MJP –
The national opioid crisis, triggered by the rampant use of prescription opioids and the illicit activities of the opioid industry, resulted in settlements between the federal government and numerous state departments of justice.
A statement from the California Department of Justice indicates that in November and December 2022, three major US retailers—Walgreens, CVS, and Walmart—reached separate nationwide settlements with multiple states. Walgreens paid $5.7 billion, CVS $5 billion, and Walmart $3.1 billion. Teva and Allergan, two opioid producers, settled for $6.6 billion in July 2022.
In addition to competition for pharmaceutical business from Walmart (WMT), Target (TGT), Costco (COST), Amazon (AMZN), and Mark Cuban’s CostPlus Drug, the Philadelphia-based drugstore company was already experiencing financial trouble.
In order to avoid further financial hardship, the firm opted to file for Chapter 11 bankruptcy on October 15, 2023, declaring $3.3 billion in debt. This was in response to an opioid settlement demand of more than $1 billion.
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While Walmart, Walgreens, and Target have shuttered a few underperforming locations and a few dozen due to theft and organized crime since 2021, Rite Aid has liquidated hundreds of stores due to underperformance and leases that don’t make financial sense as a result of its bankruptcy. Of the 2,100 pharmacies that were part of the network when it filed for Chapter 11, 345 have already shuttered as of April 26.
Emptyness fills a radio booth. Take the lead. Big Three Media Firms Confronted With Chapter 11 Bankruptcy, According to DB Report Smaller regional pharmacy chains, especially those that identify as bargain retailers, are under financial pressure from national drugstore chains like Rite Aid.
A pharmacy chain in Eastern Kentucky, Rx Discount Pharmacy, has filed for Chapter 11 bankruptcy. Chapter 11 reorganization papers were filed by Rx Discount Pharmacy on May 1 in London’s U.S. Bankruptcy Court for the Eastern District of Kentucky. In its bankruptcy petition, the debtor failed to state why it was submitting the paperwork.
In its petition, the pharmacy company situated in Hazard, Kentucky, detailed assets of up to $50,000 and liabilities ranging from $1 million to $10 million. Cardinal Health 110 LLC owed $485,000 to the debtor, QFS Capital owed $180,000, the U.S. Small Business Administration owed $500,000, and Peoples Bank & Trust Co. owed $174,777.
After launching its first Hazard location in 1995, Rx Discount Pharmacy expanded to six more cities. The debtor owns multiple drugstores, including the main pharmacy, Rx Discount Pharmacy No. 18 in McKee, Kentucky, and Clay Discount Pharmacy in Manchester, Kentucky.
A number of the debtor’s businesses are involved in the medical supply industry. These include Credential, Insurance & Contract Specialist in Hazard, Scrub World in Lexington, Kentucky, Casey’s Sundries & More in West Liberty, Kentucky, and Quality Care Medical Equipment & Scrubs in Hazard.
You may get your immunizations, complex drugs, medical equipment, over-the-counter prescriptions, convenience goods, and more at these pharmacies, and they even offer home delivery and curbside pickup.
