Should CVS Re-Consider the E-Cigarette As a 'Harm Reducing' Device?

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When CVS Caremark Corporation, a leading American retail chain pharmaceutical company, announced it would cease selling cigarettes and tobacco products as of October 1, 2014, the company received accolades from the President, Congress and among many anti-smoking stakeholder groups. Last year, company representatives announced that cigarettes and tobacco products did not fit into the present mission of CVS as a health care provider. CVS was lauded in the media as being a socially responsible company, especially since the company estimated that it could lose approximately $2 billion in sales annually by ceasing the sales of cigarettes and tobacco products in its pharmacies. Although this $2 billion in lost sales was equivalent to only 1.6 percent of annual revenues of $126 billion for 2013, it is still an anticipated loss for the company and its shareholders.

The positive reputational effect of the "no cigarette and tobacco" sales, which became effective on September 3, 2014, as well as the move to an enhanced branding image as a "health" retailer with its new change in corporate name - which also took place on September 3. 2014 - to CVS Health reflecting "its broader health care commitment", were calculated to recoup much of that loss as a result of "goodwill" generated by its "no cigarette and tobacco" sales decision with approving, new customers. Along with the name change, CVS Health also announced the same day that it was launching a comprehensive program to encourage and support smokers in their effort to quit the nicotine habit by offering smoking cessation counseling, nicotine replacement therapy products, smoking cessation medications, a dedicated quit phone line service, and online resources.

One year after this decision was implemented, the CVS Health Research Institute reported on their study ("Impact of the CVS Tobacco Sales Removal on Smoking Cessation: When CVS Health Quit Tobacco, Many Smokers Quit Too"), employing an interrupted time series design, that evaluated cigarette-pack purchases at drug stores and a variety of other consumer outlets over the eight months after the September 2014 announcement by CVS that it would cease selling all cigarettes and tobacco products in its 7,700 retail pharmacies nationwide. The results of this study, which included data collected from 13 states where CVS/Pharmacy's market share was at 15 percent or greater, found that the company's cigarette and tobacco sales removal decision was associated with a one percent reduction in cigarette pack sales through April 2015, translating into the average smoker purchasing five fewer cigarette packs. Moreover, CVS researchers found that over the same time period, nicotine patch sales increased by 4 percent, or five purchases per 1,000 smokers in the month immediately following the tobacco removal from CVS pharmacies, with nicotine patch sales gradually returning to pre-removal levels over the remaining seven months of the study period.

While CVS Health has taken a retail leadership role, in the year since the company's announcement, no other major retailer has announced it would no longer be selling tobacco products in its outlets. As the CVS Health Research Institute notes in its official study release, smoking is the leading cause of preventable death and disease, responsible for more than 480,000 deaths each year, and totaling $133 billion in medical costs and $156 billion in lost employee productivity. Furthermore, nearly 70 percent of smokers in the U.S. try to quit each year. In a small way, CVS Health has had a small impact on smoking cessation with its voluntary decision to stop selling cigarette and tobacco products in its pharmacies.

On September 1, the federal government's Centers for Disease Control reported that for 2014, the percentage of adults aged 18 and over who were current cigarette smokers was statistically estimated at 16.8 percent, down from 17.8 percent in 2013, and a significant decline from 24.7 percent in 1997. What factors do experts attribute this 32 percent decline in adult smoking to over the past 18 years? These factors are wide-ranging and comprehensive, including anti-smoking advertising campaigns, higher cigarette taxes, public smoking bans, and the growing popularity of electronic cigarettes.

A vexing dilemma for CVS Health is that, as its research study reveals, the use of nicotine patches as a smoking cessation device have shown to have a limited effect on smokers wanting to quit the habit. Should CVS Health take the next step in retail industry leadership and charge its' Health Research Institute with evaluating state-of-the-art tobacco cessation, or "harm reduction" devices, including e-cigarettes? If e-cigarettes, which vaporize nicotine and are showing early evidence of being more effective than nicotine patches, are capable of moving tobacco smokers away from traditional, more harmful cigarettes, should CVS Health re-consider stocking e-cigarettes as a potential smoking cessation or harm reduction device? As the percentage of adult smokers in the U.S. continues its downward trajectory, a statistical "saddle point" will likely be reached in the next few years. These remaining "hard core" smokers will need to have available the most effective alternatives to traditional tobacco products to at least reduce their tobacco dependency, if not quit their tobacco habit. This is a challenge that CVS Health, among all other consumer product retailers, is best positioned to address in its' retail health care industry leadership role.

Thomas Hemphill (thomashe@umflint.edu) is a policy advisor to The Heartland Institute, and professor of strategy, innovation and public policy, School of Management, University of Michigan at Flint. 

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