In a move hailed by President Barack Obama, CVS Caremark said Wednesday it is getting out of the business of selling cigarettes, a decision that will cost its 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," said Helena Foulkes, CVS/pharmacy president.
The company, the nation's second-largest drugstore chain, has increasingly positioned its pharmacies as a health-care resource, with 750 retail clinics nationally located in its stores. But beyond its retail pharmacies, CVS Caremark's pharmacy benefit division contracts with large employers and health insurers to provide drug coverage.
(Read more: Big tobacco: Sorry. So, can we grow now?)
"Increasingly, we have clients and health plans and health system partners who are seeing us as an extension of their health-care services," Foulkes said. "We know that the sale of tobacco is extremely inconsistent with being a health-care provider."