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CVS Health Quits U.S. Chamber Over Stance on Smoking

274 points by andrewguenther 11y ago

SilasX 11y ago
Can someone give the cynical spin on this? I know a lot of these companies purport to care about stopping smoking, but is there also a profit motive? I've heard scattered accounts that when a convenience store stops carrying cigarettes they also draw fewer problem customers, but haven't validated it.
- rathboma 11y ago
  CVS is rolling out walk-in clinics in their stores. So for them it makes a lot of sense and helps them make the case they're a health focused company.
  - wcummings 11y ago
    They still have whole aisle's dedicated to beer and junk food, so it's about more than just eliminating unhealthful offerings from their stores. Tobacco is on the way out in the US, in 10 or 20 years you'll have to buy tobacco in specialty stores. I think CVS just saw the writing on the wall and seized a convenient opportunity to jettison the business.
    - oldmanjay 11y ago
      I'm not too into the "beer and junk food" line. I see a fairly large difference between offering choices that can be unhealthy if a person overdoes them, and helping to lobby governments to keep markets open for an addictive, harmful drug.
      - vonmoltke 11y ago
        Depends on how you spin it. I know many people who would characterize ethanol as an "addictive, harmful drug". Large food companies spend lots of money trying to make their products more appealing, and by some evidence addicting. The difference is that people can get drunk and blow out their liver or get fat and blow out their pancreas (usually) without direct effects to those around them. Since 90% of tobacco users have to use it in a way that blows every bystander's lungs out while they are blowing their own out, it gets much more vitriol.
        oldmanjay 11y ago
        >Since 90% of tobacco users have to use it in a way that blows every bystander's lungs out while they are blowing their own out, it gets much more vitriol. What's funny about this is that it's not necessarily true. The whole "secondhand smoke" thing appears to be one of those convenient lies aimed at a greater good. It certainly isn't blowing out anyone's lungs. Still, the falloff in smoking is something I'm totally into, just because it stinks. There is no science at all supporting the notion that the harm from ethanol approaches that of tobacco, so I'm not too worried about the people you know. In particular, the addiction rates are vastly different. Basically, your opening sentence says it all: your point relies on spin to be sharp.
        SilasX 11y ago
        It doesn't matter. Objecting on the basis that it smells horrible is just as valid a concern as long-term health effects.
        wcummings 11y ago
        Many second-hand smoke studies are performed on spouses of smokers, over long periods of time (living w/ a smoker for decades, basically). Second-hand smoke in say, a park (where smoking is frequently banned) is not a factor. It's a convenient lie to discourage smoking.
        hbhakhra 11y ago
        I think it could be argued that people that drink heavily harm more people around them then people that smoke. I don't have any studies to say which one is worse, but there is no way you can say people that get drunk don't have a direct effect on those around them.
        deleted 11y ago
        [deleted]
      - wcummings 11y ago
        Addicts drive the alcohol industry, same as tobacco. I don't see the difference.
    - jfoster 11y ago
      What makes you think they won't address that in the future? They do need to balance the economics of their business. There's no point in removing every negative aisle at the same time if it will destroy (or make them lose control of) their business.
  - tptacek 11y ago
    CVS is playing catch-up on walk-in clinics with Walgreens, which still stocks cigarettes.
- justonepost 11y ago
  Well, CVS obviously doesn't want to compete against companies that can profit from selling cigarettes as they will be at a disadvantage. CVS is also looking to burnish their brand by showing they truly look out for public health. That's as cynical as I can get. On the whole, they are doing a pretty good job at burnishing their brand in my eyes...
- ubercore 11y ago
  The most likely cynical spin I can think of isn't that cynical; just trying to anticipate cultural trends they can use to their advantage in marketing and public opinion. Investing in sometimes-slightly painful positions earlier than their competitors.
- ben1040 11y ago
  They said they would take a $2bn hit to annual revenue [1] when they originally announced this. But I imagine long-term the issue is that having acquired a pharmacy benefits management company, they maybe determined that a plan member who doesn't smoke is a plan member who is more profitable? CVS's PBM subsidiary last year was also proposing charging an additional fee to members who filled their prescriptions at pharmacies that also sold tobacco.[2] Not sure if this ever happened or not; that seems anti-competitive. I don't see why filling my prescription at Walgreens instead of CVS should cost me more, only because you can buy a pack of smokes at Walgreens. [1] http://www.cvshealth.com/newsroom/press-releases/pharmacy-services-corporate-info-events/cvs-caremark-stop-selling-tobacco http://www.cvshealth.com/newsroom/press-releases/pharmacy-se... [2] http://www.washingtonpost.com/blogs/wonkblog/wp/2014/10/20/after-cutting-tobacco-sales-cvs-is-pressuring-other-pharmacies-to-do-the-same/ http://www.washingtonpost.com/blogs/wonkblog/wp/2014/10/20/a...
- dragonwriter 11y ago
  > Can someone give the cynical spin on this? Customers dying younger because they are buying an addicting, health-damaging product may produce some money if you are selling them the product, but if you are selling other products -- especially other expensive, long-term regular-purchase products that they will reliably come back to you for -- it can be a net loss. Perhaps CVS has decided that there's more return on customer acquisition dollars if it gets out of the cigarette business (both selling and promoting indirectly via USCC) and stops actively killing off its own reliable customer basis (and, incidentally, other people). I don't know that that's really all that "cynical" of a spin, but its a self-interest profit motive rather than an altruistic one. > I've heard scattered accounts that when a convenience store stops carrying cigarettes they also draw fewer problem customers, but haven't validated it. That's quite possibly a factor, but CVS isn't just a "convenience store"; they are drugstores (that is, a key feature of their stores is the pharmacy) and they also have and are expanding in-store clinics (so they are also health-care providers.)
- qq66 11y ago
  The profit motive is that it's rarely smart to fight a battle that you know you're going to lose. When lions fight, they stop as soon as they know who's going to win -- the losing lion would rather walk away with his life than force the winner to kill him. CVS has basically decided that smoking is on its way out the door, and they've decided to forgo the remaining profits in selling a smaller number of cigarettes each year for the next few years. They've decided that they'll be better off getting ahead of this trend, shifting to more health-oriented branding, and opposing smoking publicly and vocally.
  - jsprogrammer 11y ago
    What is the cost of maintaining sales of the product?
    - krschultz 11y ago
      What is the value of the PR CVS gains by being a leader?
- bsder 11y ago
  Cost vs. profit. Tobacco takes up valuable real-estate in your retail area (right at counter--right at checkout). Tobacco sales continue to fall so your gross sales are falling. Tobacco prices tend to be regulated heavily (minimum price that you can't sell under), so profit is probably fixed. Underage tobacco purchases are heavily penalized--so your cost due some store selling to a minor is minimized. CVS took a bit of hit, but I suspect that they have numbers on the profit they gain by repurposing that space. I'm sure somebody crunched the numbers.
  - johnmaguire2013 11y ago
    This doesn't explain why they would actively fight to make it illegal.
- pxlpshr 11y ago
  I'm the cofounder of a health tech startup. This is my opinion. The cynical spin was healthcare pre-2008. Today, our healthcare industry is finally making meaningful changes to its model, moving from fee-for-service toward value-based care and risk sharing. [1] This means payers, providers, and everyone in between is now incentivized to get IN FRONT of problems (like smoking) before it creates an even bigger, high-cost/high-risk patient population (heart disease, cancer, etc). Those who don't will get phased out / merged. The reality is ~75% of the $2.2 trillion we spend on healthcare per year goes toward fighting said chronic conditions. From a distribution perspective, 20% of the population is responsible for ~80% of costs... 5% of population, ~50% of costs. Moving the needle a small amount matters a lot. [1] This is one example of a brand changing due to industry consolidation. Prices are being commoditized across the board for care, for drugs, etc. As others have said, CVS & Walgreens are no longer just pharmacies selling drugs. They are diversifying and growing into providers just like payers.
  - SilasX 11y ago
    I can understand that much, but CVS doesn't (privately) reap the returns from healthier customers. That dynamic would apply to a health insurer or provider, not a glorified convenience store.
    - acomjean 11y ago
      alive customers are the best kind. CVS is a pharmacy so keeping patients alive longer means more money on perscription medication.
    - johnmaguire2013 11y ago
      In fact, wouldn't they lose profits on tobacco cessation products and medications used by smokers with health problems?
      - larrys 11y ago
        Agree. If people smoke and are unhealthy they in theory would need a larger amount of prescription drugs which CVS sells and profits from.
- cronjobber 11y ago
  This may not apply to the US: In my corner of the world, word on the street is that sellers of tobacco products make nearly no profit at all on it. Reason is that between sky-high taxes raising prices and anti-smoking propaganda lowering demand, sellers are squeezed out of a profit. However, there still are a lot of smokers who would be less likely to visit your place of business if you stopped to stock tobacco products. So you continue to deal in it even though it makes you little money. If a large player leaves a market like this, they drop a low-profit use of shelf space, but also lose smokers to competitors. In that position, the most desirable endpoint would be more bans on smoking, because less smokers mean less of an advantage for competitors.
  - LordKano 11y ago
    Where I live when they passed an indoor smoking ban in the county, certain businesses near the county line were up in arms because smokers will drive an extra 5 minutes to go to a bar/restaurant where they can have a cigarette too. There were bars that were in danger of going out of business because they couldn't get a waiver and enough of their customers were going elsewhere.
    - TillE 11y ago
      It's much higher in Europe, but in the US the number of smokers is a little below 20%, including those in prime bar-going age. http://www.cdc.gov/tobacco/data_statistics/fact_sheets/adult_data/cig_smoking/ http://www.cdc.gov/tobacco/data_statistics/fact_sheets/adult... I'm not convinced that's enough to make a significant dent in business, especially if you balance it out with those who will be attracted by the idea that their clothes will not smell like smoke.
      - LordKano 11y ago
        You have not considered another factor. The non-smokers who will stop going to an establishment when their smoking friends go somewhere else. Drinking is often a social activity. Non-smokers who drink already have established places where they go. Those places will have done nothing to alienate them and cause them to change their habits. They'll keep going where they have been going because for them, nothing will have changed. Bars and restaurants don't always operate with huge margins. If 15% of their customers decided to go elsewhere overnight, I have no doubt that it would cause serious problems.
- jfoster 11y ago
  What if they are planning to arrange their business profit motives around what they care about? If they are, you might be able to find something to be cynical about, but actually they might have structured their business in concert with their values.
themartorana 11y ago
I know CVS is not 100% altruistic, with Caremark (sp?) being huge and there being talk from CVS about making prescribers pay more at pharmacies that sell cigarettes and whatnot (and how that may help make up for lost cigarette sales) [0] - but way to take a stance and really see it through. In terms of corporate good, this is great. And what a horrible shame on the U.S. Chamber of Commerce. I'm so sick of the idea of the dollar above all else. Cigarettes kill people. That's it. Deciding it's ok to not only sell these death sticks, but actively fight against the championing of healthier living and longer lives is absolutely, totally, and completely shameful. [0] http://www.wsj.com/articles/BL-270B-850 http://www.wsj.com/articles/BL-270B-850
- justonepost 11y ago
  It's not just shame, this is literally evil. Cigarettes don't merely kill people, they addict them as well. And what's worse, is the US Chamber of Commerce has decades of extremely conclusive research on this matter. It's one thing to kill someone accidentally, but to take a gun and point it for power and profit...
  - deleted 11y ago
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  - wpietri 11y ago
    Anybody curious about the topic should check out the Legacy Tobacco Documents Library: https://industrydocuments.library.ucsf.edu/tobacco/ https://industrydocuments.library.ucsf.edu/tobacco/ I once happened to meet a researcher who spent some time with the data set and they had all sorts of horrific stories about how consciously evil the cigarette companies were. The one that sticks with me is the people planning marketing campaigns for mentally handicapped adults. I had no words. I still don't, really.
- dailyrorschach 11y ago
  A great deal of the Chamber's funding comes from Tobacco companies. In fact there are conference rooms named for them. If you haven't seen Last Week Tonight's take on the international bad behavior of the Tobacco companies I really encourage you to check it out. It's about 18min long, but well worth it: https://www.youtube.com/watch?v=6UsHHOCH4q8 https://www.youtube.com/watch?v=6UsHHOCH4q8 They've responded to a shrinking market in the US and other highly developed nations, by doubling down on their efforts to sell to everyone in the rest of the world. And woe to the country with a smaller GDP than Phillip Morris who decides to try to put restrictions on a pack of smokes.
serve_yay 11y ago
Um, why is the chamber campaigning against anti-smoking laws? How strange. Edit: Oh, because they're funded by tobacco companies. Welp.
rnikander 11y ago
First they come for the tobacco, then the addictive candy that causes obesity, then the life-wasting and mind-altering games in the app stores ...
- bronson 11y ago
  First they came for the heroin and cocaine.
deleted 11y ago
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mb0 11y ago
The CVS in my neighborhood sells 24oz cans of 8.1% ABV malt liquor for $1.36/can. Have to wonder how those sales fit into their mission to improve public health.
- deleted 11y ago
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- baudehlo 11y ago
  I agree that isn't a health related choice. But fighting one battle doesn't mean they have to fight all of them.
  - simplexion 11y ago
    I believe alcohol is a far more important battle to be fighting against than tobacco. It's amazing people's beliefs in regards to alcohol. I had a friend, who was already drunk, rant at me about my use of cannabis because they didn't like the thought of something that takes away your control. Alcohol is so often thought of as a "nothing" drug even though it is probably one of the worst recreational drugs.
    - baudehlo 11y ago
      I think the big thing with alcohol is it's a lot harder to become addicted to. I don't disagree that alcohol addiction is a problem (and a more damaging social problem in some aspects - a smoker father is probably far less of an issue than an alcoholic father). But I don't agree that going back to prohibition would benefit the situation.
      - zamalek 11y ago
        > I think the big thing with alcohol is it's a lot harder to become addicted to. Supposedly a portion of a hangover is withdrawals (which is why the "hair of the hound that bit you" is effective). However the crux of your point remains true: alcohol withdrawals only last a morning (by my experience) where nicotine withdrawals last a few weeks to months (also personal experience). The last time I drank was probably 5 days ago and I have no cravings. The last time I smoked was 8 months ago and I have cravings at least once every 2-3 days. Tobacco is much, much, worse.
arca_vorago 11y ago
For those who aren't aware, it's worth it to keep in mind that the US Chamber of Commerce is not a federal or government entity, and is rather a cleverly named US business lobbying group with deep ties to the Republican party which as been involved in very shady practices over the years. So it tends to be one of those places where big companies push legislation that runs out the small to medium sized businesses with redtape complexity to maintain market dominance. Of course that doesn't stop the majority of Republican congresscritters from touting it as the best thing for "deregulation" since sliced bread...
- tptacek 11y ago
  It's pretty silly to suggest that the GOP is an enemy of small to medium businesses, since to a demographic first approximation, virtually every small-medium business owner is a Republican. The CoC is shady, like you said. And it supports the GOP. It is not itself the GOP.
  - arca_vorago 11y ago
    While I agree the CoC is not the GOP, it certainly heavily leans that way in practice and in policy. There are notable exceptions. "It's pretty silly to suggest that the GOP is an enemy of small to medium businesses" This I disagree with though. To me, having spent most of my time in GOP owned areas, my conclusion is that the GOP parades small/medium business values to their support base, but when it really comes down to someone writing legislation on K-street, it almost always favors the megacorps. The GOP is, indeed, in my mind at least, anti small/med business, but they sell themselves otherwise. They're just good at propaganda.
    - tptacek 11y ago
      GOP tax policy strongly favors small business owners. They support lower rates across the board, and in particular disfavor the Democratic party's policy of boosting revenue with increased taxes on higher brackets (business owners are disproportionately in the highest marginal bracket). The GOP also wants to eliminate the AMT, and retain the mortgage interest tax deduction. GOP health care policy strongly favors small business owners. For instance, the GOP opposes the employer health care mandate. The GOP's stance on regulations strongly favors small business owners: they disfavor them pretty much across the board. On a message board, it may seem like environmental regulations matter primarily to giant extractive industry companies, but most industrial businesses in the US are small businesses. I'd be interested in some specific examples of policies the GOP supports that the Democrats don't support that aren't beneficial to small businesses. Two caveats: * I'm a Democrat. "Do what's best for the public school system shalt be the whole of the law" is roughly what I believe. * The calculus is different if by "small business" you really (perhaps accidentally) mean "small tech company".
tptacek 11y ago
See Mad Men, Season 4, Episode 12, "Blowing Smoke". And then a serious question: What does it cost CVS to leave the Chamber of Commerce? The CoC is a conservative lobbying group. CVS already operates a 4:1 Republican-leaning lobbying operation. Were there any material benefits to CVS to remain affiliated with the CoC?
leephillips 11y ago
Good for them. But I find it hard to take seriously their claim that they are committed to improving public health when their shelves are stuffed with homeopathic products - more all the time. Pushing this fake medicine is a direct threat to health. It preys upon the naive and poorly educated, who will waste their money on this quackery rather than seeking effective treatment for their medical problems.
- wpietri 11y ago
  I would like to agree, but most of the homeopathic remedy consumers I know are surprisingly crafty. If you ask them if they believe that it works, they will say yes. But if a serious illness comes up, they will immediately switch to real medical treatment. Put differently, they seem to have an intuitive understanding to only use placebos for illnesses that are well served by placebos. They have no rational understanding of that, of course. But they do get a lot more benefits from placebos than I do, so I can't say they're entirely wrong.
  - leephillips 11y ago
    I've observed similar behavior in regard to religion, etc. But it's generally unsound to extrapolate from the people we happen to know to whole populations (not that I have any actual data about who uses homeopathic medicines and how). What concerns me is that the way the stuff is shelved and advertised looks like it would lead to an uncritical person with, say, flu symptoms to just grab one of these boxes off the shelf.
    - DanBC 11y ago
      Boots in the UK have homeopathy on the same shelf as herbal remedies. They ignore my gentle polite requests for them to place some distance between items that have active ingredients and items that have no active ingredient.
nemo44x 11y ago
When they clear their shelves of all the soda, sugary and corn based snacks and fake medications (homeopathic garbage) then I'll begin to take their concern for health seriously. Obesity and diabetes is a far greater health risk than cigarettes. Cigarettes are awful for many reasons and they smell bad but corn and HFCS based foods make sick and kill a lot more people (and cost society much more!) than cigarettes. It's no wonder than countries with high rates of smoking (France, Japan) who have diets that lack all the garbage the CVS's of the world peddle have some of the highest life expectancies. Smokers are just an easy, minority target to vilify and it needs to stop.
- s73v3r 11y ago
  They have to start somewhere.
Lorento 11y ago
I think this is just a sign that there's healthy decision making going on. If what the CoC claims is true, that Jamaica's law was passed without following the proper process, then that is a problem and it should be challenged whether you want the law or not. You can't have a law-making process, trademark protections, etc and then just walk over them when you decide it's an important law. The whole point of the process is to decide if it's the correct law in the first place! The CoC's purpose is to support the interests of it's members. So they absolutely should be doing this. What good is a chamber of commerce that arbitrarily decides to throw some of its members under the bus when new laws threaten their businesses? The real complaint people should be making is that it allows tobacco businesses as members, or even that the government allows tobacco businesses to exist at all. What shocks me the most is that the CVS pharmacy was selling cigarettes 1 year ago! What?! Pharmacies sell cigarettes in America?!
- knowaveragejoe 11y ago
  > I think this is just a sign that there's healthy decision making going on. If what the CoC claims is true, that Jamaica's law was passed without following the proper process, then that is a problem and it should be challenged whether you want the law or not. You can't have a law-making process, trademark protections, etc and then just walk over them when you decide it's an important law. The whole point of the process is to decide if it's the correct law in the first place! The CoC's purpose is to support the interests of it's members. So they absolutely should be doing this. What good is a chamber of commerce that arbitrarily decides to throw some of its members under the bus when new laws threaten their businesses? The real complaint people should be making is that it allows tobacco businesses as members, or even that the government allows tobacco businesses to exist at all. Jamaica is one example, did you look at the others? In some cases it appears the CoC's stance goes beyond simple good faith defense of their members. > What shocks me the most is that the CVS pharmacy was selling cigarettes 1 year ago! What?! Pharmacies sell cigarettes in America?! To my knowledge, they all still do so with the exception of CVS.
- aidenn0 11y ago
  > What shocks me the most is that the CVS pharmacy was selling cigarettes 1 year ago! What?! Pharmacies sell cigarettes in America?! http://www.bbcamerica.com/mind-the-gap/2013/10/29/6-differences-american-drugstores-british-chemists/ http://www.bbcamerica.com/mind-the-gap/2013/10/29/6-differen... TL;DR pharmacies are located in convenience stores in the US.
simplexion 11y ago
e-cig to the rescue!
mr_spothawk 11y ago
i like smoking. but it's bad for me. but i'd be bummed if i couldn't find tobacco to smoke.
stuaxo 11y ago
Well, yes - it appears to mostly function as a front group for tobacco companies and is nothing to do with the US government, even if they imply it (as per last weeks article) http://www.nytimes.com/2015/07/01/business/international/us-chamber-works-globally-to-fight-antismoking-measures.html http://www.nytimes.com/2015/07/01/business/international/us-...
eladrin201 11y ago
John Oliver effect, anyone?

274 points by andrewguenther 11y ago

Can someone give the cynical spin on this? I know a lot of these companies purport to care about stopping smoking, but is there also a profit motive? I've heard scattered accounts that when a convenience store stops carrying cigarettes they also draw fewer problem customers, but haven't validated it.

rathboma 11y ago
CVS is rolling out walk-in clinics in their stores. So for them it makes a lot of sense and helps them make the case they're a health focused company.
- wcummings 11y ago
  They still have whole aisle's dedicated to beer and junk food, so it's about more than just eliminating unhealthful offerings from their stores. Tobacco is on the way out in the US, in 10 or 20 years you'll have to buy tobacco in specialty stores. I think CVS just saw the writing on the wall and seized a convenient opportunity to jettison the business.
  - oldmanjay 11y ago
    I'm not too into the "beer and junk food" line. I see a fairly large difference between offering choices that can be unhealthy if a person overdoes them, and helping to lobby governments to keep markets open for an addictive, harmful drug.
    - vonmoltke 11y ago
      Depends on how you spin it. I know many people who would characterize ethanol as an "addictive, harmful drug". Large food companies spend lots of money trying to make their products more appealing, and by some evidence addicting. The difference is that people can get drunk and blow out their liver or get fat and blow out their pancreas (usually) without direct effects to those around them. Since 90% of tobacco users have to use it in a way that blows every bystander's lungs out while they are blowing their own out, it gets much more vitriol.
      - oldmanjay 11y ago
        >Since 90% of tobacco users have to use it in a way that blows every bystander's lungs out while they are blowing their own out, it gets much more vitriol. What's funny about this is that it's not necessarily true. The whole "secondhand smoke" thing appears to be one of those convenient lies aimed at a greater good. It certainly isn't blowing out anyone's lungs. Still, the falloff in smoking is something I'm totally into, just because it stinks. There is no science at all supporting the notion that the harm from ethanol approaches that of tobacco, so I'm not too worried about the people you know. In particular, the addiction rates are vastly different. Basically, your opening sentence says it all: your point relies on spin to be sharp.
        SilasX 11y ago
        It doesn't matter. Objecting on the basis that it smells horrible is just as valid a concern as long-term health effects.
        wcummings 11y ago
        Many second-hand smoke studies are performed on spouses of smokers, over long periods of time (living w/ a smoker for decades, basically). Second-hand smoke in say, a park (where smoking is frequently banned) is not a factor. It's a convenient lie to discourage smoking.
      - hbhakhra 11y ago
        I think it could be argued that people that drink heavily harm more people around them then people that smoke. I don't have any studies to say which one is worse, but there is no way you can say people that get drunk don't have a direct effect on those around them.
        deleted 11y ago
        [deleted]
    - wcummings 11y ago
      Addicts drive the alcohol industry, same as tobacco. I don't see the difference.
  - jfoster 11y ago
    What makes you think they won't address that in the future? They do need to balance the economics of their business. There's no point in removing every negative aisle at the same time if it will destroy (or make them lose control of) their business.
- tptacek 11y ago
  CVS is playing catch-up on walk-in clinics with Walgreens, which still stocks cigarettes.
justonepost 11y ago
Well, CVS obviously doesn't want to compete against companies that can profit from selling cigarettes as they will be at a disadvantage. CVS is also looking to burnish their brand by showing they truly look out for public health. That's as cynical as I can get. On the whole, they are doing a pretty good job at burnishing their brand in my eyes...
ubercore 11y ago
The most likely cynical spin I can think of isn't that cynical; just trying to anticipate cultural trends they can use to their advantage in marketing and public opinion. Investing in sometimes-slightly painful positions earlier than their competitors.
ben1040 11y ago
They said they would take a $2bn hit to annual revenue [1] when they originally announced this. But I imagine long-term the issue is that having acquired a pharmacy benefits management company, they maybe determined that a plan member who doesn't smoke is a plan member who is more profitable? CVS's PBM subsidiary last year was also proposing charging an additional fee to members who filled their prescriptions at pharmacies that also sold tobacco.[2] Not sure if this ever happened or not; that seems anti-competitive. I don't see why filling my prescription at Walgreens instead of CVS should cost me more, only because you can buy a pack of smokes at Walgreens. [1] http://www.cvshealth.com/newsroom/press-releases/pharmacy-services-corporate-info-events/cvs-caremark-stop-selling-tobacco http://www.cvshealth.com/newsroom/press-releases/pharmacy-se... [2] http://www.washingtonpost.com/blogs/wonkblog/wp/2014/10/20/after-cutting-tobacco-sales-cvs-is-pressuring-other-pharmacies-to-do-the-same/ http://www.washingtonpost.com/blogs/wonkblog/wp/2014/10/20/a...
dragonwriter 11y ago
> Can someone give the cynical spin on this? Customers dying younger because they are buying an addicting, health-damaging product may produce some money if you are selling them the product, but if you are selling other products -- especially other expensive, long-term regular-purchase products that they will reliably come back to you for -- it can be a net loss. Perhaps CVS has decided that there's more return on customer acquisition dollars if it gets out of the cigarette business (both selling and promoting indirectly via USCC) and stops actively killing off its own reliable customer basis (and, incidentally, other people). I don't know that that's really all that "cynical" of a spin, but its a self-interest profit motive rather than an altruistic one. > I've heard scattered accounts that when a convenience store stops carrying cigarettes they also draw fewer problem customers, but haven't validated it. That's quite possibly a factor, but CVS isn't just a "convenience store"; they are drugstores (that is, a key feature of their stores is the pharmacy) and they also have and are expanding in-store clinics (so they are also health-care providers.)
qq66 11y ago
The profit motive is that it's rarely smart to fight a battle that you know you're going to lose. When lions fight, they stop as soon as they know who's going to win -- the losing lion would rather walk away with his life than force the winner to kill him. CVS has basically decided that smoking is on its way out the door, and they've decided to forgo the remaining profits in selling a smaller number of cigarettes each year for the next few years. They've decided that they'll be better off getting ahead of this trend, shifting to more health-oriented branding, and opposing smoking publicly and vocally.
- jsprogrammer 11y ago
  What is the cost of maintaining sales of the product?
  - krschultz 11y ago
    What is the value of the PR CVS gains by being a leader?
bsder 11y ago
Cost vs. profit. Tobacco takes up valuable real-estate in your retail area (right at counter--right at checkout). Tobacco sales continue to fall so your gross sales are falling. Tobacco prices tend to be regulated heavily (minimum price that you can't sell under), so profit is probably fixed. Underage tobacco purchases are heavily penalized--so your cost due some store selling to a minor is minimized. CVS took a bit of hit, but I suspect that they have numbers on the profit they gain by repurposing that space. I'm sure somebody crunched the numbers.
- johnmaguire2013 11y ago
  This doesn't explain why they would actively fight to make it illegal.
pxlpshr 11y ago
I'm the cofounder of a health tech startup. This is my opinion. The cynical spin was healthcare pre-2008. Today, our healthcare industry is finally making meaningful changes to its model, moving from fee-for-service toward value-based care and risk sharing. [1] This means payers, providers, and everyone in between is now incentivized to get IN FRONT of problems (like smoking) before it creates an even bigger, high-cost/high-risk patient population (heart disease, cancer, etc). Those who don't will get phased out / merged. The reality is ~75% of the $2.2 trillion we spend on healthcare per year goes toward fighting said chronic conditions. From a distribution perspective, 20% of the population is responsible for ~80% of costs... 5% of population, ~50% of costs. Moving the needle a small amount matters a lot. [1] This is one example of a brand changing due to industry consolidation. Prices are being commoditized across the board for care, for drugs, etc. As others have said, CVS & Walgreens are no longer just pharmacies selling drugs. They are diversifying and growing into providers just like payers.
- SilasX 11y ago
  I can understand that much, but CVS doesn't (privately) reap the returns from healthier customers. That dynamic would apply to a health insurer or provider, not a glorified convenience store.
  - acomjean 11y ago
    alive customers are the best kind. CVS is a pharmacy so keeping patients alive longer means more money on perscription medication.
  - johnmaguire2013 11y ago
    In fact, wouldn't they lose profits on tobacco cessation products and medications used by smokers with health problems?
    - larrys 11y ago
      Agree. If people smoke and are unhealthy they in theory would need a larger amount of prescription drugs which CVS sells and profits from.
cronjobber 11y ago
This may not apply to the US: In my corner of the world, word on the street is that sellers of tobacco products make nearly no profit at all on it. Reason is that between sky-high taxes raising prices and anti-smoking propaganda lowering demand, sellers are squeezed out of a profit. However, there still are a lot of smokers who would be less likely to visit your place of business if you stopped to stock tobacco products. So you continue to deal in it even though it makes you little money. If a large player leaves a market like this, they drop a low-profit use of shelf space, but also lose smokers to competitors. In that position, the most desirable endpoint would be more bans on smoking, because less smokers mean less of an advantage for competitors.
- LordKano 11y ago
  Where I live when they passed an indoor smoking ban in the county, certain businesses near the county line were up in arms because smokers will drive an extra 5 minutes to go to a bar/restaurant where they can have a cigarette too. There were bars that were in danger of going out of business because they couldn't get a waiver and enough of their customers were going elsewhere.
  - TillE 11y ago
    It's much higher in Europe, but in the US the number of smokers is a little below 20%, including those in prime bar-going age. http://www.cdc.gov/tobacco/data_statistics/fact_sheets/adult_data/cig_smoking/ http://www.cdc.gov/tobacco/data_statistics/fact_sheets/adult... I'm not convinced that's enough to make a significant dent in business, especially if you balance it out with those who will be attracted by the idea that their clothes will not smell like smoke.
    - LordKano 11y ago
      You have not considered another factor. The non-smokers who will stop going to an establishment when their smoking friends go somewhere else. Drinking is often a social activity. Non-smokers who drink already have established places where they go. Those places will have done nothing to alienate them and cause them to change their habits. They'll keep going where they have been going because for them, nothing will have changed. Bars and restaurants don't always operate with huge margins. If 15% of their customers decided to go elsewhere overnight, I have no doubt that it would cause serious problems.
jfoster 11y ago
What if they are planning to arrange their business profit motives around what they care about? If they are, you might be able to find something to be cynical about, but actually they might have structured their business in concert with their values.

themartorana 11y ago

I know CVS is not 100% altruistic, with Caremark (sp?) being huge and there being talk from CVS about making prescribers pay more at pharmacies that sell cigarettes and whatnot (and how that may help make up for lost cigarette sales) [0] - but way to take a stance and really see it through. In terms of corporate good, this is great. And what a horrible shame on the U.S. Chamber of Commerce. I'm so sick of the idea of the dollar above all else. Cigarettes kill people. That's it. Deciding it's ok to not only sell these death sticks, but actively fight against the championing of healthier living and longer lives is absolutely, totally, and completely shameful. [0] http://www.wsj.com/articles/BL-270B-850 http://www.wsj.com/articles/BL-270B-850

justonepost 11y ago
It's not just shame, this is literally evil. Cigarettes don't merely kill people, they addict them as well. And what's worse, is the US Chamber of Commerce has decades of extremely conclusive research on this matter. It's one thing to kill someone accidentally, but to take a gun and point it for power and profit...
- deleted 11y ago
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- wpietri 11y ago
  Anybody curious about the topic should check out the Legacy Tobacco Documents Library: https://industrydocuments.library.ucsf.edu/tobacco/ https://industrydocuments.library.ucsf.edu/tobacco/ I once happened to meet a researcher who spent some time with the data set and they had all sorts of horrific stories about how consciously evil the cigarette companies were. The one that sticks with me is the people planning marketing campaigns for mentally handicapped adults. I had no words. I still don't, really.
dailyrorschach 11y ago
A great deal of the Chamber's funding comes from Tobacco companies. In fact there are conference rooms named for them. If you haven't seen Last Week Tonight's take on the international bad behavior of the Tobacco companies I really encourage you to check it out. It's about 18min long, but well worth it: https://www.youtube.com/watch?v=6UsHHOCH4q8 https://www.youtube.com/watch?v=6UsHHOCH4q8 They've responded to a shrinking market in the US and other highly developed nations, by doubling down on their efforts to sell to everyone in the rest of the world. And woe to the country with a smaller GDP than Phillip Morris who decides to try to put restrictions on a pack of smokes.

serve_yay 11y ago

Um, why is the chamber campaigning against anti-smoking laws? How strange. Edit: Oh, because they're funded by tobacco companies. Welp.

rnikander 11y ago

First they come for the tobacco, then the addictive candy that causes obesity, then the life-wasting and mind-altering games in the app stores ...

bronson 11y ago
First they came for the heroin and cocaine.

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mb0 11y ago

The CVS in my neighborhood sells 24oz cans of 8.1% ABV malt liquor for $1.36/can. Have to wonder how those sales fit into their mission to improve public health.

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baudehlo 11y ago
I agree that isn't a health related choice. But fighting one battle doesn't mean they have to fight all of them.
- simplexion 11y ago
  I believe alcohol is a far more important battle to be fighting against than tobacco. It's amazing people's beliefs in regards to alcohol. I had a friend, who was already drunk, rant at me about my use of cannabis because they didn't like the thought of something that takes away your control. Alcohol is so often thought of as a "nothing" drug even though it is probably one of the worst recreational drugs.
  - baudehlo 11y ago
    I think the big thing with alcohol is it's a lot harder to become addicted to. I don't disagree that alcohol addiction is a problem (and a more damaging social problem in some aspects - a smoker father is probably far less of an issue than an alcoholic father). But I don't agree that going back to prohibition would benefit the situation.
    - zamalek 11y ago
      > I think the big thing with alcohol is it's a lot harder to become addicted to. Supposedly a portion of a hangover is withdrawals (which is why the "hair of the hound that bit you" is effective). However the crux of your point remains true: alcohol withdrawals only last a morning (by my experience) where nicotine withdrawals last a few weeks to months (also personal experience). The last time I drank was probably 5 days ago and I have no cravings. The last time I smoked was 8 months ago and I have cravings at least once every 2-3 days. Tobacco is much, much, worse.

arca_vorago 11y ago

For those who aren't aware, it's worth it to keep in mind that the US Chamber of Commerce is not a federal or government entity, and is rather a cleverly named US business lobbying group with deep ties to the Republican party which as been involved in very shady practices over the years. So it tends to be one of those places where big companies push legislation that runs out the small to medium sized businesses with redtape complexity to maintain market dominance. Of course that doesn't stop the majority of Republican congresscritters from touting it as the best thing for "deregulation" since sliced bread...

tptacek 11y ago
It's pretty silly to suggest that the GOP is an enemy of small to medium businesses, since to a demographic first approximation, virtually every small-medium business owner is a Republican. The CoC is shady, like you said. And it supports the GOP. It is not itself the GOP.
- arca_vorago 11y ago
  While I agree the CoC is not the GOP, it certainly heavily leans that way in practice and in policy. There are notable exceptions. "It's pretty silly to suggest that the GOP is an enemy of small to medium businesses" This I disagree with though. To me, having spent most of my time in GOP owned areas, my conclusion is that the GOP parades small/medium business values to their support base, but when it really comes down to someone writing legislation on K-street, it almost always favors the megacorps. The GOP is, indeed, in my mind at least, anti small/med business, but they sell themselves otherwise. They're just good at propaganda.
  - tptacek 11y ago
    GOP tax policy strongly favors small business owners. They support lower rates across the board, and in particular disfavor the Democratic party's policy of boosting revenue with increased taxes on higher brackets (business owners are disproportionately in the highest marginal bracket). The GOP also wants to eliminate the AMT, and retain the mortgage interest tax deduction. GOP health care policy strongly favors small business owners. For instance, the GOP opposes the employer health care mandate. The GOP's stance on regulations strongly favors small business owners: they disfavor them pretty much across the board. On a message board, it may seem like environmental regulations matter primarily to giant extractive industry companies, but most industrial businesses in the US are small businesses. I'd be interested in some specific examples of policies the GOP supports that the Democrats don't support that aren't beneficial to small businesses. Two caveats: * I'm a Democrat. "Do what's best for the public school system shalt be the whole of the law" is roughly what I believe. * The calculus is different if by "small business" you really (perhaps accidentally) mean "small tech company".

tptacek 11y ago

See Mad Men, Season 4, Episode 12, "Blowing Smoke". And then a serious question: What does it cost CVS to leave the Chamber of Commerce? The CoC is a conservative lobbying group. CVS already operates a 4:1 Republican-leaning lobbying operation. Were there any material benefits to CVS to remain affiliated with the CoC?

leephillips 11y ago

Good for them. But I find it hard to take seriously their claim that they are committed to improving public health when their shelves are stuffed with homeopathic products - more all the time. Pushing this fake medicine is a direct threat to health. It preys upon the naive and poorly educated, who will waste their money on this quackery rather than seeking effective treatment for their medical problems.

wpietri 11y ago
I would like to agree, but most of the homeopathic remedy consumers I know are surprisingly crafty. If you ask them if they believe that it works, they will say yes. But if a serious illness comes up, they will immediately switch to real medical treatment. Put differently, they seem to have an intuitive understanding to only use placebos for illnesses that are well served by placebos. They have no rational understanding of that, of course. But they do get a lot more benefits from placebos than I do, so I can't say they're entirely wrong.
- leephillips 11y ago
  I've observed similar behavior in regard to religion, etc. But it's generally unsound to extrapolate from the people we happen to know to whole populations (not that I have any actual data about who uses homeopathic medicines and how). What concerns me is that the way the stuff is shelved and advertised looks like it would lead to an uncritical person with, say, flu symptoms to just grab one of these boxes off the shelf.
  - DanBC 11y ago
    Boots in the UK have homeopathy on the same shelf as herbal remedies. They ignore my gentle polite requests for them to place some distance between items that have active ingredients and items that have no active ingredient.

nemo44x 11y ago

When they clear their shelves of all the soda, sugary and corn based snacks and fake medications (homeopathic garbage) then I'll begin to take their concern for health seriously. Obesity and diabetes is a far greater health risk than cigarettes. Cigarettes are awful for many reasons and they smell bad but corn and HFCS based foods make sick and kill a lot more people (and cost society much more!) than cigarettes. It's no wonder than countries with high rates of smoking (France, Japan) who have diets that lack all the garbage the CVS's of the world peddle have some of the highest life expectancies. Smokers are just an easy, minority target to vilify and it needs to stop.

s73v3r 11y ago
They have to start somewhere.

Lorento 11y ago

I think this is just a sign that there's healthy decision making going on. If what the CoC claims is true, that Jamaica's law was passed without following the proper process, then that is a problem and it should be challenged whether you want the law or not. You can't have a law-making process, trademark protections, etc and then just walk over them when you decide it's an important law. The whole point of the process is to decide if it's the correct law in the first place! The CoC's purpose is to support the interests of it's members. So they absolutely should be doing this. What good is a chamber of commerce that arbitrarily decides to throw some of its members under the bus when new laws threaten their businesses? The real complaint people should be making is that it allows tobacco businesses as members, or even that the government allows tobacco businesses to exist at all. What shocks me the most is that the CVS pharmacy was selling cigarettes 1 year ago! What?! Pharmacies sell cigarettes in America?!

knowaveragejoe 11y ago
> I think this is just a sign that there's healthy decision making going on. If what the CoC claims is true, that Jamaica's law was passed without following the proper process, then that is a problem and it should be challenged whether you want the law or not. You can't have a law-making process, trademark protections, etc and then just walk over them when you decide it's an important law. The whole point of the process is to decide if it's the correct law in the first place! The CoC's purpose is to support the interests of it's members. So they absolutely should be doing this. What good is a chamber of commerce that arbitrarily decides to throw some of its members under the bus when new laws threaten their businesses? The real complaint people should be making is that it allows tobacco businesses as members, or even that the government allows tobacco businesses to exist at all. Jamaica is one example, did you look at the others? In some cases it appears the CoC's stance goes beyond simple good faith defense of their members. > What shocks me the most is that the CVS pharmacy was selling cigarettes 1 year ago! What?! Pharmacies sell cigarettes in America?! To my knowledge, they all still do so with the exception of CVS.
aidenn0 11y ago
> What shocks me the most is that the CVS pharmacy was selling cigarettes 1 year ago! What?! Pharmacies sell cigarettes in America?! http://www.bbcamerica.com/mind-the-gap/2013/10/29/6-differences-american-drugstores-british-chemists/ http://www.bbcamerica.com/mind-the-gap/2013/10/29/6-differen... TL;DR pharmacies are located in convenience stores in the US.

simplexion 11y ago

e-cig to the rescue!

mr_spothawk 11y ago

i like smoking. but it's bad for me. but i'd be bummed if i couldn't find tobacco to smoke.

stuaxo 11y ago

Well, yes - it appears to mostly function as a front group for tobacco companies and is nothing to do with the US government, even if they imply it (as per last weeks article) http://www.nytimes.com/2015/07/01/business/international/us-chamber-works-globally-to-fight-antismoking-measures.html http://www.nytimes.com/2015/07/01/business/international/us-...

eladrin201 11y ago

John Oliver effect, anyone?