Supporters are heralding CVS Health's decision to create narrow pharmacy networks that penalize tobacco users as a brilliant move, but detractors think it may alienate customers. Both sides have valid arguments, but I think that CVS Health's decision leans toward the brilliant. Here's why.
First, a bit of background
CVS Health announced earlier this year that it would stop selling tobacco products in its retail stores and the company followed through on that promise in September.
The choice has been met both with support from antitobacco advocates who remain concerned by the number of preventable deaths caused by tobacco and by opposition from investors who worry over the impact of $2 billion in lost annual revenue and the risk of angering consumers.
In making its decision to halt sales of tobacco, CVS Health said that eliminating tobacco was in line the company's broader mission of improving consumer health. But recent news that CVS Health is creating new drug plans that charge higher co-pays for scripts filled at tobacco retailers suggests that the decision could also be based on feedback it was receiving from clients of its $76 billion pharmacy benefit business.
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