CASE 20
The Mission of CVS: Corporate Social
Responsibility and Pharmacy Innovation
CASE NOTES FOR INSTRUCTORS
CVS made national news when it announced it was going to stop selling tobacco products, forgoing $2
billion in sales in the short-run. CVS claimed it was making this decision because it wanted to position
itself as a healthcare company, and it did not see tobacco product sales as being congruent with a
company that should be known for health. While this will cost CVS in the short-run, it is likely to
positively impact future partnerships with healthcare companies. It could also give the firm a competitive
advantage over rival firms Rite Aid and Walgreen’s.
This case discusses CVS’s decision. However, students should be aware that even a firm striving to be
socially responsible still has ethical lapses. For instance, two Florida CVS locations got into trouble for
QUESTIONS AND DISCUSSION
1. How has CVS handled its ethical challenges?
CVS has handled its ethical challenges in a number of ways. For the HIPAA privacy violation, it took
a more reactive approach when it was found guilty of misconduct. The company paid a fine and was
forced to implement a Corrective Action plan. It was also fined for deceptive marketing practices,
although it did not admit fault. In Florida the Drug Enforcement Administration suspended the
2. Evaluate CVS’s decision to no longer sell tobacco products.
Students’ answers will vary. Some might think it is a bad idea. After all, CVS will lose money in the
short-term, and its competitors have not made a similar commitment. Some might question if this is
3. What is the future of CVS in positioning itself as a healthcare company based on its decision to be
socially responsible?
.
ADDITIONAL RESOURCES