Why CVS’s decision to stop selling cigarettes is nothing to celebrate

Ewan Watt Freelance Writer
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The great H. L. Mencken once remarked that “The truly civilized man is always skeptical and tolerant.” Although he never pinned his ideological colors to the mast, it is little wonder that Mencken has become the “wittiest defender of liberty,” revered in libertarian circles for his belief in the virtues of free will, the tolerance of the market, and the skepticism of good intentions. It’s a stance that’s distinctly lacking in our politics today, but one of great value.

For example, these traits appear to have disappeared in the discussion of CVS Caremark’s decision to cease selling cigarettes and other tobacco products, effective October 1. According to Larry J. Merlo, President and CEO of CVS Caremark, the sale of tobacco products was “inconsistent with our purpose” and discontinuing their sale was “the right thing for us to do for our customers and our company to help people on their path to better health.”

Despite the fact this obviously reins in consumer choice, as a private company CVS obviously has every right to take such action. In a blog post, Reason’s Nick Gillespie praised the company, adding “that we should let people make more decisions about their lives, their loves, and their businesses.” Amen to that — and long may it last. However, there is an ugly underbelly to this move.

The widespread consensus that CVS decided to benevolently forego the $2 billion in annual tobacco sales might not be what it’s cracked out to be. Firstly, Dr. Troyen Brennan, the company’s chief medical officer, stated that “CVS Caremark believes that now is the time for retailers, perhaps spurred by policy makers, to eliminate sales of cigarettes and other tobacco products by institutions that also have pharmacies.” CVS isn’t merely taking voluntary action, they’re also publicly calling for coercive measures to undermine the business models of their competitors and the integrity of consumer choice. And that’s something to celebrate?

Whether this has been prompted by government isn’t entirely clear, but with the lucrative Affordable Care Act and the carefully coordinated social media campaign with the White House, it certainly has some of the hallmarks of ‘Blue Eagle’-style corporatism. At least the skeptics among us won’t be too surprised if government rules or Congress legislates that any pharmacy receiving government funds via Medicare or Medicaid can no longer sell products they deem unwholesome.

But the real concern here stems from the fact that CVS is taking this ‘voluntary’ move because they’re simply replacing these lost revenues with fruits emanating from their hard fought battles to increase the size of government. Consumers lose choice; CVS will be compensated by their taxes. From the initial discussions around the Affordable Care Act to its eventual passage and botched implementation, CVS’s lobbying team has been omnipresent — and increasingly aggressive. In fact the company more than doubled its lobbying expenditures in the third quarter of 2013 to nearly $5 million. Such massive investment isn’t made to create a free market and enhance consumer choice. It’s to ensure that government — not competition — is augmenting your bottom line.

This has become all the more clearer thanks to Heidi Moore’s article in the left-wing Guardian. Moore highlights the fact that CVS doesn’t need revenues from tobacco sales because Obamacare represents “a bigger source of business” and smokers represent “directly the opposite of that business opportunity.” In addition, according to Moore, CVS “estimates that it has relationships with as many as 82% of the people who are eligible to use Obamacare exchanges. To executives, and to Wall Street, that spells a business opportunity.”

Throw in the fact that their main competitor, Walgreens, has moved their “retirees and temporary workers to private healthcare exchanges,” while CVS “has its sights set on a new breed of profits from public exchanges, and from Obamacare,” it makes perfect sense. Big government can be awful for markets and free people, but it can be excellent for business.

Losing our healthy skepticism is bad for individual liberty. Of course we should never shy away from toleration and respecting business choices, whether good or bad. But far from being a celebration of voluntary actions, the CVS saga is a reminder of the nefarious relationships that can exist between business and government to limit individual liberty and consumer choice. What at least appears to be a landmark moment in corporate benevolence has the foul reek of cronyism.

Ewan Watt writes extensively on state and national issues in the US, covering the 2012 presidential election for both print and online publications. A native of Scotland, he lives and works in Virginia. He writes strictly in a personal capacity. You can follow him on Twitter at @ewancwatt