CVS Makes the First Move
by Jennifer Lin
Do you know that approximately 443,000 people die from smoking or secondhand smoke exposure every year (from 2000-2004) in the United States? (According to the data on CDC, Centers for Disease Control and Prevention) If that number is not appealing to you, now imagine everyday 1,200 people die from smoking cigarettes and a third of them are very young adults just like you and me. Is this question serious enough to warn us to be away from cigarettes and to ring the bell of social responsibility of business among the individual proprietors and corporate executives (that Milton Friedman has discussed in the book Corporate Ethics and Corporate Governance)?
CVS, as one of the largest drugstore chains (ranked top10 in 2011) in America, has responded to this question with the action of vowing to quit selling tobacco products in all of its convenience store by October 2014. In accordance with the clear and definite goal of “health care is more important than retail business”, the chief medical officer Troyen A. Brennan aims to reduce the availability of cigarettes in the stores. This reduction will lead to an estimate lost of 2 billion dollars in the following year. But really, is he actually concerning about the health of the public due to his social responsibility? OR is it because of the growing industry of health care can benefit him more from the competition among the companies? Nevertheless, this decision will lessen the money in stockholders’ pocket; what is worse, the shareholders will not be satisfied with this decision-making and start to pull back their shares from the company. So is CVS confronted with a money loss crisis?
The paradox which this company is facing has been well taken over by the executive vise president Helena Foulkes. Well, not 100% solve the problem but with the expectation of the pharmacies’ benefit in the market, it shows that the pharmacies benefit will grow to nearly 90 Billion dollars this year, which is 30 billion dollars more than the last three years. (What I meant by the pharmacies benefit is that the CVS is going to establish 7 hundred more minute-clinics and in total there will be 1500 minute-clinics by the end of 2017) Besides the minute clinics, there will also be a smoking cessation program, which will meet the customers’ needs while at the same time covering up the lost revenue and income. So now, does CVS’ decision still merely stop the public from buying cigarettes from their stores; or it represents a more successful business’ arrival.
Sources:
http://smokefreecapital.org/category/blog/