Rite Aid, a popular chain of drugstores, faced a casualty of various losses throughout the years, as well as instances of failed mergers. Hence, it filed for bankruptcy and is on the verge of disappearance. The drugstore chain is too poor and too small to pay back the costs of lawsuits that led to the rise of the opioid epidemic.
On Sunday, Rite Aid filed for bankruptcy in New Jersey due to its inability to procure money to settle several lawsuits from federal, state, and private sources. These lawsuits alleged that the drugstore oversupplied prescription painkillers. All these suits went on hold after the company filed for bankruptcy.
According to the Wall Street Journal,
“As part of the restructuring, the company will close more of its 2,100 stores and name a new chief executive. Its collapse imperils some of the roughly 47,000 jobs at the company, which just celebrated its 61st anniversary. Lenders will provide the company with about $200 million in new financing as part of a plan to restructure more than $3 billion of existing debt in chapter 11.”
However, a pharmacy benefit management firm, MedImpact, offered to purchase Rite Aid’s Elixir for $575 million. As per sources close to the company, despite the bid, the company will hold an auction to find out whether it can find a higher bid.
There shall be a new chief executive of the company. Jeffrey Stein, who is the head of a financial advisory firm, will take over the role. Elizabeth Burr, who is the current interim CEO of the Rite Aid, will remain on board for some time.
The Department of Justice complained that the pharmacists of Rite Aid filled opioid prescriptions despite warnings. They ignored evidence that various Rite AId stores were creating unlawful prescriptions.