- CVS Caremark announced today that Caremark-managed plans will charge an additional $15 co-pay for drugs purchased in pharmacies that offer tobacco products.
- According to the Wall Street Journal, a CVS Health spokesperson said that "numerous" Caremark clients have inquired about a "tobacco-free" network of pharmacies. CVS therefore is "in the process of identifying pharmacies that do not sell tobacco products."
- A specific start-date for the program has not been named.
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.
Some independent pharmacies are calling the new practice is anti-competitive, suggesting that CVS may not provide a complete list of all the independent pharmacies that do not sell tobacco products. This would give the company an unfair market advantage, given than CVS and Caremark are owned by the same parent company and frequently benefit from joint promotions.
"The consumer would not be able to figure out which independents are part of the program and so they will go directly to CVS," John Giampolo, head of the trade group and buying cooperative Independent Pharmacy Alliance, told the Wall Street Journal.
"It's an unfair competitive practice," Giampolo said. "An independent pharmacy may have to scramble to do their own marketing."