Pharmacy giant Rite Aid has filed for Chapter 11 bankruptcy Sunday leaving an uncertain fate for its 2,100 stores.
The news comes after the corporation was unable to settle hundreds of lawsuits that accused them of oversupplying prescription painkillers in the midst of the US opioid crisis.
Rite Aid listed estimated assets and liabilities ranging from $1billion to $10billion, according to a court filing with the U.S. Bankruptcy Court for the District of New Jersey.
It is unclear just how many Rite Aid stores are expected to close, or the locations, as the company currently operates more than 2,100 retail shops across 17 states.
The drug store retailer is just one of many across the country who have been named a defendant in lawsuits that alleged they helped fuel the opioid crisis.
Rite Aid filed for bankruptcy Sunday after the company was unable to settle hundreds of lawsuits that accused the drug store retailer of overprescribing opioids and fueling the US opioid crisis
The Department of Justice accused the big-name store of filling hundreds of thousands of prescriptions for controlled substances, including opioids, despite apparent ‘red flags’. They also alleged that Rite Aid deleted internal notes about questionable prescriptions and told managers to tell pharmacists ‘To be mindful of everything that is put in writing’
During the rise of the COVID19 pandemic, Rite Aid tried to redeem itself by rolling out vaccines and other health services, but it still wasn’t enough for the company to stay afloat
As the company plans to close their doors an estimated 47,000 jobs will be affected.
In an attempt to help aide more than $3billion in existing debt, lenders are set to provide the company with around $200million in financing.
A person close to the matter told The Wallstreet Journal: ‘MedImpact, a pharmacy benefit management firm, has offered to buy Rite Aid’s Elixir segment for $575 million, though an auction will be held to see if Rite Aid can find a higher bid.’
A new Chief Executive has also been named, as Jeffrey Stein who currently heads a financial advisory firm will take over next to existing CEO Elizabeth Burr.
In March, the US Department of Justice sued the drug store retailer for allegedly violating the federal False Claims Act and Controlled Substances Act.
They accused the big-name store of filling hundreds of thousands of prescriptions for controlled substances, including opioids, despite apparent ‘red flags’.
The DOJ also alleged that Rite Aid deleted internal notes about questionable prescriptions and told managers to tell pharmacists ‘To be mindful of everything that is put in writing’.
Rite Aid has denied all allegations as a spokeswoman for the company said in a statement: ‘We expect to negotiate a resolution of the opioid-related lawsuits with the various parties involved. We also intend to resolve our legacy contract disputes, government investigations and securities matters.’
Other than the many lawsuits that the company has faced, it has struggled to keep up with its competing pharmacy retailers- Walgreens and CVS.
The Wall Street Journal reported that in the past five years Rite Aid has managed to rack up more than $2billion in net losses.
Compared to a decade ago, the company has operated half as many stores as it once did.
Rite Aid managed to redeem itself during the rise of the COVID-19 pandemic as they rolled out vaccines and testing services.
Though sales increased, it wasn’t enough for the company to stay afloat.
The Center for Disease Control and Prevention reported that ‘From 1999 to 2021, nearly 280,000 people died in the United States from overdoses involving prescription opioids.’
Other major retailers like Walgreens, CVS and Walmart have also been involved in prescription opioid related lawsuits but have agreed to pay their way out it with an estimated $13billion paid over several years.
Content source – www.soundhealthandlastingwealth.com
