Facing billions of dollars in legal liabilities over its alleged role in heavily overprescribing opioids and contributing to the opioid epidemic, the pharmacy chain Rite Aid may be preparing to file for Chapter 11 bankruptcy protection, according to an August 25 Wall St. Journal report

One of the nation’s largest pharmacy chains with over 2,200 locations, Rite Aid faces numerous opioid lawsuits, including one filed by the U.S. Department of Justice earlier this year, which accuses the chain of knowingly filling "unlawful prescriptions for controlled substances" in violation of the False Claims Act and Controlled Substances Act, allegations Rite Aid denies. Rite Aid also faces over 1,000 federal lawsuits, which were consolidated into a multidistrict litigation (MDL) in Ohio. 

By filing for bankruptcy, the lawsuits would be stayed, at least temporarily while the U.S. Bankruptcy Court considers the company’s restructuring process. If granted bankruptcy protection, Rite Aid could escape the litigation through means other than a jury verdict such as a mandatory settlement. 

In addition to filing for bankruptcy, Rite Aid is rumored to likely close 400 stores, according to a Yahoo Finance report. News of the potential bankruptcy filing sent Rite Aid’s stock plummeting by more than 50%. The company’s stock value has declined by over 90% over the past year. 

According to The Wall St. Journal, Rite Aid has a $3.3 billion debt load that would be restructured if bankruptcy protection is granted. Other chain pharmacies have been named as defendants in federal opioid lawsuits, including the larger chains Walgreens and CVS. 

The company is also facing lawsuits over opioid distribution from state and local governments around the country. Other pharmacies, drugmakers and distributors have reached nationwide settlements of similar claims totaling more than $50 billion, according to Reuters. In 2022, Rite Aid reached a $10.5 million agreement with several U.S. counties. The chain has not settled any federal opioid lawsuits. 

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