Rite Aid Sued for Opioid Abuse, Declares Bankruptcy
Drugstore chain Rite Aid has declared bankruptcy and is set to close thousands of stores while facing debt in billions and battling lawsuits at the same time. The news of Rite Aid filing for bankruptcy on Sunday broke on national media that cited the drugstore’s reasons for bankruptcy in its official filing: rise in debt, fall in sales, and litigation.
On the business side, Rite Aid is reportedly lagging in sales against its competitors, mainly Walgreen and CVS. Business Insider (October 16) wrote that Rite Aid’s business woes go back to 2017 when its attempted merger with Walgreen failed amidst antitrust scrutiny. The setback resulted in a massive shrinking of Rite Aid’s footprint and 2000 of its stores were sold to Walgreen. Its subsequent attempt to merge with Albertsons fell through the same fate.
In recent years, Rite Aid has seen a big drop in revenue with competition from other major retailers as well as online stores, mainly Amazon, and direct-to-consumer (DTC) pharmacy startups. Since early 2023, nearly 81% of Rite Aid stock has fallen. The company is now $3.3 billion deep in debt as of June and that is only part of their story of failure. The other part revolves around litigation relating the ongoing opioid crisis.
Earlier this year, Biden’s Department of Justice sued Rite Aid for allegedly ignoring the “red flags” when filling thousands of illegal prescriptions for opioids and other controlled substances. Reporting on the lawsuit, Reuters wrote:
Rite Aid pharmacists were accused of ignoring obvious signs of misuse, including in prescriptions for “trinities,” a combination of opioids, benzodiazepine, and muscle relaxants preferred by drug abusers for their increased euphoric effect.
Rite Aid has denied any wrongdoing and is hoping to reach a settlement while it has filed for bankruptcy. Last year, the drugstore settled for about $30 million to resolve lawsuits accusing Rite Aid of oversupply of prescription opioids.
On top of it all, operating in unsafe Democrat-run cities also seems to be not helpful to the struggling drugstore’s business. Recently, a video of a Rite Aid store in Philadelphia being raided and looted by a flash mob made rounds on social media.
Seeking bankruptcy protection, Rite Aid is now looking at closing down some 2000 stores across the country, per CBS News.