Rite-Aid files for bankruptcy amid deluge of opioid lawsuits
AILSA CHANG, HOST:
Rite Aid, one of the country's largest pharmacy chains, has filed for bankruptcy. The company is billions of dollars in debt and faces an avalanche of lawsuits linked to prescription opioids. NPR's Brian Mann joins us now. Hey, Brian.
BRIAN MANN, BYLINE: Hey, Ailsa.
CHANG: So the thing is, in many communities, Rite Aid is, like, the only pharmacy serving people. So what's going to happen to those stores?
MANN: Yeah, that's a good question. There are 2,100 of these stores still across 17 states. Rite Aid has already closed about 200 locations, and executives say they are now scrambling to save as many of the remaining stores as they can, but more are certain to close. During a court hearing this afternoon in new Jersey, the company's lawyers acknowledged that if this bankruptcy process doesn't go smoothly and quickly, it could force the entire chain to close.
CHANG: OK. Well, tell us more about how Rite Aid got into so much financial trouble.
MANN: Well, the pharmacy business is just really cutthroat. Rite Aid is up against big players like CVS and Walgreens and Walmart. And increasingly, they're also up against Amazon for products like shampoo and vitamins, so Rite Aid's sales have slumped. Executives now say they're roughly $3.3 billion in debt. And as you mentioned, Ailsa, they're facing this avalanche of opioid lawsuits.
CHANG: Yeah. Remind us about the role that Rite Aid played in all of that, in the opioid crisis.
MANN: Yeah. The company sold a lot of highly addictive and really profitable opioid pain pills prescribed by doctors. Of course, they weren't alone in this. All the pharmacy chains made big money selling opioids. Most have reached settlements, agreeing to pay billions of dollars in compensation. Rite Aid hasn't managed to work out that kind of deal. And so there are still more than a thousand of these lawsuits. And earlier this year, the Justice Department filed a new federal lawsuit against the company. Rite Aid denies any wrongdoing. And now with this bankruptcy, it's not clear whether people who say they were harmed by Rite Aid's behavior - it's unclear whether they'll get any compensation.
CHANG: And Rite Aid isn't the first company that's filed for Chapter 11 related to the opioid crisis, right?
MANN: Yeah. That's right. The whole industry has been hit by this. Rite Aid is the first pharmacy chain to file for bankruptcy. But we've seen a bunch of other drug companies forced to reorganize Purdue Pharma. Of course, they're in bankruptcy. The drug makers Endo and Insys and Mallinckrodt - they've all sought Chapter 11 protection.
CHANG: Well, as significant as these bankruptcies are, we just can't talk about the opioid crisis without talking about the millions of people affected by it across the country. So where do things stand now on that front?
MANN: Well, I have to say things are getting worse. The latest data from the centers for Disease Control and Prevention found more than 112,000 drug deaths in the latest 12-month period here in the U.S. It's the highest toll of fatal overdoses ever. The big culprit now is street fentanyl, the synthetic opioid produced by the Mexican drug cartels. But it's important to say the U.S. medical industry is still prescribing vastly more pain pills than other countries. Those medications are still killing a lot of Americans - nearly 17,000 fatal overdoses from prescription pills every year. In suing Rite Aid earlier this year, Attorney General Merrick Garland issued a statement saying the Justice Department plans to hold companies accountable for the opioid epidemic that's killing Americans.
CHANG: Well, with respect to Rite Aid, what happens next for the company?
MANN: Well, again, the attorneys say they have to move fast through Chapter 11 if any part of the company is to survive. And, as you mentioned, these pharmacies provide essential services for a lot of neighborhoods, about 45,000 jobs on the line - so a lot at stake over the next few months as this bankruptcy moves forward.
CHANG: That is NPR's Brian Mann. Thank you so much, Brian.
MANN: Thank you.
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