Rite Aid Files for Bankruptcy
cbsnews.com
cbsnews.com
They just paid $30M. I’d hardly call it worthy of being mentioned. The big issue is their profitability. They over extended and now are pulling back like Wallgreens and the others. And using bankruptcy to restructure any liabilities from the opioid epidemic lawsuits.
If Rite-Aid goes away, no big loss, but losing the Thrifty's ice cream would be heartbreaking to many.
Noticed a freezer absolutely brimming full of this ice cream brand I never heard of. I can't imagine how much they have to throw out month after month.
I bought a case of it. It was fine. On par with....eddys.
Wendy's just put their stores next to a McDonald's.
The same logic doesn't apply to pharmacies: I don't have a sudden need for drugs on the road.
(I'm not sure how much I actually buy the mathematics in the article.)
What they’re afraid of is not doing that, and then the area goes through a growth spurt and suddenly you’ve got a town that your competitor owns. This even applies when the stores are minimally profitable, because if you don’t bother, then the competitor that does actually makes a profit because they have no competition. It’s almost a form of retail Mutually Assured Destruction.
An Indian owner opened a hamburger concept when we already have two excellent options. They didn’t last. We don’t have an Indian (vegetarian) restaurant.
I thinking my restaurant entrepreneur community would rather compete t against other successful businesses. Like a sports team.
CVS: https://data.alltheplaces.xyz/runs/2023-10-14-13-31-57/outpu...
Walgreens: https://data.alltheplaces.xyz/runs/2023-10-14-13-31-57/outpu...
Rite Aid: https://data.alltheplaces.xyz/runs/2023-10-14-13-31-57/outpu...
Then you can conduct all sorts of analysis such as k-nearest-neighbour distance analysis between brands, etc.
Sample output of the three brands (green for Walgreens, yellow for CVS and red for Rite Aid): https://github.com/davidhicks/atp_samples/blob/main/us_pharm...
The world simply no longer has a need for every street corner having the same types of stores selling the same types of things at the same prices.
( •_•)>⌐■-■
Money for nothing?
(⌐■_■)
"How did you go bankrupt? Two ways. Gradually, then suddenly." - E. Hemingway
It very much had a semi-abandoned, depressing feel to it.
CVS and Walgreens are headed down that path, too.
At the end of the day, if I’m in a major metro area and I’m not near a supermarket, I’m going to CVS.
It is one of the saddest, most depressing things i've ever seen. Just seeing staff, most of whom had been working in that market for years, was heartbreaking. You didn't even have to talk to them to see how the slow moving death sentencew was affecting them
It gave me a taste of how living in a communist country must be like.
Good one :).
https://ilsr.org/rule/pharmacy-ownership-laws/2832-2/
(Walmart spent almost $10M attempting to challenge this law, and still lost to North Dakota voters: https://www.drugtopics.com/view/walmart-spent-93-million-cha...)
I'm intrigued, but where was it proven?
> In North Dakota, prescription drug prices are more affordable than in two-thirds of all states. Pharmacies are more plentiful, with more per capita than in neighboring South Dakota, Minnesota, or nationally, and they’re more broadly distributed; North Dakota’s rural areas are 51 percent more likely to contain a pharmacy than similarly-populated areas of South Dakota. And in general, independent pharmacies provide higher quality care, studies and surveys of customer satisfaction find.
> North Dakota reaps economic benefits, too, from this local ownership. Without the Pharmacy Ownership Law, a 2014 report from ILSR estimates, about 70 of North Dakota’s independent pharmacies would close. Chain pharmacies headquartered around the country and out-of-state mail order companies would fill the gap, and ILSR estimates that direct economic losses to the state’s economy would be at least $17 million, and as high as $29 million, without accounting for indirect impacts such as lost tax revenue.
So, prescriptions are affordable and accessible to prescription consumers, these independently owned and operated pharmacies are sustainable, dollars are kept local and in the state, and large format retailers (Walmart, CVS, Walgreens, Rite Aid) are kept out of the market. Voted for by 60% of North Dakota voters in their last referendum. "Proven to be beneficial for all parties involved."
I did read the link, but was hoping there might be something more to it.
prescription drug prices are more affordable than in two-thirds of all states. Pharmacies are more plentiful, with more per capita than in neighboring South Dakota, Minnesota
So 17th best in the country in prices doesn't seem like a huge win? Neighboring Montana is doing better at 11th best (2014 - most recent price data from your link), and North Dakota has been dropping in the rankings, from 10 in 2010 to 17 in 2014.
You can't really tell if there has been a small benefit or small penalty to consumers. But definitely doesn't scream huge win on this policy.
Germany does so as well, and requires even stuff like aspirin be sold only in pharmacies. Result is that such basic medication is a lot more expensive there than in eg neighbouring Netherlands.
IT is also a rule in many states that independent doctor practices and I believe veterinarians, too, must be owned by the licensed professional (MDs or Vets)
Yet private equity and hospitals are scooping up independent doctor practices left and right
It is a weird concept - you get some kind of medical director, and ownership is never changed, just control changes, the owner charges a management fee to the practice, and voila - you now "own" a doctor's office.
I would absolutely would want to see this arrangement tested, since it goes against the spirit of the law
Seriously though, aren't they making a play for this space?
To get legit products from Amazon is like winning a scratch off. It's not rare, just not common.
i've been around the sun enough times to know that when things are too cheap, there's usually a reason. history is full of pills being sold that weren't what they claimed to be on the box.
We know most of the reason though, and that is that the insurance model of the US is completely broken and blows prices completely out of the water. The Amazon pharma prices are only 'too cheap' relative to the base US inflated price. They're much closer to the prices you see in perfectly peer level countries in Europe where they have perfectly safe drugs.
Once you have any mtbung that falls into that category, 90% of the benefits go away because if you have to go in for that one thing anyway, it’s mostly less hassle just to get everything there rather than split things up between multiple pharmacies.
https://www.usatoday.com/story/money/2015/06/15/cvs-health-t...
Kroger bought out Albertsons, which had a 1700-branch in-store pharmacy operation too:
https://www.supermarketnews.com/nonfood-pharmacy/will-kroger...
Not sure how well the independents do with the PBMs these days and a lot of PBMs alliances with dispensing pharmacies.
They'll almost certainly re-emerge under new ownership. It's like J. Crew declaring bankruptcy in 2020, but consumers who didn't follow the news never had the slightest idea. Frequently in bankruptcy, retail locations never cease operations even for a single day.
It's not like Toys 'R' Us stores disappearing in 2018. That happened because big-box toy stores were simply no longer viable as a category.
While CVS and Walgreens prove that the Rite Aid drugstores are still entirely viable as a business, under new (better) management.
And at these locations where they install the cases, you have to wait for a person to come over and unlock it, except they also didn’t increase staffing to deal with all of these case opening requests.
I thought getting bought and pillaged by private equity was the reason.
I can pillage my retirement savings any time I want.
But individual _companies_ are under the controls of their owners (modulo applicable laws). That's because we empirically figured out that this model works well, and also because we want to incentivize people to start and run companies in the first place.
Also keep in mind that in some sense companies are just legal shells. If you strip assets like eg machine tools, in order to make money you actually need to sell them. But if you do that, someone else has them to use them. They don't just disappear.
Yet another thing: not all companies should be kept around. It's good for less inefficient companies to go bankrupt, and for people to change jobs. (Especially as long as the overall unemployment rate is low enough. But you don't keep that rate low by making it harder to fire or harder to 'pillage' companies. Just the opposite, you get more job creation the easier you make it for people to benefit from creating companies and jobs.)
But private equity had nothing to do with why nobody was willing to buy it to keep it going post-bankruptcy with a fresh balance sheet.
https://last10k.com/sec-filings/rad/0001104659-23-109236.htm
Are drug stores now responsible for doing their own screening on products?
I wonder what will happen to dispensaries once companies like Rite Aid are allowed to crumble.
https://www.pbs.org/newshour/economy/judge-says-pharmacies-o...
"“We allege that Rite Aid filled hundreds of thousands of prescriptions that did not meet legal requirements,” said Associate Attorney General Vanita Gupta. “According to our complaint, Rite Aid’s pharmacists repeatedly filled prescriptions for controlled substances with obvious red flags, and Rite Aid intentionally deleted internal notes about suspicious prescribers. These practices opened the floodgates for millions of opioid pills and other controlled substances to flow illegally out of Rite Aid’s stores.”
<snip>
The government’s complaint alleges that, from May 2014 through June 2019, Rite Aid knowingly filled at least hundreds of thousands of unlawful prescriptions for controlled substances that lacked a legitimate medical purpose, were not for a medically accepted indication, or were not issued in the usual course of professional practice. These unlawful prescriptions included, for example, prescriptions for the dangerous and highly abused combination of drugs known as “the trinity,” prescriptions for excessive quantities of opioids, such as oxycodone and fentanyl, and prescriptions issued by prescribers whom Rite Aid pharmacists had repeatedly identified internally as writing illegitimate prescriptions.
The government alleges that Rite Aid pharmacists filled these prescriptions despite clear “red flags” that were highly indicative that the prescriptions were unlawful. The government further alleges that Rite Aid not only ignored substantial evidence from multiple sources that its stores were dispensing unlawful prescriptions, including from certain pharmacists, its distributor, and its own internal data, but compounded its failure to act by intentionally deleting internal notes about suspicious prescribers written by Rite Aid pharmacists and directing district managers to tell pharmacists “to be mindful of everything that is put in writing.” By knowingly filling unlawful prescriptions for controlled substances, the government alleges that Rite Aid violated the CSA and, where Rite Aid sought reimbursement from federal healthcare programs, also violated the FCA."
Source: https://www.justice.gov/usao-ndoh/pr/united-states-files-com...
> A federal judge in Ohio who oversees the National Prescription Opiate Litigation (NPOL) has recently issued a ruling with significant implications for pharmacists and pharmacies. The ruling requires pharmacists to document refusals of opioid prescriptions based on so-called “red flags.” Pharmacy companies are required to share these documented refusals with pharmacists at all of their practice sites. Pharmacists are required to consider their colleagues’ documented prior refusals during their screen of subsequent opioid prescriptions.
I'm not sure if (or why) they aren't going after the doctors making the red flag prescriptions, however.
As someone who was an (alternate) juror on a Federal "pill mill" trial, they are. That trial was truly eye opening to how flagrant some doctors are when it comes to writing bogus prescriptions.
The doctor in that trial had deals with imaging companies to create justification for egregious prescriptions. I'm talking about starting people on 160 mg/day of oxy for relatively minor "injuries." Several pharmacies reported the doctor which helped get the investigation rolling.
Was odd to me that they didn't explain what it is: opioids, benzodiazepines and carisoprodol (muscle relaxant).
It seems so obvious that this is the kind of thing the government is eventually going to go after.
I can only wonder if this was a policy made my management (CEO/CFO) that was hidden from the board? To boost performance for bonuses/stock/etc. and then leave the owners to clean up the mess when it was finally discovered?
Is the situation similar with CVS or Walgreens ? If not, why not ?
Did they have better controls, or they just got lucky from a number of factors (i.e. lower presence in states with serious opioid problems, etc)
https://www.npr.org/2022/11/02/1133523740/cvs-health-agrees-...
The DoJ said they violated two acts in doing so: https://www.justice.gov/usao-ndoh/pr/united-states-files-com...
Why did they do it? Because like everyone else involved: there were big profits to be made.
Rite-Aid is the first pharmacy to file for bankrupcy but several drugmakers have already done so.
https://www.npr.org/2023/10/16/1206256476/rite-aid-files-for...
> 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.
Another successful acquisition story. :)
Others:
Bi-Rite Creamery
Shop-Rite
etc.
Walgreen's needs to fix their font too. It looks like 1990's Microsoft fonts. I shop at CVS because I like their graphic design better.