Doing the right thing first is seldom easy. CVS Caremark announced hat it would become the first national pharmacy chain to prevent selling cigarettes and other cigarettes and tobacco products altogether. The company’s chief executive, Larry J. Merlo, said “We came to the decision that cigarettes and providing health care just don’t go together within the same setting,” in accordance with the New York Times.
It is a gutsy, principled and potentially expensive move. It’s especially gutsy, and controversial, for any publicly traded company.
The first estimates are that this decision will definitely cost CVS Near Me about $2 billion in sales, or about 17 cents per share of stock, annually. I suspect these estimates are probably low. CVS may only sell $2 billion in tobacco products, but not many customers just purchase a pack of cigarettes whenever they go to the drugstore. After they are there, they probably pick up other things too. Maybe milk. Maybe candy. Maybe the prescriptions they need to counter the various ill effects of smoking.
CVS is increasingly moving toward providing more health services at their stores. The pharmacy chain provides the second largest quantity of retail locations in the country, 800 in which include “Minute Clinics” which provide basic take care of common ailments and preventive measures like flu shots. Merlo has said CVS desires to add 700 more such clinics by 2017. The clear narrative CVS hopes to convey towards the public is it is a company less about selling assorted retail products and much more about meeting healthcare needs that do not require a trip to the doctor.
I actually have without doubt that, as CVS says, companies centered on protecting health have zero business in the tobacco business. Many will probably argue they may have no business in, say, the candy business either. I don’t buy that logic, though. Candy fails to inexorably poison us as tobacco does.
If CVS were a privately owned company, the analysis could stop there. Private business owners can do whatever they want using their companies. They can decide to forego profit for principle.
A phone call like this is tougher for that directors and managers of the publicly traded enterprise like CVS. These people have a fiduciary duty to shareholders, and that duty generally takes the form of maximizing the long-run price of the home – that is, the company – entrusted for them. CVS may argue that its long-run value is enhanced by sitting on principle by doing this. It seems like clear that this argument will, in large part, concern positioning the company to take a bigger share of the medical care dollar moving forward. The company’s leadership may also reason that standing on principle will probably draw some customers in their mind, even since they lose others.
Maybe that logic is sound, yet it is not gonna be easy to prove. I am certain someone will file a lawsuit obliging CVS Customer Service Phone Number to prove it, too. Unfortunately for CVS’ directors and management team, the likely effect on revenue and customer traffic is way more easily quantified compared to projected and intangible benefits they presumably hope this decision will create.
In the meantime, CVS is doubling down on its position. It will not only stop selling tobacco products completely by October, however it will launch a “robust national quitting smoking program” this spring, the Los Angeles Times reported.
While many shareholders may be hard to win over, CVS’ decision is drawing praise from health care professionals and antismoking groups. Kathleen Sebelius, secretary of Health insurance and Human Services, said in a statement, “Today’s CVS/Caremark announcement helps bring our country even closer to achieving a tobacco-free generation.” Dr. Risa Lavizzo-Mourey, president and chief executive officer of the Robert Wood Johnson Foundation, said in the decision, “CVS is clearly establishing a leadership position to make the land healthier and then in constructing a culture of health.” (2) Such public endorsements will probably help CVS justify its choice, though they may not really enough alone to appease shareholders right away.
I don’t think CVS is doing wrong by doing the right thing. Even a public firm can lead by example, and the illustration of a company inside the medical care business making its customers’ health its chief business focus is a powerful one. Time will zrfhfn if CVS’ shareholders will reap the rewards of being patient using this change. In almost any case, I think the job of https://Locationsnearmenow.Net/CVS-Pharmacy-Hours-Open-Close/ – besides being ethically strong – has sufficient business justification that courts should refrain from second-guessing it. If shareholders are unhappy, they can elect a brand new board to pick new managers, or they can just sell their shares.
Congratulations to CVS on having the guts to go first. This nonsmoker, at the very least, is ready to walk an added block or two to show my appreciation through my purchases. The walking will be great for me, too.