briandear 7y ago
  CVS isn’t just a pharmacy. It’s more of a variety store that also has a pharmacy.
  - bbanyc 7y ago
    CVS started as a variety store (it stood for Consumer Value Stores) and there are still a few older locations that don't have pharmacies, but pharmacy counter revenue has greatly outpaced "front store" revenue for a long time now. Today the parent company is called CVS Health and in addition to the retail chain it owns health insurer Aetna and pharmacy benefits manager Caremark. (As well as the pharmacy counters inside Target stores.) So CVS is primarily a pharmacy, unlike Walmart and Kroger, which are stores that have pharmacies.
    - plorkyeran 7y ago
      The pharmacy may be what makes most of the money, but I've never seen a CVS where the pharmacy was more than a tiny thing at the back of a large store.
      - 7y ago

Gusen 7y ago

Listen to President Donald Trump demand a $4 billion dollar bribe from child rapists to "turn a blind eye" on January 3, 2019. Download the video, turn the volume all the way up and put head phones on. Trump is on a call from with Henry Porter and Gigi Hadid. (Page 63) Bribe demand @1018am https://drive.google.com/file/d/1Grdr8xF2psKNsuYlEnl9dIRV-77.. https://drive.google.com/file/d/1Grdr8xF2psKNsuYlEnl9dIRV-77.... This is the tip of the iceberg. PDF link below: Full 84 page document [updated 9Sep]: FBI_FinalDraft_26Jul2019_BSchlenker.pdf https://drive.google.com/file/d/1Sj9EN_pHmicKS6rFQlmk67knMdJ.. https://drive.google.com/file/d/1Sj9EN_pHmicKS6rFQlmk67knMdJ....

lacker 7y ago

I’m disturbed by the author treating Jim Cramer as a representative of serious Wall Street opinion. There’s no real evidence here that it was a good decision - all sorts of things go into the stock price.

nirav72 7y ago
I use to do some day trading. The joke among the day trading community in those days was that if Kramer recommends buying into a company, then usually a good idea to do the opposite.
- deleted 7y ago
  [deleted]
- mattmaroon 7y ago
  That's probably true due to the size of his megaphone. Even if all his advice was great, his recommending a stock could quickly drive the price up to where it wasn't great anymore.
  - radarthreat 7y ago
    No, his secret is that he'll praise a stock one week and pan it the next (or vice versa) so that he can cherry pick his 'wins' later.
    - mattmaroon 7y ago
      Ha, that's pretty smart.

RcouF1uZ4gsC 7y ago

Are people who are happy about this also supportive of pharmacists who don’t dispense drugs that terminate pregnancies because they have a moral objection?

oofabz 7y ago
Yes. I support the right of private enterprise to choose what products and services they offer.
- stallmanite 7y ago
  Is it cool if they refuse to serve black people then? Where is the line in your mind?
  - oofabz 7y ago
    No, it's not okay for businesses to decide who to serve. That's totally different than deciding what to serve.
icebraining 7y ago
Personal opinion: no, because regular products like tobacco are not comparable to prescription drugs like mifepristone and misoprostol. Being granted the right to sell controlled substances can come with additional restrictions on what you can refuse to sell.
Dylan16807 7y ago
Pharamacies, as critical medical infrastructure, need to do their best to dispense anything prescribed by a doctor. They don't need to carry anything else. And convenience stores obviously don't have to carry anything in particular. Ideally there's also a full suite of basic over the counter medicines but I wouldn't say it's a necessity at pharmacies. I would say it's very important that somewhere carries those...

csdreamer7 7y ago

I remember leaving a CVS at one time. Seeing all the posters and health products. Then seeing an employee unlock the case for cigarettes. Really felt like a mixed message. When I first heard the news I worried it would kill CVS. Tobacco companies at the time had famous tech company margins. It would really hurt them to do so. Still do it seems: Phillips Morris operating margin is 38%. I am really glad it worked out for them. I hate it when other people can smoke because I can smell it downwind. I can smell it on other people. I could barely smell it on one guy who said he washed his hands and arms in the bathroom sink afterwards to avoid others smelling it.

mehhh 7y ago
The smell is only part of the problem for nom-smokers, if you spend any significant time around a person smokibg your clothes will get the smell of cigarettes embedded.
- csdreamer7 7y ago
  Indeed. If I have to walk through smoke I have to change my clothes or it gives me a headache.

sudosteph 7y ago

I worked at a CVS in high school, and tobacco products were definitely a huge percentage (30%-ish) of transactions back then. But at the time, my CVS was also the only easily accessible destination for people in town without cars to buy those products. And it was a college town too, so there were plenty of those folks. I do think that getting rid of tobacco products helps the brand image though. It always took longer to get customers through a line when you had to find their particular brand out of 30. It's also true that many of the customers buying tobacco were noticeably lower-class, so I could imagine this change making middle class and higher people more into CVS (sort of like the Target vs Walmart divide).

eth0up 7y ago

Good fucking grief. Courage? I don't need to regurgitate the discrepancies mentioned by many here, eg sugar snake oil, junkfood, ALCOHOL etc. I'll instead infuriate some guardian angels with a less pharisaic perspective on tobacco. Tobacco is a plant. Its use is not solely relegated to neatly packed, ugly boxes of pre-rolled toxic cardboard shavings. It can and does take the form of hand-rolled cigars and snus - which when not consumed fanatically, have low correlation with disease. Snus is not exposed to heat, neither in processing or consumption. This results in a product with negligible nitrosamines. Until a nephilim lands amongst us with enough courage to ban hotdogs and candybars, public danger thereof will probably exceed that of snus, if frequency of consumption is proportionate. The same ideology that impels such extreme measures as botanical bans, has humans suffering for decades in cages for possessing marijuana; another plant. I will be reasonable and suggest that one could easily go on a diet of hotdogs, beer and candybars and fare worse than one who enjoys a daily cigar, and they could do it shopping exclusively at CVS (not the cigar smoker though, who must shop at Walgreens and doesn't drink). A more obscure but significant problem with some tobacco is psychology. The packaging, quantity and pre-rolling exacerbate it, making it too easy to effectively smoke a habit, rather than cigarette, ie some smoking is done less because of addiction and more due to habit. Cigarettes, and in some cases tobacco, are obviously problematic. Abandoning either rather than banning both altogether seems reasonable. However, I can no longer buy a cigar at CVS. I can get Rx for restless leg filled and wash it down with acetaminophen and beer and Skittles though. Meanwhile, cigars are legal, but CVS is at a higher level. I know tobacco can be a problem. Is it a problem? Maybe some applications are problematic. Well, certainly some are.

shadowmore 7y ago
I am in awe of your wordsmithing capabilities and would like to subscribe to your newsletter.

nitwit005 7y ago

Seems a bit odd given that the stores are still filled with alcohol, and they seem to target the pot smoking crowd with some of the eye drop products. It seemed pretty clear to me their business was prescriptions and addictions in one convenient place.

wrs 7y ago

He missed a piece of the story. Caremark (the pharmacy benefit manager owned by CVS) also introduced an optional pharmacy network that increases copays at pharmacies that sell cigarettes -- that is, pretty much every retail pharmacy other than CVS's. [1] Whether this is just more "Courage to Lead", or a genius ploy to increase CVS's retail pharmacy revenue, or both, I leave you to consider. [1] https://www.drugchannels.net/2014/10/thoughts-on-caremarks-no-tobacco.html https://www.drugchannels.net/2014/10/thoughts-on-caremarks-n...