CVS, the largest pharmacy chain in the United States, will stop selling cigarettes and other tobacco products in all of its 7,600 stores by October 1, its parent company CVS Caremark announced this morning. It is the first time any drugstore has ever dropped this deadly cash cow, and it is part of a major shift in direction for the drugstore giant. 
 
 “We’ve got 26,000 pharmacists and nurse practitioners who are helping millions of patients each and every day,” said Larry Merlo, the chief executive of CVS Caremark. “They manage conditions like high blood pressure, high cholesterol, and diabetes -- all conditions that are worsened by smoking. We’ve come to the decision that cigarettes have no place in an environment where healthcare is being delivered.” 
 
 The decision gained immediate praise from the American Medical Association, the Robert Wood Johnson Foundation, and the American Cancer Society . “Over time, we think lives will be saved by this,” says Cancer Society President John Seffrin. But the public-health-mindedness will cost CVS billions – literally. The company says $2 billion in sales will be shaved off its $125 billion top line. That will pressure earnings, too, though Merlo swears incremental cost cuts will keep those pressures from showing up in its profit statements. 
 
 Merlo says that continuing to sell cigarettes, which the Surgeon General blames for 480,000 deaths every year from heart disease, lung cancer, and stroke, was anathema to CVS’ long-term plan to become a central player in the U.S. health care system that interacts ever more closely with patients, giving flu shots, reminding them when they are not filling prescriptions, and, through its 800 Minute Clinic in-store nurse practitioner stations, prescribing medicines. “I see my role as insuring that the company is positioned for growth,” says Merlo. “And that is what this decision is about.” 
 
 CVS, like rivals Walgreen and Rite-Aid Corporation, is seeing a dramatic change to its business as it focuses less on taking marginal revenue out of drug sales and more on larger agreements with hospitals and insurance companies. In fact, CVS is in the midst of an even bigger shift than its competitors. Because of its 2007 merger with Caremark, the company is not only a drug store chain but also a pharmacy benefit manager, meaning it works with insurance companies and employers to control drug costs. The assumption is that by being a rival to both Rite-Aid and benefits manager Express Scripts , CVS can extract better savings and offer better care to patients, saving employers money both by cutting costs and by making people healthier. 
 
 Among CVS’ newer offerings: a deal with insurers through which patients who have not filled a needed prescription, like a hypertension drug, are given counseling from a pharmacist if they show up wanting something else, like an antibiotic. This is possible because CVS has records of both in-store and mail-order prescriptions; unfilled prescriptions cost the medical system $300 billion annually, CVS says. Another new product will help patients sign up for expensive drugs for cancer, rheumatoid arthritis, and other “specialty” conditions, help them figure out how to pay for them, and allow them to either get them in the mail or pick them up at a CVS story. 
 
 These new efforts have led CVS to work more closely with hospitals, doctors’ networks, and what are called Accountable Care Organizations, new types of organizations encouraged by Obamacare in which doctors agree to be paid not for every stitch, prescription, or procedure but based on how well patients do after treatment. If CVS can help save money or keep patients healthier, it might get a piece of the action. But these efforts were leading to cognitive dissonance, says Troyen Brennan, a former professor of medicine at Harvard Medical School who is now CVS’ chief medical officer. 
 
 “We would always get the question: why do you continue to sell cigarettes?” says Brennan. “Because from the physicians’ and nurses’ point of view, you’re either all in for healthcare or you’re not.” He says he thinks that having been the first pharmacy to drop cigarettes will be a “competitive advantage” against other retail pharmacies because of the credibility it will give CVS when talking to physicians. 
 
 It’s certainly getting good buzz from organizations pre-briefed on the announcement. Risa Lavizzo-Mourey, MD, the CEO of the Robert Wood Johnson Foundation, called CVS’ cig ban “a huge and important step forward for moving us as a nation to a place where we can be healthier.” And Robin Koval, the chief executive of Legacy, the foundation formed to stop teen smoking formed when 46 states’ attorneys general settled with tobacco makers, literally said “Wow.” 
 
 “For the number one retail pharmacy chain to take a very bold step like this and put people and their health in front of profits sends a signal that if you want to talk the talk about being there to serve your customers and their healthcare needs, then you have to walk the walk,” says Koval. 
 
 In the shorter term, the cigarette ban may help with one new business: CVS is offering patients’ smoking cessation therapy, which will usually be paid for by insurance but which some patients will need to pay for out of pocket. Patients will be offered several counseling sessions with a nurse practitioner and perhaps, if they need them, nicotine replacement gums, lozenges, or patches or medicines like Chantix and Zyban that can help patients quit. CVS does not sell so-called e-cigarettes, which vaporize nicotine so it can be inhaled. 
 
 Will the halo from the public health praise be enough to make up for the hit to earnings? Maybe. The $2 billion in annual sales lost is only 1.6% of total revenue. In turn, CVS says that this will pressure earnings by 17 cents per share, or 40%, on an annual basis. But because the removal won’t have fully happened until October, that will only hit this year’s earnings by 6 to 9 cents per share. And CVS says it can make up those costs, maintaining its guidance, although that earnings coverage has to come from somewhere. The company is making a bold bet on rebranding itself as being not just a store, but a healthcare company. Arguably, it’s not there yet. But Merlo has established a clear sense of direction, and when it comes to a big, often slow-moving company, that is a good thing. 
 
 Also on Forbes: ||||| "Ending the sale of cigarettes and tobacco products at CVS/pharmacy is the right thing for us to do for our customers and our company to help people on their path to better health," said Larry J. Merlo, President and CEO, CVS Caremark. "Put simply, the sale of tobacco products is inconsistent with our purpose." 
 
 Merlo continued, "As the delivery of health care evolves with an emphasis on better health outcomes, reducing chronic disease and controlling costs, CVS Caremark is playing an expanded role in providing care through our pharmacists and nurse practitioners. The significant action we're taking today by removing tobacco products from our retail shelves further distinguishes us in how we are serving our patients, clients and health care providers and better positions us for continued growth in the evolving health care marketplace." 
 
 Smoking is the leading cause of premature disease and death in the United States with more than 480,000 deaths annually. While the prevalence of cigarette smoking has decreased from approximately 42 percent of adults in 1965 to 18 percent today, the rate of reduction in smoking prevalence has stalled in the past decade. More interventions, such as reducing the availability of cigarettes, are needed. 
 
 "CVS Caremark is continually looking for ways to promote health and reduce the burden of disease," said CVS Caremark Chief Medical Officer Troyen A. Brennan, M.D., M.P.H. "Stopping the sale of cigarettes and tobacco will make a significant difference in reducing the chronic illnesses associated with tobacco use." 
 
 In a Journal of the American Medical Association (JAMA) Viewpoint published online this morning, Brennan and co-author Steven A. Schroeder, Director, Smoking Cessation Leadership Center, University of California, San Francisco, wrote, "The paradox of cigarette sales in pharmacies has become even more relevant recently, in large part because of changes in the pharmacy industry…Most pharmacy chains are retooling themselves as an integral part of the health care system. They are offering more counseling by pharmacists, an array of wellness products and outreach to clinicians and health care centers….Perhaps more important, pharmacies are moving into the treatment arena, with the advent of retail health clinics. These retail clinics, originally designed to address common acute infections, are gearing up to work with primary care clinicians to assist in treating hypertension, hyperlipidemia and diabetes – all conditions exacerbated by smoking." 
 
 CVS Caremark's decision to stop selling tobacco products is consistent with the positions taken by the American Medical Association, American Heart Association, American Cancer Society, American Lung Association and American Pharmacists Association that have all publicly opposed tobacco sales in retail outlets with pharmacies. 
 
 "As a leader of the health care community focused on improving health outcomes, we are pledging to help millions of Americans quit smoking," said Merlo. "In addition to removing cigarettes and tobacco products for sale, we will undertake a robust national smoking cessation program." 
 
 The program, to be launched this Spring, is expected to include information and treatment on smoking cessation at CVS/pharmacy and MinuteClinic along with online resources. The program will be available broadly across all CVS/pharmacy and MinuteClinic locations and will offer additional comprehensive programs for CVS Caremark pharmacy benefit management plan members to help them to quit smoking. Approximately seven in ten smokers say they want to quit and about half attempt to quit each year. 
 
 "Every day, all across the country, customers and patients place their trust in our 26,000 pharmacists and nurse practitioners to serve their health care needs," commented Helena B. Foulkes, President, CVS/pharmacy. "Removing tobacco products from our stores is an important step in helping Americans to quit smoking and get healthy." 
 
 The decision to exit the tobacco category does not affect the company's 2014 segment operating profit guidance, 2014 EPS guidance, or the company's five-year financial projections provided at its December 18th Analyst Day. The company estimates that it will lose approximately $2 billion in revenues on an annual basis from the tobacco shopper, equating to approximately 17 cents per share. Given the anticipated timing for implementation of this change, the impact to 2014 earnings per share is expected to be in the range of 6 to 9 cents per share. The company has identified incremental opportunities that are expected to offset the profitability impact. This decision more closely aligns the company with its patients, clients and health care providers to improve health outcomes while controlling costs and positions the company for continued growth. 
 
 About CVS Caremark 
 
 CVS Caremark is dedicated to helping people on their path to better health as the largest integrated pharmacy company in the United States. Through the company's more than 7,600 CVS/pharmacy stores; its leading pharmacy benefit manager serving more than 60 million plan members; and its retail health clinic system, the largest in the nation with more than 800 MinuteClinic locations, it is a market leader in mail order, retail and specialty pharmacy, retail clinics, and Medicare Part D Prescription Drug Plans. As a pharmacy innovation company with an unmatched breadth of capabilities, CVS Caremark continually strives to improve health and lower costs by developing new approaches such as its unique Pharmacy Advisor program that helps people with chronic diseases such as diabetes obtain and stay on their medications. Find more information about how CVS Caremark is reinventing pharmacy for better health at info.cvscaremark.com. 
 
 Forward-Looking Statements 
 
 This press release contains certain forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially. For these statements, the Company claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. The Company strongly recommends that you become familiar with the specific risks and uncertainties outlined in our Securities and Exchange Commission filings, including those in the Risk Factors section in our Annual Report on Form 10-K for the year ended December 31, 2012 and under the section entitled "Cautionary Statement Concerning Forward-Looking Statements" in our most recently filed Quarterly Report on Form 10-Q. 
 
 SOURCE CVS Caremark ||||| “We’re at the forefront of what we all see as a changing health care landscape,” Larry J. Merlo, the chief executive of CVS Health, said in an interview. 
 
 As the medical industry braces for the flood of new patients with insurance through the Affordable Care Act, drugstores see an opportunity to provide basic care to consumers who may not want to wait to see a doctor, if one is available in their area at all. And major chains like Walmart, the country’s largest retailer, can offer such services for prices that may appeal to patients on the fringes of the health care system. 
 
 “Health care is going to retail, especially for people without privilege,” Mr. Snow said. 
 
 Drugstores want to use their clinics to help drive foot traffic to their stores, and to their pharmacies, where customers can fill prescriptions. 
 
 CVS has entered partnerships with more than 40 health systems, including local hospitals, to help run its clinics. The company opened 32 clinics last quarter and is on track to open at least 150 more this year, Carolyn Castel, a CVS spokeswoman, said. Revenues at the clinics are up 24 percent in the second quarter, compared with a year earlier, and the company plans to operate 1,500 clinics by 2017, CVS said. 
 
 As CVS seeks new health partners, its decision to end cigarette sales may make it more appealing than its tobacco-selling rivals. 
 
 “Think of it this way: Would you find cigarette machines or retail stores in the gift shops in a hospital selling cigarettes? Of course not,” said Nancy Copperman, the corporate director of public health initiatives for the North Shore-Long Island Jewish Health System , a minute clinic partner. “I think it does give them a leg up.” 
 
 Video 
 
 In February, CVS Health, formerly known as CVS Caremark, announced that it would stop selling cigarettes and other tobacco products by October. At the time, the company estimated that the decision would cut its overall sales by $2 billion. 
 
 Advertisement Continue reading the main story 
 
 Robert C. Garrett, the chief executive officer of Hackensack University Health Network, which operates seven minute clinics with CVS in New Jersey and is opening its eighth in November, agreed that the move made CVS a more attractive health partner. Mr. Garrett said that Hackensack was in discussions with CVS about ways to expand its services. 
 
 “When you stop selling cigarettes as a retailer, it sends a very big signal to the rest of the health care community that you are in the health care business,” said Tom Charland, the chief executive of Merchant Medicine, a health care research and consulting firm. “I do think that it’s going to open up many possibilities in all of the partnerships that they’re trying to create across the country.” 
 
 Newsletter Sign Up Continue reading the main story Please verify you're not a robot by clicking the box. Invalid email address. Please re-enter. You must select a newsletter to subscribe to. Sign Up You agree to receive occasional updates and special offers for The New York Times's products and services. Thank you for subscribing. An error has occurred. Please try again later. View all New York Times newsletters. 
 
 Of course, other retail chains that operate health clinics, like Walmart and Walgreens , have attracted health care partners even though they seem to have no plans to stop selling cigarettes. 
 
 “We believe that if the goal is to truly reduce tobacco use in America, then the most effective thing retail pharmacies can do is address the root causes and help smokers quit,” said James Cohn, a spokesman for Walgreens, in an email. Mr. Cohn pointed to the company’s initiatives to help people quit smoking . 
 
 A spokeswoman for Walmart, Danit Marquardt, declined to comment. A spokeswoman for Rite Aid , Ashley Flower, said the company would “continue to evaluate” its products and services. 
 
 But some of CVS’s competitors have made bolder moves in other ways. CVS has not dedicated the floor space to its clinics the way that Walmart has, for example, and is still experimenting with how to streamline the clinic with the rest of the store. “As far as I can tell, they haven’t really figured out how do you cut up the floor space of a retail traditional pharmacy,” Mr. Snow said. 
 
 Mr. Merlo said that some of CVS’s newer clinics have done a “better job” of integrating the pharmacy, the clinic and the over-the-counter products. 
 
 “I think that’s something that we’re continuing to work on to make it a better customer experience,” he said. 
 
 A big opportunity for CVS as it pushes into health care, however, has nothing to do with what happens in the pharmacy itself. The company also wants to become a larger pharmacy benefit manager, which manages prescription drug plans for employers and insurers. 
 
 Advertisement Continue reading the main story 
 
 CVS expects its pharmacy benefit management business, CVS/Caremark, to grow to nearly $90 billion this year, up $30 billion over the last three years, Ms. Castel said. The company’s push into other areas of health care could help CVS expand that business further. 
 
 “If I’m an employer with 2,000 employees, it makes CVS more appealing to me as a pharmacy benefits management company as well because I have this integration with health systems,” Mr. Charland said. “That’s important to employers who are trying to reduce their health care costs.” 
 
 “For me, the story is not around how CVS can directly benefit from what they’ve done,” Mr. Snow said. “Rather, the story is around how CVS is engineering their public image in order to be perceived as the place to go to become healthy.”
– A sea change in CVS policy: By October 1, America's biggest pharmacy chain will no longer sell any tobacco products, parent company CVS Caremark announced today in what CEO Larry Merlo calls the "right thing for us to do." "We’ve got 26,000 pharmacists and nurse practitioners who are helping millions of patients each and every day," explains Merlo. "They manage conditions like high blood pressure, high cholesterol, and diabetes—all conditions that are worsened by smoking. We’ve come to the decision that cigarettes have no place in an environment where healthcare is being delivered." CVS is the first retailer ever to drop tobacco, Forbes reports—a move that will cost the company $2 billion in annual sales. CVS, as well as other pharmacies, is looking to get more involved with healthcare; it already offers flu shots and Minute Clinics, where nurse practitioners can prescribe medications. Selling cigarettes just doesn't fit with that plan for growth, Merlo says. And CVS' chief medical officer thinks that dropping tobacco will give CVS an advantage over rival pharmacies when making deals with healthcare providers. Ex-smoker President Obama wasted no time in supporting the move, the Weekly Standard reports: He "applauds" the news and calls it "a powerful example."