CVS Caremark (CVS) unveiled its new name change to CVS Health — and with a new tobacco-free image that will focus the drug store squarely in the healthcare industry.
CVS wiped its stores clean of all tobacco products as of Wednesday, beating its initial target date of Oct. 1. It also launched a comprehensive smoking cessation program through its pharmacies, the company announced.
The lost tobacco sales, which the company first announced it would take off its shelves in February, will deprive CVS of about $2 billion in annual revenue.
The drug-store is banking on its image change. The company hopes that by becoming the first chain to stop selling tobacco, consumers will be convinced that its 7,700 pharmacies are the go-to for their health and wellness needs.
While the financial benefit from a public relations halo-effect is unclear, CVS believes that the move could have an effect on the larger use of cigarettes and other tobacco products.
Based on a study the company released, the number of people buying tobacco dropped by about 13% in Boston and San Francisco after those cities banned tobacco sales at retailers with pharmacies.
None of the other retail chains have followed suit, yet. Walgreen (WAG), the largest U.S. Drug-store chain, said that only 4% of tobacco products are sold at pharmacies and believes that stopping sales won’t have a material impact on the number of smokers.
CVS will continue to operate its pharmacy business under the CVS/pharmacy name and its pharmacy benefit management business under the CVS/caremark brand. It also has its walk-in clinic program, MinuteClinic, as well as its specialty pharmacy services that will remain unchanged.