By: Amanda Nakhul, Biomedical Sciences c/o 2027

Pharmacies such as CVS, Walgreens, and Rite Aid are known for being convenient, affordable, and accessible to most communities. Unfortunately, on May 5th, 2025, Rite Aid officially filed for Chapter 11 bankruptcy protection for the second time in less than two years. As stated by the United States Courts, “A Chapter 11 debtor usually proposes a plan of reorganization to keep its business alive and pay creditors over time. People in business or individuals also can seek relief in Chapter 11”.¹ Since Rite Aid listed their assets and liabilities each in the range of $1 billion to $10 billion and confirmed its intention to sell nearly all of its assets, concerns have emerged about the influence of large corporations such as Amazon on traditional retail pharmacies.² If companies as large as Rite Aid are facing bankruptcy, it raises an important question: what does this mean for smaller businesses struggling to compete?

To regain stability, Rite Aid has pursued certain financial approaches to remain solvent. For instance, they are pursuing a “strategic and value-maximizing sale process” leveraging remaining inventory and adjusting prices to optimize returns. However, this process involves the sale of nearly all assets, including pharmacy records and real estate holdings. Additionally, the company has secured nearly $2 billion in financing from existing lenders to bolster this process and sustain operations during the bankruptcy proceedings. Even CEO Matt Schroeder expressed optimism about interest from both national and regional potential buyers, signaling some hope that portions of the business could survive under new ownership.²

Despite these efforts, optimism proved insufficient. Rite Aid has embarked on a massive shutdown of its retail footprint. Since emerging from its first bankruptcy in 2023, where it closed around 500 stores, the chain now faces a nearly complete wind-down. To minimize patient disruption, prescription files and pharmacy services are being transferred to other chains. CVS Pharmacy plans to acquire 625 Rite Aid prescription files and 64 entire stores, primarily in Idaho, Oregon, and Washington. Other chains including Walgreens, Albertsons, Kroger, and Giant Eagle are also part of the transition plan to absorb patients and maintain continuity of care.³

In Philadelphia, the impact has been particularly severe. All 33 remaining Rite Aid stores in the city are set to close, as well as dozens more across the Delaware Valley. Over 595 corporate office workers at the Navy Yard headquarters have been laid off, with layoffs projected to reach 1,100 Pennsylvania employees by the end of the summer. ⁴ These closures not only affect customers but also disrupt healthcare students and professionals who relied on Rite Aid as a major source of hands-on community pharmacy training.

The closures of Rite Aid locations have carried significant emotional and social weight across communities. Once a trusted neighborhood pharmacy, Rite Aid provided not only medications and health consultations but also everyday essentials that fostered convenience and connection. In its final days, widespread markdowns drew loyal customers for one last visit, turning familiar aisles of prescriptions and wellness products into rows of empty shelves and clearance signs. The sight of these shuttered pharmacies- once integral to patient care and community well-being- has come to represent the broader decline of local pharmacy access and the fading sense of trust that many communities once associated with their neighborhood drugstore.

References

1. United States Courts. (2024). Chapter 11 – Bankruptcy Basics. United States Courts. https://www.uscourts.gov/court-programs/bankruptcy/bankruptcy-basics/chapter-11-banuptcy-basics
2. Biswas, S., & Matsuda, A. (2025, May 5). Rite Aid Files Repeat Chapter 11, Its Second in Two Years. The Wall Street Journal. https://www.wsj.com/articles/rite-aid-files-repeat-chapter-11-its-second-in-two-years-989a7dba
3. Willeford, J. (2025, May 23). Patients to see prescriptions transferred to rival pharmacy chain after Rite Aid bankruptcy sparks over… The US Sun. https://www.the-sun.com/money/14312123/rite-aid-bankruptcy-patients-prescriptions-transferred-cvs/
4. Mosbrucker-Garza, K. (2025, May 7). Massive layoffs at Rite Aid’s Philly HQ after filing for bankruptcy. WHYY. https://whyy.org/articles/rite-aid-closing-philadelphia-bankruptc