Rite Aid to Sell Pharmacy Assets From Over 1,000 Stores to CVS, Walgreens
The announcement comes shortly after the company announced it had filed its second chapter 11 bankruptcy in under 2 years.
Rite Aid will transition pharmacy assets from over 1,000 locations to CVS, Walgreens, and other retailers as part of multiple agreements, the company announced in a release.1 The company also said it reached a sale agreement with CVS to hand over operations of multiple stores in Washington, Oregon and Idaho.
Rite Aid to Sell Pharmacy Assets from Over 1,000 Stores to CVS, Walgreens / IanDewarPhotography - stock.adobe.com
The transactions are still subject to approval by the US Bankruptcy Court for the District of New Jersey. A hearing is currently set to be conducted on May 21, 2025. Rite Aid said that the stores in the agreements will remain open during the transition so that customers can continue to access critical pharmacy services.
READ MORE: Rite Aid’s Closure is a Call to Action to Address Pharmacy Payment Model
“A key priority for Rite Aid is to ensure that as many of our loyal customers as possible continue to receive the pharmacy services and care they require without interruption,” Matt Schroeder, CEO of Rite Aid, said in a release.1 “These agreements ensure our pharmacy customers will experience a smooth transition while preserving jobs for some of our valued team members.”
Earlier this month, Rite Aid announced that it had filed for chapter 11 bankruptcy as part of a “strategic and value-maximizing sale process.”2 The bankruptcy is the company’s second in under 2 years. It previously filed for chapter 11 in October 2023 but has continued to face financial hardships due to the “rapidly evolving retail and healthcare landscapes.”
“I will be forever grateful to our thousands of associates for their commitment to Rite Aid and its mission, and I thank our entire team—from store associates to corporate employees—for their dedication to our customers and our company," Schroeder said at the time of the announcement. "With their support, we have played a critical role in supporting the healthcare needs of countless Americans across the communities that we are honored to serve.”
Rite Aid was founded in 1962 in Scranton, Pennsylvania and is now based in Philadelphia. It was once the third largest pharmacy chain in the United States, operating over 5,000 stores at its peak in 2008. The company currently has 1240 stores located in 15 states, down from about 2100 when it filed its first bankruptcy.
Rite Aid is not the only large chain pharmacy dealing with significant financial issues. In March, Walgreens announced it had entered an agreement to be acquired by the private equity firm Sycamore Partners for $23.7 billion—down from its valuation of $100 billion a decade ago.3 Both Walgreens and CVS have also recently closed hundreds of locations all over the country.
In a previous interview with Drug Topics®, Douglas Hoey, RPh, MBA, CEO of the National Community Pharmacists Association (NCPA), said that Rite Aid’s situation should be a wake-up call to any casual observer of the community pharmacy landscape. He noted that this should be a call to action for employers and policy makers that something needs to be done to try and fix the issues within pharmacy payment models.
“Without payment reform, pharmacies as we know them are moving toward extinction—that won't happen—but again, it's a call to action for legislators who've been sitting on their hands and employers who have been unaware of the situation that they need to do something different,” Hoey said. “What they need to do differently is they need to pay pharmacies fairly. Cost plus, a fair dispensing fee, transparency, simplicity, [and] predictability is what is needed to fix this broken system.”
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