Doing the right thing first is seldom easy. CVS Caremark announced hat it would become the first national pharmacy chain to prevent selling cigarettes as well as other tobacco products altogether. The company’s chief executive, Larry J. Merlo, said “We came to the decision that cigarettes and providing medical care just don’t go together within the same setting,” based on the New York City Times.

It really is a gutsy, principled and potentially expensive move. It’s especially gutsy, and controversial, to get a publicly traded company.

The primary estimates are the 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 most likely low. CVS may only sell $2 billion in cigarettes and tobacco products, although not many customers just purchase a pack of cigarettes once they go to the drugstore. Once they are there, they probably pick up other items too. Maybe milk. Maybe candy. Maybe the prescriptions they should counter the various ill effects of smoking.

CVS is increasingly moving toward providing more health services at their stores. The pharmacy chain has the second largest quantity of retail locations in the country, 800 of which include “Minute Clinics” that provide basic take care of common ailments and safety measures like flu shots. Merlo has said CVS wants to add 700 more such clinics by 2017. The clear narrative CVS hopes to convey for the public is that it is actually a company less about selling assorted retail products and a lot more about meeting healthcare needs which do not require visiting the doctor.

We have undoubtedly that, as CVS says, companies focused on protecting health do not have business inside the tobacco business. A few will probably argue that they have no business in, say, the candy business either. I don’t buy that logic, though. Candy will not inexorably poison us as tobacco does.

If CVS were a privately held company, the analysis could stop there. Private business people can do anything they want using their companies. They can decide to forego profit for principle.

A phone call like this one 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 shape of maximizing the long-run value of the home – which is, the company – entrusted to them. CVS may debate that its long-run value is enhanced by sitting on principle this way. It appears clear that this argument will, in large part, concern positioning the company to adopt a larger share from the health care dollar going forward. The company’s leadership may also reason that standing on principle is likely to draw some customers to them, even since they lose others.

Maybe that logic is sound, however it is not gonna be simple to prove. I am sure someone will file a lawsuit obliging to prove it, too. Unfortunately for CVS’ directors and management team, the likely impact on revenue and customer traffic is far more easily quantified compared to the projected and intangible benefits they presumably hope this decision will create.

For the time being, CVS is doubling down on its position. Not only will it stop selling tobacco products completely by October, however it will launch a “robust national smoking cessation program” this spring, the La Times reported.

While many shareholders may be hard to make an impression on, CVS’ decision is drawing praise from medical 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 in the Robert Wood Johnson Foundation, said in the decision, “CVS is clearly establishing a leadership position for making the country healthier as well as in constructing a culture of health.” (2) Such public endorsements will likely help CVS justify its choice, though they may not 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 demonstration of a company inside the healthcare business making its customers’ health its chief business focus is really a powerful one. Time will zrfhfn if CVS’ shareholders will reap the rewards of being patient with this particular change. In every case, I think the position of CVS Pharmacy 24 Hours – besides being ethically strong – has sufficient business justification that courts should refrain from second-guessing it. If shareholders are unhappy, they can elect a new board to pick new managers, or they can just sell their shares.

Congratulations to CVS on obtaining the guts to visit first. This nonsmoker, a minimum of, is prepared to walk an additional block or two to show my appreciation through my purchases. The walking is going to be great for me, too.

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