Popular Drugstore Chain Files for Bankruptcy, Facing Lawsuits and Losses
With the opioid epidemic continuing to ravage the United States, one company viewed by many to be a key player in the problem is feeling the financial sting. On Oct. 15, Rite Aid announced it was filing for Chapter 11 bankruptcy protection as it attempts to steer the ship into better waters.
The nationwide pharmacy chain’s slowing sales and billions of dollars of debt are the least of its worries. According to The New York Times, the company has faced more than 1,000 federal, state, and local lawsuits in recent years claiming its pharmacies allegedly filled thousands of illegal prescriptions for painkillers. It came to a head in March 2023 when the Department of Justice filed a complaint against the company for filling controlled substance prescriptions for customers who it says had obvious red flags. The company has denied such claims.
In a statement addressing the bankruptcy news, CEO Jeffrey Stein insisted that the move is a way for the company to move forward, rather than be dragged down by the issues it currently faces.
“Rite Aid has served customers and communities across our country for more than 60 years, and the important actions we are taking today will enable us to move ahead as a stronger company,” Stein said in a statement. “With the support of our lenders, we look forward to strengthening our financial foundation, advancing our transformation initiatives, and accelerating the execution of our turnaround strategy. In doing so, we will be even better able to deliver the healthcare products and services our customers and their families rely on now and into the future.”
The company has already secured $3.45 billion in financing from some of its lenders to help support the company through the Chapter 11 process. In the meantime, you Rite Aid stores will be following CVS and Walgreens‘ lead in shuttering brick-and-mortar locations.