CVS ditches tobacco products

CVS Caremark, the second largest drug store chain, announced it will stop selling tobacco products in all 7,600 branches by Oct. 1.

CVS is the first pharmacy to take action. The chain's executives stated that selling cigarettes contradicts their image as a health care provider.

The move may cost the company $2 billion in tobacco-related sales, according to Forbes. However, CEO Larry Merlo assured 'CBS This Morning' that the ban "is the right decision."

He said: "There's a growing focus and emphasis on healthy outcomes, managing chronic disease and, by the way, more than half of all Americans today suffer from one or more chronic diseases, as well as a focus on controlling and reducing health care costs."

Focusing more on its health care services could eventually help CVS gain back its lost sales, but analysts are focusing on the short-term repercussions, according to Reuters. Investors reveal that already CVS shares fell 1 percent, while its competitors Walgreen Co. and Rite Aid had a 3.9 and 2 percent increase in shares, respectively.

Even if other pharmacy conglomerates follow in CVS' footsteps, CBS News reports that half of cigarette sales still come from gas stations, 4 percent from drug stores, and there's a possibility that dollar discount stores will pick up the slack. Dollar General alone sells the product in about 10,000 stores.

However, Dr. Richard Wender of the American Cancer Society is optimistic about the move, reports Reuters.

"Every time we make it more difficult to purchase a pack of cigarettes, someone quits," he said.  

Despite the fact that only 18 percent of U.S. adults smoke, compared to 43 percent in 1965, it remains the number one preventable killer in America.

Alexandra von Plato, president and global chief creative officer of Publicis Healthcare Communications Group, believes it's only a matter of time before CVS' competitors follow suit.

"This is a trend we're going to see many, many retailers and food companies jump on."