CVS develops tobacco-free prescription network

Staff Writer
Columbus CEO

First, CVS Health pulled tobacco from its store shelves. Now, it plans to make some customers think twice about filling prescriptions at other stores that still sell smokes.

The nation's second-largest drugstore chain is developing a new tobacco-free pharmacy network for clients of its Caremark pharmacy benefits management business.

The network would slap an extra co-payment on patients who fill their prescriptions at stores that still sell tobacco. That payment won't apply to prescriptions filled in the tobacco-free network, which would include CVS and Target locations nationally, as well as other pharmacies that abstain. Target Corp. gave up tobacco sales in 1996.

Rival national drugstore chains Walgreen Co. and Rite Aid Corp. still sell tobacco.

Pharmacy benefits managers, or PBMs, run prescription drug plans for employers, insurers and other customers. They process mail-order prescriptions and handle bills for prescriptions filled at retail pharmacies.

CVS spokeswoman Carolyn Castel said her company developed the new network after several PBM customers asked for it. The tobacco-free network will only be used by the PBM customers that choose it.

"It's not across the board," she said, adding that the size of the extra co-payment would vary according to client.

The new network will start next year, and customers will receive a list of participating pharmacies before any network change takes place.

CVS announced in February that it would remove tobacco products from its more than 7,700 drugstores nationally to help sharpen its focus on health. It completed that task in September, when it also announced that it would change its name to CVS Health from CVS Caremark.

Drugstore chains, grocers and big retailers like Target have delved deeper into customer health in recent years, in part to serve the aging baby boom generation and the millions of uninsured people who are expected to gain coverage under the federal health care overhaul. They've been adding walk-in clinics to their stores, expanding the care they provide, and putting more health care products on their shelves.

CVS has said it might lose about $2 billion in revenue annually after removing tobacco, but company leaders expect to counter that loss at least partially by expanding the company's health care business.

Wall Street has yet to express misgivings about the lost revenue. Shares of CVS Health closed at $81.76 on Monday and have climbed about 24 percent since the company announced its split with tobacco. That's nearly triple the rise of the Standard & Poor's 500 index over the same span.