Major US pharmacy chain Rite Aid has filed for bankruptcy and secured $3.45 billion in financing as part of its restructuring efforts. The company is facing challenges such as declining sales and lawsuits related to opioids. In 2022, Rite Aid settled for up to $30 million in lawsuits alleging its pharmacies contributed to the oversupply of prescription opioids. The bankruptcy filing is a part of its financial restructuring plan, aimed at reducing the company’s debt and resolving litigation claims. Jeffrey Stein has been appointed as Rite Aid’s new CEO, replacing Elizabeth Burr.
In March, the Justice Department filed a complaint against Rite Aid, accusing it of knowingly filling hundreds of thousands of unlawful prescriptions for controlled substances from May 2014 to June 2019. The company and its pharmacists were accused of ignoring “red flags” indicating the illegality of these prescriptions. The complaint was filed by three whistleblowers who had previously worked at Rite Aid pharmacies. Despite the bankruptcy filing and noncompliance with listing standards, Rite Aid’s business operations and reporting requirements will remain unaffected.
Rite Aid has reassured that it will continue to pay wages and cover other costs as usual, although it plans to close down some underperforming stores among its more than 2,100 pharmacies across 17 states. The company reported a decline in revenue to $5.7 billion in the fiscal quarter ending June 3, compared to $6.0 billion in the previous year, resulting in a net loss of $306.7 million. The bankruptcy filing and financial restructuring are crucial steps for Rite Aid to address its financial challenges and position itself for future growth.
