CVS drops tobacco products

On Wednesday, CVS Caremark announced plans to discontinue selling cigarettes. CNBC reports the move will cost the company's retail division $2 billion in annual sales.

"We made this decision as a business decision because we are positioning ourselves as a health care company," CVS/pharmacy President Helena Foulkes told CNBC.

With 750 in-store retail clinics nationally, CVS Clients and health system partners are seeing the company as an extension of their health care services and the company sees the sale of tobacco as inconsistent with being a health care provider.

CVS will lose $1.5 billion in direct tobacco revenues annually, and $500 million in ancillary sales from purchases made with tobacco products. The losses total 3 percent of its retail division's annual sales in 2012.

Four years ago, the American Pharmacists Association urged state boards not to license pharmacies in outlets that sell tobacco.

According to CNBC, CVS is the second-largest drugstore chain, and the first major pharmacy retailer to voluntarily stop selling tobacco products.

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