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All eyes on Walgreen's as CVS quits tobacco sales

The landmark decision by CVS Caremark on Wednesday to halt tobacco sales at its 7,600 U.S. drugstores by Oct. 1 ratchets up pressure on its larger rival, Deerfield, Ill.-based Walgreen Co., to follow suit.

CVS, the nation's No. 2 drugstore chain, said it would forgo $2 billion in annual sales by dropping sales of cigarettes, smokeless tobacco and other tobacco products, reflecting its continued shift toward being more of a health care provider than simply a storefront that disburses prescription drugs.

Retail pharmacies like CVS, Rite Aid and Walgreen's are seeking to play a larger role in the U.S. health system by becoming more comprehensive health care providers with in-store clinics, vaccination administration and other services.

They're collectively trying to capture a surge of newly insured Americans who are gaining coverage through the health care overhaul law, which is expected to expand insurance to 11 million to 13 million by the end of 2014.

The initiative from CVS, the first major pharmacy to undertake such a ban, puts the bullseye on the back of Walgreen's, the nation's largest pharmacy chain, which has faced withering attacks from health and advocacy groups for years surrounding its policy of selling tobacco products.

Despite its more recent transformation into a more health care-focused company, Walgreen's has remained steadfast in its tobacco policy, arguing last year that it must continue to sell those products to stay competitive with other drugstore chains, convenience stores and grocery stores.

Michael Polzin, a Walgreen's spokesman, said Wednesday the company has been evaluating its tobacco line for "some time," and said it "will continue to evaluate the choice of products our customers want, while also helping to educate them and providing smoking cessation products and alternatives that help reduce the demand for tobacco products."

Walgreen's on Wednesday also announced a partnership with GlaxoSmithKline Consumer Healthcare to launch a free, Internet-based smoking cessation program called Sponsorship to Quit. The program will provide smokers with customized tools to track their progress in quitting smoking.

CVS' move drew praise from President Barack Obama, a former smoker, who said CVS "sets a powerful example ... that will have a profoundly positive impact on the health of our country."

FILE - In this Wednesday, July 17, 2013 file photo, Marlboro cigarettes are on display in a CVS store in Pittsburgh. The nation's second-largest drugstore chain says it will phase out cigarettes, cigars and chewing tobacco by Oct. 1 as it continues to focus more on health care. The move will cost the Woonsocket, R.I., company about $2 billion in annual revenue. (AP Photo/Gene J. Puskar, File) - AP