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Did CVS halt tobacco sales to join ACOs?


CVS Caremark's decision to stop selling cigarettes and other tobacco products could mean more partnerships between insurers and the pharmacy giant, reported Forbes.

Some experts say the move is an attempt by CVS to enhance its chances of participating in accountable care organizations. By dropping cigarette sales, CVS aims to boost its relationship with providers, many of whom applauded the drug store chain for its decision and agree that tobacco undermines consumers' health, as FiercePracticeManagement previously reported.

ACOs predominately use primary care doctors, nurse practitioners and pharmacists, including those employed by CVS and other chain stores, to reach out to patients about their care and medications with the goal of reducing overall healthcare utilization.

"We see our decision more fully aligning with your outcomes-based reimbursement models ... and we think that we will become the pharmacy of choice for these entities and physicians," CVS CEO Larry Merlo told analysts and investors on a conference call last week, Forbes reported. "We serve millions of customers each and every day through our retail pharmacies, our MinuteClinics, our patients and pharmacy counseling through Caremark channels."

Experts claim CVS and its competitor Walgreen are battling to become the primary pharmacy for ACOs, but they've been passed over because of their tobacco sales, according to Forbes.

Although CVS stands to lose about $2 billion in annual sales with its anti-tobacco stance, it hopes to earn money by participating in ACOs and their revenue-sharing opportunities.

To learn more:
- read the Forbes article

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Special report: The future of accountable care organizations
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