Monday, February 10, 2014
Republicans Attack CVS Ban on Cigarettes as Ruinous for the Economy and the Company
SAN NARCISO, Calif. (Bennington Vale Evening Transcript) -- Last week, in what Republicans labeled a socialist plot, CVS Caremark announced plans to stop selling tobacco products, including cigarettes, in its stores beginning October 1. This move makes CVS the first national pharmacy to pull tobacco products from its shelves. Executives for the drug chain said selling cigarettes runs contrary to the company’s core mission to promote the health of its customers. "Put simply, the sale of tobacco products is inconsistent with our purpose," said CVS Caremark CEO Larry Merlo. But influential members of the GOP now question the legality of a commercial enterprise deciding what it will or won't vend. On Monday, the head economist of a local Republican think tank said he was in the process of filing a formal complaint against CVS with the U.S. Securities and Exchange Commission (SEC).
Conservative pundits with Fox News joined the attack, chastising the decision as another Obama administration tactic to destroy the economy. "The Real Story" host Gretchen Carlson asked: "Is it OK legally ... to restrict tobacco availability in a private store like this?"
"For people who smoke, you know, they have a right to buy cigarettes. It's not illegal," she added in a panic.
During the same segment, Melissa Francis, host of Fox Business, worried about a slippery slope where CVS transforms itself into an anti-capitalist, communist hate machine that bans sugary snacks, soda and even alcohol from stores. And after President Obama weighed in to support CVS' decision, it became evident that the move was indeed driven by the administration’s socialist agenda, primarily where Obamacare is concerned.
Typically, the business decisions such as this would fall in line with the ethos of free markets that Republicans endorse. But as Len Waybill, head economist for the conservative Peter Pinguid Society, pointed out, CVS' strategy is not rooted in free market thinking. It actually violates business corporation acts, which legally mandate that publicly traded companies make as much money for shareholders as legally possible.
"Corporations are bound to pursue their own self interests, meaning the financial interests of their shareholders," Waybill noted. "They have a legal and fiduciary responsibility. CVS' decision, in my opinion, breaks not only the law but also its promise to investors. Simply stated, CVS is no longer trustworthy, and I struggle to see how its representatives can claim that this is for the wellbeing of their customers."
Prominent Republicans blame the president and his policies directly. In February 2011, Obama told the press he had quit smoking. Sources inside the White House said Mr. Obama’s decision to quit tobacco came after daughters Malia and Sasha asked: "You don’t smoke, do you, Dad? You're not going to turn orange from cigarettes and cry a lot like John Boehner, are you?"
Obama's healthier lifestyle choice drove a larger wedge in the already fractured divide between the White House and Republican lawmakers.
House Speaker John Boehner, his eyes welling with tears, told reporters at that time: "This is just another elitist attempt to undermine American values. Tobacco was one of the country's biggest cash crops back in the good old days, and it helped propel the nation to economic power. President Obama's decision to quit smoking could serve as a dangerous example to millions of other smoking Americans. Then what happens? People stop buying the product, that's what, and an entire industry crumbles. It goes to show how empty the president's rhetoric is when it comes to being 'business friendly' and ramping up the economy he sabotaged with bank bailouts and unemployment."
The real problem, according to Len Waybill, who filed the charges with the SEC today, is that CVS is denying its customers access to goods and its shareholders opportunities to generate revenues -- just as Obamacare robs hospitals and insurers of their honest rights to earn profits.
"CVS told the American people it had decided, without their consent, to part ways with a product that contains known carcinogens. And that probably seems pretty tame," Waybill explained. "But those cancer causing substances also create one in five cancer patients who need expensive medical treatments and drugs: drugs they buy from pharmacies like CVS. Not only will the chain lose $2 billion in profits from selling tobacco products, which it admits will happen, it has also put nearly 60 percent of its core earnings -- pharmacy services -- at risk. I mean, 30 percent of CVS' valuation comes right from the sale of specialty drugs, which a lot of people aren't going to need if the store forces them to be healthier. It's insane."
Waybill said that if the SEC fails to impose penalties or tougher regulatory controls over CVS Caremark, the move to ban tobacco products could bankrupt the chain within 12 to 24 months.
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