CVS To End All Tobacco Sales By October 1

(RTTNews) - CVS Caremark will stop selling cigarettes, cigars and chewing tobacco by October 1, the company announced Wednesday morning. CVS becomes the first national pharmacy chain to phase out smokes, a move that will cost it about $2 billion in annual revenue.

President Barack Obama, a former smoker, says the CVS new policy "will have a profoundly positive impact on the health of our country."

"As one of the largest retailers and pharmacies in America, CVS Caremark sets a powerful example, and today's decision will help advance my administration's efforts to reduce tobacco-related deaths, cancer, and heart disease, as well as bring down health care costs - ultimately saving lives and protecting untold numbers of families from pain and heartbreak for years to come," the President said in a statement.

The American Medical Association and American Pharmacists Association are among groups that have publicly opposed tobacco sales in retail outlets with pharmacies.

Smoking is the leading cause of premature disease and death in the U.S. with over 480,000 deaths annually.

CVS, which has set up MinuteClinic walk-in medical clinics inside select stores in 28 states, admitted that cigarettes have no place in a setting where health care is being delivered.

"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," he said in a press release.

"As a leader of the health care community focused on improving health outcomes, we are pledging to help millions of Americans quit smoking," said Merlo. "In addition to removing cigarettes and tobacco products for sale, we will undertake a robust national smoking cessation program."

Management says the decision to exit the tobacco category does not affect the company's 2014 segment operating profit guidance, 2014 EPS guidance, or the company's five-year financial projections.

The company estimates that it will lose approximately $2 billion in revenues on an annual basis from the tobacco shopper, equating to approximately 17 cents per share. However, CVS says it has found ways to offset the profitability impact.

Meanwhile, larger rival Walgreens says it is evaluating whether it will continue to sell tobacco products, according to CNBC.