US pharmacy chain Rite Aid said it filed for bankruptcy yesterday after suffering declining sales and legal threats over its alleged involvement in the opioid crisis.

Rite Aid has one of the largest pharmacy networks in the United States, with 2,100 outlets selling medicines and health products as well as food and hygiene items.

The Philadelphia-based group said in a press release it had already reached agreements with several major creditors to restructure its debt.

It also said it had received commitments for US$3.45 billion (RM16.3 billion) in new financing, which should enable it to continue operating.

Investors have expected the bankruptcy filing for several weeks after the share price fell to 38 cents, down from more than US$20 just two and a half years ago.

Rite Aid was paying the price for a string of failed mergers and acquisitions, as well as the consequences of the opiate crisis.

In 2006, it bought the Eckerd and Brooks chains for US$3.4 billion in a deal that expanded its network to over 5,000 branches, but also weakened its financial situation.

The group then sought to sell itself to rival Walgreens in 2015, but the deal fell through, with Walgreens taking over only 2,200 stores two years later.

In 2018, a planned merger with supermarket group Albertsons also fell through.

In its last financial year, sales contracted by 1.9% to US$24 billion, and the group posted a loss of US$749 million.

In March, the US Justice Department filed a suit against Rite Aid in a Cleveland federal court, accusing the company of filling prescriptions for opiates oxycodone and fentanyl, two powerful painkillers responsible for thousands of overdose deaths in the US every year.

The opioid crisis, which has caused more than 500,000 deaths over 20 years in the US, has triggered a flurry of suits against drugmakers, distributors and pharmacies from victims as well as cities, counties and states. – AFP, October 16, 2023.