Will CVS Exempt E-Cigs?

Modi predicts result will make “a big statement” about the growing segment (Part 2)

WOONSOCKET, R.I. -- As of October, tobacco products will no longer be sold at the nation’s second largest pharmacy chain (click here to read the full story). However, CVS will continue to sell several nicotine replacement therapy (NRT) products in an effort to support a new cessation program.

Larry Merlo

“As a leader of the health care community focused on improving health outcomes, we are pledging to help millions of Americans quit smoking,” Larry J. Merlo, the retailer’s president and CEO, said in a press release. “In addition to removing cigarettes and tobacco products for sale, we will undertake a robust national smoking cessation program.”

The program is set to launch this spring, providing smoking cessation information and treatment options both at CVS and MinuteClinic locations. Additionally, CVS Caremark pharmacy benefit management plan members will receive comprehensive programs to help them quit smoking.

With tobacco-free cessation options still available at CVS, there’s a question on how the chain will handle electronic cigarettes. Like NRT, they are smoke and tobacco-free; yet they are classified as tobacco products and all three Big Tobacco companies are now fully committed to the segment.

“I think (e-cigarettes) are actually the more interesting storyline here,” Modi said in an interview with CNBC. “What will CVS do? That will make a big statement in terms of how the perception of this category will be with the consumer.”

Although Merlo did not clarify whether or not CVS would continue to sell electronic cigarettes, many leading manufacturers expressed support for the company’s actions to encourage smoking cessation – and optimism that electronic cigarettes could aid in such efforts.

“We believe electronic cigarettes can help end this epidemic,” said the Scottsdale, Ariz.-based NJOY in a company-issued statement. “We welcome the opportunity to work with leaders and stakeholders from around the world who share our mission to obsolete tobacco cigarettes.”

“We are also pleased that CVS will continue to emphasize the importance of alternatives to tobacco,” agreed Andries Verleur, CEO of Miami’s VMR Products (maker of V2 e-cigs). “We hope they will ultimately recognize the impact of electronic cigarettes, which do not contain tobacco, in this category."

Modi noted that CVS is likely waiting to see how the FDA classifies electronic cigarettes before making its final decision. Meaning it could be a while before there’s any clarity.

“CVS has basically made a commitment to health and wellness,” he said. “So if they sell e-cigarettes, what does that say about this category in terms of smoking cessation and relative risk? I think it’s going to be a very interesting decision when they make it.”

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