From a business standpoint, CVS has the right to charge more for co-pays on health insurance for pharmacies that sell tobacco products. If they charge more, considering the law of demand, people will demand less, and CVS will make less profit if the consumer demand is more elastic than their supply. According to the article, CVS has already lost $2 billion in revenue to change their company image, beginning with this business decision. This choice is on CVS to decide who they want to charge more too, and are responsible for any financial reverberations that they may face from this. However, from an ethical position, it is not fair to charge $15 more for these prescriptions. For example, a person of lower income may only have access to one local …show more content…
The same applies in an emergency if a person cannot get to a tobacco-free pharmacy. They will be subject to pay more for a prescription. Implementing a practice such as this affects many stakeholders. People who are covered by the CVS health plan would be primary and normative stakeholders since they would be the most affected by the co-pay, and CVS has the moral obligation to their customers to provide affordable medication in a market that is so inelastic for demand. Additionally, rival pharmacies would be primary stakeholders since the co-pay price depends on whether they are tobacco free or not; influencing the amount of business they may get from those covered under CVS’s …show more content…
Due to a higher co-pay of $15, people would be more willing to buy medication from CVS to save money. With the elevated inflow of customers into their store locations, CVS will be gaining more business and the word will spread about not only their pharmaceutical benefits, but other products and services their store has to offer. Furthermore, since people will be exposed to a tobacco free environment when purchasing prescriptions from CVS, it is likely that, in the long-run, people will buy less since it will not be as readily available. Additionally, the reduction in co-pay for visiting pharmacies that do not sell tobacco provides incentive for customers to not shop where it can be bought. Thus, according to the article it may have “long-term positive health impacts” through promoting a tobacco-free workforce (WSJ Silverman). It is an ethically sound plan to try and promote the health of the public, but at the cost of some unethical, and competitive business practices that will give CVS an advantage over other