More than 20 million Americans have died from tobacco related disease since 1965 and that makes tobacco use one of the nation's biggest killers and one of its most costly conditions. According to the Surgeon General, spending on tobacco related disease totals more than $130 billion a year.
Given those statistics, it may not be surprising to learn that CVS Health (NYSE:CVS) is putting itself knee-deep in the quest to curb smoking. The company has stopped selling tobacco related products at its stores and thanks to a study it conducted in San Francisco and Boston, CVS Health is also rolling out a national campaign to help tobacco users kick their habit.
The CVS Health study, which appeared in Health Affairs, found that "If retailers with pharmacies across the country were to forgo sales of tobacco products, there could be 25,000 to 60,000 fewer tobacco related deaths per year."
That flies in the face of what many people might expect. After all, conventional wisdom suggests that if one retailer stops selling tobacco, tobacco users will simply start buying it somewhere else.
But according to CVS Health's study, that's not the case. The company looked at the relationship between eliminating tobacco sales in Boston and San Francisco -- two cities that banned tobacco sales in stores with pharmacies -- and tobacco purchases.
What they learned is that tobacco purchases slumped 13% once the ban was instituted in those two key markets. That decline came despite tobacco products still being readily available in many other retailers, including gas stations and convenience stores.
What it could mean
According to studies, up to 70% of tobacco users are trying to quit and the easy access to cigarettes at pharmacies provides one more avenue for impulse buys that could derail their cessation program.
That's particularly disconcerting when considering that many pharmacy customers could be at the store filling a prescription designed to treat a disease caused by tobacco.
It's likely for that reason that the American Medical Society has lobbied against pharmacies selling tobacco for years and why the AMA's House of Delegates recently encouraged doctors to direct patients to non-tobacco selling pharmacies.
If doctors follow that recommendation, it could lead to other pharmacy chains eliminating tobacco sales. In theory, it could even lead to grocers and mass-merchant retailers curbing tobacco offerings in locations that also host a pharmacy.
Of course, that would also play nicely into CVS Health's gameplan given that the company has not only eliminated tobacco sales, but has launched a national anti-smoking campaign that encourages customers to visit its MinuteClinics for personalized recommendations, or to speak with pharmacists about options for quitting.
Fool-worthy final thoughts
CVS Health's decision to forgo sales from tobacco products could help differentiate it from competitors, allowing it to attract more referrals to its clinics from health insurers and other payers and more prescriptions from physician networks.
The move also serves to distance the company from general merchandise sales in favor of revenue from providing healthcare services, such as immunizations, cold and flu treatment, and chronic disease counseling. Whether or not other pharmacies will follow suit remains a question, but based on this study it would seem that such a move could have a profound effect on national health.
Todd Campbell has no position in any stocks mentioned. Todd owns E.B. Capital Markets, LLC. E.B. Capital's clients may or may not have positions in the companies mentioned. Todd owns Gundalow Advisors, LLC. Gundalow's clients do not have positions in the companies mentioned. The Motley Fool recommends CVS Caremark. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.