It’s been a rough fall for America’s pharmacy chains. Last month, over a dozen CVS pharmacy locations saw pharmacy staff walk off the job to call attention to the poor working conditions that pharmacists and technicians face on a regular basis. Staff at Walgreens did the same last week. And now more bad news for the industry: Rite Aid has filed for bankruptcy. Here’s what you need to know:
- What’s happened? On Sunday, Rite Aid announced that it is filing for Chapter 11 bankruptcy protection in New Jersey. The bankruptcy filing is an attempt by the chain to help turn things around after slowing sales, a Justice Department lawsuit alleging that the company knowingly filled unlawful opioid prescriptions, and hundreds of store closures in the past two years.
- How will bankruptcy help Rite Aid? The company sees this as a way to help it “increase its financial flexibility” and reduce its debt. Most importantly, as part of the process, Rite Aid has received a new financing commitment from lenders for $3.45 billion, which will help give the chain some liquidity that it desperately needs.
- Will Rite Aid stores be closing? Some will. Over the past two years, Rite Aid has closed about 200 stores, reported Insider. And more stores are likely to shutter as part of the bankruptcy process. Currently, Rite Aid has about 2,100 stores, but the company’s new CEO, Jeffrey S. Stein, says the bankruptcy will give it “legal tools to accelerate our footprint optimization in an efficient and orderly manner.” Of course, “footprint optimization” is code for “closing stores.”
- How many Rite Aid stores will be closing? That’s unknown, but in a press release, the company said the stores it will close will be “underperforming” ones. Last month, NC Newsline speculated that if Rite Aid did file for bankruptcy, the company could close as many as 400 stores, but that’s not a number that has been announced by Rite Aid itself. The company has not publicly put a number on store closures.
- What happens to my prescriptions if my Rite Aid closes? The company says it will make “every effort” to be sure that customers of closing stores will be able to still get their prescriptions filled “at another Rite Aid or a nearby pharmacy.” Rite Aid also says it “will work to transfer prescriptions accordingly so that there is no disruption of services.”
- So are Rite Aid employees going to lose their jobs? If hundreds of stores do indeed close, then job loss seems inevitable. However, Rite Aid says that it will work to transfer employees from stores that are closing to other locations, where possible.
- Is the big chain pharmacy model broken? Given Rite Aid’s bankruptcy and the recent walkouts at CVS and Walgreens—with more walkouts expected to come—it sure feels like it is.
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