> Rite Aid files for bankruptcy amid opioid-related lawsuits and falling sales
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.
Never let a good bogeyman go to waste when it's just right there for taking all the blame (at least a good portion of it). All of these people will need new jobs. Do you think "opioid lawsuits" or "business incompetence" will help these fine folks find their next positions?
One can track previous employment now on linked in etc. I wouldn't hire someone who worked at Purdue and the likes. Then again, I heard the cartels are always hiring..
One of the things that worries me about this because we have other local pharmacy choices, but that Rite-Aid bought up a California favorite called Thrifty's and still sells their amazing ice cream.
If Rite-Aid goes away, no big loss, but losing the Thrifty's ice cream would be heartbreaking to many.
I found this so funny. There's a rite aid we would go to occasionally, since the area is so skewed rural and geriatric, so they constantly have a great clearance area since nobody goes there for most of the stuff they sell.
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.
Ah yes, I remember biking with friends down to the San Antonio Shopping Center, stopping at the Menu Tree for donuts, and then Thrifty's for that super inexpensive, cylinder-shaped ice cream. I must have been about 12 years old at the time.
Anecdotally the position of pharmacy chains is so weird. I feel like more than half the time if I see one of either Rite Aid, Walgreens, or CVS there's one of the other two directly across the street. Usually it's the pair of Walgreens and CVS. Someone with skills in GIS could probably answer this pretty quickly...
There's an old joke about how McDonald's would spend millions of dollars on selecting the locations for their franchises. Traffic analysis, weather forecasts, foot traffic, local politics, chances of disaster, advanced models and simulations projecting population density and future profits.
Wendy's just put their stores next to a McDonald's.
By the same token, Tesla spends a lot of time figuring out where to put superchargers. Electrify America just builds their superchargers across the street from Tesla's (or in the parking lot of the nearest Walmart).
… I always figured that gas stations clustered together to minimize the distance long haul drivers would need to go to get to a gas station. I.e., they're clustered, but near highways.
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.)
There's also the fact that there are certain spots that are better for a particular store than others so multiple stores will naturally cluster around those nodes. Major intersections that bring people in from surrounding areas easily and quickly and stuff like that.
This is how most things are. Look around next time you see a fast food restaurant. If you have some territory, there's usually an optimal place in that territory to put your pharmacy / fast food restaurant / whatever, and not putting it there means that you'll be losing customers to people who do.
This is an actual thing chains do. My understanding is that much like Coke/Pepsi it’s often about maintaining competitive parity.
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.
Or something else. My town has 7 “pizza” places, 4 Chinese, and so on. All privately owned.
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.
They are going kaput, and have been for a long time. I was in one last year, and the store had many empty and partially full shelves. The last time I had seen something similar was when K-Mart hit the skids. Aisles of nothing, and then an aisle or two of things stacked so as to appear there was more on the shelves than there actually were.
It very much had a semi-abandoned, depressing feel to it.
No I doubt CVS is. Their profits have gone up almost every quarter for almost 6 years, unlike Walgreens and Rite-Aid. Plus none of their stores that I’ve been inside has looked dead, and they always have locations in the right places like in downtown areas. You almost wonder what Walgreens and Rite-Aid have been up to all this time.
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.
Ive seen a supermarket hitting the skids. One with heavy foot traffic (they failed to renegotiate the lease).
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.
They have been closing stores for a while, and will close a lot more in C11. Corporate is very much trying to devise some way of keeping the doors open, but they are going to hit the same wall that a lot of other retail operations hit.
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.
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.
It's easy when you spend other people's money to buy something, extract value from the purchased company, and then have the company declare backruptcy.
The other people give you their money voluntarily, and you buy the company fair and square from the previous owners. Seems all legit to me, and I still don't see where the ravaging comes in?
Depends on your view of companies. If you believe they exist solely to enrich their owners, then your above statement is reasonable. If you believe they're economic engines which should gainfully employ people, then stripping away assets with an eye towards ultimately declaring bankruptcy (and/or dissolving the company) is pillaging.
As a social function, companies as an _institution_ are there to benefit lots of people (like owners, employees, customers, investors, etc).
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.)
It spent too much on solutions that were ineffective. Moving to police that can make arrests, as the article says they're doing, should be more effective, assuming that the authorities will hold the arrested crims.
Also something not mentioned is that these security measures are also hostile to customers. No one wants to feel like they’re shopping in a prison.
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.
Amazon pharmacy is the best. No hassle, no line, no stupid questions, no "closed for lunch", nobody coughing on you. And the price is so low you don't have to deal with idiotic insurance limits, I just skip insurance altogether. I get 90 days supply in about 2 days. Never going back to regular dumb pharmacies. Why is that a joke to you?
Because Amazon retail is a joke. I don't trust ANYTHING on amazon to be a legit product. there's no way in HELLZ I'll trust drugs from there. I'd rather take my chances on Silk Road. My rule for buying from Amazon: if it goes in me, if it goes on me, or it is an electronic item, it doesn't get bought from Amazon.
To get legit products from Amazon is like winning a scratch off. It's not rare, just not common.
Drugs are a much more highly regulated industry where you won't have random sellers stock intermixed for fulfillment so the plague of fakes and knockoffs are unlikely to extend to their pharmacy play.
i've had my fun with better living through chemistry taking pills of unknown manufacture. you go ahead and have fun with that. if you get them cheaper, and i pay more for something i personally feel assured about, then you do you.
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.
> 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.
The problem is there are large swathes of drugs that you cannot legally ship through the mail, including, but not limited to - anxiety meds, ADHD meds, pain meds, sleep meds…
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.
North Dakota requires pharmacies be owned by independent pharmacists. It works. Other states could follow, if they so choose. It is a choice. Prevents private equity roll ups, prevents consolidation, and is proven to be beneficial for all parties involved.
I want to believe you , but history doesnt seem to follow.
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
> North Dakota requires pharmacies be owned by independent pharmacists.
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.
> 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."
Could've read the link, but quoting here works too.
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.
North Dakota is demographically weird enough (fourth lowest population density behind Montana, Wyoming, and Alaska; only one city - Fargo - has more than 100k residents) that I'd be hesitant to draw too many conclusions from it.
The article links to their bankruptcy court documents but here's what they filed with the SEC, noting that it has a Period date of Sunday, Oct. 15th and a release date of Monday morning:
Maybe they should try being only a prescription fulfilling pharmacy, OTCs and a place you can get your shots. You can fit those things in 10% of the floor space these places usually occupy.
It's less about carrying out their own personal screening on products, as much as not following the rules of what types of prescriptions you can fill for controlled substances.
"“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."
That's wild to me that they would set corporate policy to ignore such red flags.
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?
> 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.
> 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.
Because the doctors have the AMA. The similar sorts of group for pharmacists doesn't have nearly the political pull. The largest group, APhA, has about half the members as the AMA. AMA pulled in $493M to the APhA's $34.5M last year.
Are they even going after pharmacists? Or are they just going after corporations to implement a corporate solution because going after doctors and pharmacists isn't scalable?
It's called being a scapegoat. Rather than treating drug abuse as a public health problem, the prevailing narrative is to just demonize the sources - liberty, and in this case healthcare, be damned. Here it will result in another chilling effect "nobody's fault" corporate-authoritarian regime like banking surveillance in the name of money laundering. A "private decision" has been made that you don't deserve the healthcare you claim you need, and that decision has been shared between all "private" actors so you have no actual alternative. A functioning government would actually prosecute this type of collusion under straightforward anti-trust grounds, but here it is encouraging it. Power coalesces, and such a regime is basically inevitable at this point with the foundations that have already been laid. Meaning the only ways to fix it are either to route around the whole dumpster fire (eg Silk Road) or absorb it into the government fully so there's no playing coy with the constructive reality and it can actually be litigated for the human rights violation it is.
One widely reported macro red flag... in Trumbull County, Ohio, over the course of four years, an average of 400 painkiller pills for each resident of the county were dispensed by the pharmacies operating in that county. 80 million pills in a county of 200,000 people. Lake County, Ohio had 61 million pills dispensed in that period with a little over 200,000 people living there.
Perhaps we're dealing with a situation where the hindsight is clearer than activity in the moment. Not defending Rite Aid but when a drug prescribed by a doctor flows into the system, that's fulfillment of an order to me and I'm not going to go through every medical record to find out whether or not the drug prescribed is valid or not.
It is literally the job of a pharmacist to use their own best judgement when deciding whether to fill prescriptions. That's why you need a Pharm.D to work in that position; if they were just counting pills, they wouldn't need that level of training.
The ability to sell these controlled substances is not a right. They must adhere to strict government rules and oversight. They (and others) knowingly turned a blind eye to systematic abuse since it made them lots of money.
They were sued for selling opioids to people with prescriptions the chain knew (not 'should have known' - knew) were fraudulent, and the damages that caused. To individuals and communities, for example.
> 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.
Well they've all but run them into the ground already, in the process of extracting any profit they may have been able to squeeze, so not sure it's any big loss anymore.
I figured they would, sooner or later. Almost all companies with the name "Rite" in their name wreak of the 1970's, ugly painted brick buildings, and make me not want to shop at them. They need to update their branding to the 21st century.
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.
I did wonder how they never modernized their name and mark into something distinctive, like CVS pulled off with the initialism and the red heart. The syllable "rite" isn't intrinsically bad, but it is associated with torpor, which is offputting to potential customers.
Did you think it was effective? I didn’t. There’s still the issue with the name, the pestle wasn’t successfully abstracted into a more general health association, and the colors are less distinct.
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.