Is CVS Caremark using cigarette co-pay to muscle out competitors?

October 20, 2014 6:30 PM

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Is CVS Caremark using cigarette co-pay to muscle out competitors?

This latest move by the pharmacy giant—this time in its role as a pharmacy benefit manager—wields its not-inconsiderable market share to push its competitors out of selling tobacco products. Should other pharmacies continue to offer tobacco, customers who want to avoid the new co-pay will have to head to the one national chain that doesn't sell cigarettes: CVS. This makes the pharmacy's decision to give up $2 billion in profits from cigarette sales make a lot more bottom-line sense.

"CVS retail drugstore business will certainly benefit, because prescription volume will shift into CVS retail pharmacies from other drugstore chains," Adam Fein of Pembroke Consulting told the Wall Street Journal.

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