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Special Edition: The Scoop – Merlo’s Wrecking Ball #cvsquits February 7, 2014

Filed under: Corporate — CMI/Compas @ 5:12 pm

It came in like a wrecking ball. Not even a full 24 hours had passed since World Cancer Day when CVS/Caremark made a bold announcement to extinguish cigarette sales in all 7,600 retail pharmacy locations in the United States. Larry J. Merlo, president of CVS/Caremark, stated “ending the sale of cigarettes and tobacco products at CVS/pharmacy is the right thing for us to do for our customers and our company to help people on their path to better health.”

As one of the largest retailers in the United States, this is a powerful statement and realignment of strategy in the dynamic health and wellness arena. As CVS/Caremark also operates 800 MinuteClinics that are on the rise at retail pharmacy locations, the sale of tobacco products was inconsistent with their operations as a health and wellness company.

The bold move has been widely applauded and has been endorsed by President Obama and instantly led to a hashtag on Twitter #cvsquits where consumers, cheerleaders and many more weighed in on the news with real-time reactions. CVS/Caremark’s Twitter handle avatar is now a cigarette crossed out, driving the message home even further. It’s clear that CVS/Caremark prepared for this announcement and is a great example of a brand that is actively engaging in conversation and harnessing the power of social media.

CVS/Caremark is taking things even further by announcing plans for a national smoking-cessation program that will live in-store and on-line. According to Risa Lavizzo-Mourey, president and CEO of Robert Wood Johnson Foundation, the largest philanthropy devoted to public health, “it’s a huge step forward toward our country being able to have a long-lasting culture of health.” We couldn’t agree more.

The significance of this week’s announcement reaffirms and aligns CVS/Caremark as not just your local pharmacy but also as a leader in consumer health and wellness. The company has expanded beyond that of a neighborhood retail pharmacy location, operating MinuteClinics that have become wildly popular and in some regards are becoming the first stop or the only stop in treatment, bypassing the primary care physician. From flu shots to routine physicals to acute care needs, MinuteClinics offer convenience for consumers. By establishing and tapping into its own network of EMR integration it “lay(s) the groundwork for MinuteClinic’s participation in accountable care organizations (ACOs) which are growing rapidly.” This is the new trend in today’s ever changing health landscape where companies and brands will ladder up to a higher platform beyond register sales to promote health.

In addition, CVS/Caremark also operates as a Pharmacy Benefit Manager (PBM) which allows them to apply cost pressures and seek better health outcomes for patients which align with the Obamacare incentive model. However, if consumers utilize CVS/Caremark as a one-stop shop, as many do, pharmaceutical manufacturers may find the need to further expand their relationship with this very important stakeholder – not only in stocking but also in future formulary decisions that are made and filled in their one-stop health shop.

CVS/Caremark is, essentially, operating a national health network across the United States and it’s likely that their influence will continue to expand. They are building an enterprise that seeks to support quality care and aligns to their namesake: convenience, value and savings. How’s that for living up to the brand name and promise? We will have to wait and see if their new business/healthcare model truly delivers on both fronts.

-Adam Roberts, SVP, Group Media Director
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