A MUCH-loved pharmacy chain has confirmed plans to shut 17 more stores after filing for bankruptcy.
The nationwide closures comes amid the company’s ongoing financial struggles with debt, dropping sales and growing competition.
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Rite Aid, the 63-year-old pharmaceutical chain, now only operates 708 stores across 15 states.
In comparison, at its peak in 2008, the firm ran over 5,000 locations and was considered one of the largest pharmacies in the US.
The latest round of closures were announced on July 18 and will affect residents in Washington state, New York, and Oregon.
A store in Maryland, New Hampshire and Ohio will also be cut.
This comes as the chain marked its second bankruptcy in under two years last month and announced it would close or sell off all of its 1,200 stores.
Rite Aid announced that 123 stores across eight states would be shut with California, Pennsylvania, and New York seeing the greatest number of closures.
Although a majority of the company’s stores are closing, some will be acquired by other companies and will continue to operate under new ownership.
Rite Aid is also selling off pharmacy assets such as prescription files and some physical stores to rivals such as CVS, Walgreens, and Albertsons.
PHARMA FAIL
The company’s decision to shutter the thousands of stores was pushed by a variety of factors.
Rite Aid CEO Matt Schroeder said in a press release the company was struggling with “financial pressures” before announcing the Chapter 11 filing.
Mounting debt, dropping sales, and rising competition, especially from larger pharmacy chains such as CVS and Walgreens, were all contributing factors too.
Legal battles related to opioid prescriptions further strained the company’s finances.
Rite Aid’s financial difficulties were ultimately “intensified by the rapidly evolving retail and healthcare landscapes in which we operate,” said Schroeder.
The retail pharmacy industry as a whole is facing significant difficulties, with other major players like CVS and Walgreens similarly in the process of shutting down hundreds of stores.
How does bankruptcy work?
BANKRUPTCY is a specific legal process that helps companies eliminate debt they can’t repay.
The process allows businesses to start fresh and gain access to new credit.
Supervised by federal courts, bankruptcies allow a company to sell off its assets more easily to pay off creditors, according to Investopedia.
Chapter 11, a common process for companies, is used to restructure a business with the goal of remaining open – even if it means selling off most of the company’s properties.
Chapter 7, on the other hand, sells all of a company’s assets, putting it out of business.
Chapter 15, alternatively, allows for collaboration between American and foreign courts to conduct bankruptcy proceedings with “parties of interest involving more than one country,” per the United States Courts.
The mass shutdowns across the country will reduce Americans’ access to crucial health screenings and medications, sparking growing concerns among healthcare experts about the rise of “pharmacy deserts.”
These are areas where residents have limited access to pharmacies and must travel far to access essential medications and healthcare services.
Over 48.4 million Americans, or one in seven, already found it difficult to access a drugstore prior to the Rite Aid shutdowns, per March research from healthcare company GoodRx.
That’s an uptick from 41.2 million in 2021, with roughly 45% of US counties now at risk of being classified as pharmacy deserts, according to the firm.
“Many of the counties hardest hit by pharmacy closures already had limited access. Now, they’re losing their last remaining pharmacies, creating healthcare deserts with no immediate solutions in place,” Tori Marsh, senior director of research at GoodRx, told Newsweek.
“While this report paints a troubling picture, it also highlights the importance of tools that help people find pharmacies, compare prices, and explore mail-order options, especially in underserved areas,” she added.
“Without action, pharmacy deserts will continue to expand and deepen disparities.”
Walgreens is faltering amid industry wide challenges, announcing more shutters with “closing down” banners added to 54 locations in 17 states.
Plus, a first-of-its-kind law put another pharmacy giant under pressure to close all its stores in a single state – the chain said the chaos was avoidable.
