Rite Aid, a once-mighty player in the pharmacy industry, has declared bankruptcy and will shutter all of its locations. This decision follows the company’s filing for Chapter 11 bankruptcy for the second time in May of 2025. This announcement follows only eight months after the company’s exit from an initial bankruptcy filing in September of 2024. The company’s battles have been exacerbated by the past three years of legal challenges and allegations over the company’s allegedly egregious prescription practices.
Rite Aid was founded as Thrift D Discount Center in Scranton, Pennsylvania, in 1962. Since then, it has become the nation’s third-largest standalone pharmacy chain. The company has faced significant financial pressures in recent years, culminating in over 1,000 lawsuits from federal, state, and local entities. Lawsuits allege that Rite Aid wrongfully filled prescriptions for painkillers. This creates major opportunities for abuse and diversion and exacerbates the national opioid epidemic that continues to claim too many American lives.
In March 2023, the U.S. Department of Justice filed a complaint accusing Rite Aid of filling “unlawful prescriptions for controlled substances” that exhibited multiple red flags. Rite Aid has refuted the accusations. Nonetheless, the company settled these claims by agreeing as part of its bankruptcy proceedings to pay the government $7.5 million in connection with such claims. The second bankruptcy filing has now brought most opioid-inspired lawsuits to a standstill. In the past, these cases would have been handled as tort claims through the bankruptcy’s claims process.
Rite Aid’s long-standing history of financial infirmity manifested itself in Rite Aid’s initial Chapter 11 bankruptcy filed on October 15, 2023. Repurposing, consolidating that process helped the company move billions in debt and shutter hundreds of bad stores. By June 2024, Rite Aid had reached a settlement with the Justice Department. This settlement addressed allegations under the False Claims Act and the Controlled Substances Act.
To continue to pay its bills while it works through the current bankruptcy case, Rite Aid obtained $1.94 billion in debtor-in-possession financing from its current lenders. Yet, even after all of these efforts, the company’s wind-down plan is now before the court facing strong objections from the U.S. Trustee.
Last month Rite Aid announced that nearly 400 stores would close their doors for good. In a note posted on their website, they thanked their devoted customers.
“All Rite Aid stores have now closed. We thank our loyal customers for their many years of support.” – Rite Aid
